<PAGE>   1
                                                                   EXHIBIT 10.1


                                                                 EXECUTION COPY





                         RECEIVABLES TRANSFER AGREEMENT


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




                                    BETWEEN


                             SIERRACITIES.COM INC.

                      FIRST SIERRA RECEIVABLES III, INC.,

                           FIRST UNION NATIONAL BANK,

                     VARIABLE FUNDING CAPITAL CORPORATION,

                 FIRST SIERRA EQUIPMENT CONTRACT TRUST 1999-H,

                          FAIRWAY FINANCE CORPORATION,

                             BANKERS TRUST COMPANY

                                      AND

            FIRST SIERRA HEALTHCARE EQUIPMENT CONTRACT TRUST 2000-1
              COMMON LAW TRUST ACTING THROUGH CHRISTIANA BANK AND
          TRUST COMPANY, NOT IN ITS INDIVIDUAL CAPACITY BUT SOLELY AS
                                 OWNER TRUSTEE


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



                                  DATED AS OF

                                 MARCH 1, 2000




<PAGE>   2






                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                       PAGE
                                                                                                       ----
<S>                       <C>                                                                          <C>
ARTICLE I DEFINITIONS....................................................................................3

   SECTION 1.01           Definitions....................................................................3
   SECTION 1.02           Other Definitional Provisions..................................................3

ARTICLE II TRANSFER OF CONVEYED ASSETS...................................................................4

   SECTION 2.01           Direction; Acquisition of Initial Conveyed Assets..............................4
   SECTION 2.02           Conveyance of Subsequent Conveyed Assets.......................................6
   SECTION 2.03           Custody of Contract Files......................................................8
   SECTION 2.04           Intention of the Parties; Grant of Security Interest...........................8

ARTICLE III REPRESENTATIONS AND WARRANTIES...............................................................8

   SECTION 3.01           Representations and Warranties.................................................8
   SECTION 3.02           Removal of Non-Conforming Contracts by SierraCities.com.......................20
   SECTION 3.03           Substitution of Contracts and Equipment by SierraCities.com...................20

ARTICLE IV COVENANTS....................................................................................21

   SECTION 4.01           Seller and SierraCities.com Covenants.........................................21
   SECTION 4.02           Receivables III Covenants.....................................................24
   SECTION 4.03           Transfer of Conveyed Assets...................................................27

ARTICLE V CONDITIONS PRECEDENT..........................................................................27

   SECTION 5.01           Conditions to Trust Obligations...............................................27

ARTICLE VI TERMINATION..................................................................................28

   SECTION 6.01           Termination...................................................................28
   SECTION 6.02           Effect of Termination.........................................................28

ARTICLE VII MISCELLANEOUS PROVISIONS....................................................................28

   SECTION 7.01           Amendment.....................................................................28
   SECTION 7.02           GOVERNING LAW.................................................................28
   SECTION 7.03           Notices.......................................................................29
   SECTION 7.04           Severability of Provisions....................................................30
   SECTION 7.05           Assignment....................................................................30
   SECTION 7.06           Further Assurances............................................................30
   SECTION 7.07           No Waiver; Cumulative Remedies................................................30
   SECTION 7.08           Counterparts..................................................................30
   SECTION 7.09           Binding Effect: Third-Party Beneficiaries.....................................30
   SECTION 7.10           Merger and Integration........................................................30
   SECTION 7.11           Headings......................................................................30
   SECTION 7.12           Schedules and Exhibits........................................................30
   SECTION 7.13           No Bankruptcy Petition Against Receivables III or the Trust...................30

</TABLE>

                                       i


<PAGE>   3


                         Exhibits, Schedules & Annexes

EXHIBIT A          FORM OF SUBSEQUENT TRANSFER AGREEMENT

Schedule 1         LIST OF INITIAL CONTRACTS
Annex A            DEFINED TERMS





                                      ii

<PAGE>   4




                         RECEIVABLES TRANSFER AGREEMENT

                  THIS RECEIVABLES TRANSFER AGREEMENT (this "Agreement"), dated
as of March 1, 2000, is entered into among SIERRACITIES.COM INC., formerly
First Sierra Financial Inc. ("SierraCities.com"), a Delaware corporation
located at 600 Travis Street, Suite 7050, Houston, Texas 77002, in its
individual capacity, FIRST SIERRA RECEIVABLES III, INC. ("Receivables III"), a
Delaware corporation located at 600 Travis Street, Suite 7050, Houston, Texas
77002, FIRST UNION NATIONAL BANK (formerly First Union National Bank of North
Carolina) ("First Union"), a Delaware corporation located at One First Union
Center, 301 South College Street, Charlotte, North Carolina 28288, VARIABLE
FUNDING CAPITAL CORPORATION ("VFCC"), a Delaware corporation located at One
First Union Center, 301 South College Street, Charlotte, North Carolina 28288
0610, FAIRWAY FINANCE CORPORATION ("FFC"), a Delaware corporation located at 11
West Monroe, Floor 20 East, Chicago, Illinois 60603, BANKERS TRUST COMPANY (the
"Indenture Trustee") a New York banking corporation located at Four Albany
Street, New York, New York 10006, not in its individual capacity but as Trustee
of the First Sierra Equipment Lease Trust 1997-A, the First Sierra Equipment
Lease Trust 1997-B and the First Sierra Equipment Lease Trust 1998-E (each as
defined herein), FIRST SIERRA EQUIPMENT CONTRACT TRUST 1999-H, a Delaware
business trust (the "Series 1999-H Trust") and FIRST SIERRA HEALTHCARE
EQUIPMENT CONTRACT TRUST 2000-1 (the "Issuer" or the "Trust"), a Delaware
common law trust acting through Christiana Bank and Trust Company, not in its
individual capacity but solely as Owner Trustee, located at Greenville Center,
3801 Kennett Pike, Greenville, Delaware 19807. The First Sierra Equipment Lease
Trust 1997-A, the First Sierra Equipment Lease Trust 1997-B, the First Sierra
Equipment Lease Trust 1998-E and the First Sierra Equipment Contract Trust
1999-H are collectively referred to herein as the "Warehouse Trusts."
Receivables III and each Warehouse Trust are collectively referred to herein as
the "Sellers." First Union, VFCC and FCC are collectively referred to herein as
the "Investors."

                                  WITNESSETH:

                  WHEREAS, SierraCities.com in the ordinary course of its
business acquires and originates equipment contracts and commercial loans in
the United States; and

                  WHEREAS, Receivables III, SierraCities.com and Bankers Trust
Company have entered into an Amended and Restated Master Investment Pooling and
Servicing Agreement, dated as of March 25, 1998 (the "Investment Agreement"),
whereby Receivables III may, from time to time, sell pools of contracts,
contract receivables, equipment and certain rights related thereto and arising
therefrom ("Assets") to one or more trusts to be formed pursuant to the
Investment Agreement and a supplement thereto; and

                  WHEREAS, pursuant to the Investment Agreement, the parties
thereto may, from time to time, execute a supplement to the Investment
Agreement and form a trust for the purpose of (i) accepting the transfer of a
specific pool of Assets from





<PAGE>   5






Receivables III, (ii) issuing one or more senior certificates ("Senior
Certificates"), junior certificates ("Junior Certificates") and residual
certificates ("Residual Certificates" and, together with the Senior
Certificates, the "Certificates") representing beneficial ownership interests
in the assets of each trust and (iii) selling the Senior Certificates to
investors; and

                  WHEREAS, pursuant to a Series 1997-A Supplement, dated as of
June 30, 1997, as amended (the "Series 1997-A Supplement"), among Receivables
III, SierraCities.com, Bankers Trust Company and First Union, the parties
thereto formed a trust (the "First Sierra Equipment Lease Trust 1997-A"),
issued a Senior Certificate to First Union representing the senior beneficial
ownership interest in the Assets conveyed by Receivables III to the First
Sierra Equipment Lease Trust 1997-A (the "1997-A Assets") and issued a Residual
Certificate to Receivables III representing the residual beneficial ownership
interest in the 1997-A Assets conveyed to the First Sierra Equipment Lease
Trust 1997-A; and

                  WHEREAS, First Union and Receivables III, as the beneficial
owners of the 1997-A Assets in the First Sierra Equipment Lease Trust 1997-A,
have directed that Bankers Trust Company, as the Trustee of such trust, convey
the 1997-A Assets to the Trust; and

                  WHEREAS, pursuant to a Series 1997-B Supplement, dated as of
June 26, 1997, as amended (the "Series 1997-B Supplement"), among Receivables
III, SierraCities.com, Bankers Trust Company, VFCC and First Union, the parties
thereto formed a trust (the "First Sierra Equipment Lease Trust 1997-B", issued
a Senior Certificate to VFCC representing the senior beneficial ownership
interest in the Assets conveyed by Receivables III to the First Sierra
Equipment Lease Trust 1997-B (the "1997-B Assets") and issued a Residual
Certificate to Receivables III representing the residual beneficial ownership
interest in the 1997-B Assets conveyed to the First Sierra Equipment Lease
Trust 1997-B; and

                  WHEREAS, VFCC and Receivables III, as the beneficial owners
of the 1997-B Assets in the First Sierra Equipment Lease Trust 1997-B, have
directed that Bankers Trust Company, as trustee of such trust, convey the
1997-B Assets to the Trust; and

                  WHEREAS, pursuant to a Series 1998-E Supplement, dated as of
December 21, 1998 (the "Series 1998-E Supplement"), among Receivables III,
SierraCities.com, Bankers Trust Company, FFC and Nesbitt Burns Securities,
Inc., the parties thereto formed a trust (the "First Sierra Equipment Lease
Trust 1998-E"), issued a Senior Certificate to FFC representing a senior
beneficial ownership interest in the Assets conveyed by Receivables III to the
First Sierra Equipment Lease Trust 1998-E and issued a junior certificate
representing a junior beneficial ownership interest in the Assets conveyed by
Receivables III to the First Sierra Equipment Lease Trust 1998-E (the "1998-E
Assets") and a Residual Certificate to Receivables III representing the
residual beneficial ownership interest in the 1998-E Assets conveyed to the
First Sierra Equipment Lease Trust 1998-E; and




                                       2
<PAGE>   6




                  WHEREAS, FFC and Receivables III, as the beneficial owners of
the 1998-E Assets in the First Sierra Equipment Lease Trust 1998-E, have
directed that Bankers Trust Company, as trustee of such trust, convey the
1998-E Assets to the Trust; and

                  WHEREAS, pursuant to a Facility Agreement, dated as of August
1, 1999 (the "Series 1999-H Facility Agreement"), among Receivables III,
SierraCities.com, the Series 1999-H Trust, Bankers Trust Company, issued a
secured note to Merrill Lynch Mortgage Capital Inc., secured by the Assets
conveyed by Receivables III to the Series 1999-H Trust (the "1999-H Assets")
and a trust certificate to Receivables III representing the beneficial
ownership interest in the Series 1999-H Trust and the 1999-H Assets; and

                  WHEREAS, the Series 1999-H Trust, as the beneficial owner of
the 1999-H Assets, and Receivables III, as the holder of the trust certificate
issued by the Series 1999-H Trust, desire to convey the 1999-H Assets to the
Trust; and

                  WHEREAS, each of the Warehouse Trusts, on behalf of and at
the request of Receivables III, have agreed to, and Receivables III desires to
convey, transfer, contribute and assign all of its right, title and interest in
and to the 1997-A Assets, the 1997-B Assets, the 1998-E Assets and the 1999-H
Assets, as applicable, to the Owner Trustee, on behalf of the Trust, upon the
terms and conditions hereinafter set forth; and

                  WHEREAS, each of the Sellers and the Trust agree that all
representations, warranties, covenants and agreements made by it herein shall
be for the benefit of the Noteholders, the Trust Certificateholder, the Owner
Trustee and Indenture Trustee.

                  NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:


                                   ARTICLE I

                                  DEFINITIONS


                  SECTION  101. Definitions. Whenever used in this Agreement,
capitalized terms used and not defined herein shall have the meanings set forth
in Annex A to the Indenture.

                  SECTION  102. Other Definitional Provisions.


                  (a) Terms used in Related Documents. Each term defined in
this Agreement will have the meaning assigned to such term in this Agreement
when used in any certificate or other document made or delivered pursuant to
this Agreement, unless such term is otherwise defined therein.




                                       3
<PAGE>   7





                  (b) Accounting Terms. As used in this Agreement, accounting
terms which are not defined pursuant to Section 1.01 have the respective
meanings given to them under generally accepted accounting principles, as in
effect on the date of this Agreement. To the extent that the definitions of
accounting terms in this Agreement are inconsistent with the meanings of such
terms under generally accepted accounting principles, the definitions contained
in this Agreement will control.

                  (c) "Hereof," etc. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement will refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and Section, Schedule and Exhibit references contained in this
Agreement are references to Sections, Schedules and Exhibits in or to this
Agreement, unless otherwise specified.

                  (d) Number and Gender. Each defined term used in this
Agreement has a comparable meaning when used in its plural or singular form.
Each gender-specific term used in this Agreement has a comparable meaning
whether used in a masculine, feminine or gender-neutral form.

                  (e) Including. Whenever the term "including" (whether or not
that term is followed by the phrase "but not limited to" or "without
limitation" or words of similar effect) is used in this Agreement in connection
with a listing of items within a particular classification, that listing will
be interpreted to be illustrative only and will not be interpreted as a
limitation on, or exclusive listing of, the items within that classification.


                                  ARTICLE II

                          TRANSFER OF CONVEYED ASSETS


                  SECTION 2.01 Direction; Acquisition of Initial Conveyed
Assets.

                  (a)      (i) In accordance with the terms of the Investment
         Agreement, each of the Investors, as the Senior Certificateholders of
         the related Warehouse Trust, and Receivables III, as the Junior
         Certificateholder and the Residual Certificateholder of the Warehouse
         Trusts, together representing all of the beneficial ownership
         interests in the Warehouse Trusts, hereby direct Bankers Trust Company
         to convey to the Trust those assets of each Warehouse Trust and
         Receivables III which comprise the Initial Conveyed Assets. Upon
         receipt of the consideration specified below, each of the Investors
         hereby release all of its right, title and interest in, to and under
         the Initial Conveyed Assets, such receipt being hereby acknowledged by
         execution of this Agreement by each Investor.

                  (ii)     Receivables III, as the Residual Certificateholder
         of the Warehouse Trusts, hereby requests the Warehouse Trusts to join
         in the conveyance of the Initial Conveyed Assets.





                                       4
<PAGE>   8



                  (iii)    Receivables III, as the holder of the trust
         certificate issued by the Series 1999-H Trust, hereby directs the
         Series 1999-H Trust to convey to the Trust those assets of the Series
         1999-H Trust which comprise the Initial Conveyed Assets. Upon receipt
         of the consideration specified below, Merrill Lynch Mortgage Capital,
         Inc. hereby releases all of its right, title and interest in, to and
         under the Initial Conveyed Assets, such receipt being hereby
         acknowledged by execution of this Agreement by Merrill Lynch Mortgage
         Capital, Inc.

                  (b) In consideration for (w) the issuance to Receivables III
of the trust certificate to be issued by the Holding Trust pursuant to the
Holding Trust Agreement, (x) the issuance to the Holding Trust of the trust
certificate to be issued by the Trust pursuant to the Trust Agreement, (y) the
receipt of $1,849,154.00 by First Sierra Equipment Lease Trust 1997-A,
$92,970,672.00 by First Sierra Equipment Lease Trust 1997-B, $38,758,611.00 by
First Sierra Equipment Lease Trust 1998-E and $49,770,430.00 by the Series
1999-H Trust on behalf of Merrill Lynch Mortgage Capital, Inc. and (z) other
good and valuable consideration, each of the Sellers hereby sells, transfers,
assigns, sets over and conveys to the Trust all of its right, title and
interest in, to and under the Initial Conveyed Assets (with respect to each
Seller individually, to the extent of such Seller's interest in such Initial
Conveyed Assets, whether now existing or hereinafter arising, without recourse
(except as may be set forth in the Servicing Agreement)).

                  (c) In connection with such sale and conveyance, each Seller
agrees to record and file, at the expense of the Servicer, financing statements
(and thereafter will file continuation statements with respect to such
financing statements) with respect to the related Initial Conveyed Assets
contributed and to be transferred to the Trust pursuant to this Agreement, the
related Subsequent Conveyed Assets to be contributed and transferred to the
Trust pursuant to a Subsequent Transfer Agreement and the Substitute Conveyed
Assets, meeting the requirements of applicable state law and the Filing
Requirements in such manner and in such jurisdictions as are necessary to
perfect and to maintain the perfection of, the transfer, conveyance and
contribution of the related Initial Conveyed Assets, the related Subsequent
Conveyed Assets and the related Substitute Conveyed Assets (subject to the
Filing Requirements with respect to the Equipment) from each of the Sellers to
the Trust and the transfer, assignment and pledge of the Pledged Property from
the Trust to the Indenture Trustee on behalf of the Noteholders, pursuant to
the Indenture, and to deliver an executed copy of such financing statements or
other evidence of such filings to the Trust (and copies to the Indenture
Trustee) on or prior to each Conveyance Date; provided, however, that the
Contract Files (including each original executed Contract) will not be
physically delivered to the Trust but instead will be delivered to and held by
the Indenture Trustee on behalf of the Trust.

                  (d) In connection with such assignment and conveyance,
SierraCities.com shall, at its own expense, on or prior to the related
Conveyance Date, and with respect to Substitute Contracts, as soon as possible,
but in no event later than two (2) Business Days after the related Conveyance
Date (i) cause the Contract Management System to be marked with a specified code
(the "Contract Management Code") to show that the Initial Conveyed Assets, the
Subsequent Conveyed Assets or the



                                       5
<PAGE>   9



Substitute Conveyed Assets, as the case may be, have been assigned and
transferred to the Trust in accordance with this Agreement and pledged to the
Indenture Trustee on behalf of the Noteholders, pursuant to the Indenture and
(ii) prepare and hold in its capacity as Servicer, as agent of the Trust and
the Indenture Trustee the List of Initial Contracts on or prior to the Closing
Date. Pursuant to Section 2.02 hereof, the Sellers may during the Pre-Funding
Period, convey Subsequent Contracts to the Trust at any time by delivering a
List of Subsequent Contracts to the Trust on each Conveyance Date containing
for each Subsequent Contract transferred on such Conveyance Date the
information set forth in the definition of List of Subsequent Contracts.
Pursuant to Section 3.03 hereof, SierraCities.com from time to time may convey
Substitute Contracts to the Trust at any time by delivering a List of
Substitute Contracts to the Trust on each Conveyance Date containing for each
Substitute Contract transferred on such Conveyance Date the information set
forth in the definition of List of Substitute Contracts.

                  (e) The sale and conveyance of the Conveyed Assets will be
without recourse to the Sellers.

                  SECTION 2.02 Conveyance of Subsequent Conveyed Assets.

                  (a) Subject to the conditions set forth in paragraph (c)
below, in consideration of the Trust's delivery on the related Subsequent
Transfer Date of funds in the Pre-Funding Account in the amount determined in
accordance with Section 2.02(b) hereof, each of the Sellers shall on any
Subsequent Transfer Date sell, transfer, assign, set over and convey, without
recourse, to the Trust, but subject to the other terms and provisions of this
Agreement, all of the right, title and interest of such Seller in, to and under
the Subsequent Conveyed Assets identified on the related List of Subsequent
Contracts (with respect to each Seller individually, to the extent of such
Seller's interest in such Initial Conveyed Assets, whether now existing or
hereinafter arising, without recourse (except as may be set forth in the
Servicing Agreement)). The transfer by the Sellers to the Trust of the
Subsequent Conveyed Assets identified on each List of Subsequent Contracts shall
be absolute and is intended by the Sellers and the Trust to constitute and to be
treated as a sale of the Subsequent Conveyed Assets by each Seller to the Trust.
Subsequent Transfer Dates occur not more frequently than once a month.

                  The original executed counterpart for each Subsequent
Contract shall be delivered to the Indenture Trustee, on behalf of the Trust,
two Business Days prior to the related Subsequent Transfer Date.

                  (b) The purchase price paid by the Indenture Trustee, at the
direction of the Depositor, on behalf of the Trust, from amounts released from
the Pre-Funding Account shall be equal to the aggregate Discounted Contract
Balance of the Subsequent Contracts so transferred on the related Subsequent
Transfer Date.

                  (c) The Sellers shall transfer to the Trust the Subsequent
Conveyed Assets and the Depositor on behalf of the Trust shall cause to be
released funds from the




                                       6
<PAGE>   10







Pre-Funding Account, only upon satisfaction of each of the following conditions
on or prior to the related Subsequent Transfer Date:

                  (i) The Sellers shall have delivered to the Indenture
         Trustee, as custodian, a duly executed Subsequent Transfer Agreement,
         substantially in the form of Exhibit A attached hereto, including a
         List of Subsequent Contracts attached thereto, and confirming the
         satisfaction of each condition precedent specified in this paragraph
         (c);

                  (ii) As of each Subsequent Transfer Date, as evidenced by
         delivery of the Subsequent Transfer Agreement, none of the Sellers (a)
         shall be insolvent or have been made insolvent by such transfers, nor
         shall they be aware of any pending insolvency, (b) shall intend to
         incur or believe that it shall incur debts that would be beyond its
         ability to pay as such debts mature, (c) shall make such transfer with
         actual intent to hinder, delay or defraud any Person, and (d) shall
         have assets that constitute unreasonably small capital to carry out
         its business as then conducted;

                  (iii) Each such Subsequent Contract must satisfy the
         representations and warranties made in the Servicing Agreement and
         each Seller shall have performed all obligations to be performed by it
         hereunder on or prior to such Subsequent Transfer Date;

                  (iv) The Sellers shall not have selected such Subsequent
         Contracts in a manner that they reasonably believe is adverse to the
         interests of the Noteholders;

                  (v) Such sale and transfer shall not result in a material
         adverse tax consequence to the Trust;

                  (vi) The Pre-Funding Period shall not have terminated;

                  (vii) The Sellers shall have provided the Indenture Trustee
         and the Rating Agencies with an Addition Notice not later than three
         Business Days prior to such Subsequent Transfer Date and shall have
         provided any information reasonably requested by any of the foregoing
         with respect to the related Subsequent Contracts;

                  (viii) The Sellers shall have deposited in the Collection
         Account all collections in respect of the related Subsequent Contracts
         since the related Subsequent Cut-Off Date;

                  (ix) Each Seller shall, at its own expense, on or prior to
         the related Subsequent Transfer Date, indicate in its computer files
         that the Subsequent Contracts identified in the related Subsequent
         Transfer Agreement have been sold to the Trust pursuant to such
         Subsequent Transfer Agreement and pledged to the Indenture Trustee
         pursuant to the Indenture;




                                       7
<PAGE>   11



                  (x) Copies of relevant UCC financing statements prepared for
         filing by the Servicer pursuant to Section 2.01(c) hereof shall have
         been delivered to the Indenture Trustee and all Filing Requirements
         shall have been complied with;

                  (xi) SierraCities.com and the Sellers shall have delivered to
         the Rating Agencies and the Indenture Trustee "bringdown opinions" to
         the Opinions of Counsel regarding bankruptcy, corporate enforceability
         and perfection delivered on the Closing Date and such other opinions
         as the Indenture Trustee may reasonably request with respect to the
         transfer of such Subsequent Contracts.

                  SECTION 2.03 Custody of Contract Files. In connection with
the sale, assignment, transfer and conveyance of the Contracts to the Trust
pursuant to this Agreement, the Indenture Trustee will retain the Contract
Files and any related evidence of insurance and payments in accordance with the
terms of the Indenture.

                  SECTION 2.04 Intention of the Parties; Grant of Security
Interest. It is the intention of the parties hereto that each transfer of the
Conveyed Assets to be made pursuant to the terms hereof shall constitute an
absolute assignment and a sale of such Contract by each Seller to the Trust and
not a loan. In the event, however, that a court of competent jurisdiction were
to hold that any such transfer constitutes a loan and not a sale, it is the
intention of the parties hereto that this Agreement and each Subsequent
Transfer Agreement is deemed to be a security agreement and that each Seller
shall be deemed to have granted to the Trust as of the related Conveyance Date
a first priority perfected security interest in all of such Seller's right,
title and interest in, to and under each Conveyed Asset, and all income and
proceeds thereof. Such grant is made to secure the payment of all amounts
payable under this Agreement and each related Subsequent Transfer Agreement.



                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

                  SECTION 3.01 Representations and Warranties.

                  (a) SierraCities.com hereby makes the following
representations and warranties for the benefit of the Owner Trustee, the
Indenture Trustee, the Noteholders and the Trust. Such representations and
warranties are made as of any Conveyance Date with respect to Contracts
transferred to the Trust on such date and shall survive each assignment,
transfer and conveyance by SierraCities.com of the Conveyed Assets to the Trust
and its successors and assigns.

                  (i) Organization and Good Standing. SierraCities.com is a
         corporation duly organized, validly existing and in good standing,
         under the laws of the State of Delaware, with corporate 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 Conveyed Assets;




                                       8
<PAGE>   12




                  (ii) Due Qualification. SierraCities.com is qualified as a
         foreign corporation in any state where it is required to be so
         qualified to conduct its business, to enforce the Source Agreements to
         which it is a party, and to service the Contracts as required by the
         Servicing Agreement and has obtained all necessary licenses, consents
         and approvals as required under federal and state law, in each case,
         where the failure to be so qualified, licensed, consented to or
         approved could reasonably be expected materially and adversely to
         affect the ability of SierraCities.com to comply with the terms of
         this Agreement or any other Transaction Document to which it is a
         party;

                  (iii) Legal Name. The legal name of SierraCities.com is as
         set forth on the signature line of this Agreement and, other than the
         change from First Sierra Financial, Inc. to SierraCities.com Inc.,
         SierraCities.com has not changed its name since its incorporation and
         since its incorporation, SierraCities.com did not use, nor does
         SierraCities.com now use, any trade names, fictitious names, assumed
         name of "doing business as" names;

                  (iv) Power and Authority. SierraCities.com has the corporate
         power and authority to execute and deliver this Agreement, the Source
         Agreements to which it is a party and the Contracts and any other
         Transaction Document to which it is a party, and to carry out their
         respective terms; and the execution, delivery, and performance of this
         Agreement, the Source Agreements, the Contracts and any other
         Transaction Document to which it is a party has been duly authorized
         by SierraCities.com by all necessary corporate action;

                  (v) Due Execution and Delivery. This Agreement and each of
         the other Transaction Documents to which it is a party have been duly
         executed and delivered on behalf of SierraCities.com;

                  (vi) Valid Assignment; Binding Obligations. This Agreement
         and the other Transaction Documents to which SierraCities.com is a
         party, when duly executed and delivered, will constitute legal, valid,
         and binding obligations of SierraCities.com enforceable against
         SierraCities.com in accordance with their respective terms subject as
         to enforceability to applicable bankruptcy, reorganization,
         insolvency, moratorium or other laws affecting creditors' rights
         generally and to general principles of equity (regardless of whether
         enforcement is sought in a proceeding in equity or at law);

                  (vii) Insolvency. SierraCities.com is not insolvent and will
         not be rendered insolvent by the transactions contemplated by this
         Agreement and has an adequate amount of capital to conduct its
         business in the ordinary course and to carry out its obligations
         hereunder and under each other Transaction Document to which it is a
         party;

                  (viii) No Violation. The consummation of the transactions
         contemplated by and the fulfillment of the terms of this Agreement and
         each Transaction Document to which it is a party will not conflict
         with, result in any breach of any



                                       9
<PAGE>   13


         of the terms and provisions of, or constitute (with or without notice
         or lapse of time) a default under, the articles of incorporation or
         bylaws of SierraCities.com, or any material term of any indenture,
         agreement, mortgage, deed of trust, or other instrument to which
         SierraCities.com is a party or by which it is bound, or result in the
         creation or imposition of any Lien upon any of its properties pursuant
         to the terms of any such indenture, agreement, mortgage, deed of
         trust, or other instrument, other than this Agreement or each
         Transaction Document to which it is a party or violate any law or any
         order, injunction, writ, rule, or regulation applicable to
         SierraCities.com of any court or of any federal or state regulatory
         body, administrative agency, or other Governmental Authority having
         jurisdiction over SierraCities.com or any of its properties which
         would have a material adverse effect on the Conveyed Assets;

                  (ix) Ability to Perform. No event has occurred which
         adversely affects SierraCities.com's operations or its ability to
         perform its obligations under the Transaction Documents to which it is
         a party;

                  (x) No Proceedings. There are no Proceedings or
         investigations pending, or, to the knowledge of SierraCities.com,
         threatened, before any court, regulatory body, administrative agency,
         or other tribunal or Governmental Authority (A) asserting the
         invalidity of this Agreement or each other Transaction Document to
         which it is a party, (B) seeking to prevent the consummation of any of
         the transactions contemplated by this Agreement, or (C) seeking any
         determination or ruling that might (in the reasonable judgment of
         SierraCities.com) materially and adversely affect the performance by
         SierraCities.com of its obligations under, or the validity or
         enforceability of, this Agreement or each other Transaction Document
         to which it is a party;

                  (xi) No Consent Required. SierraCities.com 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
         Transaction Documents to which it is a party, except for such as have
         been obtained, effected or made;

                  (xii) Consolidated Return Taxable Income from the Equipment
         and the Related Contracts. The Depositor and SierraCities.com are
         members of an affiliated group within the meaning of Section 1504 of
         the Code which has filed, and will continue to file, a consolidated
         return for federal income tax purposes at all times until satisfaction
         in full of all obligations (i) of SierraCities.com hereunder and (ii)
         of SierraCities.com and the Depositor under the Transaction Documents
         or other documents relating to the financing contemplated hereby. The
         Depositor shall treat the Contracts as owned by it for federal, state
         and local income tax purposes, and the affiliated group of which the
         Depositor is a member within the meaning of Section 1504 of the Code
         shall treat the Contracts as owned by the Depositor and shall report
         and include the rental and other income from the Equipment and the
         Contracts in gross income;




                                      10
<PAGE>   14



                  (xiii) Principal Place of Business. The principal place of
         business and chief executive office of SierraCities.com is located at
         600 Travis Street, Suite 7050, Houston, Texas 77002 and, there are now
         no, and during the past four months there have not been, any other
         locations where SierraCities.com is located (as that term is used in
         the UCC in the state of such location) except that, with respect to
         such changes occurring after the date of this Agreement, as shall have
         been specifically disclosed to the Servicer and the Indenture Trustee
         in writing;

                  (xiv) Tax Returns. SierraCities.com has filed on a timely
         basis all tax returns (federal, state and local) required to be filed
         and has paid or made adequate provisions for the payment of all taxes,
         assessments and other governmental charges due from SierraCities.com;
         and

                  (xv) Pensions. Each pension plan or profit sharing plan to
         which SierraCities.com is a party has been fully funded in accordance
         with the obligations of SierraCities.com set forth in such plan.

                  (b) Receivables III, on its own behalf and as beneficial
owner of the trust certificate issued by the Series 1999-H Trust, hereby makes
the following representations and warranties for the benefit of the Indenture
Trustee, the Owner Trustee, the Noteholders and the Trust. Such representations
and warranties are made as of each Conveyance Date and shall survive each sale,
assignment, transfer and conveyance by the Sellers of the respective Conveyed
Assets to the Trust and its successors and assigns.

                  (i) Organization and Good Standing. Receivables III is a
         corporation duly organized, validly existing and in good standing,
         under the laws of the State of Delaware, with corporate 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 Conveyed Assets.
         Receivables III has no subsidiaries other than special purpose trusts
         created to finance the acquisition of Contracts and Equipment;

                  (ii) Due Qualification. Receivables III is qualified as a
         foreign corporation in any state where it is required to be so
         qualified to conduct its business and has obtained all necessary
         licenses, consents and approvals as required under federal and state
         law, in each case, where the failure to be so qualified, licensed,
         consented to or approved could reasonably be expected materially and
         adversely to affect the ability of Receivables III to comply with the
         terms of this Agreement or any other Transaction Document to which it
         is a party;

                  (iii) Legal Name. The legal name of Receivables III is as set
         forth in the signature line of this Agreement and Receivables III has
         not changed its name since its incorporation and since its
         incorporation, Receivables III did not use, nor does Receivables III
         now use, any trade names, fictitious names, assumed name of "doing
         business as" names;




                                      11
<PAGE>   15




                  (iv) Power and Authority. Receivables III has the corporate
         power and authority to execute and deliver this Agreement and any
         other Transaction Document to which it is a party, and to carry out
         their respective terms; Receivables III has duly authorized the sale
         and assignment to the Owner Trustee, on behalf of the Trust, of all of
         its right, title and interest, if any, in the Conveyed Assets by all
         necessary corporate action; and the execution, delivery, and
         performance of this Agreement and any other Transaction Document to
         which it is a party has been duly authorized by Receivables III by all
         necessary corporate action;

                  (v) Due Execution and Delivery. This Agreement has been duly
         executed and delivered on behalf of Receivables III;

                  (vi) Valid Assignment; Binding Obligations. This Agreement
         constitutes a valid assignment, transfer and conveyance to the Owner
         Trustee, on behalf of the Trust, of all right, title, and interest of
         Receivables III in, to and under the Conveyed Assets, and the Conveyed
         Assets will be held by the Trust free and clear of any Lien of any
         Person claiming through or under Receivables III, except the lien on
         the Conveyed Assets in favor of the Indenture Trustee granted pursuant
         to the Indenture; and this Agreement, when duly executed and
         delivered, will constitute the legal, valid, and binding obligation of
         Receivables III enforceable against Receivables III in accordance with
         their respective terms subject as to enforceability to applicable
         bankruptcy, reorganization, insolvency, moratorium or other laws
         affecting creditors' rights generally and to general principles of
         equity (regardless of whether enforcement is sought in a proceeding in
         equity or at law);

                  (vii) Insolvency. Receivables III is not insolvent and will
         not be rendered insolvent by the transactions contemplated by this
         Agreement and has an adequate amount of capital to conduct its
         business in the ordinary course and to carry out its obligations
         hereunder and under each other Transaction Document to which it is a
         party;

                  (viii) No Violation. The consummation of the transactions
         contemplated by and the fulfillment of the terms of this Agreement and
         each Transaction Document to which it is a party 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 articles of incorporation or bylaws of Receivables III, or any
         material term of any indenture, agreement, mortgage, deed of trust, or
         other instrument to which Receivables III is a party or by which it is
         bound, or result in the creation or imposition of any Lien upon any of
         its properties pursuant to the terms of any such indenture, agreement,
         mortgage, deed of trust, or other instrument, other than this
         Agreement and each Transaction Document to which it is a party, or
         violate any law or any order, injunction, writ, rule, or regulation
         applicable to Receivables III of any court or of any federal or state
         regulatory body, administrative agency, or other Governmental
         Authority having jurisdiction



                                      12
<PAGE>   16


         over Receivables III or any of its properties which would have a
         material adverse effect on the Conveyed Assets;

                  (ix) No Proceedings. There are no proceedings or
         investigations pending, or, to the knowledge of Receivables III,
         threatened, before any court, regulatory body, administrative agency,
         or other tribunal or Governmental Authority (A) asserting the
         invalidity of this Agreement or any Transaction Document to which it
         is a party, (B) seeking to prevent the consummation of any of the
         transactions contemplated by this Agreement, or (C) seeking any
         determination or ruling that might (in the reasonable judgment of
         Receivables III) materially and adversely affect the performance by
         Receivables III of its obligations under, or the validity or
         enforceability of, this Agreement or any Transaction Document to which
         it is a party;

                  (x) No Consent Required. Receivables III 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
         Transaction Documents to which it is a party, except for such having
         been obtained, effected or made;

                  (xi) Fair Consideration. The consideration received by
         Receivables III as set forth herein is fair consideration having value
         reasonably equivalent to or in excess of the value of the Conveyed
         Assets conveyed by it and the performance of Receivables III's
         obligation hereunder;

                  (xii) Principal Place of Business. The principal place of
         business and chief executive office of Receivables III is located at
         600 Travis Street, Suite 7050, Houston, Texas 77002 and, there are now
         no, and during the past four months there have not been, any other
         locations where Receivables III is located (as that term is used in
         the UCC in the state of such location) except that, with respect to
         such changes occurring after the date of this Agreement, as shall have
         been specifically disclosed to the Servicer and the Indenture Trustee
         in writing. The principal place of business and chief executive office
         of each of the Warehouse Trusts (other than the Series 1999-H Trust)
         is located in care of Bankers Trust Company, Four Albany Street, New
         York, New York 10006 and the principal place of business of the Series
         1999-H Trust is located in care of Christiana Bank & Trust Company,
         3801 Kennett Pike, Greenville, Delaware 19807 and, there are now no,
         and during the past four months there have not been, any other
         locations where each Warehouse Trust is located (as that term is used
         in the UCC in the state of such location).

                  (xiii) Valid Business Reasons. Receivables III has valid
         business reasons for selling its interest in the Conveyed Assets
         rather than obtaining a loan with the Conveyed Assets as collateral;



                                      13
<PAGE>   17






                  (xiv) Absence of Event. No event has occurred which adversely
         affects Receivables III's operations or its ability to perform its
         obligations under the Transaction Documents to which it is a party;

                  (xv) Non Consolidation. Receivables III is operated in such a
         manner that it will not be consolidated in the estate of
         SierraCities.com such that the separate existence of Receivables III
         and SierraCities.com would be disregarded in the event of a bankruptcy
         or insolvency of SierraCities.com; and

                  (xvi) Receivables III will treat its conveyance of the
         Conveyed Assets as a sale for all financial reporting and accounting
         purposes.

                  (c) First Union hereby makes the following representations
and warranties for the benefit of the Indenture Trustee, the Owner Trustee, the
Noteholders and the Trust. Such representations and warranties are made as of
each Conveyance Date and shall survive each sale, assignment, transfer and
conveyance by the Sellers of the respective Conveyed Assets to the Trust and
its successors and assigns:

                  (i) Organization and Good Standing. First Union is a national
         bank duly organized, validly existing and in good standing, under the
         laws of the United States, with corporate 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 Conveyed Assets;

                  (ii) Due Qualification. First Union is qualified as a foreign
         corporation in any state where it is required to be so qualified to
         conduct its business and has obtained all necessary licenses, consents
         and approvals as required under federal and state law, in each case,
         where the failure to be so qualified, licensed, consented to or
         approved could reasonably be expected materially and adversely to
         affect the ability of First Union to comply with the terms of this
         Agreement or any other Transaction Document to which it is a party;

                  (iii) Power and Authority. First Union has the corporate
         power and authority to execute and deliver this Agreement and each
         other Transaction Document to which it is a party, and to carry out
         their respective terms; and the execution, delivery, and performance
         of this Agreement and any other Transaction Document to which it is a
         party has been duly authorized by First Union by all necessary
         corporate action;

                  (iv) Due Execution and Delivery. This Agreement has been duly
         executed and delivered on behalf of First Union;

                  (v) Valid Assignment; Binding Obligations. This Agreement
         constitutes a valid contribution, assignment, transfer and conveyance
         to the Owner Trustee, on behalf of the Trust, of all right, title, and
         interest of First Union in, to and under the Conveyed Assets and the
         Conveyed Assets will be held by the Trust free and clear of any Lien
         of any Person claiming, through or under First




                                      14
<PAGE>   18





         Union, except the lien on the Conveyed Assets in favor of the
         Indenture Trustee granted pursuant to the Indenture; and this
         Agreement, when duly executed and delivered, will constitute legal,
         valid, and binding obligations of First Union enforceable against
         First Union in accordance with their respective terms subject as to
         enforceability to applicable bankruptcy, reorganization, insolvency,
         moratorium or other laws affecting creditors' rights generally and to
         general principles of equity (regardless of whether enforcement is
         sought in a proceeding in equity or at law);

                  (vi) No Violation. The consummation of the transactions
         contemplated by and the fulfillment of the terms of this Agreement
         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 articles of incorporation or bylaws of First
         Union, or any material term of any indenture, agreement, mortgage,
         deed of trust, or other instrument to which First Union is a party or
         by which it is bound, or result in the creation or imposition of any
         Lien upon any of its properties pursuant to the terms of any such
         indenture, agreement, mortgage, deed of trust, or other instrument,
         other than this Agreement, or violate any law or any order,
         injunction, writ, rule, or regulation applicable to First Union of any
         court or of any federal or state regulatory body, administrative
         agency, or other Governmental Authority having jurisdiction over First
         Union or any of its properties which would have a material adverse
         effect on the Conveyed Assets;

                  (vii) Valid Business Reasons. First Union has valid business
         reasons for selling its interest in the Conveyed Assets rather than
         obtaining a loan with the Conveyed Assets as collateral;

                  (viii) Absence of Event. No event has occurred which
         adversely affects First Union's operations or its ability to perform
         its obligations under the Transaction Documents to which it is a
         party;

                  (ix) Insolvency. First Union is not insolvent and will not be
         rendered insolvent by the transactions contemplated by this Agreement
         and has an adequate amount of capital to conduct its business in the
         ordinary course and to carry out its obligations hereunder and under
         each other Transaction Document to which it is a party;

                  (x) No Proceedings. There are no proceedings or
         investigations pending, or, to the knowledge of First Union,
         threatened, before any court, regulatory body, administrative agency,
         or other tribunal or Governmental Authority (A) asserting the
         invalidity of this Agreement, (B) seeking to prevent the consummation
         of any of the transactions contemplated by this Agreement, or (C)
         seeking any determination or ruling that might (in the reasonable
         judgment of First Union) materially and adversely affect the
         performance by First Union of its obligations under, or the validity
         or enforceability of, this Agreement;






                                      15
<PAGE>   19




                  (xi) No Consent Required. First Union 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
         Transaction Documents to which it is a party, except for such having
         been obtained, effected or made;

                  (xii) Fair Consideration. The consideration received by First
         Union as set forth herein is fair consideration having value
         reasonably equivalent to or in excess of the value of the Conveyed
         Assets conveyed by it and the performance of First Union's obligations
         hereunder; and

                  (xiii) Accounting Treatment. First Union will treat the
         assignment of the Conveyed Assets to the Trust pursuant to Article II
         as a sale of the Conveyed Assets to the Trust for financial reporting
         and accounting purposes.

                  (d) VFCC hereby makes the following representations and
warranties for the benefit of the Indenture Trustee, the Noteholders and the
Trust. Such representations and warranties are made as of each Conveyance Date
and shall survive each sale, assignment, transfer and conveyance by the Sellers
of the respective Conveyed Assets to the Trust and its successors and assigns:

                  (i) Organization and Good Standing. VFCC is a corporation
         duly organized, validly existing and in good standing, under the laws
         of the State of Delaware, with corporate 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 Conveyed Assets;

                  (ii) Due Qualification. VFCC is qualified as a foreign
         corporation in any state where it is required to be so qualified to
         conduct its business and has obtained all necessary licenses, consents
         and approvals as required under federal and state law, in each case,
         where the failure to be so qualified, licensed, consented to or
         approved could reasonably be expected materially and adversely to
         affect the ability of VFCC to comply with the terms of this Agreement
         or any other Transaction Document to which it is a party; (iii) Power
         and Authority. VFCC has the corporate power and authority to execute
         and deliver this Agreement and each other Transaction Document to
         which it is a party, and to carry out their respective terms; and the
         execution, delivery, and performance of this Agreement and each other
         Transaction Document to which it is a party has been duly authorized
         by VFCC by all necessary corporate action;

                  (iv) Due Execution and Delivery. This Agreement has been duly
         executed and delivered on behalf of VFCC;





                                      16
<PAGE>   20






                  (v) Valid Assignment; Binding Obligations. This Agreement
         constitutes a valid sale, assignment, transfer and conveyance to the
         Owner Trustee, on behalf of the Trust, of all right, title, and
         interest of VFCC in, to and under the Conveyed Assets and the Conveyed
         Assets will be held by the Trust free and clear of any Lien of any
         Person claiming, through or under VFCC, except the lien on the
         Conveyed Assets in favor of the Indenture Trustee granted pursuant to
         the Indenture; and this Agreement, when duly executed and delivered,
         will constitute the legal, valid, and binding obligation of VFCC
         enforceable against VFCC in accordance with their respective terms
         subject as to enforceability to applicable bankruptcy, reorganization,
         insolvency, moratorium or other laws affecting creditors' rights
         generally and to general principles of equity (regardless of whether
         enforcement is sought in a proceeding in equity or at law);

                  (vi) No Violation. The consummation of the transactions
         contemplated by and the fulfillment of the terms of this Agreement
         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 articles of incorporation or bylaws of VFCC, or
         any material term of any indenture, agreement, mortgage, deed of
         trust, or other instrument to which VFCC is a party or by which it is
         bound, or result in the creation or imposition of any Lien upon any of
         its properties pursuant to the terms of any such indenture, agreement,
         mortgage, deed of trust, or other instrument, other than this
         Agreement, or violate any law or any order, injunction, writ, rule, or
         regulation applicable to VFCC of any court or of any federal or state
         regulatory body, administrative agency, or other Governmental
         Authority having jurisdiction over VFCC or any of its properties which
         would have a material adverse effect on the Conveyed Assets;

                  (vii) Valid Business Reasons. VFCC has valid business reasons
         for selling its interest in the Conveyed Assets rather than obtaining
         a loan with the Conveyed Assets as collateral;

                  (viii) Absence of Event. No event has occurred which
         adversely affects VFCC's operations or its ability to perform its
         obligations under the Transaction Documents to which it is a party;

                  (ix) Insolvency. VFCC is not insolvent and will not be
         rendered insolvent by the transactions contemplated by this Agreement
         and has an adequate amount of capital to conduct its business in the
         ordinary course and to carry out its obligations hereunder and under
         each other Transaction Document to which it is a party;

                  (x) No Proceedings. There are no proceedings or
         investigations pending, or, to the knowledge of VFCC, threatened,
         before any court, regulatory body, administrative agency, or other
         tribunal or Governmental Authority (A) asserting the invalidity of
         this Agreement, (B) seeking to prevent the consummation of any of the
         transactions contemplated by this Agreement, or



                                      17
<PAGE>   21




         (C) seeking any determination or ruling that might (in the reasonable
         judgment of VFCC) materially and adversely affect the performance by
         VFCC of its obligations under, or the validity or enforceability of,
         this Agreement;

                  (xi) No Consent Required. VFCC 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 Transaction Documents
         to which it is a party except for such having been obtained, effected
         or made;

                  (xii) Fair Consideration. The consideration received by VFCC
         as set forth herein is fair consideration having value reasonably
         equivalent to or in excess of the value of the Conveyed Assets
         conveyed by it and the performance of VFCC's obligations hereunder;
         and

                  (xiii) Accounting Treatment. VFCC will treat the assignment
         of the Conveyed Assets to the Trust pursuant to Article II as a sale
         of the Conveyed Assets to the Trust for financial reporting and
         accounting purposes.

                  (e) FFC hereby makes the following representations and
warranties for the benefit of the Indenture Trustee, the Noteholders and the
Trust. Such representations and warranties are made as of each Conveyance Date
and shall survive each sale, assignment, transfer and conveyance by the Sellers
of the respective Conveyed Assets to the Trust and its successors and assigns:

                  (i) Organization and Good Standing. FFC is a corporation duly
         organized, validly existing and in good standing, under the laws of
         the State of Delaware, with corporate 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 Conveyed Assets;

                  (ii) Due Qualification. FFC is qualified as a foreign
         corporation in any state where it is required to be so qualified to
         conduct its business and has obtained all necessary licenses, consents
         and approvals as required under federal and state law, in each case,
         where the failure to be so qualified, licensed, consented to or
         approved could reasonably be expected materially and adversely to
         affect the ability of FFC to comply with the terms of this Agreement
         or each Transaction Document to which it is a party;

                  (iii) Power and Authority. FFC has the corporate power and
         authority to execute and deliver this Agreement and any other
         Transaction Document to which it is a party, and to carry out their
         respective terms; and the execution, delivery, and performance of this
         Agreement and each Transaction Document to which it is a party has
         been duly authorized by FFC by all necessary corporate action;




                                      18
<PAGE>   22





                  (iv) Due Execution and Delivery. This Agreement has been duly
         executed and delivered on behalf of FFC;

                  (v) Valid Assignment; Binding Obligations. This Agreement
         constitute a valid sale, assignment, transfer and conveyance to the
         Owner Trustee, on behalf of the Trust, of all right, title, and
         interest of FFC in, to and under the Conveyed Assets and the Conveyed
         Assets will be held by the Trust free and clear of any Lien of any
         Person claiming, through or under FFC, except the lien on the Conveyed
         Assets in favor of the Indenture Trustee granted pursuant to the
         Indenture; and this Agreement, when duly executed and delivered, will
         constitute the legal, valid, and binding obligation of FFC enforceable
         against FFC in accordance with their respective terms subject as to
         enforceability to applicable bankruptcy, reorganization, insolvency,
         moratorium or other laws affecting creditors' rights generally and to
         general principles of equity (regardless of whether enforcement is
         sought in a proceeding in equity or at law);

                  (vi) No Violation. The consummation of the transactions
         contemplated by and the fulfillment of the terms of this Agreement
         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 articles of incorporation or bylaws of FFC, or
         any material term of any indenture, agreement, mortgage, deed of
         trust, or other instrument to which FFC is a party or by which it is
         bound, or result in the creation or imposition of any Lien upon any of
         its properties pursuant to the terms of any such indenture, agreement,
         mortgage, deed of trust, or other instrument, other than this
         Agreement, or violate any law or any order, injunction, writ, rule, or
         regulation applicable to FFC of any court or of any federal or state
         regulatory body, administrative agency, or other Governmental
         Authority having jurisdiction over FFC or any of its properties which
         would have a material adverse effect on the Conveyed Assets;

                  (vii) Valid Business Reasons. FFC has valid business reasons
         for selling its interest in the Conveyed Assets rather than obtaining
         a loan with the Conveyed Assets as collateral;

                  (viii) Absence of Event. No event has occurred which
         adversely affects FFC's operations or its ability to perform its
         obligations under the Transaction Documents to which it is a party;

                  (ix) Insolvency. FFC is not insolvent and will not be
         rendered insolvent by the transactions contemplated by this Agreement
         and has an adequate amount of capital to conduct its business in the
         ordinary course and to carry out its obligations hereunder and under
         each other Transaction Document to which it is a party;

                  (x) No Proceedings. There are no proceedings or
         investigations pending, or, to the knowledge of FFC, threatened,
         before any court, regulatory body, administrative agency, or other
         tribunal or Governmental Authority





                                      19
<PAGE>   23






         (A) asserting the invalidity of this Agreement, (B) seeking to prevent
         the consummation of any of the transactions contemplated by this
         Agreement, or (C) seeking any determination or ruling that might (in
         the reasonable judgment of FFC) materially and adversely affect the
         performance by FFC of its obligations under, or the validity or
         enforceability of, this Agreement;

                  (xi) No Consent Required. FFC 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 Transaction Documents to
         which it is a party except for such having been obtained, effected or
         made;

                  (xii) Fair Consideration. The consideration received by FFC
         as set forth herein is fair consideration having value reasonably
         equivalent to or in excess of the value of the Conveyed Assets
         conveyed by it and the performance of FFC's obligations hereunder; and

                  (xiii) Accounting Treatment. FFC will treat the assignment of
         the Conveyed Assets to the Trust pursuant to Article II as a sale of
         the Conveyed Assets to the Trust for financial reporting and
         accounting purposes.

                  SECTION 3.02 Removal of Non-Conforming Contracts by
SierraCities.com. Upon the occurrence of a Warranty Event with respect to a
Contract, SierraCities.com will repurchase such Contract by depositing (or
causing to be deposited) to the Collection Account the Repurchase Amount with
respect to such Contract in accordance with the terms of Section 4.01 of the
Indenture or replace such Contract with a Substitute Contract pursuant to
Section 3.03 hereof and Section 4.02 of the Indenture. Upon the repurchase of a
Contract pursuant to the terms of the Source Agreement, SierraCities.com will
cause the Source Repurchase Price with respect to such Contract to be deposited
to the Collection Account in accordance with the terms of Section 4.03 of the
Indenture.

                  SECTION 3.03 Substitution of Contracts and Equipment by
SierraCities.com.

                  (a) With respect to a substitution of Contracts in accordance
with the provisions of this Section 3.03 and Section 4.02 of the Indenture,
each proposed Substitute Contract must be an Eligible Contract, and be eligible
to be substituted by SierraCities.com pursuant to Section 4.02 of the
Indenture.

                  (b) Any substitution of a Contract pursuant to this Agreement
will be effected by (i) delivery to the Indenture Trustee, as custodian of the
original executed counterpart of each such Substitute Contract, (ii) filing of
any UCC financing statements in accordance with the Filing Requirements
necessary to perfect the interest of the Trust and the Indenture Trustee in the
Substitute Contracts, (iii) delivery to the Indenture Trustee of a List of
Substitute Contracts reflecting such substitution and (iv) delivery to the
Indenture Trustee of a release request and the originally executed trust
receipt relating thereto.


                                      20
<PAGE>   24


                  (c) The parties hereto agree that in addition to the
obligation of SierraCities.com to repurchase or to substitute any Contract and
the related Equipment as to which a breach of the representations set forth in
the Servicing Agreement has occurred and is continuing, SierraCities.com will
enforce its remedies against the Source under the Source Agreement. In
consideration of the purchase of the Equipment and the Contract,
SierraCities.com shall remit the Repurchase Amount to the Servicer for
allocation of such Repurchase Amount pursuant to the terms of the Indenture.
Except as may be set forth in the Transaction Documents, it is understood and
agreed that the obligations of SierraCities.com with respect to a breach as
provided in this Section 3.03 and Section 4.01 of the Indenture constitute the
sole remedy against SierraCities.com for such breach available to the Trust,
the Indenture Trustee and Noteholders. The representations and warranties set
forth in Sections 3.01 and 3.02 hereof shall survive the assignment of the
Conveyed Assets to the Owner Trustee, on behalf of the Trust, and the pledge of
the Pledged Property to the Indenture Trustee.

                  (d) Except as provided in this Article III, upon each
Seller's transfer of its interest in the Conveyed Assets to the Trust, the
Sellers will not bear any further risk with respect to the ultimate
collectibility of the Contracts or the adequacy of the collateral securing the
Contracts or the value or sufficiency of the Equipment.


                                  ARTICLE IV

                                   COVENANTS

                  SECTION 4.01 Seller and SierraCities.com Covenants.
SierraCities.com and the Sellers, as applicable, hereby covenant and agree with
the Trust, the Noteholders and the Indenture Trustee with respect to itself as
follows:

                  (a) Preservation of Security Interest. The Sellers 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 the Filing Requirements and by law fully to preserve, maintain, and
protect the respective right, title and interest of the Owner Trustee, on
behalf of the Trust, and the Indenture Trustee in the Conveyed Assets.
SierraCities.com shall deliver (or cause to be delivered) to the Trust
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.

                  (b) Obligations with Respect to Conveyed Assets. Each of the
Sellers and SierraCities.com will duly fulfill all obligations on its part to
be fulfilled under or in connection with each Contract and the Source
Agreement, and will do nothing to impair the rights of the Owner Trustee, on
behalf of the Trust or the Indenture Trustee in any of the Conveyed Assets.






                                      21
<PAGE>   25


                  (c) Compliance with Law. SierraCities.com will comply, in all
material respects, with all acts, rules, requisitions, orders, decrees and
directions of any Governmental Authority applicable to its business and to the
Conveyed Assets or any part thereof; provided, however, that SierraCities.com
may contest any act, regulation, order, decree or direction in any reasonable
manner which shall not materially and adversely affect the rights of the Trust,
the Indenture Trustee or the Owner Trustee in the Conveyed Assets.

                  (d) Conveyance of Conveyed Assets; Security Interests. Except
for the transfers and conveyances hereunder or under any other Transaction
Document, the Sellers will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien, on any
Conveyed Asset, or any interest therein and SierraCities.com shall defend the
right, title, and interest of the Owner Trustee, on behalf of the Trust, the
Indenture Trustee and their respective successors and assigns in, to, and under
the Conveyed Assets, against all claims of third parties claiming, through or
under the Sellers; provided, however, that nothing in this Section 4.01(d)
shall prevent or be deemed to prohibit SierraCities.com from suffering to exist
upon any of the Conveyed Assets any Liens for municipal or other local taxes if
such taxes shall not at the time be due and payable or if SierraCities.com
shall concurrently be contesting the validity thereof in good faith by
appropriate proceedings and shall have set aside on its books adequate reserves
with respect thereto and such contests pose no risk of forfeiture.

                  (e) Notification of Breach. The Sellers will advise the Trust
and the Indenture Trustee promptly, in reasonable detail, upon discovery of the
occurrence of any breach by SierraCities.com of any of its representations,
warranties and covenants contained herein.

                  (f) Further Assurances.

                  (i) SierraCities.com will make, execute or endorse,
         acknowledge and file or deliver to the Trust and the Indenture Trustee
         from time to time such schedules, confirmatory assignments,
         conveyances, transfer endorsements, powers of attorney, certificates,
         reports and other assurances or instruments and take such further
         steps relating to the Conveyed Assets and other rights covered by this
         Agreement, as the Trust or the Indenture Trustee may request and
         reasonably require, provided that no UCC filing will be required with
         respect to the Equipment, except as required by the Filing
         Requirements.

                  (ii) The Sellers hereby agree to do all acts, transactions,
         and things and to execute and deliver all agreements, documents,
         instruments, and papers by and on behalf of the Sellers as the Trust
         or its counsel may reasonably request in order to consummate the
         transfer of the Conveyed Assets to the Trust and the subsequent pledge
         thereof to the Indenture Trustee for the benefit of the Noteholders,
         and the rating, issuance and sale of the Notes.





                                      22
<PAGE>   26






                  (g) Indemnification. SierraCities.com agrees to indemnify,
defend and hold the Trust, the Owner Trustee and the Indenture Trustee harmless
from and against any and all loss, liability, damage, judgment, claim,
deficiency, or expense (including interest, penalties, reasonable attorneys'
fees and amounts paid in settlement) to which any of them may become subject
insofar as such loss, liability, damage, judgment, claim, deficiency, or
expense arises out of or is based upon a breach by SierraCities.com of its
representations and warranties contained in Section 3.01 or its covenants
contained in Section 4.01, or any information certified or set forth in this
Agreement or in any schedule delivered by SierraCities.com hereunder, being
untrue in any material respect at any time. The obligations of SierraCities.com
under this Section 4.01(g) shall be considered to have been relied upon by the
Trust, the Owner Trustee and the Indenture Trustee and shall survive the
execution, delivery, and performance of this Agreement regardless of any
investigation made by the Trust, the Owner Trustee, the Indenture Trustee or on
their respective behalf. THE INDEMNIFICATION OBLIGATIONS OF SIERRACITIES.COM
PURSUANT TO THE PRECEDING PROVISIONS OF THIS PARAGRAPH SHALL APPLY REGARDLESS
OF ANY NEGLIGENCE OR OTHER FAULT ON THE PART OF THE TRUST, THE OWNER TRUSTEE,
THE INDENTURE TRUSTEE OR ANY OF THEIR RESPECTIVE OFFICERS, EMPLOYEES OR AGENTS.

                  (h) Notice of Liens. SierraCities.com shall notify the Trust
and the Indenture Trustee, promptly after becoming aware of any Lien on any
Conveyed Asset.

                  (i) Taxes. SierraCities.com shall promptly pay all applicable
taxes required to be paid in connection with the assignment of the Conveyed
Assets and acknowledges that the Trust shall have no responsibility with
respect thereto. SierraCities.com shall promptly pay and discharge, or cause
the payment and discharge of, all federal income taxes (and all other material
taxes) when due and payable by each such Seller, except (i) such as may be paid
thereafter without penalty or (ii) such as may be contested in good faith by
appropriate proceedings and for which an adequate reserve has been established
and is maintained in accordance with GAAP. SierraCities.com shall promptly
notify the Trust, the Indenture Trustee and the Noteholders of any material
challenge, contest or proceeding pending by or against SierraCities.com before
any taxing authority. SierraCities.com and the Depositor shall have entered
into a Tax Sharing Agreement, pursuant to which (i) SierraCities.com shall
assume the sole responsibility for making any required payments of taxes to the
Internal Revenue Service and shall agree to indemnify and hold the Depositor
harmless against any claims of liability for such taxes and (ii) the Depositor
shall be required to make certain payments to SierraCities.com in respect of
its separate federal income tax liability. So long as any Notes remain
outstanding, SierraCities.com and the Depositor shall not terminate or amend
such Tax Sharing Agreement without the prior written consent of the Indenture
Trustee, except that SierraCities.com shall not require the Depositor to make
any payments to SierraCities.com, pursuant to the Tax Sharing Agreement, which
exceed the aggregate federal income tax liability of the Depositor, on a
separate return basis for all taxable years covered by the Tax Sharing
Agreement, that would arise if all allowable losses arising at any time during
such period were applied to reduce the Depositor's aggregate separate taxable
income for all such years.




                                      23
<PAGE>   27






                  (j) Taxes and Other Liabilities. SierraCities.com shall
promptly pay and discharge all material taxes, assessments, fees, claims and
other governmental charges when due and payable by SierraCities.com, the First
Sierra Group, or any member of the First Sierra Group, except (i) such as may
be paid thereafter without penalty or (ii) such as may be contested in good
faith by appropriate proceedings and for which an adequate reserve has been
established and is maintained in accordance with GAAP. SierraCities.com shall
promptly notify the Trust and the Indenture Trustee of any material challenge,
contest or proceeding pending by or against SierraCities.com or the First
Sierra Group before any taxing authority.

                  (k) Non-Consolidation. SierraCities.com shall be operated in
such a manner that Receivables III and/or the Holding Trust, the holder of the
trust certificate to be issued by the Trust, would not be substantively
consolidated with SierraCities.com, such that the separate corporate existence
of SierraCities.com and Receivables III, on the one hand, and Holding Trust
and/or the Trust, on the other hand, would be ignored in the event of a
bankruptcy of SierraCities.com.

                  (l) No Agency. SierraCities.com will not act as an agent of
Receivables III, Holding Trust or the Trust in any capacity except to the
limited extent provided in the Transaction Documents, but instead will present
itself to the public as a corporation separate from Receivables III and/or
Holding Trust or the Trust;

                  (m) Financial Statements. The financial statements and books
and records of SierraCities.com reflect the separate existence of Receivables
III, Holding Trust and the Trust.

                  SECTION 4.02 Receivables III Covenants. Receivables III
hereby covenants and agrees with the Trust, the Noteholders and the Indenture
Trustee as follows:

                  (a) Obligor's Quiet Enjoyment. Receivables III hereby
acknowledges and agrees that its rights in the Equipment are expressly subject
to the rights of the related Obligors in such Equipment pursuant to the
applicable Contracts. Receivables III covenants and agrees that, so long as an
Obligor shall not be in default of any of the provisions of the applicable
Contract, neither Receivables III nor any assignee of Receivables III will
disturb the Obligor's quiet and peaceful possession of the related Equipment
and the Obligor's use thereof for its intended purpose.

                  (b) Operation of Receivables III. Receivables III shall be
operated in such a manner that it would not be substantively consolidated in
the trust estate of another Person (that is, such that the separate legal
existence of Receivables III and such Person would be disregarded) and in that
regard, Receivables III shall:

                  (i) be a limited purpose corporation whose primary activities
         are restricted in its certificate of incorporation;

                  (ii) not engage in any action that would cause the separate
         legal identity of Receivables III not to be respected, including,
         without limitation, (a) holding itself out as being liable for the
         debts of any other party or (b) acting other than through its duly
         authorized agents;


                                      24
<PAGE>   28


                  (iii) not be involved in the day-to-day management of
         SierraCities.com and/or Holding Trust;

                  (iv) not incur, assume or guarantee any indebtedness except
         for such indebtedness as may be incurred by Receivables III in
         connection with the issuance of the Notes;

                  (v) not commingle its funds, assets and records relating
         thereto with those of SierraCities.com or any other entity;

                  (vi) entitle the separate creditors of Receivables III to be
         satisfied out of Receivables III's assets prior to any value in
         Receivables III becoming available to Receivable III's equityholders,
         or SierraCities.com's creditors or Holding Trust's creditors;

                  (vii) act solely in its own name in the conduct of its
         business, including business correspondence and other communications,
         and shall conduct its business so as not to mislead others as to the
         identity of the entity with which they are concerned;

                  (viii) maintain company records and books of account and
         shall not commingle its company records and books of account with the
         records and books of account of any entity;

                  (ix) not engage in any business or activity other than in
         connection with or relating to its Certificate of Incorporation and/or
         Bylaws;

                  (x) not form, or cause to be formed, any subsidiaries;

                  (xi) comply with all restrictions and covenants in, and shall
         not fail to comply with the corporate formalities established in, its
         Certificate of Incorporation and/or Bylaws;

                  (xii) maintain its assets separately from the assets of
         SierraCities.com, Holding Trust and First Sierra Healthcare Equipment
         Contract Trust 2000-1 (including, in each case, through the
         maintenance of a separate bank account);

                  (xiii) manage its day-to-day business without the involvement
         of SierraCities.com and/or Holding Trust;

                  (xiv) maintain a separate office from that of
         SierraCities.com and/or Holding Trust;

                  (xv) not act as an agent of SierraCities.com or Holding
         Trust, except to the limited extent provided in the Transaction
         Documents; and



                                      25
<PAGE>   29





                  (xvi) maintain at all times two independent directors as
         required by its Certificate of Incorporation and/or Bylaws.

                  (c) Merger or Consolidation.

                  (i) Receivables III will keep in full effect its existence,
         rights and franchises as a corporation and will obtain and preserve
         its qualification to do business as a foreign corporation in each
         jurisdiction which permits such qualification and in which it is
         necessary to protect the validity and enforceability of this
         Agreement, any other Transaction Document to which it is a party or
         any of the Contracts and to perform its duties under this Agreement
         and each other Transaction Document to which it is a party.

                  (ii) Any partnership or corporation (i) into which
         Receivables III may be merged or consolidated, (ii) resulting from any
         merger, conversion, or consolidation to which Receivables III shall be
         party, or (iii) succeeding to Receivables III's business substantially
         as a whole, shall execute an agreement of assumption to perform all of
         Receivables III's obligations under this Agreement and any other
         Transaction Document to which Receivables III is a party, and upon
         such execution will be Receivables III's successor under this
         Agreement and any other such Transaction Document, without the
         execution or filing of any document or any further act on the part of
         any of the parties to this Agreement and any other such Transaction
         Document, anything in this Agreement and any other Transaction
         Document to the contrary notwithstanding; provided, however, that (a)
         immediately after giving effect to such transaction, no covenant made
         pursuant to Section 4.02(c) shall have been breached, (b) Receivables
         III shall have delivered to the Trust, the Rating Agencies, the Owner
         Trustee and the Indenture Trustee an Officer's Certificate and an
         opinion of counsel, satisfactory to each of them, each stating that
         such consolidation, conversion, merger, or succession and such
         agreement of assumption comply with this Section 4.02(c) and that all
         conditions precedent, if any, provided for in this Agreement relating
         to such transaction have been complied with, (c) Receivables III shall
         have delivered to the Trust, the Owner Trustee, the Rating Agencies
         and the Indenture Trustee an opinion of counsel, satisfactory to each
         of them, either (1) stating that, in the opinion of such counsel, all
         financing statements and continuation statements and amendments
         thereto have been executed and filed that are necessary fully to
         preserve and protect the interest of the Owner Trustee, on behalf of
         the Trust, in the Contracts and reciting the details of such filings,
         or (2) stating that, in the opinion of such counsel, no such action
         shall be necessary to preserve and protect such interest and (d) such
         partnership or corporation shall have organizational documents with
         similar restrictions as those of Receivables III.

                  (d) Non-Consolidation. Receivables III shall be operated in
such a manner that Holding Trust or the Trust would not be substantively
consolidated with Receivables III, such that the separate corporate existence
of Receivables III, on the one hand, and Holding Trust or the Trust, on the
other hand, would be ignored in the event of a bankruptcy of Receivables III.




                                      26
<PAGE>   30





                  (e) No Agency. Receivables III will not act as an agent of
Holding Trust or the Trust in any capacity except to the limited extent
provided in the Transaction Documents, but instead will present itself to the
public as a corporation separate from Holding Trust or the Trust.

                  SECTION 4.03 Transfer of Conveyed Assets. Each Seller,
Receivables III and each Investor understands that the Trust intends to pledge
the Pledged Property to the Indenture Trustee on behalf of the Noteholders,
pursuant to the Indenture. Each Seller, Receivables III and each Investor
agrees that such assignee of the Trust may exercise the rights of the Trust
hereunder and shall be entitled to all of the benefits of the Trust hereunder
to the extent provided for in such assignment.


                                   ARTICLE V

                              CONDITIONS PRECEDENT


                  SECTION 5.01 Conditions to Trust Obligations. The obligations
of the Trust to accept the transfer of the Initial Conveyed Assets on the
Closing Date shall be subject to the satisfaction of the following conditions:

                  (a) All representations and warranties of SierraCities.com,
each Seller, Receivables III and each Investor contained in this Agreement
shall be true and correct on the Closing Date with the same effect as though
such representations and warranties had been made on such date;

                  (b) All information concerning the Initial Conveyed Assets
provided to the Trust shall be true and correct as of the Initial Cut-Off Date
in all material respects;

                  (c) Each Seller shall have delivered to the Trust a List of
Initial Contracts with respect to its respective Initial Contracts as of the
Initial Cut-Off Date and shall have substantially performed all other
obligations required to be performed by the provisions of this Agreement;

                  (d) SierraCities.com and each Seller shall have recorded and
filed, at its expense, any financing statement with respect to the Initial
Contracts and the other Initial Conveyed Assets to be transferred from time to
time to the Owner Trustee, on behalf of the Trust, from each Seller pursuant to
this Agreement meeting the requirements of applicable state law in such manner
in such jurisdictions as are necessary to perfect the transfer of the Initial
Contracts and the other Initial Conveyed Assets from each such Seller to the
Owner Trustee, on behalf of the Trust, and shall deliver a file-stamped copy of
such financing statements or other evidence of such filings to the Trust;

                  (e) All corporate and legal proceedings and all instruments
in connection with the transactions contemplated by this Agreement shall be
satisfactory in form and substance to the Trust, and the Trust shall have
received from each Seller copies of all documents (including, without
limitation, records of corporate proceedings) relevant to the transactions
herein contemplated as the Trust may reasonably have requested; and




                                      27
<PAGE>   31



                  (f) All respective conditions necessary to vest in each
Seller good title, free and clear of all Liens (other than Liens permitted in
the proviso contained in Section 4.01(d) hereof), to its respective Initial
Contracts and interests in Original Equipment shall have been satisfied.


                                  ARTICLE VI

                                  TERMINATION

                  SECTION 6.01 Termination. The respective obligations and
responsibilities of each Seller, SierraCities.com and the Trust created by this
Agreement shall terminate upon the latest of (i) the maturity or other
liquidation of the last Contract and the disposition of any amounts received
upon disposition of any Defaulted Contracts and any Equipment leased
thereunder; and (ii) the termination of the Indenture in accordance with the
terms thereof; provided, however, that the indemnifications contained in
Section 4.01(g) herein shall survive the termination of this Agreement and the
other Transaction Documents.

                  SECTION 6.02 Effect of Termination.

                    No termination or rejection or failure to assume the
executory obligations of this Agreement in the bankruptcy of any Seller or the
Trust shall be deemed to impair or affect the obligations pertaining to any
executed sale or executed obligations, including, without limitation,
pre-termination breaches of representations and warranties by any Seller.
Without limiting the foregoing, prior to termination, the failure of
SierraCities.com to pay a Repurchase Amount shall render such transfer or
obligation executory, nor shall the continued duties of the parties pursuant to
Article IV or Section 7.06 of this Agreement render an executed sale executory.


                                  ARTICLE VII

                            MISCELLANEOUS PROVISIONS

                  SECTION 7.01 Amendment. This Agreement may be amended from
time to time by the parties hereto only with (i) the prior written consent of
the Servicer and the Indenture Trustee and (ii) prior written notice to the
Rating Agencies by the Servicer and, to the extent such amendment materially
affects the interests of the Owner Trustee, with the prior written consent of
the Owner Trustee.

                  SECTION 7.02 GOVERNING LAW. THIS AGREEMENT AND ANY AMENDMENT
HEREOF PURSUANT TO SECTION 7.01 SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO




                                      28
<PAGE>   32




AGREEMENTS MADE AND TO BE PERFORMED THEREIN AND THE OBLIGATIONS, RIGHTS, AND
REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.

                  SECTION 7.03 Notices. All demands, notices, and
communications under this Agreement shall be in writing and shall be deemed to
have been duly given, made and received (i) when delivered against receipt of
registered or certified mail or upon actual receipt of registered or certified
mail, postage prepaid, return receipt requested; (ii) when delivered by courier
with appropriate evidence of receipt; or (iii) upon transmission via facsimile
or telex with appropriate evidence of receipt (a) in the case of
SierraCities.com, at the following address: 600 Travis Street, Suite 7050,
Houston, Texas 77002, Fax No.: (713) 221-1818, (b) in the case of Receivables
III, at the following address: 600 Travis Street, Suite 6950, Houston, Texas
77002, Fax No.: (713) 221-1818, (c) in the case of First Union, One First Union
Center, 301 South College Street, Charlotte, North Carolina 28288 0610, (d) in
the case of the Indenture Trustee, Four Albany Street, New York, New York
10006, Attention: Corporate Trust and Agency Group -- Structure & Finance, Fax
No.: (212) 250-6439, (e) in the case of VFCC, One First Union Center, 301 South
College Street, Charlotte, North Carolina 28288-0610, (f) in the case of FFC,
c/o Nesbitt Burns Securities, Inc., 11 West Monroe, Floor 20 East, Chicago,
Illinois 60603 (g) in the case of the Trust, c/o Christiana Bank and Trust
Company, 3801 Kennett Pike, Greenville, Delaware 19807, Attention: Corporate
Trust Administration, Fax No.: (302) 421-5815, and (h) in the case of the
Indenture Trustee at its address set forth in Section 11.06 of the Indenture.
Either party may alter the address to which communications are to be sent by
giving notice of such change of address in conformity with the provisions of
this Section 7.03 for giving notice and by otherwise complying with any
applicable terms of this Agreement, including, but not limited to, subsections
4.01(b) and (c).

                  SECTION 7.04 Severability of Provisions. If any one or more
of the covenants, agreements, provisions, or terms of this Agreement shall be
for any reason whatsoever held invalid, then such covenants, agreements,
provisions, or terms shall be deemed severable from the remaining covenants,
agreements, provisions, or terms of this Agreement and shall in no way affect
the validity or enforceability of the other provisions of this Agreement.

                  SECTION 7.05 Assignment. Notwithstanding anything to the
contrary contained in this Agreement, this Agreement may not be assigned by the
Sellers or SierraCities.com, without the prior written consent of the Trust and
the Indenture Trustee (acting upon the written direction of the Majority
Holders) and, except as provided in Section 4.03, this Agreement may not be
assigned by the Trust without the prior written consent of SierraCities.com,
the Sellers and the Indenture Trustee. Whether or not expressly stated, all
representations, warranties, covenants and agreements of SierraCities.com,
Receivables III, the Investors and the Trust in this Agreement, or in any
document delivered by any of them in connection with this Agreement, shall be
for the benefit of, and shall be exercisable by, the Owner Trustee and the
Indenture Trustee for the benefit of the Noteholders.





                                      29
<PAGE>   33



                  SECTION 7.06 Further Assurances. Each of the parties hereto
agrees to do such further acts and things and to execute and deliver to the
Indenture Trustee such additional assignments, agreements, powers and
instruments as are required by the Indenture Trustee to carry into effect the
purposes of this Agreement or to better assure and confirm unto the Indenture
Trustee its rights, powers and remedies hereunder.

                  SECTION 7.07 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Trust or each Seller,
any right, remedy, power or privilege hereunder, shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power
or privilege hereunder preclude any other or further exercise hereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privilege provided by law.

                  SECTION 7.08 Counterparts. This Agreement may be executed in
two or more counterparts (and by different parties on separate counterparts),
each of which shall be an original, but all of which shall constitute one and
the same instrument.

                  SECTION 7.09 Binding Effect: Third-Party Beneficiaries. This
Agreement will inure to the benefit of and be binding upon the parties hereto.
The Indenture Trustee, the Owner Trustee and the Noteholders are intended third
party beneficiaries of this Agreement.

                  SECTION 7.10 Merger and Integration. Except as specifically
stated otherwise herein, this Agreement sets forth the entire understanding of
the parties relating to the subject matter hereof, and all prior
understandings, written or oral, are superseded by this Agreement. This
Agreement may not be modified, amended, waived or supplemented except as
provided herein.

                  SECTION 7.11 Headings. The headings herein are for purposes
of reference only and shall not otherwise affect the meaning or interpretation
of any provision hereof.

                  SECTION 7.12 Schedules and Exhibits. The schedules and
exhibits attached hereto and referred to herein shall constitute a part of this
Agreement and are incorporated into this Agreement for all purposes.

                  SECTION 7.13 No Bankruptcy Petition Against Receivables III
or the Trust. Each of the parties hereto agrees that, prior to the date that is
one year and one day after the payment in full of the latest maturing Notes
issued by the Trust, it will not institute against Receivables III or the
Trust, or join any other Person in instituting against Receivables III or the
Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other proceedings under the laws of the United States or any
state of the United States. This Section 7.13 shall survive the termination of
this Agreement.



                            [Signature Pages Follow]




                                       30
<PAGE>   34



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


                           SIERRACITIES.COM INC.,
                           in its individual capacity



                           By:  /s/ E. Roger Gebhart
                               -----------------------------------------------
                                    E. Roger Gebhart
                                    Executive Vice President/ Treasurer


                           FIRST SIERRA RECEIVABLES III, INC., in its
                               individual capacity and as Junior
                               Certificateholder of the First Sierra Equipment
                               Lease Trust 1998-E



                           By:  /s/ E. Roger Gebhart
                               -----------------------------------------------
                                    E. Roger Gebhart
                                    Vice President

                           FIRST UNION NATIONAL BANK,
                               as Certificateholder of the First Sierra
                               Equipment Lease Trust 1997-A



                           By:  /s/ Bill A. Shirley
                               ------------------------------------------------
                                    Bill A. Shirley
                                    Senior Vice President


                           VARIABLE FUNDING CAPITAL CORPORATION, as
                               Certificateholder of the First Sierra Equipment
                               Lease Trust 1997-B



                           By:  /s/ Darrell R. Baber
                               ------------------------------------------------
                                    Darrell R. Baber
                                    Director



<PAGE>   35




                           FAIRWAY FINANCE CORPORATION, as Senior
                               Certificateholder of the First Sierra Equipment
                               Lease Trust 1998-E



                           By:  /s/ Dwight Jenkins
                               ------------------------------------------------
                                    Dwight Jenkins
                                    Vice President

                           FIRST SIERRA EQUIPMENT CONTRACT
                               TRUST 1999-H, A DELAWARE BUSINESS
                               TRUST ACTING THROUGH CHRISTIANA
                               BANK & TRUST COMPANY, NOT IN ITS
                               INDIVIDUAL CAPACITY BUT SOLELY AS
                               OWNER TRUSTEE, as Issuer


                           By:  /s/ Louis W. Geibel
                               ------------------------------------------------
                                    Louis W. Geibel
                                    Vice President


                           BANKERS TRUST COMPANY, not in its
                               individual capacity, but solely as Trustee of
                               each of the First Sierra Equipment Lease Trust
                               1997-A, the First Sierra Equipment Lease Trust
                               1997-B and the First Sierra Equipment Lease
                               Trust 1998-E


                           By:  /s/ Patricia Russo
                               ------------------------------------------------
                                    Patricia Russo
                                    Vice President
<PAGE>   36



                           FIRST SIERRA HEALTHCARE EQUIPMENT
                               TRUST 2000-1, A COMMON LAW TRUST
                               ACTING THROUGH CHRISTIANA BANK
                               AND TRUST COMPANY NOT IN ITS
                               INDIVIDUAL CAPACITY BUT SOLELY AS
                               OWNER TRUSTEE, as Issuer



                           By:  /s/ Louis W. Geibel
                               ------------------------------------------------
                                    Louis W. Geibel
                                    Vice President


Acknowledged and Agreed:

MERRILL LYNCH
   MORTGAGE CAPITAL, INC.

By:  /s/ Jeffrey Cohen
    ------------------------------
         Jeffrey Cohen
         Authorized Signatory


               [Signature Page To Receivables Transfer Agreement]



<PAGE>   37



                                   EXHIBIT A

                     FORM OF SUBSEQUENT TRANSFER AGREEMENT

                  This Subsequent Transfer Agreement (this "Agreement"), dated
as of _______, 1999, is entered into among SIERRACITIES.COM INC., formerly
First Sierra Financial, Inc. ("SierraCities.Com"), a Delaware corporation
located at 600 Travis Street, Suite 7050, Houston, Texas 77002, in its
individual capacity, FIRST SIERRA RECEIVABLES III, INC. ("Receivables III"), a
Delaware corporation located at 600 Travis Street, Suite 7050, Houston, Texas
77002, FIRST UNION NATIONAL BANK (formerly First Union National Bank of North
Carolina) ("First Union") a Delaware corporation located at One First Union
Center, 301 South College Street, Charlotte, North Carolina 28288-0610,
VARIABLE FUNDING CAPITAL CORPORATION ("VFCC") a Delaware corporation located at
One First Union Center, 301 South College Street, Charlotte, North Carolina
28288-0610, FAIRWAY FINANCE CORPORATION ("FFC"), a Delaware corporation located
at 11 West Monroe, Floor 20 East, Chicago, Illinois 60603, BANKERS TRUST
COMPANY (the "Indenture Trustee") a New York banking corporation located at
Four Albany Street, New York, New York 10006, not in its individual capacity
but as Trustee of the First Sierra Equipment Lease Trust 1997-A, the First
Sierra Equipment Lease Trust 1997-B and the First Sierra Equipment Lease Trust
1998-E (each as defined herein), FIRST SIERRA EQUIPMENT CONTRACT TRUST 1999-H,
a Delaware business trust (the "Series 1999-H Trust") and FIRST SIERRA
HEALTHCARE EQUIPMENT CONTRACT TRUST 2000-1 (the "Issuer" or the "Trust"), a
Delaware common law trust acting through Christiana Bank and Trust Company, not
in its individual capacity but solely as Owner Trustee, located at Greenville
Center, 3801 Kennett Pike, Greenville, Delaware 19807.

                  The First Sierra Equipment Lease Trust 1997-A, the First
Sierra Equipment Lease Trust 1997-B, the First Sierra Equipment Lease Trust
1998-E and the First Sierra Equipment Contract Trust 1999-H are collectively
referred to herein as the "Warehouse Trusts." Receivables III and the Warehouse
Trusts are collectively referred to herein as the "Sellers." First Union, VFCC
and FFC are collectively referred to herein as the "Investors."

                  Pursuant to this Agreement and the Receivables Transfer
Agreement, dated as of March 1, 2000 (the "Receivables Transfer Agreement"),
among SierraCities.com, Receivables III, First Union, VFCC, the Series 1999-H
Trust, FFC, the Indenture Trustee and the Trust, the parties hereto agree to
the sale by the Sellers and the purchase by the Trust of the Subsequent
Conveyed Assets listed on the attached List of Subsequent Contracts, and the
pledge of the Subsequent Conveyed Assets by the Trust to the Indenture Trustee.

                  Capitalized terms used and not defined herein have their
respective meanings as set forth in the definitions contained in Annex A to the
Indenture, dated as of March 1, 2000 (the "Indenture"), among the Trust,
SierraCities.com, as Servicer, and the Indenture Trustee, which definitions are
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.




                                      A-1



<PAGE>   38





                  Section 1. Conveyance of Subsequent Conveyed Assets.

                  (a) Each of the Sellers does hereby sell, transfer, assign,
set over and convey to the Trust, without recourse, (i) all of its respective
right, title and interest in and to the Subsequent Equipment (except for any
licensed products that may accompany the Equipment) and any new unit or units
of Equipment substituted for any existing unit or units of Equipment, including
all income and proceeds upon any sale or other disposition of the Subsequent
Equipment, (ii) all of its respective right, title and interest in and to, but
not its obligations under, the Subsequent Contracts and all amendments,
additions and supplements including schedules, summary schedules and
subschedules made or hereafter made with respect thereto, (iii) all monies due
or to become due in payment of the Subsequent Contracts on or after the related
Subsequent Cut-Off Date, including without limitation, all Scheduled Payments
thereunder (whether or not due), any Prepayments, any payments in respect of a
casualty or early termination and any Liquidation Proceeds received with
respect thereto, but excluding any Excluded Amounts, (iv) the Contract Files,
(v) all Insurance Proceeds relating to the foregoing and such Seller's rights
and interests in the Insurance Policies relating to the foregoing, (vi) all
Source Agreements and Source Agreement Rights to the extent they relate to any
Subsequent Contract and any Subsequent Equipment covered by the Subsequent
Contracts and (vii) all proceeds and income of the foregoing or relating
thereto.

                  (b) Intention of the Parties; Grant of Security Interest. It
is the intention of the parties hereto that each transfer of the Conveyed
Assets to be made pursuant to the terms hereof shall constitute an absolute
assignment and a sale of such Contract by each Seller to the Trust and not a
loan. In the event, however, that a court of competent jurisdiction were to
hold that any such transfer constitutes a loan and not a sale, it is the
intention of the parties hereto that this Agreement is deemed to be a security
agreement and that each Seller shall be deemed to have granted to the Trust as
of the date hereof a first priority perfected security interest in all of such
Seller's right, title and interest in, to and under each Conveyed Asset, and
all income and proceeds thereof. Such grant is made to secure the payment of
all amounts payable under this Agreement.

                  (c) The expenses and costs relating to the delivery of the
Subsequent Conveyed Assets, this Agreement and such other items required under
the Receivables Transfer Agreement shall be borne by SierraCities.com.

                  (d) Annexed hereto is a List of Subsequent Contracts listing
the Contracts that constitute the Subsequent Contracts to be conveyed pursuant
to this Agreement on the date hereof.

                  Section 2. Representations and Warranties; Conditions
Precedent.

                  (a) Each of the Sellers hereby affirm the representations and
warranties set forth in Section 3.01 of the Receivables Transfer Agreement that
relate to such Seller as of the date hereof.



                                      A-2



<PAGE>   39





                  (b) SierraCities.com hereby affirms that each Subsequent
Contract satisfies the representations and warranties set forth in Section 2.02
of the Servicing Agreement relating to the Contracts.

                  (c) Each of the Sellers is solvent, is able to pay its debts
as they become due and has capital sufficient to carry on its business and its
obligations hereunder; each such Seller will not be rendered insolvent by the
execution and delivery of this Agreement or by the performance of its
respective obligations hereunder nor is it aware of any pending insolvency; no
petition of bankruptcy (or similar insolvency proceeding) has been filed by or
against any of the Sellers prior to the date hereof;

                  (d) All terms and conditions of the Receivables Transfer
Agreement are hereby ratified and confirmed; provided, however, that in the
event of any conflict the provisions of this Agreement shall control over the
conflicting provisions of the Receivables Transfer Agreement.

                  (e) Each of the Sellers and SierraCities.com hereby confirm
that each of the conditions precedent set forth in Sections 2.02 of the
Receivables Transfer Agreement have been satisfied as of the date hereof.

                  (f) Each of the Sellers and SierraCities.com represent and
warrant that the aggregate Discounted Contract Balance of the Subsequent
Contracts listed on the List of Subsequent Contracts annexed hereto and
conveyed to the Trust pursuant to this Agreement as of the related Subsequent
Cut-Off Date is $__________.

                  Section 3. Grant from Trust to Indenture Trustee.

                  The Trust hereby grants as of the Subsequent Transfer Date to
the Indenture Trustee, as indenture trustee for the benefit of the Noteholders,
to secure all of the Trust's obligations under the Indenture, all of the
Trust's right, title and interest in and to, whether now existing or hereafter
created, (a) the Subsequent Conveyed Assets, (b) all funds on deposit from time
to time in the Collection Account allocable to the Subsequent Contracts,
excluding any investment income from such funds; (c) all its rights under this
Agreement; and (d) all present and future claims, demands, causes and choses in
action in respect of any or all of the foregoing and all payments on or under,
and all proceeds of every kind and nature whatsoever in respect of, any or all
of the foregoing and all payments on or under, and all proceeds of every kind
and nature whatsoever in the conversion thereof, voluntary or involuntary, into
cash or other liquid property, all cash proceeds, accounts, accounts
receivable, notes, drafts acceptances, checks, deposit accounts, rights to
payment of any and every kind, and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing.

                  Section 4. Governing Law.

                  This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the
parties hereunder shall



                                      A-3



<PAGE>   40




be determined in accordance with such laws, without giving effect to principles
of conflicts of law.

                  Section 5. Counterparts.

                  This Agreement may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same instrument.

                  Section 6. Successors and Assigns.

                  This Agreement shall inure to the benefit of and be binding
upon the Sellers, the Trust and the Owner Trustee and their respective
successors and assigns. The Indenture Trustee shall be express third party
beneficiaries hereto.

                  Section 7. Acceptance of Contract Files by Indenture Trustee.

                  The Indenture Trustee acknowledges receipt of the Contract
Files for each of the Subsequent Contracts listed on the List of Subsequent
Contracts annexed hereto.

                  Section 8. Ratification of Receivables Transfer Agreement.

                  Each party hereto hereby agrees that the Receivables Transfer
Agreement is in all respects ratified and confirmed and the Receivables
Transfer Agreement, as so supplemented by this Agreement shall be read, taken
and construed as one and the same instrument. In the event of any conflict
between the terms contained in the Receivables Transfer Agreement and in this
Agreement, the terms contained in this Agreement shall govern.

                  Section 9. Binding Effect: Third-Party Beneficiaries.

                    This Agreement will inure to the benefit of and be binding
upon the parties hereto. The Indenture Trustee, the Owner Trustee and the
Noteholders are intended third party beneficiaries of this Agreement.



                                      A-4



<PAGE>   41



                  IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the day and year first written above.

                           SIERRACITIES.COM INC.,
                            in its individual capacity



                           By:
                                -----------------------------------------------
                                Name:
                                Title:


                           FIRST SIERRA RECEIVABLES III, INC. in its
                            individual capacity and as Junior Certificateholder
                            of the First Sierra Equipment Lease Trust 1998-E




                           By:
                                -----------------------------------------------
                                Name:
                                Title:




                           FIRST UNION NATIONAL BANK,
                            as Certificateholder of the First Sierra Equipment
                            Lease Trust 1997-A



                           By:
                                -----------------------------------------------
                                Name:
                                Title:



                           VARIABLE FUNDING CAPITAL CORPORATION, as
                            Certificateholder of the First Sierra Equipment
                            Lease Trust 1997-B




                           By:
                                -----------------------------------------------
                                Name:
                                Title:




                                      A-5




<PAGE>   42




                           FAIRWAY FINANCE CORPORATION, as Senior
                            Certificateholder of the First Sierra Equipment
                            Lease Trust 1998-E




                           By:
                                -----------------------------------------------
                                Name:
                                Title:



                           FIRST SIERRA EQUIPMENT CONTRACT
                            TRUST 1999-H, A DELAWARE BUSINESS
                            TRUST ACTING THROUGH CHRISTIANA
                            BANK & TRUST COMPANY, NOT IN ITS
                            INDIVIDUAL CAPACITY BUT SOLELY AS
                            OWNER TRUSTEE, as Issuer



                           By:
                                -----------------------------------------------
                                Name:
                                Title:




                           BANKERS TRUST COMPANY, not in its
                            individual capacity, but solely as Trustee of each
                            of the First Sierra Equipment Lease Trust 1997-A,
                            the First Sierra Equipment Lease Trust 1997-B and
                            the First Sierra Equipment Lease Trust 1998-E



                           By:
                                -----------------------------------------------
                                Name:
                                Title:



                                      A-6




<PAGE>   43


                            FIRST SIERRA HEALTHCARE EQUIPMENT
                             CONTRACT TRUST 2000-1, A COMMON
                             LAW TRUST ACTING THROUGH
                             CHRISTIANA BANK AND TRUST COMPANY, NOT IN ITS
                             INDIVIDUAL CAPACITY BUT SOLELY AS OWNER TRUSTEE,
                             as Issuer



                           By:
                                -----------------------------------------------
                                Name:
                                Title:



Acknowledged and Agreed:

MERRILL LYNCH
   MORTGAGE CAPITAL, INC.

By:
     -----------------------------------------------
     Name:
     Title:

               [Signature Page To Subsequent Transfer Agreement]



                                      A-7




<PAGE>   44




                                   SCHEDULE 1

                           LIST OF INITIAL CONTRACTS

                      [On File With Dewey Ballantine LLP]






<PAGE>   45





                FIRST SIERRA HEALTHCARE EQUIPMENT CONTRACT TRUST
                                 SERIES 2000-1

                            ANNEX A -- DEFINED TERMS

   "Account" means any account established pursuant to Article III of the
Indenture.

   "Addition Notice" means, with respect to any transfer of Subsequent
Contracts to the Trust pursuant to Section 2.02(c) of the Receivables Transfer
Agreement, notice of a Seller's election to transfer Subsequent Contracts to
the Trust, such notice to designate the related Subsequent Transfer Date and
the approximate aggregate Discounted Contract Principal Balance of the
Subsequent Contracts to be transferred on such Subsequent Transfer Date.

   "Advance Payment" means, with respect to a Contract and a Collection Period,
any Scheduled Payment, Final Scheduled Payment or portion of either made by or
on behalf of an Obligor and received by the Servicer during such Collection
Period, which Scheduled Payment, Final Scheduled Payment or portion thereof
does not become due until a subsequent Collection Period.

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

   "Aggregate Discounted Contract Principal Balance" means, at any time of
determination, an amount equal to the sum of the Discounted Contract Principal
Balances of all Contracts then comprising the Pledged Property.

   "Aggregate Initial Note Principal Balance" means the aggregate of the
Initial Class A Note Principal Balance and the Initial Class B Note Principal
Balance.

   "Aggregate Note Principal Balance" means, as of any date of determination,
the aggregate of the Class A Note Principal Balance and the Class B Note
Principal Balance Outstanding on such date of determination.

   "Applicable Securities" means, for so long as the Class A Note Principal
Balance is greater than zero, the Class A Notes; following reduction of the
Class A Note Principal Balance to zero, and for so long as the Class B Note
Principal Balance is greater than zero, the Class B Notes; following reduction
of the Class B Note Principal Balance to zero, the Trust Certificate.

   "Applicant" has the meaning specified in Section 5.06 of the Indenture.

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

   "Available Funds" means, with respect to a Payment Date, (i) all amounts
held in the Collection Account on the related Determination Date for the
related Collection Period, after




<PAGE>   46


taking into account all deposits to be made on such Determination Date, (ii)
proceeds of any Servicer Advances to be made no later than the Business Day
immediately prior to the Payment Date, other than any such amounts which relate
to any subsequent Collection Period, (iii) any Repurchase Amounts to be
deposited by the Trust Certificate Holder two Business Days prior to the
Payment Date pursuant to Section 4.01 of the Indenture (iv) on each Payment
Date on or prior to the Payment Date in June 2000, the Capitalized Interest
Requirement, if any, and (v) on the Payment Date immediately following the
termination of the Pre-Funding Period, the amount on deposit in the Pre-Funding
Account at such time.

   "Bankruptcy Code" means the Bankruptcy Code of 1978, as amended, as codified
under Title 11 of the United States Code, and the Bankruptcy Rules promulgated
thereunder, as the same may be in effect from time to time.

    "Base Principal Amount" means, with respect to any Payment Date, an amount
equal to the sum of (i) the excess of (x) the Aggregate Discounted Contract
Principal Balances of the Contracts as of the close of business on the last day
of the second preceding Collection Period over (y) the Aggregate Discounted
Contract Principal Balances of the Contracts as of the close of business on the
last day of the immediately preceding Collection Period plus (ii) on the
Payment Date immediately following the termination of the Pre-Funding Period,
the amount on deposit in the Pre-Funding Account at such time.

   "Benefit Plan" has the meaning as specified in Section 5.03(f) of the
Indenture.

   "Business Day" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York, Houston, Texas, Greenville,
Delaware, in the city and State where the Indenture Trustee's principal
corporate trust office is located, or in the city and State where the
Servicer's principal office is located, are authorized or obligated by law,
executive order or governmental decree to be closed; provided, however, that
the Servicer shall, from time to time, deliver written notice to the other
parties hereto of any differences in Business Days between the States of Texas
(or any other state where the Servicer has its principal office) and New York.

   "Capitalized Interest Account" means the account established and maintained
pursuant to Section 3.02(b) of the Indenture.

   "Capitalized Interest Account Deposit" means $12.79.

   "Capitalized Interest Requirement" means with respect to any Payment Date
occurring during the Pre-Funding Period, an amount equal to interest for the
related Interest Accrual Period on the amount on deposit in the Pre-Funding
Account, calculated at the sum of the weighted average of the Note Rates on the
Notes.

   "Capitalized Interest Required Reserve Amount" means on any Payment Date, an
amount equal to the product of (i) the Discount Rate less the sum of (a) the
Servicing Fee Rate and (b) 2.5%, (ii) the amount on deposit in the Pre-Funding
Account as of such Payment Date, and (iii) a fraction, the numerator of which
is the number of days remaining until the Payment Date immediately following
the termination of the Pre-Funding Period and the denominator of which is 360.

   "Calculation Date" means, with respect to a Collection Period, the close of
business on the last day of such Collection Period, or if such day is not a
Business Day, the immediately succeeding Business Day.




                                    Annex-2

<PAGE>   47



   "Casualty Loss" means, with respect to a Contract, any loss, theft,
condemnation, governmental taking, destruction, or damage beyond repair of any
item of Equipment subject thereto which results, in accordance with the terms
of the Contract, in a reduction in the number or amount of any future Scheduled
Payments due thereunder or in the termination of the Obligor's obligation to
make future Scheduled Payments thereunder.

   "Certificate Register" and "Certificate Registrar" shall mean the register
mentioned and the registrar appointed pursuant to Section 3.4 of the Trust
Agreement.

   "Class" means all of the Class A-1 Notes, and all of the Class A-2 Notes and
all of the Class B Notes, as applicable.

   "Class A Base Principal Distribution Amount" means with respect to any
Payment Date, the sum of (a) the product of (i) the Class A Percentage and (ii)
the Base Principal Amount for the related Collection Period plus (b) Overdue
Principal with respect to the Class A Notes.

   "Class A Maturity Date" means the Class A-1 Maturity Date or the Class A-2
Maturity Date, as applicable.

   "Class A Note" means any one of the Class A-1 Notes, or the Class A-2 Notes.

   "Class A Note Factor" means the seven digit decimal number that the Servicer
will compute or cause to be computed for each Collection Period and will make
available to the Indenture Trustee on the related Determination Date
representing the ratio of (a) the Class A Note Principal Balance which will be
outstanding on the next Payment Date (after taking into account all
distributions to be made on such Payment Date) to (b) the Initial Class A Note
Principal Balance.

   "Class A Noteholder" means the Person in whose name a Class A Note is
registered in the Register.

   "Class A Note Interest" means the Class A-1 Note Interest or the Class A-2
Note Interest, as applicable.

   "Class A Note Principal Balance" means, at any time, the Initial Class A
Note Principal Balance minus all payments theretofore received by the Class A
Noteholders on account of principal.

   "Class A Overdue Principal" means, with respect to any Payment Date, the
difference, if any, equal to (a) the aggregate of the Class A Principal Payment
Amounts due on all prior Payment Dates and (b) the aggregate amount of the
principal (from whatever source) actually distributed to Class A Noteholders on
all prior Payment Dates.

   "Class A Percentage" means (a) with respect to the earlier of (i) each
Payment Date prior to and including the May 2001 Payment Date or (ii) the
Payment Date on which the Class A-1 Note Principal Balance has been reduced to
zero, 100.0% and (b) on each Payment Date beginning with the June 2001 Payment
Date until the Class A Note Principal Balance has been reduced to zero 92.55%;
provided, however, that following the occurrence of a Gross Charge-Off Event,
the Class A Percentage shall be equal to 100.0% until the Class A Note
Principal Balance has been reduced to zero.

   "Class A Percentage Interest" means the interest in the Class A Portion of
the Trust that is evidenced by a Class A Note and that is set forth on the face
of such Note; provided, however, that the Issuer shall only issue Class A Notes
evidencing in the aggregate Class A Percentage



                                    Annex-3
<PAGE>   48




Interests totaling 100%. To the extent that, for federal income tax purposes,
the Class A Notes constitute indebtedness, all references in this Agreement to
Holders of Class A Notes owning a specified percentage of the outstanding Class
A Note Principal Balance shall be construed to mean Holders of Class A Notes
evidencing such specified percentage of the then outstanding indebtedness.

   "Class A Portion" means the aggregate interest in the Trust evidenced by the
Class A Notes.

   "Class A Principal Payment Amount" means, for any Payment Date, the lesser
of (i) the Class A Base Principal Distribution Amount for such Payment Date,
and (ii) the Class A Note Principal Balance as of such Payment Date (prior to
making any distributions of principal on such Payment Date); provided, however,
for any Payment Date which occurs on a Class A Maturity Date for any Class A
Note, the Class A Principal Payment Amount shall not be less than the amount
required to reduce the Note Principal Balance of such Class of Class A Notes to
zero.

   "Class A Termination Date" means the date on which all amounts owing to the
Class A Noteholders have each been paid in full.

   "Class A-1 Maturity Date" means the Payment Date in January 2005.

   "Class A-1 Note" means any one of the Class A-1 Notes executed and
authenticated by the Indenture Trustee, substantially in the form of Exhibit
C-1 to the Indenture.

   "Class A-1 Note Current Interest" means, with respect to any Collection
Period, the interest accrued during the related Interest Accrual Period, equal
to the product of (x) a fraction, the numerator of which is the number of
actual days elapsed during the related Interest Accrual Period and the
denominator of which is 360, (y) the Class A-1 Note Rate and (z) the aggregate
Class A-1 Note Principal Balance outstanding immediately prior to such Payment
Date.

   "Class A-1 Noteholder" means the Person in whose name a Class A-1 Note is
registered in the Register.

   "Class A-1 Note Interest" means, with respect to any Collection Period, the
Class A-1 Note Current Interest and the Class A -1 Overdue Interest.

   "Class A-1 Note Principal Balance" means, at any time, the Initial Class A-1
Note Principal Balance minus all payments theretofore received by the Class A-1
Noteholders on account of principal.

   "Class A-1 Note Rate" means 7.49% per annum.

   "Class A-1 Overdue Interest" means, with respect to any Payment Date, the
difference between (a) the sum of (i) the excess, if any, of any Class A-1 Note
Interest due on the immediately preceding Payment Date over the Class A-1 Note
Interest paid on such immediately preceding Payment Date and (ii) without
duplication of the amount described in clause (i), the amount of the Class A-1
Overdue Interest due and unpaid as of the immediately preceding Payment Date
and (b) any Class A-1 Overdue Interest paid on such Payment Date.

   "Class A-1 Percentage Interest" means the interest in the Class A-1 Portion
of the Trust that is evidenced by a Class A-1 Note and that is set forth on the
face of such Note; provided, however, that the Issuer shall only issue Class
A-1 Notes evidencing in the aggregate Class A-1 Percentage Interests totaling
100%. To the extent that, for federal income tax purposes, the Class A-1 Notes


                                    Annex-4

<PAGE>   49



constitute indebtedness, all references in the Transaction Documents to Holders
of Class A-1 Notes owning a specified percentage of the outstanding Class A-1
Note Principal Balance shall be construed to mean Holders of Class A-1 Notes
evidencing such specified percentage of the then outstanding indebtedness.

   "Class A-1 Portion" means the aggregate interest in the Trust evidenced by
the Class A-1 Notes.

   "Class A-2 Maturity Date" means the Payment Date in December 2010.

   "Class A-2 Note" means any one of the Class A-2 Notes executed and
authenticated by the Indenture Trustee, substantially in the form of Exhibit
C-2 to the Indenture.

   "Class A-2 Note Current Interest" means, with respect to any Collection
Period, the interest accrued during the related Interest Accrual Period, equal
to the product of (x) one-twelfth of the Class A-2 Note Rate and (y) the
aggregate Class A-2 Note Principal Balance outstanding immediately prior to
such Payment Date.

   "Class A-2 Noteholder" means the Person in whose name a Class A-2 Note is
registered in the Register.

   "Class A-2 Note Interest" means, with respect to any Collection Period, the
Class A-2 Note Current Interest and the Class A-2 Overdue Interest.

   "Class A-2 Note Principal Balance" means, at any time, the Initial Class A-2
Note Principal Balance minus all payments theretofore received by the Class A-2
Noteholders on account of principal.

   "Class A-2 Note Rate" means 7.77% per annum.

   "Class A-2 Overdue Interest" means, with respect to any Payment Date, the
difference between (a) the sum of (i) the excess, if any, of any Class A-2 Note
Interest due on the immediately preceding Payment Date over the Class A-2 Note
Interest paid on such immediately preceding Payment Date and (ii) without
duplication of the amount described in clause (i), the amount of the Class A-2
Overdue Interest due and unpaid as of the immediately preceding Payment Date,
and (b) any Class A-2 Overdue Interest paid on such Payment Date.

   "Class A-2 Percentage Interest" means the interest in the Class A-2 Portion
of the Trust that is evidenced by a Class A-2 Note and that is set forth on the
face of such Note; provided, however, that the Issuer shall only issue Class
A-2 Notes evidencing in the aggregate Class A-2 Percentage Interests totaling
100%. To the extent that, for federal income tax purposes, the Class A-2 Notes
constitute indebtedness, all references in the Transaction Documents to Holders
of Class A-2 Notes owning a specified percentage of the outstanding Class A-2
Note Principal Balance shall be construed to mean Holders of Class A-2 Notes
evidencing such specified percentage of the then outstanding indebtedness.

   "Class A-2 Portion" means the aggregate interest in the Trust evidenced by
the Class A-2 Notes.

   "Class B Base Principal Distribution Amount" means, with respect to any
Payment Date, the sum of (a) the product of (i) the Class B Percentage and (ii)
the Base Principal Amount for the related Collection Period plus (b) Overdue
Principal with respect to the Class B Notes.

   "Class B Maturity Date" means the Payment Date in May 2011.




                                    Annex-5

<PAGE>   50



   "Class B Note" means any one of the Class B Notes executed and authenticated
by the Indenture Trustee, substantially in the form of Exhibit D-1 to the
Indenture

   "Class B Note Current Interest" means, with respect to any Payment Date, the
interest accrued during the related Interest Accrual Period, equal to the
product of (x) one-twelfth of the Class B Note Rate and (y) the Class B Note
Principal Balance outstanding immediately prior to such Payment Date.

   "Class B Note Factor" means the seven digit decimal number that the Servicer
will compute or cause to be computed for each Collection Period and will make
available to the Indenture Trustee on the related Determination Date
representing the ratio of (a) the Class B Note Principal Balance which will be
outstanding on the next Payment Date (after taking into account all
distributions to be made on such Payment Date) to (b) the Initial Class B Note
Principal Balance.

   "Class B Noteholder" means the Person in whose name a Class B Note is
registered in the Register.

   "Class B Note Interest" means, with respect to any Payment Date, the Class B
Note Current Interest and the Class B Overdue Interest.

   "Class B Note Principal Balance" means, at any time, the Initial Class B
Note Principal Balance minus all payments theretofore received by the Class B
Noteholders on account of principal.

   "Class B Note Rate" means 7.95% per annum.

   "Class B Overdue Interest" means, with respect to any Payment Date, the
difference between (a) the sum of (i) the excess, if any, of any Class B Note
Interest due on the immediately preceding Payment Date over the Class B Note
Interest paid on such immediately preceding Payment Date and (ii) without
duplication of the amount described in clause (i), the amount of the Class B
Overdue Interest due and unpaid as of the immediately preceding Payment Date,
and (b) any Class B Overdue Interest paid on such Payment Date.

   "Class B Overdue Principal" means, with respect to any Payment Date, the
difference, if any, equal to (a) the aggregate of the Class B Principal Payment
Amounts due on all prior Payment Dates and (b) the aggregate amount of the
principal (from whatever source) actually distributed to Class B Noteholders on
all prior Payment Dates.

   "Class B Percentage" means on any date of determination, 100% minus the
Class A Percentage as of such date of determination.

   "Class B Percentage Interest" means the interest in the Class B Portion of
the Trust that is evidenced by a Class B Note and that is set forth on the face
of such Note; provided, however, that the Issuer shall only issue Class B Notes
evidencing in the aggregate Class B Percentage Interests totaling 100%. To the
extent that, for federal income tax purposes, the Class B Notes constitute
indebtedness, all references in the Transaction Documents to Holders of Class B
Notes owning a specified percentage of the outstanding Class B Note Principal
Balance shall be construed to mean Holders of Class B Notes evidencing such
specified percentage of the then outstanding indebtedness.

   "Class B Portion" means the aggregate interest in the Trust evidenced by the
Class B Notes.





                                    Annex-6

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   "Class B Principal Payment Amount" means, for any Payment Date, the lesser
of (i) the Class B Base Principal Distribution Amount for such Payment Date and
(ii) the amount necessary to reduce the Class B Note Principal Balance to zero.

   "Closing Date" means April 11, 2000.

   "Code" means the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations adopted thereunder, as the same may be in effect from time to time
and any successor thereto.

   "Collection Account" means the Eligible Bank Account established pursuant to
Section 3.01 of the Indenture.

   "Collection Period" means, with respect to any Payment Date, the period from
the opening of business on the second day of the immediately preceding calendar
month through the close of business on the first day of the calendar month in
which such Payment Date occurs.

   "Collections" means, with respect to a Collection Period and a Contract, all
Scheduled Payments, Liquidation Proceeds, Insurance Proceeds, Early Termination
Contract Proceeds, Prepayments, proceeds from any Contract subject to a
Casualty Loss, Final Scheduled Payments, Prepayments and amounts received in
respect of the Contracts or related Equipment pursuant to any Source Agreements
(including amounts received as a Source Repurchase Price from the Source under
any recourse agreements, amounts received as a Source Repurchase Price from the
Guarantor, amounts withdrawn from the Reserve Account or amounts withdrawn from
the Letter of Credit Deposit Account) and Defaulted Contract Recoveries
received by the Servicer from or on behalf of an Obligor with respect to such
Contract during such Collection Period. Collections do not include Servicing
Charges, Excluded Amounts, Repurchase Amounts, Advance Payments and Servicer
Advances.

   "Computer Tape" means, collectively, the computer tapes generated by the
Servicer which provide information relating to the Contracts and which were, or
will be, used by the Servicer in selecting the Contracts conveyed to the Issuer
pursuant to the Receivables Transfer Agreement and any Subsequent Transfer
Agreement.

   "Contract" means each of the agreements evidencing the indebtedness of the
related Obligor, including, as applicable, schedules, supplements and
amendments thereto, under which the Source or SierraCities.com, as applicable,
leases or finances specified Equipment to an Obligor and which are conveyed to
the Trust and identified on the List of Initial Contracts delivered on the
Closing Date, with respect to Subsequent Contracts, on the List of Subsequent
Contracts delivered on the related Subsequent Transfer Date or, with respect to
Substitute Contracts, on the List of Substitute Contracts delivered on the
related Substitute Transfer Date.

   "Contract File" means, with respect to each Contract, (1) a certified copy
of the master Contract, if applicable, (2) the executed original counterpart of
the Contract that constitutes "chattel paper" or an "instrument" for purposes
of Sections 9-105(1)(b), 9-105(l)(i) or 9-305 of the UCC, (3) an original
certificate, executed by an Obligor, evidencing delivery and acceptance of the
Equipment, (4) Obligor's corporate resolutions and secretary's certificate, if
required under the Credit and Collection Policies and Procedures, (5) a
guaranty, if any, (6) copies of documentation relating to the purchase of the
Equipment, (7) documents evidencing or related to any Insurance Policy (such
documents required to be included therein only with respect to Equipment which
had an Original Equipment Cost of more than $40,000), (8) evidence of filing or
copies of all UCC financing statements filed with respect to the Equipment or
the Contract in





                                    Annex-7

<PAGE>   52






accordance with the Filing Requirements; all such UCC financing statements
shall include either (a) UCC standard forms executed by the debtor and the
secured party, as required, or (b) evidence of the electronic filing of such
UCC financing statement, in which case acknowledgement copies shall be
forwarded promptly as they are received, (9) with respect to a Contract
originated by the Source, a certified copy of the related sale and assignment
between the Source and SierraCities.com, as well as any other Contract
assignments, (10) copies of any additional Contract documents evidencing any
changes or modifications of a Contract by the Servicer in accordance with the
terms of the Servicing Agreement, and (11) reference to the applicable contract
management code on the Contract Management System and any other documents
relating thereto held by SierraCities.com, as Servicer.

   "Contract Management Code" has the meaning set forth in Section 2.01 of the
Receivables Transfer Agreement.

   "Contract Management System" means the computerized electronic contract
management system maintained by SierraCities.com for all Contracts and other
agreements similar to the Contracts.

   "Contract Number" means, with respect to each Contract, its identifying
number.

   "Contract Pool" means, at any time, all Contracts held as part of the
Pledged Property.

   "Conveyance Date" means, with respect to the Initial Contracts, the Closing
Date, with respect to a Subsequent Contract, the related Subsequent Transfer
Date and with respect to Substitute Contracts, the Substitute Transfer Date.

   "Conveyed Assets" means the Initial Conveyed Assets, the Subsequent Conveyed
Assets and the Substitute Conveyed Assets.

   "Corporate Trust Office" means the principal office of the Indenture Trustee
at which at any particular time its corporate trust business shall be
administered, which office at the date of this Agreement is specified in
Section 11.06 of the Indenture.

   "Credit and Collection Policies and Procedures" means the credit and
collection policies and procedures of the Servicer.

   "Credit File" means, with respect to each Contract, the following documents:
(a) copies of the Contract, any UCC financing statements and any other original
documents related to the Contract, (b) the application of the related Obligor,
(c) documentation evidencing the information with respect to such Contract
input into the Contract Management System and (d) any other information
required by the Servicer pursuant to its customary policies and procedures.

   "Cut-Off Date" means, with respect to the Initial Contracts, the Initial
Cut-Off Date, with respect to the Subsequent Contracts, the related Subsequent
Cut-Off Date and with respect to each Substitute Contract, the related
Substitute Cut-Off Date.

   "DCR" means Duff & Phelps Credit Rating Co.

   "Default Notice" means the notice, substantially in the form of Exhibit E to
the Indenture, delivered by the Servicer to the Indenture Trustee, the Source
and the Guarantor of the Source's obligation, whereby the Servicer seeks to
enforce Source Agreement Rights.




                                    Annex-8

<PAGE>   53





   "Defaulted Contract" means a Contract that becomes defaulted at the earlier
of the date on which (i) the Servicer has determined in its sole discretion, in
accordance with the Servicing Standard and its customary servicing procedures,
that such Contract is not collectible, (ii) all or part of a Scheduled Payment
thereunder is more than 180 days delinquent, or (iii) such Contract was
repurchased by the Source pursuant to the Source Agreement. The determination
as to delinquency of Scheduled Payments shall be made after the application of
amounts received in accordance with the Servicer's accounting procedures
related to classification of delinquency consistent with its delinquency
results for financial reporting purposes.

   "Defaulted Contract Recoveries" means all proceeds of the sale of Equipment
related to Defaulted Contracts and any amounts collected as judgments against
an Obligor or others related to the failure of such Obligor to pay any required
amounts under the related Contract or to return the Equipment, in each case as
reduced by (i) any unreimbursed Servicer Advances with respect to such Contract
or such Equipment and (ii) any reasonably incurred out-of-pocket expenses
incurred by the Servicer in enforcing such Contract or in liquidating such
Equipment.

   "Delinquent Contract" means, as of any Determination Date, any Contract
(other than a Contract which became a Defaulted Contract prior to such
Determination Date) with respect to which all or a portion of any Scheduled
Payment was not received when due by the Servicer as of the close of business
on the last day of the month in which such payment was due. The determination
as to delinquency of Scheduled Payments shall be made after the application of
amounts received in accordance with the Servicer's accounting procedures
related to classification of delinquency consistent with its delinquency
results for financial reporting purposes.

   "Depositor" means First Sierra Receivables III, Inc., a Delaware corporation.

   "Depository" means The Depository Trust Company, 55 Water Street, New York,
New York 10041 and any successor Depository hereafter named.

   "Determination Date" means, with respect to a Payment Date, a date which is
two Business Days prior to such Payment Date.

   "Direct Participant" means any broker-dealer, bank or other financial
institution for which the Depository holds the Class A and Class B Notes from
time to time as a securities depositary.

   "Discounted Contract Principal Balance" means, with respect to any Contract,
on any Determination Date, the sum of the present value of all of the remaining
Scheduled Payments becoming due under such Contract after the end of the prior
Collection Period, discounted monthly at the Discount Rate in the manner
described below; provided, however, that except to the extent expressly
provided in the Indenture or the Servicing Agreement, the Discounted Contract
Principal Balance of any Defaulted Contract, Early Termination Contract, or
Expired Contract or Contract purchased by the Servicer or SierraCities.com
pursuant to the Servicing Agreement or by the Trust Certificate Holder pursuant
to the Indenture, shall be deemed to be equal to zero as of the last day of the
immediately preceding Collection Period.

   In connection with all calculations required to be made pursuant to the
Transaction Documents with respect to the determination of Discounted Contract
Principal Balances, for any date of determination the "Discounted Contract
Principal Balance" for each Contract shall be calculated assuming:




                                    Annex-9

<PAGE>   54







         Scheduled Payments are due on the last day of each Collection Period;

         Scheduled Payments are discounted on a monthly basis using a 30 day
month and a 360 day year; and

         Scheduled Payments are discounted to the last day of the Collection
Period prior to the Determination Date.

   "Discount Rate" means, as of any date, 8.45%. The Discount Rate is equal to
the sum of (a) the Class B Note Rate and (b) the Servicer Fee Rate.

   "Drawing Certificate" means the drawing certificate delivered by the
Indenture Trustee to a Letter of Credit Confirming Bank to request a draw on a
Letter of Credit, substantially in the form of Exhibit F-1 and F-2 to the
Indenture.

   "Early Termination Contract" means any Contract that has terminated pursuant
to the terms of such Contract prior to its scheduled expiration date, other
than a Defaulted Contract.

   "Early Termination Contract Proceeds" means any and all cash proceeds or
rents realized from the sale or re-lease of Equipment under an Early
Termination Contract (net of reasonable out-of-pocket remarketing expenses).

   "Eligible Bank Account" means a segregated account, which may be an account
maintained with the Indenture Trustee, which is either (a) maintained with a
depository institution or trust company whose long term unsecured debt
obligations are rated at least, if deposits are to be held in such account for
more than thirty days, (i) "AA-" or better by S&P, (ii)"A2" or better by Moody's
and (iii) A by DCR and whose short-term unsecured obligations are rated at
least, if deposits are to be held in such account for thirty days or less, (i)
"A-1+" by S&P, (ii) "P-1" by Moody's and (iii) D-1 by DCR; provided, that if DCR
does not rate such entity then the ratings of S&P and Moody's shall suffice, or
(b) a segregated trust account or similar account maintained with a federally or
state chartered depository institution subject to regulations regarding
fiduciary funds on deposit substantially similar to 12 C.F.R. Section 9.10(b).

   "Eligible Contract" means any Contract that is not a Defaulted Contract and
with respect to which all of the representations and warranties set forth in
Section 2.02 of the Servicing Agreement were true as of the date made.

   "Eligible Investments" means any of the following, in each case as
determined at the time of the investment or contractual commitment to invest
therein (to the extent such investments would not require the registration of
the Trust as an investment company pursuant to the Investment Company Act):

                  (a) negotiable instruments or securities represented by
         instruments in bearer or registered or book-entry form which evidence:

            (i) obligations which have the benefit of the full faith and credit
         of the United States of America, including depository receipts issued
         by a bank as custodian with respect to any such instrument or security
         held by the custodian for the benefit of the holder of such depository
         receipt,

            (ii) demand deposits or time deposits in, or bankers' acceptances
         issued by, any depository institution or trust company incorporated
         under the laws of the United States of America or any state thereof
         and subject to supervision and examination by Federal or state banking
         or depositary institution authorities; provided that at the time of
         the Indenture Trustee's investment or contractual commitment to invest
         therein, the





                                    Annex-10

<PAGE>   55






         certificates of deposit or short-term deposits (if any) or long-term
         unsecured debt obligations (other than such obligations whose rating
         is based on collateral or on the credit of a Person other than such
         institution or trust company) of such depositary institution or trust
         company has a credit rating in the highest rating category from each
         Rating Agency, or, if not rated by DCR or Moody's, the highest rating
         category provided by S&P;

            (iii) certificates of deposit having a rating in the highest rating
         category by each of the Rating Agencies, or, if not rated by DCR and
         Moody's, the highest rating category provided by S&P; or

            (iv) investments in money market funds which are (or which are
         composed of instruments or other investments which are) rated in the
         highest rating category by each of the Rating Agencies (including
         funds for which the Indenture Trustee or any of its Affiliates is
         investment manager or advisor), or, if not rated by DCR and Moody's,
         the highest rating category provided by S&P;

                  (b) demand deposits in the name of the Indenture Trustee in
         any depositary institution or trust company referred to in clause
         (a)(ii) above;

                  (c) commercial paper (having original or remaining maturities
         of no more than 270 days) having a credit rating in the highest rating
         category by each of the Rating Agencies, or, if not rated by DCR and
         Moody's, the highest rating category provided by S&P;

                  (d) Eurodollar time deposits that are obligations of
         institutions whose time deposits carry a credit rating in the highest
         rating category by each of the Rating Agencies, or, if not rated by
         DCR and Moody's, the highest rating category provided by S&P;

                  (e) repurchase agreements involving any Eligible Investment
         described in any of clauses (a)(i), (a)(iii) or (d) above, so long as
         the other party to the repurchase agreement has its long-term
         unsecured debt obligations rated in the highest rating category by
         each of the Rating Agencies, or, if not rated by DCR and Moody's, the
         highest rating category provided by S&P; and

                  (f) any other investment with respect to which the Rating
         Agency Condition has been satisfied.

   Any Eligible Investment must mature no later than the Business Day prior to
the next Payment Date.

   "Equipment" means, with respect to a Contract, the equipment leased, sold or
financed, as applicable, to an Obligor pursuant to such Contract, and any
inventory, accounts and other general intangibles or assets, as the case may
be, that secure payment under such Contract which Equipment includes the
Original Equipment, the Subsequent Equipment and the Substitute Equipment.

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

   "Event of Default" has the meaning specified in Section 8.01 of the
Indenture.





                                    Annex-11

<PAGE>   56



   "Event of Servicing Termination" has the meaning specified in Section 6.01
of the Servicing Agreement.

   "Excess Amounts" means, with respect to any Contract, any payment required
to be paid by the related Obligor pursuant to such Contract at the maturity of
such Contract in excess of the final Scheduled Payment with respect to such
Contract.

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

   "Excluded Amounts" means any payments received from an Obligor or the Source
in connection with any application fees, tax processing fees, wire transfer
fees, express mail fees, insurance premiums, late charges and other penalty
amounts, taxes, fees or other charges imposed by any governmental authority,
any indemnity payments made by an Obligor for the benefit of the obligee under
the related Contract or any payments collected from an Obligor or received from
the Source relating to servicing and/or maintenance payments pursuant to the
related Contract or maintenance agreement, as applicable, Expired Contract
Proceeds (other than any amounts then due from a related Source under the
related Source Agreement) or any other non-rental charges reimbursable to the
Servicer in accordance with the Servicer's customary policies and procedures
plus any collections received following the end of the immediately preceding
Collection Period up to the amount of the Servicer Advance made on the
immediately preceding Payment Date.

   "Expired Contract" means any Contract that has terminated on its scheduled
expiration date after full payment of all Scheduled Payments and the Final
Scheduled Payment.

   "Expired Contract Proceeds" means any and all cash proceeds or rents
realized from the sale or re-lease of Equipment under an Expired Contract.

   "Federal Reserve Board" means the Board of Governors of the Federal Reserve
System and any successor thereto.

   "Filing Locations" means the jurisdictions in which any Equipment is located
under Contracts as of the applicable Cut-Off Date.

   "Filing Requirements" means

   (a) with respect to the Contracts, a UCC-1 financing statement with respect
to the assignment of all Contracts and any related Source Agreement Rights by
the related Source to SierraCities.com pursuant to the related Source
Agreement, by SierraCities.com to the Sellers pursuant to the Warehouse Trusts,
by the Sellers to the Owner Trustee, on behalf of the Issuer pursuant to the
Receivables Transfer Agreement,

   (b) with respect to the Contracts and any related Source Agreement Rights, a
UCC-1 financing statement with respect to the pledge by the Owner Trustee, on
behalf of the Issuer, of all Contracts and any related Source Agreement Rights
to the Indenture Trustee pursuant to the Indenture,

   (c) with respect to Equipment, (i) in each Filing Location in which
Equipment with an Original Equipment Cost of $75,000 or greater is then
located, financing statements on Form UCC-1 for Contracts originated by the
Source, naming the Obligor as debtor and the Source as secured party and First
Sierra Financial, Inc. or SierraCities.com as assignee; and (ii) with respect
to clause (i), the filings in paragraph (b) above in favor of the Indenture
Trustee in


                                    Annex-12

<PAGE>   57



respect of the Contracts shall include all related rights relating to such
Contracts, including the security interests in the Equipment subject to this
clause (c).

   "Final Scheduled Payment" means, with respect to any Contract, any payment
set forth in such Contract other than the regular Scheduled Payment which is
required to be paid by the related Obligor at the maturity of such Contract.

   "Financing Statements" means a form UCC-1 financing statement.

   "First Sierra Group" means, as of any relevant date, the affiliated group
within the meaning of section 1504 of the Code of which SierraCities.com, or
any successor thereto, is the common parent, or of which SierraCities.com is a
member, and shall mean any group eligible to file consolidated, combined or
unitary returns for state, local or foreign tax purposes which includes
SierraCities.com, regardless of the identity of the common parent.

   "GAAP" means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar function of comparable stature and authority within the accounting
profession), or in such other statements by such other entity as may be in
general use by significant segments of the U.S. accounting profession, which
are applicable to the circumstances as of the date of determination.

   "Governmental Authority" means (a) any federal, state, county, municipal or
foreign government, or political subdivision thereof, (b) any governmental or
quasi-governmental agency, authority, board, bureau, commission, department,
instrumentality or public body, (c) any court or administrative tribunal or (d)
with respect to any Person, any arbitration tribunal or other non-governmental
authority to the jurisdiction of which such Person has consented.

   "Gross Charge-Off Event" exists on any Payment Date on which the Gross
Charge-Off Ratio exceeds 10.0%.

   "Gross Charge-Off Ratio" means, with respect to any Payment Date, the
quotient, expressed as a percentage, of (a) the sum of the aggregate Discounted
Contract Principal Balance of all Defaulted Contracts divided by (b) the
Aggregate Discounted Contract Principal Balance of all Contracts as of the
related Conveyance Date. For the purposes of the calculation of the Gross
Charge-Off Ratio, the Discounted Contract Principal Balance of any Contract
which is a Defaulted Contract shall not be zero, but shall instead be
calculated as provided in the definition of Discounted Contract Principal
Balance without reference to the last proviso in such definition.

   "Guarantor" means Sky Financial Group, Inc. as guarantor of the Source's
obligations under the Source Agreement.

    "Guaranty" means that certain Guaranty dated as of October 1, 1999 in favor
of SierraCities.com by Sky Financial Group, Inc.

    "Holder" means the Person in whose name a Note is registered in the
Register, or in the case of a Trust Certificate, in the Certificate Register,
as the case may be.

   "Holding Trust Agreement" means the First Sierra Holding Trust III Trust
Agreement, dated as of March 1, 2000, between the Depositor of the Holding
Trust and the Owner Trustee of the Holding Trust.



                                    Annex-13

<PAGE>   58




   "Holding Trust" means First Sierra Holding Trust III.

   "Income Taxes" means any federal, state, local or foreign taxes based upon,
measured by, or imposed upon gross or net income, gross or net receipts,
capital, net worth, or the privilege of doing business, and any minimum taxes
or withholding taxes based upon any of the foregoing, including any penalties,
interest or additions to tax imposed with respect thereto.

   "Indebtedness" means, as to any Person, (a) all indebtedness of such Person
for borrowed money, (b) all leases of equipment of such Person as Obligor, (c)
to the extent not included in clause (b), above, all capital leases of such
Person as Obligor, (d) any obligation of such Person for the deferred purchase
price of Property or services (other than trade or other accounts payable in
the ordinary course of business and not more than ninety (90) days past due),
(e) any obligation of such Person that is secured by a Lien on assets of such
Person, whether or not that Person has assumed such obligation or whether or
not such obligation is non-recourse to the credit of such Person, (f)
obligations of such Person arising under acceptance facilities or under
facilities for the discount of accounts receivable of such Person and (g) any
obligation of such Person to reimburse the issuer of any letter of credit
issued for the account of such Person upon which a draw has been made.

   "Indenture" means the Indenture, dated as of March 1, 2000, among the Trust,
the Servicer and the Indenture Trustee, as amended, supplemented or otherwise
modified from time to time.

   "Indenture Trustee" means the institution executing the Indenture and
Servicing Agreement as Indenture Trustee, or its successor in interest, and any
successor indenture trustee appointed as provided herein, or any successor to
the Indenture Trustee's corporate trust business (or a substantial portion
thereof) and initially shall mean Bankers Trust Company, a New York banking
corporation.

   "Indenture Trustee Fee" means, with respect to each Payment Date, an amount
equal to $416.67.

   "Indenture Trustee Expenses" means, the reasonable expenses of the Indenture
Trustee, as set forth in Section 7.07(a)(ii) of the Indenture.

   "Independent Certificate" means a certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.05 of the Indenture,
prepared by an Independent appraiser or other expert appointed pursuant to an
Issuer Order and approved by the Indenture Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer
has read the definition of "Independent" in the Indenture and that the signer
is Independent within the meaning thereof.

   "Independent Public Accountant" means any of (a) Arthur Andersen LLP, (b)
Deloitte & Touche, (c) PricewaterhouseCoopers, (d) Ernst & Young, and (e) KPMG
Peat Marwick (and any successors thereof); provided, that such firm is
independent with respect to the Servicer or any subservicer, as the case may
be, within the meaning of the Securities Act of 1933, as amended.

   "Indirect Participant" means any financial institution for whom any Direct
Participant holds an interest in a Class A or Class B Note.


                                    Annex-14

<PAGE>   59



   "Initial Aggregate Discounted Contract Principal Balance" means the
Aggregate Discounted Contract Principal Balance as of the Initial Cut-Off Date,
which amount is equal to $188,652,640.43.

        "Initial Class A Note Principal Balance"            $174,600,000
        "Initial Class A-1 Note Principal Balance"          $ 75,000,000
        "Initial Class A-2 Note Principal Balance"          $ 99,600,000
        "Initial Class B Note Principal Balance"            $ 14,052,729

   "Initial Contracts" means the Contracts pledged by the Trust to the
Indenture Trustee for the benefit of the Noteholders pursuant to the Indenture
on the Closing Date.

   "Initial Conveyed Assets" means, with respect to the Receivables Transfer
Agreement (a) all of the Sellers' right, title and interest in and to the
Original Equipment, (except for any licensed products that may accompany the
Original Equipment) and any new unit or units of Equipment substituted for any
existing unit or units of Original Equipment, including all income and proceeds
upon any sale or other disposition of the Original Equipment, (b) all of the
Sellers' right, title and interest in and to, but not its obligations under,
the Initial Contracts and all amendments, additions and supplements including
schedules, summary schedules and subschedules made or hereafter made with
respect thereto, (c) all monies due or to become due in payment of the Initial
Contracts on or after the Initial Cut-Off Date, including without limitation,
all Scheduled Payments thereunder (whether or not due), any Prepayments, any
payments in respect of a casualty or early termination and any Liquidation
Proceeds received with respect thereto, but excluding any Excluded Amounts, (d)
the Contract Files, (e) all Insurance Proceeds relating to the foregoing and
the Sellers' rights and interests in the Insurance Policies relating to the
foregoing, (f) all Source Agreements and Source Agreement Rights to the extent
they relate to any Initial Contract and any Original Equipment covered by the
Initial Contracts and (g) all proceeds and income of the foregoing or relating
thereto.

   "Initial Cut-Off Date" means the close of business on March 1, 2000.

   "Initial Receivables" means the Initial Contracts and the Original Equipment.

   "Initial Unpaid Amount" means, with respect to a Contract, the excess of (x)
the aggregate amount of all Scheduled Payments due prior to the related Cut-Off
Date over (y) the aggregate of all Scheduled Payments made prior to the related
Cut-Off Date with respect to such Contract.

   "Insurance Policy" means, with respect to an item of Equipment and the
related Contract, any insurance policy required to be maintained by the Obligor
pursuant to such Contract that covers physical damage to such physical
Equipment and liability resulting from the use, operation or possession of such
Equipment (including policies procured by or on behalf of SierraCities.com on
behalf of the Obligor).

   "Insurance Proceeds" means, with respect to an item of Equipment and the
related Contract, any amount received during a Collection Period pursuant to an
Insurance Policy issued with respect to such Equipment and related Contract.

   "Interest Accrual Period" means, with respect to any Payment Date, the
period from and including the prior Payment Date to but excluding such Payment
Date and with respect to the initial Payment Date, the period from and
including the Closing Date to but excluding such Payment Date.



                                    Annex-15

<PAGE>   60



   "Investment Company Act" means the Investment Company Act of 1940, as
amended (15 U.S.C. 80a-1 et seq.), as the same may be in effect from time to
time, or any successor statute thereto.

   "Investment Earnings" means any and all income from the investment of monies
held, from time to time, in the Collection Account, the Reserve Account, the
Supplemental Interest Reserve Account the Letter of Credit Deposit Account, the
Pre-Funding Account and the Capitalized Interest Account pursuant to Section
3.03 of the Indenture, net of any losses on any investments held in such
accounts.

   "IRS" means the Internal Revenue Service and any successor thereto.

   "Issuer" or "Trust" means First Sierra Healthcare Equipment Contract Trust
2000-1, a common law trust acting through Christiana Bank & Trust Company, not
in its individual capacity but solely as Owner Trustee.

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

   "Letters of Credit" means (i) the irrevocable standby letter of credit
number 452 dated as of December 30, 1999 issued by Sky Bank for the benefit of
First Sierra Financial, Inc., as amended by Amendment No. 1 dated March 31,
2000 (the "Sky Letter of Credit") which Letter of Credit was confirmed by The
Northern Trust Company Chicago in an Advice of Letter of Credit, Advice No.
K274605, dated January 3, 2000, which advice was confirmed by the Confirming
Bank on April 4, 2000 and which advice was transferred to the Trust by the
Confirming Bank pursuant to a Transfer Advice of Irrevocable Letter of Credit
dated April 7, 2000 and (ii) the irrevocable standby letter of credit number
SLC99-1850 dated as of December 30, 1999 issued by MidAm Bank for the benefit
of First Sierra Financial, Inc., as amended by Amendment No. 1 dated March 31,
2000 (the "MidAm Letter of Credit") as confirmed by Bank One N.A. on January 3,
2000, reference number 00321781, which confirmation was amended by Amendment
No. 1 dated April 4, 2000, which Letter of Credit was transferred in its entity
to the Trust by Bank One N.A. on April 7, 2000.

    "Letter of Credit Confirming Bank" means (i) with respect to the Sky Letter
of Credit, Northern Trust Company, Chicago and (ii) with respect to the MidAm
Letter of Credit, Bank One, N.A., Chicago.

    "Letter of Credit Deposit Account" means the Eligible Bank Account
established pursuant to Section 3.08 of the Indenture.

   "Letter of Credit Draw Event" means the occurrence or continuation of any of
the following events:

  (i) Sky Financial Group, Inc. has failed to meet its repurchase obligations
set forth in its Guaranty dated December 30, 1999; or

   (ii) Sky Financial Group, Inc. or MidAm Bank has notified First Sierra
Financial Inc that the related Letter of Credit will not be renewed for an
additional 364 days (or the prior banking day if the expiry date falls on a
non-banking date) from its current expiry; or





                                    Annex-16

<PAGE>   61





   (iii) the long term debt credit rating of (x) Bank One N.A. has dropped
below an S&P rating of "A" or a Moody's rating of "Aa" or (y) the long term
debt credit rating of Northern Trust Company, Chicago has dropped below an S&P
rating of "AA" or a Moody's rating of "Aa"; or

   (iv) a Letter of Credit Confirming Bank has notified First Sierra Financial,
Inc. that it will not continue to confirm the related Letter of Credit for an
additional 364 days(or the prior banking day if the expiry date falls on a
non-banking date) from its current expiry.

   "Letter of Credit Draw" has the meaning set forth in Section 3.08(b) of the
Indenture.

   "Lien" means any mortgage, pledge, hypothecation, assignment for security,
security interest, encumbrance, levy, lien or charge of any kind, whether
voluntarily incurred or arising by operation of law or otherwise, affecting any
property, including any agreement to grant any of the foregoing, any
conditional sale or other title retention agreement, any Contract in the nature
of a security interest, and the filing of or agreement to file or deliver any
financing statement (other than a precautionary financing statement with
respect to a lease that is not in the nature of a security interest) under the
UCC or comparable law of any jurisdiction.

   "Liquidation Proceeds" means, with respect to a Defaulted Contract, proceeds
from the sale or re-lease of the Equipment, proceeds of the related Insurance
Policy, proceeds from any Source Agreements and any other recoveries with
respect to such Defaulted Contract and the related Equipment, net of reasonable
remarketing expenses and amounts so received that are required to be refunded
to the Obligor on such Contract.

   "List of Contracts" means the List of Initial Contracts, each List of
Subsequent Contracts and each List of Substitute Contracts.

   "List of Initial Contracts" means the List of Initial Contracts delivered
pursuant to Section 2.03(a) of the Indenture.

   "List of Subsequent Contracts" means the List of Subsequent Contracts
delivered pursuant to Section 2.02(c) of the Receivables Transfer Agreement.

   "List of Substitute Contracts" means the List of Substitute Contracts
delivered pursuant to Section 4.02 of the Indenture.

   "Lockbox Account" means the lockbox account established pursuant to the
Lockbox Agreement.

   "Lockbox Agreement" means the Lockbox Agreement dated as of February 13,
1995, among SierraCities.com and Chase Bank of Texas, N.A.

   "Lockbox Bank" means Chase Bank of Texas, N.A.

   "Majority Holders" means the holders of the Applicable Securities that
together own Applicable Securities with an aggregate Percentage Interest in
excess of 50%.

   "Monthly Statement" has the meaning specified in Section 4.08 of the
Servicing Agreement.

   "Moody's" means Moody's Investors Service, Inc.

   "Necessary Consents" means, with respect to any Person, all necessary
consents to the closing of the transactions contemplated by the Transaction
Documents.

   "Notes" means the Class A Notes and the Class B Notes.





                                    Annex-17

<PAGE>   62





   "Noteholder" means the Person in whose name a Note is registered in the
Register held by the Note Registrar.

   "Note Principal Balance" means, with respect to any Class of Notes, the
Class A-1 Note Principal Balance, the Class A-2 Note Principal Balance, and the
Class B Note Principal Balance, as applicable.

   "Note Rate" means, with respect to any Class of Notes, the Class A-1 Note
Rate, the Class A-2 Note Rate, and the Class B Note Rate, as applicable.

   "Note Registrar" means, initially, the Indenture Trustee pursuant to Section
5.03 of the Indenture.

   "Obligor" means, with respect to any Contract, the Person or Persons
obligated to make payments with respect to such Contract, including any
guarantor thereof.

   "Officer's Certificate" means a certificate delivered by an Authorized
Officer.

   "Opinion of Counsel" means a written opinion of counsel, who may be counsel
employed by the Servicer or other counsel, in each case acceptable to the
addressees thereof.

   "Original Equipment" means any of the Equipment relating to the Initial
Contracts.

   "Original Equipment Cost" means the invoice price of the Equipment,
exclusive of amounts, if any, paid for taxes, warranty extensions or service
contracts.

   "Original Pre-Funded Amount" means $1,000.00.

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

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

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

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

   (iv) Notes that have been alleged to be destroyed, lost or stolen for which
replacement Notes have been issued as provided for in Section 5.04 of the
Indenture;

provided, however, that in determining whether the Holders of the requisite
Outstanding Amount of the Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or under any Transaction
Document, Notes owned by the Issuer, any other obligor upon the Notes, the
Sellers or any Affiliate of any of the foregoing Persons shall be disregarded
and deemed not to be Outstanding, except that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Notes that a
Responsible Officer of the Indenture Trustee either actually knows to be so
owned or has received written notice thereof shall be so disregarded. Notes so



                                    Annex-18

<PAGE>   63



owned that have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgee's right so to act with respect to such Notes and that the pledgee is
not the Issuer, any other obligor upon the Notes, the Sellers or any Affiliate
of any of the foregoing Persons.

   "Outstanding Amount" means the aggregate principal amount of all Notes or
class of Notes, as applicable, Outstanding at the date of determination.

   "Owner Trustee" means Christina Bank & Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as owner trustee under
the Trust Agreement and the Holding Trust Agreement, and any successor owner
trustee.

   "Payment Date" means the 18th day of each calendar month, or if such day is
not a Business Day, the immediately following Business Day, commencing on May
18, 2000 until such time as the Indenture has been terminated in accordance
with Article IX thereof.

   "Percentage Interest" means, with respect to a Noteholder and a Class of
Notes on any date of determination, the percentage obtained by dividing the
Note Principal Balance of the Note held by such Noteholder as of the Closing
Date by the related Note Principal Balance of the related Class of Notes as of
the Closing Date.

   "Permitted Liens" means:

       (a) Liens granted in favor of the Trust under the Receivables Transfer
Agreement or the Indenture Trustee on behalf of the Noteholders pursuant to the
Indenture; and

       (b) Liens constituting the rights of Obligors under Contracts.

   "Person" means a natural person, partnership, limited partnership, limited
liability company, trust, estate, association, corporation, custodian, nominee
or any other individual or entity in its own or any representative capacity.

   "Pledged Property" means the property pledged by the Trust to the Indenture
Trustee on behalf of the Noteholders pursuant to Section 2.01 of the Indenture,
except for the Initial Unpaid Amounts relating thereto.

   "Pool Factor" means the seven digit decimal number that the Servicer will
compute or cause to be computed for each Collection Period and will make
available on the related Determination Date representing the ratio of (a) the
Aggregate Discounted Contract Principal Balance of the Contracts as of the
immediately preceding Calculation Date to (b) the Initial Aggregate Discounted
Contract Principal Balance.

   "Pre-Funded Amount" means the Original Pre-Funded Amount reduced by amounts
withdrawn from the Pre-Funding Account in accordance with Section 3.02 of the
Indenture.

   "Pre-Funding Earnings" means with respect to any Payment Date, the actual
Investment Earnings then on deposit in the Pre-Funding Account.

   "Pre-Funding Account" means that certain account established and maintained
by the Indenture Trustee pursuant to Section 3.02(a) of the Indenture.

   "Pre-Funding Period" means the period from and including the Closing Date
until the earlier of (i) the date on which the balance of funds on deposit in
the Pre-Funding Account is reduced to an amount less than $100,000, (ii) the
date on which an Event of Default or an Event of Servicing Termination occurs,
or (iii) the close of business on June 10, 2000.



                                    Annex-19

<PAGE>   64



   "Prepayment" means, with respect to a Collection Period and a Contract
(except a Defaulted Contract), the amount received by the Servicer during such
Collection Period from or on behalf of an Obligor with respect to such Contract
in excess of the sum of (x) the Scheduled Payment and any Final Scheduled
Payment due during such Collection Period, plus (y) the aggregate of any
overdue Scheduled Payments, Initial Unpaid Amounts and unpaid Servicing Charges
for such Contract, so long as such amount is designated by the Obligor as a
prepayment and the Servicer has consented to such prepayment. Defaulted
Contract Recoveries are not considered to be Prepayments.

   "Prepayment Amount" means, with respect to a Payment Date and a Contract, an
amount, without duplication, equal to the sum of (i) the Discounted Contract
Principal Balance as of the close of business on the second preceding
Collection Period (without any deduction for any security deposit paid by an
Obligor, unless such security deposit has been deposited in the Collection
Account pursuant to the Indenture); (ii) the product of (x) such Contract's
Discounted Contract Principal Balance as of the beginning of the immediately
preceding Payment Date and (y) one-twelfth of the Discount Rate; (iii) any
Scheduled Payments theretofore due and not paid by an Obligor; and (iv) any
Final Scheduled Payment due or to become due under the Contract.

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

   "Rating Agency Condition" means written confirmation from each Rating Agency
that the use of such investment will not result in the reduction or withdrawal
of the rating assigned by such Rating Agency to any of the Notes.

   "Rating Agencies" means DCR and Moody's.

   "Receivables" means the Contracts together with the Equipment.

   "Receivables Transfer Agreement" means the Receivables Transfer Agreement,
dated as of March 1, 2000, among SierraCities.com, the Depositor, First Union
National Bank, Variable Funding Capital Corporation, Fairway Finance
Corporation, Merrill Lynch Mortgage Capital, Inc., First Sierra Equipment
Contract Trust 1999-H, Bankers Trust Company, as trustee of the Sellers, and
the Issuer.

   "Record Date" means, with respect to any Payment Date, the last day of the
related Interest Accrual Period.

   "Register" means the register kept by the Indenture Trustee pursuant to
Section 5.03 of the Indenture.

   "Registration Statement" shall mean the Registration Statement filed with
the SEC under the Securities Act (No. 333-12199) materially in the form in
which it was declared effective.

   "Regulations G, T, U and X" means, collectively, Regulations G, T, U and X
adopted by the Federal Reserve Board (12 C.F.R. Parts 207, 220, 221 and 224,
respectively) and any other regulation in substance substituted therefor.

   "Representation Letter" means letters to, or agreements with, the Depository
to effectuate a book entry system with respect to the Class A and Class B Notes
registered in the Register under the nominee name of the Depository.



                                    Annex-20

<PAGE>   65



   "Repurchase Amount" means, with respect to a Payment Date and a Contract,
the sum, without duplication, of (a) the Discounted Contract Principal Balance
as of the close of business on the last day of the second preceding Collection
Period (without any deduction for any security deposit paid by an Obligor,
unless such security deposit has been deposited in the Collection Account
pursuant to the Indenture); (b) the product of (i) such Contract's Discounted
Contract Principal Balance as of the beginning of the immediately preceding
Collection Period and (ii) one-twelfth of the Discount Rate; (c) any Scheduled
Payments theretofore due and not paid by an Obligor; and (d) any Final
Scheduled Payment due or to become due under the Contract.

   "Repurchase Contract" means any Contract that has been repurchased by
SierraCities.com pursuant to Section 4.01 of the Indenture.

   "Requisite Amount" means, with respect to the Closing Date and any
Subsequent Transfer Date, an amount equal to the product of (x) 2.35% and (y)
the sum of (i) Initial Aggregate Discounted Contract Principal Balance as of
the Initial Cut-Off Date and (ii) the aggregate Discounted Contract Principal
Balance of all Subsequent Contracts as of the related Subsequent Cut-Off Date,
which amount shall be equal to $4,433,337.05.

   "Reserve Account" means the Eligible Bank Account established pursuant to
Section 3.04 of the Indenture.

   "Responsible Officer" means (i) when used with respect to the Indenture
Trustee, any officer assigned to the Corporate Trust Office, including any
Principal, Managing Director, Vice President, Assistant Vice President,
Secretary, Assistant Secretary, any trust officer or any other officer of the
Indenture Trustee customarily performing functions similar to those performed
by any of the above designated officers, and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject and (ii)
when used with respect to the Owner Trustee, any Vice President, Assistant Vice
President, Secretary, Assistant Secretary, Managing Director, any trust officer
or any other officer of the Owner Trustee customarily performing functions
similar to those performed by any of the above designated officers, and also,
with respect to a particular matter, any other officer to whom such matter is
referred because of such officer's knowledge of and familiarity with the
particular subject.

   "Scheduled Payments" means, with respect to a Contract, the periodic payment
(exclusive of any amounts in respect of late charges, insurance, warranty
extensions, service contracts or taxes and reflecting any adjustment for any
partial Prepayment and further reflecting the effect of any permitted
modification to such Contract) set forth in such Contract due from the Obligor
in the related Collection Period; provided, however, that with respect to any
Contract as to which SierraCities.com retained the security deposit, a
Scheduled Payment shall not include the final payment or payments to be made
thereon equal to the amount of such security deposit.

   "S&P" means Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc.

   "SEC" means the Securities and Exchange Commission and any successor
thereto.

   "Securities Act" means the Securities Act of 1933, as amended.

   "Seller" means First Sierra Receivables III, Inc.


                                    Annex-21
<PAGE>   66



   "Servicer" means the Person performing the duties of the Servicer under the
Indenture and the Servicing Agreement, initially SierraCities.com.

   "Servicer Advance" means any amount paid by the Servicer with respect to a
Delinquent Contract pursuant to Section 4.03 of the Servicing Agreement.

   "Servicer Fee" means the fee payable to the Servicer on each Payment Date in
consideration for the Servicer's performance of its duties pursuant to Article
4 of the Servicing Agreement in an amount equal to the product of (a)
one-twelfth of the Servicer Fee Rate and (b) the Aggregate Discounted Contract
Principal Balance as of the opening of business on the first day of the related
Collection Period.

   "Servicer Fee Rate" means 0.50% per annum.

   "Servicer Termination Notice" means the notice described in Section 6.01 of
the Servicing Agreement.

   "Servicing Agreement" means the Servicing Agreement, dated as of March 1,
2000, among the Servicer, SierraCities.com, the Trust and the Indenture
Trustee, as amended, supplemented or otherwise modified from time to time.

   "Servicing Charges" means the sum of (a) any late payment charges paid by an
Obligor on a Delinquent Contract after application of any such charges to
amounts then due under such Contract and (b) any other incidental charges or
fees received from an Obligor.

   "Servicing Officer" means any representative of the Servicer involved in, or
responsible for, the administration and servicing of the Contracts whose name
appears on a list of servicing officers furnished to the Indenture Trustee by
the Servicer, as such list may from time to time be amended.

   "Servicing Standard" has the meaning specified in Section 4.01(a) of the
Servicing Agreement.

   "SierraCities.com" means SierraCities.com Inc., formerly First Sierra
Financial, Inc., a Delaware corporation.

   "Source" means Sky Financial Solutions, Inc., the third party from whom
SierraCities.com acquired the Contracts pursuant to SierraCities.com's "private
label program".

   "Source Agreement" means the agreement between SierraCitities.com, Inc. and
the Source pursuant to which SierraCities.com acquired all right, title and
interest of the Source in and to a Contract and a security interest in the
Source's right, title and interest in and to the related Equipment.

   "Source Agreement Rights" means (i) any and all rights of SierraCities.com
under the Source Agreement with respect to such Source Agreement to the extent
such Source Agreement relates to any Contract and any Equipment covered by the
Contracts and (ii) any and all rights of SierraCities.com under the Guaranty or
any letters of credit with respect to the Source Agreement to the extent the
Guaranty, any letter of credit or Source Agreement relates to any Contract and
any Equipment covered by the Contracts.

   "Source Repurchase Price" means, with respect to any Contract required to be
repurchased by the Source pursuant to the terms of the Source Agreement and as
of the date such Contract is required to be repurchased, an amount equal to the
sum of (i) the Discounted Contract Balance of such Contract, plus (ii) any
costs and expenses incurred by the Servicer in enforcing its rights


                                    Annex-22

<PAGE>   67


and remedies under the Source Agreement and under such Contract, plus (iii) any
accrued but unpaid late charges, taxes or other charges due under such
Contract. Solely for the purposes of calculating the Source Repurchase Price,
"Discounted Contract Balance" shall mean, with respect to any Contract required
to be repurchased by the Source pursuant to the terms of the Source Agreement
and as the date such Contract is required to be repurchased, an amount equal to
the sum of (i) all Scheduled Payments due under such Contract and unpaid as of
such date, plus (ii) the present value of the remaining Scheduled Payments to
become due under such Contract, discounted to such date of determination using
a "Purchase Cost Discount Rate" specified by the Servicer in the related
Default Notice.

   "State" means any state of the United States of America and, in addition,
the District of Columbia and Puerto Rico.

   "Subsequent Contracts" means those contracts listed on the List of
Subsequent Contracts attached to the related Subsequent Transfer Agreement.

   "Subsequent Conveyed Assets" means, with respect to any Subsequent Transfer
Agreement (a) all of the Sellers' right, title and interest in and to the
Subsequent Equipment relating to Subsequent Contracts (except for any licensed
products that may accompany the Subsequent Equipment) and any new unit or units
of Equipment substituted for any existing unit or units of Subsequent
Equipment, including all income and proceeds upon any sale or other disposition
of the Subsequent Equipment, (b) all of the Sellers' right, title and interest
in and to, but not its obligations under, the Subsequent Contracts, and all
amendments, additions and supplements including schedules, summary schedules
and subschedules made or hereafter made with respect thereto, (c) all monies
due or to become due in payment of the Subsequent Contracts on or after the
related Subsequent Cut-Off Date, including without limitation, all Scheduled
Payments thereunder (whether or not due), any Prepayments, any payments in
respect of a casualty or early termination and any Liquidation Proceeds
received with respect thereto, but excluding any Excluded Amounts, (d) the
Contract Files, (e) all Insurance Proceeds relating to the foregoing and the
Sellers' rights and interests in the Insurance Policies relating to the
foregoing, (f) the Source Agreement and Source Agreement Rights to the extent
they relate to any Subsequent Contract and any Subsequent Equipment covered by
the Subsequent Contracts and (g) all proceeds and income of the foregoing or
relating thereto.

   "Subsequent Cut-Off Date" means with respect those Subsequent Contracts
which are pledged to the Indenture Trustee pursuant to a Subsequent Transfer
Agreement, three Business Days prior to such Subsequent Transfer Date.

   "Subsequent Equipment" means the Equipment relating to the Subsequent
Contracts, a security interest in which will be pledged to the Indenture
Trustee on the related Subsequent Transfer Date.

   "Subsequent Receivables" means the Subsequent Contracts and the Subsequent
Equipment.

   "Subsequent Transfer Agreement" means each Subsequent Transfer Agreement
dated as of a Subsequent Transfer Date executed by the Sellers and the Trust
substantially in the form of Exhibit A to the Receivables Transfer Agreement,
by which Subsequent Receivables are sold to the Trust.

   "Subsequent Transfer Date" means any date on which a Subsequent Contract is
pledged to the Indenture Trustee pursuant to Section 2.01 of the Indenture.


                                    Annex-23

<PAGE>   68


   "Substitute Contract" has the meaning specified in Section 4.02(a) of the
Indenture.

   "Substitute Conveyed Assets" means, with respect to the Receivables Transfer
Agreement (a) all of the Sellers' right, title and interest in and to the
Substitute Equipment relating to Substitute Contracts (except for any licensed
products that may accompany the Substitute Equipment) and any new unit or units
of Equipment substituted for any existing unit or units of Substitute Equipment,
including all income and proceeds upon any sale or other disposition of the
Substitute Equipment, (b) all of the Sellers' right, title and interest in and
to, but not its obligations under, the Substitute Contracts and all amendments,
additions and supplements including schedules, summary schedules and
subschedules made or hereafter made with respect thereto, (c) all monies due or
to become due in payment of the Substitute Contracts on or after the related
Substitute Cut-Off Date, including without limitation, all Scheduled Payments
thereunder (whether or not due), any Prepayments, any payments in respect of a
casualty or early termination and any Liquidation Proceeds received with respect
thereto, but excluding any Excluded Amounts, (d) the Contract Files, (e) all
Insurance Proceeds relating to the foregoing and the Sellers' rights and
interests in the Insurance Policies relating to the foregoing, (f) the Source
Agreement and Source Agreement Rights to the extent they relate to any
Substitute Contract and any Substitute Equipment covered by the Substitute
Contracts and (g) all proceeds and income of the foregoing or relating thereto.

   "Substitute Cut-Off Date" means, with respect to a Substitute Contract, the
close of business on the first day of the calendar month in which the related
Substitute Transfer Date occurs.

   "Substitute Equipment" means the Equipment pledged to the Indenture Trustee
on each Substitute Transfer Date.

   "Substitute Transfer Date" means any date on which a Substitute Contract is
pledged pursuant to Section 4.02 of the Indenture.

   "Subsequent Transfer Agreement" has the meaning set forth in Section 2.02(c)
of the Receivables Transfer Agreement.

   "Supplemental Interest Required Amount" means an amount equal to the excess
of (i) the product of (x) 1.0% and (y) the sum of (i) Initial Aggregate
Discounted Contract Principal Balance as of the Initial Cut-Off Date and (ii)
the aggregate Discounted Contract Principal Balance of all Subsequent Contracts
as of the related Subsequent Cut-Off Date over (ii) the amount previously
withdrawn from the Supplemental Interest Reserve Account pursuant to Section
3.09(c) of the Indenture.

   "Supplemental Interest Reserve Account" means the Eligible Bank Account
established pursuant to Section 3.09 of the Indenture.

   "Tape" means the data base with respect to the Contracts used to calculate
the information in the Monthly Statement.

   "Tax Sharing Agreement" means any tax allocation agreement or arrangement
with respect to the First Sierra Group, including any arrangement for payments
by or to a member of the First Sierra Group with respect to its liability for
taxes (including taxes excluded from the definition of Income Taxes hereunder)
of the First Sierra Group or arising from its contribution to taxable income or
loss of the First Sierra Group.

   "TIA" means the Trust Indenture Act of 1939.


                                    Annex-24

<PAGE>   69


   "Transaction Documents" means the Receivables Transfer Agreement, each
Subsequent Transfer Agreement, the Indenture, this Annex A, the Servicing
Agreement, the Notes, the Trust Certificate, the Trust Agreement and the
Holding Trust Agreement.

   "Trust Agreement" shall mean the Trust Agreement, dated as of March 1, 2000,
between the Depositor and the Owner Trustee, as amended, supplemented or
otherwise modified from time to time.

   "Trust Certificate" means the Trust Certificate evidencing the beneficial
ownership interest of a Holder of the Trust Certificate in the Trust, initially
issued by the Issuer to the Holding Trust.

   "Trust Certificate Holder" means the holder of the Trust Certificate issued
pursuant to the Trust Agreement.

   "Trust Certificate Principal Balance" means, as of any Payment Date, the
difference, if any, between (i) the sum of (x) the Aggregate Discounted
Contract Principal Balances of all Contracts as of the end of the immediately
preceding Collection Period and (y) the Aggregate Discounted Contract Principal
Balances as of the day prior to such Payment Date of all Substitute Contracts
to be conveyed to the Trust on such Payment Date and (ii) the Aggregate Note
Principal Balance, after taking into account any distributions on such Payment
Date.

   "Trust Operating Expenses" means, with respect to any Payment Date, the
aggregate amount described in clauses (iii) through (vi), inclusive, of Section
3.05(b) of the Indenture with respect to such Payment Date.

   "UCC" means the Uniform Commercial Code as in effect in the applicable
jurisdiction.

   "Underwriters" means Merrill Lynch, Pierce Fenner & Smith., a Delaware
corporation and First Union Securities, Inc., a North Carolina corporation.

   "Unscheduled Principal Payments" means, with respect to any Payment Date,
the aggregate amounts received during the immediately preceding Collection
Period pursuant to any Source Agreement, in respect of Contracts, or the
related Equipment (excluding Excluded Amounts).

   "Warranty Event" has the meaning provided in Section 4.01(a) of the
Indenture.


                                    Annex-25