<PAGE>

                                                                     EXHIBIT 4.1



                               TRANSFER AGREEMENT


                                      among


                         CONSECO LEASE FINANCE II, INC.
                                    Purchaser


                                       and


                   CONSECO FINANCE VENDOR SERVICES CORPORATION
                               Seller and Servicer



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

                            Dated as of July 1, 2000

                                 ---------------
<PAGE>

                               TABLE OF CONTENTS

                                                                            Page
                                                                            ----
ARTICLE I     DEFINITIONS.....................................................2
   SECTION 1.1   General......................................................2
   SECTION 1.2   Specific Terms...............................................2
   SECTION 1.3   Certain References...........................................3
   SECTION 1.4   No Recourse..................................................3
   SECTION 1.5   Action by or Consent of Noteholders..........................3

ARTICLE II    CONVEYANCE OF THE LEASES........................................4
   SECTION 2.1   Conveyance of Leases and Related Assets......................4
   SECTION 2.2   Substitution.................................................5
   SECTION 2.3   Intention of the Parties.....................................7

ARTICLE III   REPRESENTATIONS AND WARRANTIES..................................7
   SECTION 3.1   Representations and Warranties of Vendor Services............7
   SECTION 3.2   Representations and Warranties of Lease Finance..............9

ARTICLE IV    COVENANTS OF VENDOR SERVICES...................................11
   SECTION 4.1   Protection of Title of Lease Finance and the LLC............11
   SECTION 4.2   Other Liens or Interests....................................13
   SECTION 4.3   Costs and Expenses..........................................13
   SECTION 4.4   Indemnification.............................................13
   SECTION 4.5   Further Assurances..........................................15
   SECTION 4.6   Negative Covenant...........................................15

ARTICLE V     REPURCHASES....................................................16
   SECTION 5.1   Repurchase of Leases Upon Breach of Representation
                   or Warranty...............................................16
   SECTION 5.2   Reassignment of Purchased Leases and Equipment..............17
   SECTION 5.3   Waivers.....................................................17

ARTICLE VI    MISCELLANEOUS..................................................17
   SECTION 6.1   Reserved....................................................17
   SECTION 6.2   Merger or Consolidation of Vendor Services or
                   Lease Finance.............................................17
   SECTION 6.3   Limitation on Liability of Vendor Services and Others.......18
   SECTION 6.4   Vendor Services May Own Notes...............................18
   SECTION 6.5   Amendment...................................................18
   SECTION 6.6   Notices.....................................................19
   SECTION 6.7   Merger and Integration......................................20
   SECTION 6.8   Severability of Provisions..................................20
   SECTION 6.9   Governing Law...............................................20


                                       -i-
<PAGE>

   SECTION 6.10  Counterparts................................................20
   SECTION 6.11  Conveyance of the Leases to the Trust.......................20
   SECTION 6.12  Nonpetition Covenant........................................20
                                         SCHEDULES

Schedule A  --  Schedule of Leases and Equipment
Schedule B  --  Schedule of Representations and Warranties of Vendor Services


                                      -ii-
<PAGE>

                               TRANSFER AGREEMENT
                               ------------------


     THIS TRANSFER AGREEMENT, dated as of July 1, 2000, executed between Conseco
Lease Finance II, Inc., a Minnesota corporation, as purchaser ("Lease Finance")
and Conseco Finance Vendor Services Corporation, a Delaware corporation ("Vendor
Services"), as seller and servicer (in such capacity, the "Servicer").

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

     WHEREAS, Vendor Services owns certain Leases (the "Leases") as are more
particularly described in Schedule A attached hereto and has an ownership or
security interest in the items of Equipment subject thereto (the "Equipment"),
as more particularly described in Schedule A attached hereto; and

     WHEREAS, Lease Finance has agreed to acquire the Leases and the Equipment
from Vendor Services, and Vendor Services has agreed to transfer the Leases and
the Equipment to Lease Finance; and

     WHEREAS, pursuant to the terms of a Contribution and Servicing Agreement,
dated as of July 1, 2000 (the "Contribution and Servicing Agreement"), by and
among Conseco Finance Lease 2000-1, LLC (the "LLC"), Lease Finance, as
contributor, and Vendor Services, in its individual capacity and as Servicer, to
be executed concurrently with the execution of this Agreement, Lease Finance
will convey the Leases and certain rights to the proceeds of disposition of the
Equipment ("Residual Realizations") to the LLC; and

     WHEREAS, pursuant to the terms of an Indenture, dated as of July 1, 2000
(the "Indenture"), between Conseco Finance Lease 2000-1, LLC (the "LLC") and
U.S. Bank Trust National Association, as Trustee (the "Trustee"), to be executed
concurrently with this Agreement, the LLC will, on the Closing Date, issue the
Notes (as defined in the Indenture), secured by a pledge of the Leases and the
Residual Realizations.

     NOW, THEREFORE, in consideration of the mutual agreements herein contained,
and for other good and valuable consideration, the receipt of which is
acknowledged, Lease Finance, Vendor Services and the Servicer, intending to be
legally bound, hereby agree as follows:


                                       -1-
<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

     SECTION 1.1 General.

          (a) The words "herein," "hereof" and "hereunder" and other words of
     similar import refer to this Agreement as a whole and not to any particular
     Article, Section or other subdivision, and Article, Section, Schedule and
     Exhibit references, unless otherwise specified, refer to Articles and
     Sections of and Schedules and Exhibits to this Agreement. All capitalized
     terms used herein without definition shall have the respective meanings
     assigned to such terms in the Contribution and Servicing Agreement or, if
     not defined in the Contribution and Servicing Agreement, in the Indenture.


          (b) With respect to all terms used in this Agreement, the singular
     includes the plural and the plural the singular; words importing any gender
     include the other gender; references to "writing" include printing, typing,
     lithography, and other means of reproducing words in a visible form;
     references to agreements and other contractual instruments include all
     subsequent amendments thereto or changes therein entered into in accordance
     with their respective terms and not prohibited by this Agreement or the
     Contribution and Servicing Agreement; references to Persons include their
     permitted successors and assigns; and the terms "include" or "including"
     mean "include without limitation" or "including without limitation."

     SECTION 1.2 Specific Terms. Whenever used in this Agreement, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:

     "Agreement" means this Transfer Agreement and all amendments hereof and
supplements hereto.

     "Closing Date" means August 3, 2000.

     "Related Documents" means the Indenture, the Contribution and Servicing
Agreement, the Underwriting Agreement and related Terms Agreement with the
Underwriters of the Notes, and the Notes. The Related Documents to be executed
by any party are referred to herein as "such party's Related Documents," "its
Related Documents" or by a similar expression.

     "Repurchase Event" means, with respect to any Lease, the occurrence of a
breach of any of the representations and warranties set forth in the Schedule of
Representations that materially and adversely affects the value of such Lease.

     "Schedule of Leases" means, collectively, the schedule of Leases and
Equipment attached hereto as Schedule A, as the same may be revised from time to
time in accordance with the Contribution and Servicing Agreement.


                                       -2-
<PAGE>

     "Schedule of Representations" means the Schedule of Representations and
Warranties of Vendor Services attached hereto as Schedule B.

     "Trust Assets" means the property and proceeds of every description
conveyed pursuant to Section 2.1 of the Contribution and Servicing Agreement,
together with the Trust Accounts (including all Eligible Investments therein and
all proceeds therefrom).

     SECTION 1.3 Certain References. All references to the Principal Balance of
a Lease as of an Accounting Date shall refer to the close of business on such
day, or as of the first day of a Collection Period shall refer to the opening of
business on such day. All references to the last day of a Collection Period
shall refer to the close of business on such day.

     SECTION 1.4 No Recourse. Without limiting the obligations of Vendor
Services hereunder, no recourse may be taken, directly or indirectly, under this
Agreement or any certificate or other writing delivered in connection herewith
or therewith, against any stockholder, officer or director, as such, of any of
Vendor Services, the Servicer, Lease Finance or the Trustee, or of any
predecessor or successor of any of Vendor Services, the Servicer, Lease Finance
or the Trustee.

     SECTION 1.5 Action by or Consent of Noteholders. Whenever any provision of
this Agreement refers to action to be taken, or consented to, by Noteholders,
such provision shall be deemed to refer to Noteholders of record as of the
Record Date immediately preceding the date on which such action is to be taken,
or consent given, by such Noteholders. Solely for the purposes of any action to
be taken, or consented to, by Noteholders, any Note registered in the name of
any of Lease Finance, Vendor Services or any Affiliate thereof, shall be deemed
not to be outstanding, and the related Principal Balance, as applicable,
evidenced thereby shall not be taken into account in determining whether the
requisite Principal Balance necessary to effect any such action or consent has
been obtained; provided, however, that, solely for the purpose of determining
whether the Trustee is entitled to rely upon any such action or consent, only
Notes which the Trustee knows to be so owned shall be so disregarded.


                                       -3-
<PAGE>

                                   ARTICLE II

                            CONVEYANCE OF THE LEASES

     SECTION 2.1 Conveyance of Leases and Related Assets.

          (a) As a contribution to the capital of Lease Finance, Vendor Services
     hereby sells, transfers, assigns, and otherwise conveys to Lease Finance,
     without recourse (but without limitation of its obligations in this
     Agreement), and Lease Finance hereby acquires, all right, title and
     interest, including security interests, whether now owned or hereafter
     acquired, of Vendor Services in and to the following:

               (i) the Leases, including, without limitation, (A) all monies at
          any time paid or payable thereon or in respect thereof from and after
          the Initial Cut-Off Date or, in the case of Substitute Leases, the
          applicable Cut-Off Date, including but not limited to (1) Scheduled
          Payments (including those Scheduled Payments due prior to, but not
          received as of, the Cut-Off Date, but excluding those Scheduled
          Payments due on or after, but received prior to, the Cut-Off Date),
          (2) Prepayments, (3) Liquidation Proceeds (including all net proceeds
          from the disposition of the related Equipment), (4) Extension Fees,
          (5) payments to be applied by the Servicer to the payment of insurance
          charges, maintenance, taxes or other similar obligations, and (6)
          payments to be retained by the Servicer in payment of Administrative
          Fees, (B) all security interests of the lessor or secured party, as
          the case may be, in the related Equipment and all present or future
          leases and other contracts relating to the Equipment and all revenues,
          payments, rights to payment, profits, accounts, chattel paper,
          products and contract rights arising from or related to the Equipment
          or any use thereof or from any such lease or other contract, (C) all
          rights of the lessor or secured party, as the case may be, in all
          Insurance Policies and all other security for the payment of amounts
          due under the Leases (including all rights, if any, the lessor or the
          secured party may have against vendors and other third parties for
          payments of such amounts) and (D) all items contained in the related
          Lease Files and any and all other documents that are kept on file in
          accordance with Vendor Services's customary procedures relating to the
          Leases;

               (ii) the Equipment and all proceeds thereof, including in any
          event and without limitation, all present and future leases and other
          contracts relating to the Equipment and all revenues, payments, rights
          to payment, profits, accounts, chattel paper, products and contract
          rights arising from or related to the Equipment or any use thereof or
          from any such lease or other contract; and

               (iii) any and all proceeds of any and all of the foregoing.

          (b) LEASE FINANCE ACKNOWLEDGES THAT VENDOR SERVICES IS TRANSFERRING
     THE EQUIPMENT "AS-IS, WHERE-IS," AND THAT VENDOR SERVICES MAKES NO
     REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT,
     INCLUDING WITHOUT LIMITATION ITS MERCHANTABILITY OR FITNESS FOR A
     PARTICULAR PURPOSE.


                                       -4-
<PAGE>

     SECTION 2.2 Substitution.

          (a) Lease Finance may at any time request that Vendor Services
     transfer to it one or more Substitute Leases and the Equipment subject
     thereto to replace any Lease (for purposes of this Section 2.2, such Lease
     referred to as a "Predecessor Lease") and the Equipment subject thereto if:

               (i) the Predecessor Lease became (A) a Liquidated Lease, (B) a
          Prepaid Lease, (C) a Warranty Lease or (D) an Adjusted Lease during
          the immediately preceding Collection Period; and

               (ii) the aggregate Principal Balance of the Liquidated Leases,
          Adjusted Leases and Warranty Leases that are Predecessor Leases shall
          not in the aggregate exceed 10% of the Initial Pool Principal Balance.

          (b) Each transfer of Substitute Leases pursuant to this Section 2.2(a)
     will be subject to the satisfaction of the following conditions precedent:

               (i) Vendor Services has agreed to deliver such Substitute Leases
          and the related Equipment to Lease Finance.

               (ii) after giving effect to such substitutions and any
          adjustments pursuant to Section 3.2, the aggregate Book Value of such
          Leases must be not less than 90% of the Book Value of the Leases
          substituted or adjusted since the Closing Date.

               (iii) either the final payment on such Substitute Lease must be
          on or prior to _______________ or, to the extent the final payment on
          such Lease is due subsequent to _______________ only scheduled
          payments due on or prior to such date may be included in the Principal
          Balance of such Lease for the purpose of making any calculation under
          the Indenture.

               (iv) the Lease Pool Principal Balance, after giving effect to
          such adjustments and substitutions, must not be less than the Lease
          Pool Principal Balance prior to such adjustment or substitution
          (without giving effect to the proviso to the definition of "Principal
          Balance").

               (v) the weighted average life of the Notes, after giving effect
          to such adjustments and substitutions, must not differ materially from
          the weighted average life of the Notes prior to such adjustments and
          substitutions.

               (vi) after giving effect to such adjustments and substitutions,
          the aggregate Principal Balance of the Leases that were originated by
          Vendor Services must not be less than the aggregate Principal Balance
          of the Leases that were originated by Vendor Services prior to such
          adjustment or substitution.


                                       -5-
<PAGE>

          (c) If Vendor Services has agreed to transfer Substitute Leases to
     Lease Finance during any Collection Period, then by 11:00 a.m. on the
     following Deposit Date, Vendor Services shall deliver to Lease Finance, the
     Servicer and the Trustee:

               (i) a supplement to Exhibit A hereto setting forth the
          information shown thereon for each such Substitute Lease,

               (ii) an Officer's Certificate (A) certifying that each such
          Substitute Lease is an Eligible Lease, (B) specifying each Predecessor
          Lease for which a substitution has been made and the Principal Balance
          and the Book Value under each such Predecessor Lease and the Principal
          Balance and the Book Value under each Substitute Lease being
          transferred thereby and (C) that all conditions precedent to such
          addition or substitution have been satisfied, and

               (iii) such additional information concerning such Substitute
          Leases or Predecessor Leases as may be needed for the Servicer to
          prepare its Servicer's Certificates pursuant to Section 3.9 and to
          otherwise carry out its duties as servicer hereunder.

          (d) Subject to the provisions of Section 9.3 of the Contribution and
     Servicing Agreement, the delivery of any Officer's Certificate and
     supplement to Exhibit A pursuant to Section 2.2(c) shall be conclusive
     evidence, without further act or deed, that during the immediately
     preceding Collection Period and as of the related Cut-Off Date:

               (i) Vendor Services assigned to Lease Finance all of Vendor
          Services' right, title and interest in and to the Substitute Leases
          identified in such supplement and the related rights described in
          Section 2.1,

               (ii) Vendor Services transferred to Lease Finance all of Vendor
          Services' right, title and interest in and to the Equipment subject to
          such Substitute Leases and the related rights described in Section
          2.1, and

               (iii) Lease Finance assigned and transferred to Vendor Services,
          without representation or warranty, all of the Contributor's right,
          title and interest in and to the Predecessor Leases identified in such
          Officer's Certificate and the Equipment subject thereto.

     Vendor Services shall promptly deliver to the Servicer the original
     executed copy of each Substitute Lease assigned to Lease Finance pursuant
     to Section 2.2(a) and the related Lease File and Lease Finance shall
     promptly request the Servicer to deliver to Vendor Services the original
     executed copy of each Predecessor Lease for which substitution has been
     made pursuant to Section 2.2(a) hereof and the related Lease File.

          (e) Upon any substitution of Leases in accordance with the provisions
     of this Section 2.2, Vendor Services' obligations hereunder with respect to
     the Predecessor Lease shall cease


                                       -6-
<PAGE>

     but Vendor Services shall thereafter have the same obligations with respect
     to the Substitute Lease substituted as it has with respect to all other
     Leases subject to the terms hereof.

     SECTION 2.3 Intention of the Parties. The execution and delivery of this
Agreement shall constitute an acknowledgment by each of Vendor Services and
Lease Finance that they intend that each assignment and transfer herein
contemplated constitute a sale and assignment outright, and not for security, of
the property described in Section 2.1(a), conveying good title thereto free and
clear of any Liens, from Vendor Services to Lease Finance, and that all such
property shall not be a part of the estate of Vendor Services in the event of
the bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law, or the occurrence of another similar event, of, or with respect to Vendor
Services. In the event that such conveyance is determined to be made as security
for a loan made by Lease Finance, the LLC or the Noteholders to Vendor Services,
Vendor Services hereby grants to Lease Finance a security interest in all of
Vendor Services's right, title and interest in and to the property described in
Section 2.1(a) to secure the loan determined to have been made to Vendor
Services and the payment and performance of the other obligations of Vendor
Services under this Agreement, and agrees that in such event this Agreement
shall constitute a security agreement under applicable law.


                                   ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

     SECTION 3.1 Representations and Warranties of Vendor Services. Vendor
Services makes the following representations and warranties, on which Lease
Finance relies in purchasing the Leases and in transferring the Leases to the
LLC under the Contribution and Servicing Agreement. Such representations are
made as of the Closing Date, or with respect to each Substitute Lease, as of the
applicable Cut-Off Date, but shall survive the sale, transfer and assignment of
the Leases hereunder and the transfer of the Leases and the Residual
Realizations by Lease Finance to the LLC under the Contribution and Servicing
Agreement, and the Granting thereof under the Indenture. Vendor Services and
Lease Finance agree that Lease Finance will assign to the LLC, and the LLC will
immediately Grant to the Trustee, all of Lease Finance's rights under this
Agreement at the Closing Date and that the Trustee will thereafter be entitled
to enforce this Agreement against Vendor Services directly or on behalf of the
Noteholders.

          (a) Schedule of Representations. With respect to each Lease, the
     representations and warranties set forth on the Schedule of Representations
     are true and correct as of the date specified therein.

          (b) Organization and Good Standing. Vendor Services has been duly
     organized and is validly existing as a corporation in good standing under
     the laws of the State of Delaware, with power and authority to own its
     properties and to conduct its business as such properties are currently


                                       -7-
<PAGE>

     owned and such business is currently conducted, and had at all relevant
     times, and now has, power, authority and legal right to acquire, own and
     sell the Leases transferred to Lease Finance.

          (c) Due Qualification. Vendor Services is duly qualified to do
     business as a foreign corporation in good standing, and has obtained all
     necessary licenses and approvals, in each jurisdiction in which the
     ownership or lease of its property or the conduct of its business requires
     such qualification and in which the failure to so qualify would have a
     material adverse impact on its business or financial condition.

          (d) Power and Authority. Vendor Services has the power and authority
     to execute and deliver this Agreement and its Related Documents and to
     carry out its terms and their terms, respectively, and the execution,
     delivery and performance of this Agreement and all of Vendor Services's
     Related Documents have been duly authorized by Vendor Services by all
     necessary corporate action.

          (e) No Consents. Vendor Services holds all necessary licenses,
     certificates and permits from all government authorities necessary for
     conducting its business as it is presently conducted, and is not required
     to obtain the consent of any other party or any consent, license, approval
     or authorization from, or registration or declaration with, any
     governmental authority, bureau or agency in connection with the execution,
     delivery, performance, validity or enforceability of this Agreement, except
     for such consents, licenses, approvals or authorizations, or registrations
     or declarations, as shall have been obtained or filed, as the case may be,
     prior to the Closing Date.

          (f) Valid Sale; Binding Obligations. This Agreement and each of Vendor
     Services's Related Documents have been duly executed and delivered, and
     effect a valid sale, transfer and assignment of the Leases and Vendor
     Services's interest in the related Equipment, enforceable against Vendor
     Services, and creditors of and purchasers from Vendor Services; and this
     Agreement and each of Vendor Services's Related Documents constitute legal,
     valid and binding obligations of Vendor Services, enforceable in accordance
     with their respective terms, except as enforceability may be limited by
     bankruptcy, insolvency, reorganization or other similar laws affecting the
     enforcement of creditors' rights generally and by equitable limitations on
     the availability of specific remedies, regardless of whether such
     enforceability is considered in a proceeding in equity or at law.

          (g) No Violation. The execution and delivery of this Agreement, the
     consummation of the transactions contemplated by this Agreement and the
     Related Documents and the fulfillment of the terms of this Agreement and
     the Related Documents shall not conflict with, result in any breach of any
     of the terms and provisions of or constitute (with or without notice or
     lapse of time, or both) a default under, the certificate of incorporation
     or bylaws of Vendor Services, or any indenture, agreement, mortgage, deed
     of trust or other instrument to which Vendor Services 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, the Contribution and Servicing Agreement and the Indenture, or
     violate any law, order, rule or regulation applicable to Vendor Services of
     any court or of any federal or state regulatory body,


                                       -8-
<PAGE>

     administrative agency or other governmental instrumentality having
     jurisdiction over Vendor Services or any of its properties.

          (h) No Proceedings. There are no proceedings or investigations pending
     or, to the knowledge of Vendor Services, threatened against Vendor
     Services, before any court, regulatory body, administrative agency or other
     tribunal or governmental instrumentality having jurisdiction over Vendor
     Services or any properties of Vendor Services (i) asserting the invalidity
     of this Agreement or any of the Related Documents, (ii) seeking to prevent
     the issuance of the Notes or the consummation of any of the transactions
     contemplated by this Agreement or any of the Related Documents, (iii)
     seeking any determination or ruling that might materially and adversely
     affect the performance by Vendor Services of its obligations under, or the
     validity or enforceability of, this Agreement or any of the Related
     Documents or (iv) seeking to affect adversely the federal income tax or
     other federal, state or local tax attributes of, or seeking to impose any
     excise, franchise, transfer or similar tax upon, the transfer and
     acquisition of the Leases hereunder or under the Contribution and Servicing
     Agreement.

          (i) Chief Executive Offices. The chief executive office of Vendor
     Services is located at 1100 Landmark Towers, 345 St. Peter Street, St.
     Paul, MN 55102, and the offices where Vendor Services keeps its records
     concerning the Leases and related documents are at 3601 Minnesota Drive,
     9th Floor, France Place, Bloomington, Minnesota 55435.

     SECTION 3.2 Representations and Warranties of Lease Finance. Lease Finance
makes the following representations and warranties, on which Vendor Services
relies in selling, assigning, transferring and conveying the Leases to Lease
Finance hereunder. Such representations are made as of the Closing Date but
shall survive the sale, transfer and assignment of the Leases hereunder and the
transfer thereof by Lease Finance to the LLC under the Contribution and
Servicing Agreement.

          (a) Organization and Good Standing. Lease Finance has been duly
     organized and is validly existing and in good standing as a corporation
     under the laws of the State of Minnesota, with the power and authority to
     own its properties and to conduct its business as such properties are
     currently owned and such business is currently conducted, and had at all
     relevant times, and has, full power, authority and legal right to acquire
     and own the Leases and to transfer the Leases to the LLC pursuant to the
     Contribution and Servicing Agreement.

          (b) Due Qualification. Lease Finance is duly qualified to do business
     as a foreign corporation in good standing, and has obtained all necessary
     licenses and approvals in each jurisdiction where the failure to do so
     would materially and adversely affect (i) Lease Finance's ability to
     acquire the Leases, (ii) the validity or enforceability of the Leases or
     (iii) Lease Finance's ability to perform its obligations hereunder and
     under the Related Documents.

          (c) Power and Authority. Lease Finance has the power and authority to
     execute and deliver this Agreement and its Related Documents and to carry
     out its terms and their terms, respectively, and to acquire the Leases and
     the Equipment; and the execution, delivery and


                                       -9-
<PAGE>

     performance of this Agreement and its Related Documents and all of the
     documents required pursuant hereto or thereto have been duly authorized by
     Lease Finance by all necessary action.

          (d) No Consents. Lease Finance holds all necessary licenses,
     certificates and permits from all government authorities necessary for
     conducting its business as it is presently conducted, and is not required
     to obtain the consent of any other party or any consent, license, approval
     or authorization from, or registration or declaration with, any
     governmental authority, bureau or agency in connection with the execution,
     delivery, performance, validity or enforceability of this Agreement, except
     for such consents, licenses, approvals or authorizations, or registrations
     or declarations, as shall have been obtained or filed, as the case may be,
     prior to the Closing Date.

          (e) Binding Obligation. This Agreement and each of Lease Finance's
     Related Documents constitutes a legal, valid and binding obligation of
     Lease Finance, enforceable against Lease Finance in accordance with its
     terms; and this Agreement and each of Lease Finance's Related Documents
     constitute legal, valid and binding obligations of Lease Finance,
     enforceable in accordance with their respective terms, except as
     enforceability may be limited by bankruptcy, insolvency, reorganization or
     other similar laws affecting the enforcement of creditors' rights generally
     and by equitable limitations on the availability of specific remedies,
     regardless of whether such enforceability is considered in a proceeding in
     equity or at law.

          (f) No Violation. The execution, delivery and performance by Lease
     Finance of this Agreement, the consummation of the transactions
     contemplated by this Agreement and the Related Documents and the
     fulfillment of the terms of this Agreement and the Related Documents do not
     and will not conflict with, result in any breach of any of the terms and
     provisions of or constitute (with or without notice or lapse of time, or
     both) a default under the articles of incorporation or bylaws of Lease
     Finance, or any indenture, agreement, mortgage, deed of trust or other
     instrument to which Lease Finance is a party or by which Lease Finance is
     bound or to which any of its properties are subject, or result in the
     creation or imposition of any Lien upon any of its properties pursuant to
     the terms of any such indenture, agreement, mortgage, deed of trust or
     other instrument (other than the Contribution and Servicing Agreement and
     the Indenture), or violate any law, order, rule or regulation, applicable
     to Lease Finance or its properties, of any federal or state regulatory body
     or any court, administrative agency, or other governmental instrumentality
     having jurisdiction over Lease Finance or any of its properties.

          (g) No Proceedings. There are no proceedings or investigations
     pending, or, to the knowledge of Lease Finance, threatened against Lease
     Finance, before any court, regulatory body, administrative agency, or other
     tribunal or governmental instrumentality having jurisdiction over Lease
     Finance or its properties: (i) asserting the invalidity of this Agreement
     or any of the Related Documents, (ii) seeking to prevent the consummation
     of any of the transactions contemplated by this Agreement or any of the
     Related Documents, (iii) seeking any determination or ruling that might
     materially and adversely affect the performance by Lease Finance of its
     obligations under, or the validity or enforceability of, this Agreement or
     any of the Related Documents or (iv) that may adversely affect the federal
     or state income tax attributes of, or seeking to impose any excise,
     franchise, transfer or similar


                                      -10-
<PAGE>

     tax upon, the transfer and acquisition of the Leases hereunder or the
     transfer of the Leases to the LLC pursuant to the Contribution and
     Servicing Agreement.

          (h) Chief Executive Offices. The chief executive office of Lease
     Finance is located at 1100 Landmark Towers, 345 St. Peter Street, St. Paul,
     Minnesota 55102, and the offices where Lease Finance keeps its records
     concerning the Leases and related documents are at 3601 Minnesota Drive,
     9th Floor, France Place, Bloomington, Minnesota 55435.

In the event of any breach of a representation and warranty made by Lease
Finance hereunder, Vendor Services covenants and agrees that (i) it will not
take any action or pursue any remedy that it may have hereunder, in law, in
equity or otherwise, until a year and a day have passed since the date on which
all Notes have been paid in full, and (ii) any remedy it may have hereunder is
subject to Section 6.12. Each of Vendor Services and Lease Finance agree that
damages will not be an adequate remedy for breach of the foregoing covenant and
that this covenant may be specifically enforced by Lease Finance on behalf of
the LLC.


                                   ARTICLE IV

                          COVENANTS OF VENDOR SERVICES

     SECTION 4.1 Protection of Title of Lease Finance and the LLC.

          (a) At or prior to the Closing Date, Vendor Services shall have filed
     or caused to be filed UCC-1 financing statements, executed by Vendor
     Services, as seller or debtor, naming Lease Finance as secured party and
     the LLC as assignee and (i) describing the Leases and other property
     described in Section 2.1 as collateral, filed with the office of the
     Secretary of State of the State of Minnesota, and (ii) describing the
     Equipment as collateral, filed with the appropriate filing office in those
     jurisdictions where Equipment subject to Leases constituting at least 75%
     of the Initial Pool Principal Balance and at least 75% of the aggregate
     Book Value as of the Initial Cut-Off Date is located. Vendor Services shall
     deliver (or cause to be delivered) to Lease Finance, the LLC and the
     Trustee file-stamped copies of, or filing receipts for, any document filed
     as provided above, as soon as available following such filing. In the event
     that Vendor Services fails to perform its obligations under this
     subsection, Lease Finance or the LLC may do so at the expense of Vendor
     Services.

          (b) If Vendor Services changes its name, identity, or corporate
     structure in any manner that would, could or might make any financing
     statement or continuation statement filed by Vendor Services (or by Lease
     Finance or the LLC on behalf of Vendor Services) in accordance with
     paragraph (a) above, seriously misleading within the meaning of ss.
     9-402(7) of the UCC, it shall give Lease Finance and the LLC written notice
     thereof no later than 10 days following the occurrence of such change, and
     shall file appropriate amendments to all such previously filed financing
     statements and continuation statements within the time period required by
     the UCC.


                                      -11-
<PAGE>

          (c) If Vendor Services relocates its principal executive office and,
     as a result of such relocation, the applicable provisions of the UCC would
     require the filing of any amendment of any previously filed financing or
     continuation statement or of any new financing statement, it shall give
     Lease Finance, the LLC and the Trustee written notice thereof; and shall
     promptly file such appropriate amendments or financing statements within
     the time period required by the UCC.

          (d) Vendor Services shall at all times maintain its principal
     executive office, and any office from which it services Leases, within the
     United States of America.

          (e) Vendor Services shall maintain its computer systems so that, from
     and after the time of sale under this Agreement of the Leases, the
     Equipment and the other items described in Section 2.1(a) to Lease Finance,
     and the conveyance of the Leases by Lease Finance to the LLC, the master
     computer records (including archives) of Vendor Services that shall refer
     to a Lease, any Equipment or any of the other items described in Section
     2.1(a) indicate clearly that such Lease, Equipment or other item described
     in Section 2.1(a) has been sold to Lease Finance and that such Lease has
     been conveyed by Lease Finance to the LLC. Indication of the LLC's
     ownership of a Lease shall be deleted from or modified on any of Vendor
     Services's computer systems when, and only when, the Lease has been paid in
     full, liquidated (including receipt of all recoveries reasonably expected
     to be collected) or purchased by Vendor Services or Lease Finance.

          (f) If at any time Vendor Services shall propose to sell, grant a
     security interest in, or otherwise transfer any interest in lease contracts
     of a character similar to the Leases to any prospective purchaser, lender
     or other transferee, Vendor Services shall give to such prospective
     purchaser, lender, or other transferee computer tapes, records, or
     print-outs (including any restored from archives) that, if they shall refer
     in any manner whatsoever to any Lease, shall indicate clearly that such
     Lease has been sold to Lease Finance and is owned by the LLC. Vendor
     Services and Lease Finance agree that, if any one of them receives an
     inquiry from a bona fide potential creditor regarding whether any lease
     contract or item of equipment is identified on the Schedule of Leases, they
     will instruct the Trustee to disclose the contents of the Schedule of
     Leases to such potential creditor in accordance with the provisions of
     Section 11.17 of the Indenture.

          (g) If Vendor Services receives payments in respect of Leases, any
     Equipment or any of the other items described in Section 2.1(a), Vendor
     Services agrees to pay or cause to be paid to the Servicer all such
     payments as soon as practicable after identification thereof, but in no
     event later than two Business Days after receipt thereof by Vendor
     Services.

          (h) Vendor Services shall notify Lease Finance and the Trustee within
     three Business Days after becoming aware of any Lien on any Lease,
     Equipment or other item described in Section 2.1(a), other than the
     conveyances hereunder or under the Contribution and Servicing Agreement.

          (i) Vendor Services will promptly pay and discharge all taxes,
     assessments, levies and other governmental charges imposed on it which may
     materially and adversely affect any of the


                                      -12-
<PAGE>

     Leases, Equipment or other items described in Section 2.1(a), or Lease
     Finance's rights with respect thereto.

          (j) Vendor Services hereby agrees that it will perform its obligations
     under the agreements relating to the Leases in conformity with its
     customary and usual policies and procedures relating to the Leases.

          (k) No later than 10 days after the Closing Date, Vendor Services
     shall deliver to Lease Finance and the Trustee a written certification that
     all notifications and consents required by paragraph (J) in the Schedule of
     Representations hereto have been given or obtained, as applicable.

          (l) With respect to lease transactions, Vendor Services's credit
     underwriting standards generally require the filing of appropriate UCC
     financing statements if the underlying equipment cost is over $25,000.

     SECTION 4.2 Other Liens or Interests. Except for the conveyances hereunder,
with respect to any Lease and the related Equipment, Vendor Services will not
sell, pledge, assign or transfer to any other Person, or grant, create, incur,
assume or suffer to exist any Lien on such Lease or Equipment or any interest
therein, and Vendor Services shall defend the right, title, and interest of
Lease Finance and the LLC in and to such Lease and Equipment against all claims
of third parties claiming through or under Vendor Services.

     SECTION 4.3 Costs and Expenses. Vendor Services shall pay all reasonable
costs and disbursements in connection with the performance of its obligations
hereunder and under its Related Documents.

     SECTION 4.4 Indemnification.

     Vendor Services shall defend, indemnify and hold harmless Lease Finance,
the LLC, the Trustee and the Noteholders from and against:

          (a) any and all costs, expenses, losses, damages, claims, and
     liabilities, arising out of or resulting from any breach of any
     representations and warranties of Vendor Services contained herein (other
     than those set forth in the Schedule of Representations, the exclusive
     remedies for which are specified in Section 5.1);

          (b) any and all costs, expenses, losses, damages, claims, and
     liabilities, arising out of or resulting from the use, ownership or
     operation of any item of Equipment (notwithstanding the disclaimer of
     Section 2.1(b)); and, in addition, Vendor Services shall cause Lease
     Finance and the LLC to be named as an additional insured under its
     liability insurance policies;


                                      -13-
<PAGE>

          (c) any and all costs, expenses, losses, damages, claims and
     liabilities arising out of or resulting from any action taken, or failed to
     be taken, by it in respect of any portion of the Trust Assets other than
     any action taken in accordance with this Agreement or any Related Document;

          (d) any taxes that may at any time be asserted against Lease Finance,
     the LLC, the Trustee and the Noteholders with respect to the transactions
     contemplated in this Agreement, including, without limitation, any sales,
     gross receipts, general corporation, tangible or intangible personal
     property, privilege, or license taxes (but not including any taxes asserted
     with respect to, and as of the date of, the sale, transfer and assignment
     of the Leases to Lease Finance and of the Trust Assets to the LLC or the
     issuance and original sale of the Notes, or asserted with respect to
     ownership of the Leases or the Trust Assets, which shall be indemnified by
     Vendor Services pursuant to clause (e) below), or federal, state or other
     income taxes, arising out of distributions on the Notes or transfer taxes
     arising in connection with the transfer of the Notes) and costs and
     expenses in defending against the same, arising or imposed against such
     Persons by reason of the acts to be performed by Vendor Services under this
     Agreement;

          (e) any taxes which may at any time be asserted against such Persons
     with respect to, and as of the date of, the conveyance or ownership of the
     Leases and the conveyance or ownership of the Trust Assets under the
     Transfer Agreement or the Contribution and Servicing Agreement or the
     issuance and original sale of the Notes, including, without limitation, any
     sales, gross receipts, personal property, tangible or intangible personal
     property, privilege or license taxes (but not including any federal or
     other income taxes, including franchise taxes, arising out of the
     transactions contemplated hereby or transfer taxes arising in connection
     with the transfer of Notes) and costs and expenses in defending against the
     same, arising or imposed against such Persons;

          (f) any and all costs, expenses, losses, claims, damages, and
     liabilities to the extent that such cost, expense, loss, claim, damage, or
     liability arose out of, or was imposed upon Lease Finance, the LLC, the
     Trustee and the Noteholders through the negligence, willful misfeasance, or
     bad faith of Vendor Services in the performance of its duties under this
     Agreement or by reason of reckless disregard of the obligations and duties
     of Vendor Services under this Agreement;

          (g) any loss, liability or expense incurred by reason of the violation
     by Vendor Services or any of its Affiliates of federal or state securities
     laws in connection with the registration or the sale of the Notes;

          (h) any loss, liability or expense imposed upon, or incurred by, Lease
     Finance, the LLC, the Trustee or the Noteholders as a result of the failure
     of any Lease, or the sale of the related Equipment, to comply with all
     requirements of applicable law, but only to the extent such loss, liability
     or expense is not covered by the repurchase of such Lease and Equipment as
     required by Section 5.1; and

          (i) any loss, liability or expense imposed upon, or incurred by, Lease
     Finance, the LLC, the Trustee or the Noteholders as a result of any actions
     taken by or in the name of Lease


                                      -14-
<PAGE>

     Finance, the LLC or the Trustee at the request of Vendor Services pursuant
     to the last sentence of Section 5.2.

     Indemnification under this Section 4.4 shall include reasonable fees and
expenses of counsel and expenses of litigation and shall survive termination of
the Indenture. The indemnity obligations hereunder shall be in addition to any
obligation that Vendor Services may otherwise have.

     Promptly after receipt by an indemnified party under this Section 4.4 of
notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action or claim and (ii) does not include a statement as to or an admission
of fault, culpability or a failure to act, by or on behalf of any indemnified
party.

     SECTION 4.5 Further Assurances. Following the Closing Date, Vendor Services
shall, at the reasonable request of Lease Finance or the Trustee, and at Vendor
Services' expense, execute and deliver any further instruments of transfer or
other documents, and shall take all such other actions that may be necessary,
appropriate or desirable, to fully convey the Leases and the Equipment (subject
to Section 4.1(a)(ii)) to the Issuer or otherwise to evidence, effectuate or
implement the transactions contemplated hereby. In addition, Vendor Services, as
agent for Lease Finance, shall defend the Leases and the Equipment against any
and all claims and demands of all Persons at any time claiming the same or any
interest therein adverse to that of the Lease Finance.

     SECTION 4.6 Negative Covenant. Vendor Services (a) shall not engage in any
transaction or series of transactions or otherwise take any action or omit to
take any action which could result in a determination that Vendor Services shall
have received less than reasonably equivalent value for the transfer and
conveyance of the Leases and the other property described in Section 2.1(a) to
Lease Finance either on the Closing Date or thereafter and (b) in any event,
shall not use the proceeds


                                      -15-
<PAGE>

received from the transfer and conveyance of the Leases and the other property
described in Section 2.1(a) either on the Closing Date or thereafter (i) to pay
any dividend or make any distribution on or in respect of its capital stock or
(ii) to purchase, redeem or otherwise acquire or retire for value any of its
capital stock or the capital stock of any of its affiliates (other than any of
its wholly owned subsidiaries), if, in the case of either (i) or (ii), at the
time of any such action and after giving effect thereto (x) the present fair
saleable value of the assets of Vendor Services is less than the amount that
would be required to be paid on or in respect of Vendor Services's total
liabilities (including a reasonable estimate of its contingent liabilities (net
of tax benefits to the extent reasonably likely to be realized)), (y) the assets
of Vendor Services constitute an unreasonably small capital to carry out Vendor
Services's business as it is then conducted or as Vendor Services then intends
to conduct its business or (z) Vendor Services has incurred, intends to incur,
or believes that it will incur, debts that would be beyond Vendor Services's
ability to pay as they mature.


                                    ARTICLE V

                                   REPURCHASES

     SECTION 5.1 Repurchase of Leases Upon Breach of Representation or Warranty.
Upon the occurrence of a Repurchase Event, Vendor Services shall, unless such
breach shall have been cured in all material respects by the end of the second
Collection Period after the date on which Vendor Services becomes aware of or
receives written notice from the Trustee or the Servicer of such breach, (i)
repurchase (or substitute a Substitute Lease for) such Lease from the LLC and
the related Equipment from Lease Finance and (ii) on or before the related
Deposit Date, Vendor Services shall either pay the Purchase Amount to the
Servicer on behalf of the LLC and Lease Finance pursuant to Section 2.6 of the
Contribution and Servicing Agreement or deliver a Substitute Lease pursuant to
Article IX of the Contribution and Servicing Agreement. It is understood and
agreed that, except as set forth in the following paragraph, the obligation of
Vendor Services to repurchase any Lease and the related Equipment as to which a
breach has occurred and is continuing shall, if such obligation is fulfilled,
constitute the sole remedy against Vendor Services for such breach available to
Lease Finance, the LLC, the Noteholders or the Trustee on behalf of the
Noteholders. The provisions of this Section 5.1 are intended to grant the LLC
and the Trustee a direct right against Vendor Services to demand performance
hereunder, and in connection therewith, Vendor Services waives any requirement
of prior demand against Lease Finance with respect to such repurchase
obligation. Notwithstanding any other provision of this Agreement or the
Contribution and Servicing Agreement to the contrary, the obligation of Vendor
Services under this Section shall not terminate upon a termination of Vendor
Services as Servicer under the Contribution and Servicing Agreement and shall be
performed by Vendor Services in accordance with the terms hereof notwithstanding
the failure of the Servicer or Lease Finance to perform any of their respective
obligations with respect to such Lease under the Contribution and Servicing
Agreement.

     In addition to the foregoing and notwithstanding whether the related Lease
and the related Equipment shall have been purchased by Vendor Services, Vendor
Services shall indemnify


                                      -16-
<PAGE>

Lease Finance, the LLC, the Trustee and the Noteholders against all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel, which may be asserted against or incurred by any of them as
a result of third party claims arising out of the events or facts giving rise to
such breach.

     SECTION 5.2 Reassignment of Purchased Leases and Equipment. Upon deposit in
the Collection Account of the Purchase Amount of any Lease and the related
Equipment (if applicable) repurchased by Vendor Services under Section 5.1, or
upon delivery of a Substitute Lease, Lease Finance and the LLC shall take such
steps as may be reasonably requested by Vendor Services in order to assign to
Vendor Services all of Lease Finance's and the LLC's right, title and interest
in and to such Lease and the related Equipment (if applicable) and all security
and documents conveyed to Lease Finance and the LLC directly relating thereto,
without recourse, representation or warranty, except as to the absence of liens,
charges or encumbrances created by or arising as a result of actions of Lease
Finance or the LLC. Such assignment shall be a sale and assignment outright, and
not for security. If, following the reassignment of a Purchased Lease and the
related Equipment (if applicable), in any enforcement suit or legal proceeding,
it is held that Vendor Services may not enforce any such Lease on the ground
that it shall not be a real party in interest or a holder entitled to enforce
the Lease, Lease Finance and the LLC shall, at the expense of Vendor Services,
take such steps as Vendor Services deems reasonably necessary to enforce the
Lease, including bringing suit in Lease Finance's or the LLC's name or the name
of the Trustee on behalf of the Noteholders.

     SECTION 5.3 Waivers. No failure or delay on the part of Lease Finance or
the LLC in exercising any power, right or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or remedy preclude any other or future exercise thereof or the
exercise of any other power, right or remedy.


                                   ARTICLE VI

                                  MISCELLANEOUS

     SECTION 6.1 Reserved.

     SECTION 6.2 Merger or Consolidation of Vendor Services or Lease Finance.
Any corporation or other entity (i) into which Vendor Services or Lease Finance
may be merged or consolidated, (ii) resulting from any merger or consolidation
to which Vendor Services or Lease Finance is a party or (iii) succeeding to the
business of Vendor Services or Lease Finance, shall be the successor to Vendor
Services or Lease Finance, as the case may be (without relieving Vendor Services
or Lease Finance of its responsibilities hereunder, if it survives such merger
or consolidation) without the execution or filing of any document or any further
act by any of the parties to this Agreement. Vendor Services or Lease Finance
shall promptly inform the other parties, the LLC and the Trustee of such merger,
consolidation or purchase and assumption. Notwithstanding the foregoing, as a
condition to the consummation of the transactions referred to in clauses (i),
(ii) and (iii) above, (x) immediately


                                      -17-
<PAGE>

after giving effect to such transaction, no representation or warranty made
pursuant to Sections 3.1 (other than subsections (b) and (i)) and 3.2 (other
than subsections (a) and (h)) of this Agreement shall have been breached (for
purposes hereof, such representations and warranties shall speak as of the date
of the consummation of such transaction), (y) Vendor Services or Lease Finance,
as applicable, shall have delivered written notice of such consolidation, merger
or purchase and assumption to the Rating Agencies prior to the consummation of
such transaction and shall have delivered to the LLC and the Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation, merger or succession and such agreement of assumption comply with
this Section 6.2 and that all conditions precedent, if any, provided for in this
Agreement, relating to such transaction have been complied with, and (z) Vendor
Services or Lease Finance, as applicable, shall have delivered to the LLC and
the Trustee an Opinion of Counsel, stating that, in the opinion of such counsel,
either (A) all financing statements and continuation statements and amendments
thereto have been executed and filed that are necessary to preserve and protect
the interest of the LLC in the Trust Assets and reciting the details of the
filings or (B) no such action shall be necessary to preserve and protect such
interest.

     SECTION 6.3 Limitation on Liability of Vendor Services and Others.

          (a) Except with respect to the Representations and Warranties herein
     and in the Schedule of Representations, and the indemnification obligations
     set forth in Section 4.4 herein, Vendor Services may rely in good faith on
     the advice of counsel or on any document of any kind prima facie properly
     executed and submitted by any Person respecting any matters arising under
     this Agreement. Vendor Services shall not be under any obligation to appear
     in, prosecute or defend any legal action that is not incidental to its
     obligations under this Agreement or its Related Documents and that in its
     reasonable judgment may involve it in any expense or liability.

          (b) Any officer, director, employee or agent of Vendor Services may
     rely in good faith on the advice of counsel or on any document of any kind
     prima facie properly executed and submitted by any Person respecting any
     matters arising under this Agreement. Vendor Services shall be under no
     obligation to appear in, prosecute or defend any legal action that is not
     incidental to its obligations under this Agreement or its Related Documents
     and that in its reasonable judgment may involve it in any expense or
     liability.

     SECTION 6.4 Vendor Services May Own Notes. Subject to the provisions of the
Contribution and Servicing Agreement, Vendor Services, and any Affiliate of
Vendor Services, may in its individual or any other capacity become the owner or
pledgee of Notes with the same rights as it would have if it were not Vendor
Services or an Affiliate thereof (except as provided in Section 1.5).

     SECTION 6.5 Amendment.

          (a) This Agreement may be amended by Vendor Services and Lease Finance
     without the consent of the LLC, the Trustee or the Noteholders (i) to cure
     any ambiguity; (ii) to correct or supplement any provisions in this
     Agreement that may be inconsistent with any other provisions herein; or
     (iii) to make any other provisions with respect to matters or questions
     arising under this


                                      -18-
<PAGE>

     Agreement that are not inconsistent with the provisions hereof, provided,
     however, that such action shall not, as evidenced by an Opinion of Counsel
     delivered to the LLC and the Trustee, adversely affect in any material
     respect the interests of the Noteholders.

          (b) This Agreement may also be amended from time to time by Vendor
     Services and Lease Finance, with the prior written consent of a Note
     Majority (which consent of any Holder of a Note given pursuant to this
     Section or pursuant to any other provision of this Agreement shall be
     conclusive and binding on such Holder and on all future Holders of such
     Note and of any Note issued upon the transfer thereof or in exchange
     thereof or in lieu thereof whether or not notation of such consent is made
     upon the Note), for the purpose of adding any provisions to or changing in
     any manner or eliminating any of the provisions of this Agreement, or of
     modifying in any manner the rights of the Noteholders; provided, however,
     that no such amendment shall (i) increase or reduce in any manner the
     amount of, or accelerate or delay the timing of, collections of payments on
     Leases, distributions that shall be required to be made on any Note or the
     applicable rate of interest payable thereon, (ii) amend any provisions of
     Section 5.06 or 8.03 of the Indenture in such a manner as to affect the
     priority of payment of interest or principal to Noteholders, or (iii)
     reduce the aforesaid percentage required to consent to any such amendment
     or any waiver hereunder, without the consent of the Holders of all Notes
     then Outstanding and affected thereby; and provided, further, that no such
     amendment shall be effective unless and until the Rating Agency Condition
     has been satisfied.

          (c) Promptly after the execution of any such amendment or consent, the
     LLC or the Trustee, as applicable, shall furnish written notification of
     the substance of such amendment or consent to each Noteholder.

          (d) It shall not be necessary for the consent of Noteholders pursuant
     to this Section to approve the particular form of any proposed amendment or
     consent, but it shall be sufficient if such consent shall approve the
     substance thereof. The manner of obtaining such consents (and any other
     consents of Noteholders provided for in this Agreement) and of evidencing
     the authorization of the execution thereof by Noteholders shall be subject
     to such reasonable requirements as the LLC or the Trustee, as applicable,
     may prescribe, including the establishment of record dates. The consent of
     any Holder of a Note given pursuant to this Section or pursuant to any
     other provision of this Agreement shall be conclusive and binding on such
     Holder and on all future Holders of such Note and of any Note issued upon
     the transfer thereof or in exchange thereof or in lieu thereof whether or
     not notation of such consent is made upon the Note.

     SECTION 6.6 Notices. All demands, notices and communications to Vendor
Services or Lease Finance hereunder shall be in writing, personally delivered,
or sent by telecopier (subsequently confirmed in writing), reputable overnight
courier or mailed by certified mail, return receipt requested, and shall be
deemed to have been given upon receipt:

          (a) in the case of Vendor Services, to 1100 Landmark Towers, 345 St.
     Peter Street, St. Paul, Minnesota 55102, Attention: General Counsel, or
     such other address as shall be


                                      -19-
<PAGE>

     designated by Vendor Services in a written notice delivered to the other
     parties and to the LLC and the Trustee; and

          (b) in the case of Lease Finance, to 1100 Landmark Towers, 345 St.
     Peter Street, St. Paul, Minnesota 55102, Attention: General Counsel, or
     such other address as Lease Finance shall be designated by a written notice
     delivered to the other parties and to the LLC and the Trustee.

     SECTION 6.7 Merger and Integration. Except as specifically stated otherwise
herein, this Agreement and the Related Documents set 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 and the
Related Documents. This Agreement may not be modified, amended, waived or
supplemented except as provided herein.

     SECTION 6.8 Severability of Provisions. If any one or more of the
covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.

     SECTION 6.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.

     SECTION 6.10 Counterparts. For the purpose of facilitating the execution of
this Agreement and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and all of which counterparts shall constitute but
one and the same instrument.

     SECTION 6.11 Conveyance of the Leases to the Trust. Vendor Services
acknowledges that Lease Finance intends, pursuant to the Contribution and
Servicing Agreement, to convey the Leases, the Residual Realizations and the
other items described in Section 2.1(a), together with its rights under this
Agreement, to the LLC on the Closing Date. Vendor Services acknowledges and
consents to such conveyance and waive any further notice thereof and covenants
and agrees that the representations and warranties of Vendor Services contained
in this Agreement and the rights of Lease Finance hereunder are intended to
benefit the LLC, the Trustee and the Noteholders. In furtherance of the
foregoing, Vendor Services covenants and agrees to perform its duties and
obligations hereunder, in accordance with the terms hereof, for the benefit of
the LLC, the Trustee and the Noteholders and that, notwithstanding anything to
the contrary in this Agreement, Vendor Services shall be directly liable to the
LLC and the Trustee (notwithstanding any failure by the Servicer or Lease
Finance to perform its duties and obligations hereunder or under the
Contribution and Servicing


                                      -20-
<PAGE>

Agreement) and that the LLC and the Trustee may enforce the duties and
obligations of Vendor Services under this Agreement against Vendor Services for
the benefit of the Noteholders.

     SECTION 6.12 Nonpetition Covenant. Neither Vendor Services nor Lease
Finance shall petition or otherwise invoke the process of any court or
government authority for the purpose of commencing or sustaining a case against
the LLC (or, in the case of Vendor Services, against Lease Finance) under any
federal or state bankruptcy, insolvency or similar law or appointing a receiver,
liquidator, assignee, trustee, custodian, sequestrator or other similar official
of the LLC (or Lease Finance, as applicable) or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of the LLC
(or, in the case of Vendor Services, of Lease Finance).


                                      -21-
<PAGE>

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


                                  CONSECO LEASE FINANCE II, INC.,
                                      as Purchaser

                                  By   ____________________________
                                  Name:
                                  Title:


                                  CONSECO FINANCE VENDOR SERVICES
                                      CORPORATION,
                                      In its individual capacity and as Servicer

                                  By   ____________________________
                                  Name:
                                  Title:




                                      -22-
<PAGE>

                                   SCHEDULE A


                        SCHEDULE OF LEASES AND EQUIPMENT



                                       A-1
<PAGE>

                                   SCHEDULE B

                   SCHEDULE OF REPRESENTATIONS AND WARRANTIES
                               OF VENDOR SERVICES

     With respect to each Lease as of the Initial Cut-Off Date, and regarding
each Substitute Lease as of the applicable Cut-Off Date, Vendor Services
represents and warrants as follows :

     A. Characteristics of Leases. Each Lease (i) constitutes a valid, binding
and enforceable payment obligation of the Obligor in accordance with its terms
(except as may be limited by applicable bankruptcy, insolvency or other similar
laws affecting the enforceability of creditors' rights generally and the
availability of equitable remedies), (ii) has been duly and properly sold,
assigned and conveyed by Vendor Services to Lease Finance, (iii) was originated
by Vendor Services in the ordinary course of its business, or (in the case of
any Lease purchased by Vendor Services) was acquired by Vendor Services for
proper consideration and was validly assigned to Vendor Services by the
originator of such Lease, and (iv) contains customary and enforceable provisions
adequate to enable realization against the Obligor and/or the related Equipment
(although no representation or warranty is made with respect to the perfection
or priority of any security interest in such related Equipment).

     B. No Waivers. No provisions of any Lease have been waived, altered or
modified in any material respect, except as indicated in the Lease File.

     C. No Consumer Leases. No Lease is a "consumer lease" as defined in Article
2A of the Uniform Commercial Code, except for a de minimis number of Leases.

     D. Acceptance of Equipment. To the best of Vendor Services's knowledge,
each Obligor has accepted the related Equipment and has had reasonable
opportunity to inspect and test such Equipment.

     E. Compliance with Law. All requirements of applicable Federal, state and
local laws, and regulations thereunder, in respect of all of the Leases, have
been complied with in all material respects.

     F. No Default. There is no known default, breach, violation or event
permitting cancellation or termination of the Lease by the lessor under the
terms of any Lease (other than Scheduled Payment delinquencies (in excess of 10%
of the Scheduled Payment due) of not more than 59 days), and (except for payment
extensions and waivers of Administrative Fees in accordance with Vendor
Services's servicing and collection policies and procedures) there has been no
waiver of any of the foregoing; and as of the Cut-Off Date, no related Equipment
had been repossessed.

     G. The Obligors. Each Obligor (i) is located in the United States, and (ii)
is not (a) the United States of America or any State or local government or any
agency, department, subdivision

                                       B-1
<PAGE>

or instrumentality thereof (except for Leases representing no more than 2.5% of
the Initial Pool Principal Balance) or (b) Vendor Services or any Affiliate
thereof .

     H. Obligor Bankruptcy. Each Lease was entered into by an Obligor who, at
the Cut-Off Date, had not been identified on the records of Vendor Services as
being the subject of a current bankruptcy proceeding.

     I. Delinquencies. No Lease has a Scheduled Payment delinquency (in excess
of 10% of the Scheduled Payment due) of more than 59 days past due as of the
Cut-Off Date.

     J. Assignment to the LLC. Each Lease may be sold, assigned and transferred
by Vendor Services to Lease Finance, and may be assigned and transferred by
Lease Finance to the LLC, without the consent of, or prior approval from, or any
notification to, the applicable Obligor, other than (i) certain Leases (which,
in proportion to the aggregate of all of the Leases, are not material) that
require notification of the assignment to the Obligor, which notification will
be given by the Servicer not later than 10 days following the Closing Date, and
(ii) Leases (which, in proportion to the aggregate of all of the Leases, are not
material) that require the consent of the Obligor, which consent will be
obtained not more than 10 days following the Closing Date.

     K. Lease Not Assumable. Each Lease prohibits the sale, assignment or
transfer of the Obligor's interest therein, the assumption of the Lease by
another person in a manner that would release the Obligor thereof from the
Obligor's obligation, or any sale, assignment or transfer of the related
Equipment, without the prior consent of the lessor, other than Leases which may
(i) permit assignment to a subsidiary, corporate parent or other affiliate, (ii)
permit the assignment to a third party, provided the Obligor remains liable
under the Lease, or (iii) permit assignment to a third party with a credit
standing (determined by Vendor Services in accordance with its underwriting
policy and practice at the time for an equivalent contract type, term and
amount) equal to or better than the original Obligor.

     L. Payments in United States Dollars. The Obligor under each Lease is
required to make payments thereunder (i) in United States dollars, and (ii) in
fixed amounts and on fixed and predetermined dates.

     M. Maintenance and Repair. Each Lease requires the Obligor to assume
responsibility for payment of all expenses in connection with the maintenance
and repair of the related Equipment, the payment of all premiums for insurance
of such Equipment and the payment of all taxes (including sales and property
taxes) relating to such Equipment.

     N. Scheduled Payments. Each Lease requires the Obligor thereunder to make
all Scheduled Payments thereon under all circumstances and regardless of the
condition or suitability of the related Equipment and notwithstanding any
defense, set-off or counterclaim that the Obligor may have against the
manufacturer, lessor or lender (as the case may be).


                                       B-2
<PAGE>

     O. Repair or Replacement of Damaged Equipment. Under each Lease, if the
Equipment is damaged or destroyed, the Obligor is required either (i) to repair
such Equipment, (ii) to make a termination payment to the lessor in an amount
not less than the Required Payoff Amount, or (iii) in some cases, to replace
such damaged or destroyed Equipment with other equipment of comparable use and
value.

     P. No Termination by Lessee. None of the Leases permit the Obligor to
terminate the Lease prior to the latest Stated Maturity Date or to otherwise
prepay the amounts due and payable thereunder, except for a de minimis number of
Leases which allow for an early termination or prepayment upon payment of an
amount which is not less than the Required Payoff Amount.

     Q. No Transfer of Title Required. It is not a precondition to the valid
transfer or assignment of Vendor Services interest in any of the Equipment
related to any Lease that title to such Equipment be transferred on the records
of any governmental or quasi-governmental agency, body or authority.

     R. Good Title. Immediately prior to the sale, assignment and conveyance of
each Lease by Vendor Services to Lease Finance, Vendor Services had good title
to such Lease and Vendor Services's interest in the related Equipment (subject
to the terms of such Lease) and was the sole owner thereof, free of any Lien.

     S. No Impairment. No person has a participation in or other right to
receive Scheduled Payments under any Lease, and neither Lease Finance nor Vendor
Services has taken any action to convey any right to any Person that would
result in such Person having a right to Scheduled Payments received with respect
to any Lease.

     T. Lawful Assignment. The sale, transfer and assignment of such Lease and
Vendor Services interest in the related Equipment to Lease Finance under this
Agreement, and the transfer and conveyance of such Lease from, and the grant of
rights to the related Residual Realizations by, Lease Finance to the LLC under
the Contribution and Servicing Agreement, are not unlawful, void or voidable
under the laws of the jurisdiction applicable to such Lease.

     U. All Filings Made. All filings and other actions required to be made,
taken or performed by any Person in any jurisdiction to give the LLC a first
priority perfected lien or ownership interest in the Leases and a first priority
perfected security interest in Vendor Services's interest in the Equipment have
been made, taken or performed.

     V. Lease Files Complete. There exists a Lease File pertaining to each
Lease, and such Lease File contains the Lease or a facsimile copy thereof.

     W. One Original. There is only one original executed copy of each Lease,
and such original executed copy is in the possession of Vendor Services.


                                       B-3
<PAGE>

     X. Chattel Paper. The Leases constitute chattel paper within the meaning of
the UCC as in effect in the States of Minnesota and Delaware (other than those
Leases in which the lessor is financing exclusively the Obligor's software
license or maintenance contract for Equipment, which Leases, in proportion to
the Initial Pool Principal Balance, are not material).

     Y. Marking Records. By the Closing Date, the portions of the electronic
master record of Vendor Services relating to the Leases will have been clearly
and unambiguously marked to show that the Leases constitute part of the Trust
Assets and are owned by the LLC in accordance with the terms of the Contribution
and Servicing Agreement.

     Z. Computer Tape. The Computer Tape containing information with respect to
the Leases that was made available by Vendor Services to the Trustee on the
Closing Date and was used to select the Leases was complete and accurate in all
material respects as of the Cut-Off Date and includes a description of the same
Leases that are described in the Schedule of Leases to the Contribution and
Servicing Agreement.

     AA. Schedule of Leases. The information with respect to the Leases listed
on the Schedule of Leases attached to the Contribution and Servicing Agreement
is true, correct and complete in all material respects.

     BB. No Fraud or Misrepresentation. Each Lease was originated by Vendor
Services or acquired by Vendor Services and was sold and assigned by Vendor
Services to Lease Finance without any fraud or misrepresentation on the part of
Vendor Services.

     CC. Adverse Selection. No selection procedures adverse to the Noteholders
were utilized in selecting the Lease from those leases owned by Vendor Services
on the Cut-Off Date.

     DD. One Payment. The Obligor has made at least one payment under the Lease.


                                       B-4