<PAGE>   1
                              AMENDED AND RESTATED
                                    AGREEMENT

     THIS AMENDED AND RESTATED AGREEMENT (the "Agreement") is entered into as of
July 1, 1999 (the "Effective Date"), by and between T & W FINANCIAL CORPORATION,
a Washington corporation (hereinafter referred to as "Company"), P.L.M.
CONSULTING GROUP, L.L.C., a Nevada limited liability company (hereinafter
referred to as "PLM") and the individual members of PLM whose names appear on
the signature page of this Agreement.


                                   BACKGROUND

     A. Company is a specialized commercial finance company that provides
equipment financing to small and medium-sized businesses, principally in the
form of leases.

     B. Prior to the effective date of this Agreement, PLM, through its members
(as identified below), has provided certain consulting, marketing, advisory and
management services to Company. Through this arrangement, PLM to makes available
its members to serve as executive officers of Company upon the terms and
provisions of this Agreement.

     C. Company and PLM desire to amend and restate this Agreement in its
entirety in order to memorialize the manner in which certain compensation will
be paid by the Company to PLM from and after the Effective Date.


                                    AGREEMENT

     NOW, THEREFORE, it is agreed as follows:

     1. Availability of PLM Members. PLM agrees to make available Michael A.
Price ("M. Price"), Thomas W. Price ("T. Price"), Kenneth W. McCarthy, Jr.
("McCarthy") and Paul B. Luke ("Luke") to serve as executive officers of the
Company. The offices in which the individuals shall serve and the rates paid to
PLM are set forth in Section 4 below.

     2. Extent of Services. So long as any individual named in Section 1 is
serving as an executive officer of the Company, each individual agrees to devote
his entire time, attention and energies to the business of the Company on a
full-time basis, and shall not, during such period in which he serves as an
executive officer, engage in any other


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business activity which interferes with his duties and responsibilities for the
Company.

     3. Term. Subject to the rights reserved in Section 7, this Agreement shall
be effective on the date first above written, and shall continue for a term of
three (3) years commencing on the Effective Date and ending June 30, 2002. At
the end of that period, it shall be automatically renewed from year to year
thereafter unless it is terminated by either party giving written notice of
termination to the other at least thirty (30) days prior to the end of the
initial term or any renewal term.

     4. Fees.

          4.1 Base Fee. From and after the Effective Date of this Agreement, PLM
agrees to make available the following individuals to serve in the capacity and
at the rate opposite their respective names ("Base Fee"):
<TABLE>
<CAPTION>
         Name                       Position                  Rate
         ----                       --------                  ----
         <S>                        <C>                       <C>
         M. Price                   CEO                       $40,000/month

         T. Price                   President                 $25,000/month

         McCarthy                   Sr. Vice-President/
                                    Secretary/Gen. Counsel    $20,000/month

         Luke                       Sr. Vice-President/
                                    Treasurer                 $20,000/month
</TABLE>

The Base Fee shall be paid to PLM one-half on the fifteenth (15th) day of the
month and one-half on the thirtieth (30th) day of each month for services
rendered by the aforementioned individuals during the current month. The Base
Fee payable for any partial month shall be prorated. To the extent that an
individual named in Section 4.1 fails or ceases to serve as an officer of the
Company, the Base Fee shall be appropriately reduced by such individual
executive's respective share of the Base Fee.

          4.2 Incentive Fee. In addition to the Base Fee, the Company shall pay
PLM an incentive fee (the "Incentive Fee") with respect to each calendar quarter
based on the Company's Return on Average Managed Assets ("ROAMA") as adjusted
annually by the performance of the Company's common stock as described below.
For purposes of this Agreement, ROAMA shall equal the Company's audited
consolidated after-tax net income for such year divided by 85% of T&W Financial
Services Company L.L.C.'s average managed assets. For purposes of making the
calculations required by this Section 4.2, during the first three quarters of a
calendar year the parties shall use the figures as published in the Company's
Form 10-Q. For the fourth quarter, and for any



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adjustments to the prior quarters, the parties shall use the figures as
published in the Company's Form 10-K.

          (a) ROAMA. Provided that the Company's ROAMA equals at least 1.5% (as
determined on an annualized basis, but prorated for each calendar quarter), the
Incentive Fee shall be 90% of 8.5% of the Company's consolidated after-tax net
income. The remaining 10% shall be used to fund the bonus pool for the Company's
remaining senior management. The Company shall not be required to pay the
Incentive Fee unless the Company's ROAMA equals at least 1.5%.

          (b) Adjustment Attributable to Performance of Stock. The amount of the
Incentive Fee shall be adjusted to account for the performance of the Company's
common stock as quoted on the NASDAQ. A benchmark of 25% annual appreciation
shall be used during the term of this Agreement. On December 31 of each year,
the parties shall calculate the difference between the per share price of the
Company on December 31 and January 1. However, for calendar year 1999, the
parties shall measure the performance of the stock from July 1, 1999.

               (i) If the annual appreciation in the stock is greater than 25%,
then the amount of the Incentive Fee shall be increased by 50% of the amount by
which the actual percentage exceeds 25%.

               (ii) If the annual appreciation in the stock is less than 25%,
then the amount of the Incentive Fee shall be decreased by 50% of the actual
percentage decrease.

               (iii) If the stock fails to appreciate or depreciates, then the
amount of the Incentive Fee shall be decreased by 12.5%.

Example: The following example is intended to illustrate the adjustment to the
Incentive Fee: Assume that the per share price on January 1, 1999 is $10.00. The
performance benchmark is therefore $12.50 ($10.00 + 25%).
<TABLE>
<CAPTION>
                                Closing Per Share Price as   Increase or Decrease from    Percentage Increase or
Date                            quoted on NASDAQ             Performance Benchmark        Decrease in Incentive Fee
----                            --------------------------   -------------------------    -------------------------
<S>                             <C>                          <C>                          <C>
12/31/99                        $15.00                       50%                          12.5%


12/31/99                        $11.00                       10%                          (7.5%)
</TABLE>



Agreement                           Page 3
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<TABLE>


<S>                             <C>                          <C>                          <C>
12/31/99                        $7.50                        (25%)                        (25.0%)
</TABLE>


          4.3 Payment of the Incentive Fee. The Incentive Fee shall be paid by
the Company to PLM no later than ninety (90) days following the end of the
applicable calendar year. Any adjustment to the Incentive Fee based on the
Company's stock appreciation at the close of the year shall be made no later
than ten (10) business days after the date on which the Company files its form
10-K with the Securities and Exchange Commission containing the audited
financial statements for such calendar year. The incentive Fee for any partial
year shall be prorated.

          4.4 Termination of Services. To the extent that any individual named
in Section 4.1 fails or ceases to serve as an executive officer of Company, the
Incentive Fee for the year in which such individual ceases to so serve shall be
reduced by such individual's respective share of the Incentive Fee ( which shall
be in the same proportion as such individual's share of the Base Fee),
appropriately prorated for the number of days, if any, during such calendar year
in which such individual served as an executive officer. The Company may make
quarterly advances to PLM for anticipated Incentive Fees with respect to any
calendar year, provided that PLM agrees to promptly repay any such advances
which exceed the final Incentive Fee calculated as provided above.

     5. Taxes. PLM and its individual members shall be responsible for, and
indemnify the Company against, any taxes, penalties and interest assessed
against the Company as a result of or attributable to PLM's receipt of the Base
Fee and/or Incentive Fee payments in accordance with this Agreement.

     6. Confidentiality. In connection with the performance of services
hereunder, PLM and its members acknowledge that they may become privy to
confidential or proprietary information relating to the business and affairs of
the Company. PLM and its members agree that they shall use their best efforts
and shall cause PLM's members, employees and agents performing services on
behalf of the Company to retain all information relative to the business of the
Company in strict confidence and not to disclose any such information now or
hereafter received or obtained from the Company to any third party without the
prior consent of the Company; provided, however, that any such confidential or
proprietary information may be disclosed (i) to third parties retained by PLM on
behalf of the Company (e.g., attorneys, accountants) as shall be necessary to
perform services hereunder, (ii) to the extent such information becomes
generally available to the public other than as a result of an unauthorized
disclosure by PLM or (iii) in the event PLM, or its members, employees or agents
are compelled to disclose such information in accordance with an order from any
court of competent jurisdiction or under any provision of applicable law;
provided, however, in such event PLM shall promptly notify the Company of such
required disclosure and shall furnish only such portion of such



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information as PLM is legally compelled to disclose.

     7. Termination. Upon the happening of any of the following events, either
party shall be entitled to terminate this Agreement prior to the end of the
term, and except as to liabilities or claims which shall have accrued or arisen
prior to the date of such termination, all obligations hereunder shall cease:

          7.1 30 days' Prior Notice. This Agreement, or any portion of this
Agreement with respect to any individual named herein, may be terminated by
either the Company or PLM upon at least thirty (30) days prior written notice.
The parties acknowledge that, notwithstanding the foregoing, the Company may
terminate the services of any or all of the PLM members referred to in Section 1
as executive officers of the Company at any time without prior notice, in the
Company's sole discretion.

          7.2 Bankruptcy or Insolvency. The filing by the other party in any
court pursuant to any statute of the United States or any state of a petition in
bankruptcy or insolvency or for reorganization or for the appointment of a
receiver or trustee of all or a substantial portion of such party's property or
the making by such party of an assignment for or petition for an agreement for
the benefit of creditors or the filing of a petition in bankruptcy against such
party which is not discharged within ninety (90) days thereafter or the consent
to or sufferance of the application of any statute which obviates, restricts or
suspends the rights of creditors generally.

          7.3 Failure to Cure Material Breach. The failure of the other party to
cure a material breach of this Agreement within thirty (30) days following
delivery of a notice from the non-breaching party setting forth the details of
such alleged breach.

     8. Miscellaneous.

          8.1 Assignment. Neither party may assign its rights under this
Agreement without the written consent of the other party. Notwithstanding the
previous sentence, the Company may assign its rights under this Agreement to any
entity which is directly or indirectly controlled by the Company.

          8.2 Binding Effect; Benefits. This Agreement shall inure to the
benefit of the parties and shall be binding upon the parties and their
respective heirs, personal representatives, successors and permitted assigns.

          8.3 Notices. All notices, requests, demands and other
communications which are required or permitted under this Agreement shall be in
writing and shall be deemed to have been given when delivered in person or three
(3) days after deposit in the United States mail, certified postage prepaid,
return receipt requested, addressed as follows:




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                  If to Company, to:

                           T & W FINANCIAL CORPORATION
                           Attn:  Thomas W. Price, President
                           P.O. Box 3028
                           Federal Way, WA 98063

                  If to PLM, to:

                           P.L.M. CONSULTING GROUP, L.L.C.
                           Michael A. Price, Member
                           P.O. Box 3028
                           Federal Way, WA 98063

or to such other address as any party may designate by written notice to the
other parties.

               8.4 Amendment. This Agreement may only be amended by a written
instrument executed by the Company and PLM.

               8.5 Severability. The invalidity of all or any part of any
section of this Agreement shall not render invalid the remainder of this
Agreement or the remainder of such section.

               8.6 Governing Law. This Agreement is made in and shall be
governed and interpreted in accordance with the internal laws of the State of
Washington.

     DATED as of the date and year first written above.

COMPANY:          T & W FINANCIAL CORPORATION


                           By:
                               -----------------------------------------------
                                  Thomas W. Price, President

PLM:                       P.L.M. CONSULTING GROUP, L.L.C., by:


                          ---------------------------------
                           Kenneth W. McCarthy, Member

MEMBERS
OF PLM:


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                           Michael A. Price, Member


                           -----------------------------
                           Thomas W. Price, Member


                           ______________________________
                           Kenneth W. McCarthy, Jr., Member


                           ______________________________
                           Paul B. Luke, Member



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