Servicing Agreement

                                      among

                          SUNRISE FUNDING CORPORATION I
                                   ("Issuer")

                                       and

                           SUNRISE LEASING CORPORATION
                         ("Contributor" and "Servicer")

                                       and

            NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee
                                   ("Trustee")

                          Dated as of November 1, 1996



<PAGE>



                                Table of Contents

Section                    Heading                                      Page

Article 1                  Definitions                                     1
       Section 1.01.       Defined Terms                                   1

Article 2                  Servicer Representations, Warranties and 
                            Covenants                                      3
       Section 2.01.       Representations and Warranties                  3
       Section 2.02.       Covenants                                       5

Article 3                  Administration and Servicing of Lease Contracts 5
       Section 3.01.       Responsibilities of Servicer                    5
       Section 3.02.       Servicer Standard of Care                       8
       Section 3.03.       Lockbox Account and Servicer Remittances        8
       Section 3.04.       Servicer Advances                               9
       Section 3.05.       Financing Statements                            9
       Section 3.06.       Maintenance of Insurance Policy; Insurance 
                            Proceeds                                       10
       Section 3.07.       Personal Property and Sales Taxes               10
       Section 3.08.       No Offset                                       10
       Section 3.09.       Servicing Compensation                          10
       Section 3.10.       Substitution or Purchase of Lease Contracts and 
                            Lease Receivables                              10
       Section 3.11.       Vendor Agreements                               11

Article 4                  Accountings, Statement and Reports              11
       Section 4.01.       Monthly Servicer's Reports                      11
       Section 4.02.       Financial Statements; Certification as to 
                            Compliance; Notice of Default                  12
       Section 4.03.       Independent Accountants' Reports                13
       Section 4.04.       Access to Certain Documentation and 
                            Information                                    14
       Section 4.05.       Trustee to Cooperate                            15
       Section 4.06.       Oversight of Servicing                          15
Article 5                  The Servicer and the Issuer                     16
       Section 5.01.       Servicer Indemnification                        16
       Section 5.02.       Corporate Existence; Reorganizations            17
       Section 5.03.       Limitation on Liability of the Servicer and 
                            Others                                         17
       Section 5.04.       The Servicer Not to Resign                      17
       Section 5.05.       Issuer Indemnification                          18

Article 6                  Servicing Termination                           18
       Section 6.01.       Servicer Events of Default                      18
       Section 6.02.       Appointment of Successor Servicer               21
       Section 6.03.       Notification to Noteholders                     22
       Section 6.04.       Waiver of Past Defaults                         22
       Section 6.05.       Effects of Termination of Servicer              22
       Section 6.06.       No Effect on Other Parties                      22
<PAGE>

Article 7                  Miscellaneous Provisions                        22
       Section 7.01.       Termination of the Servicing Agreement          23
       Section 7.02.       Amendments                                      23
       Section 7.03.       Governing Law                                   23
       Section 7.04.       Notices                                         24
       Section 7.05.       Severability of Provisions                      24
       Section 7.06.       Binding Effect                                  25
       Section 7.07.       Article Headings and Captions                   25
       Section 7.08.       Legal Holidays                                  25
       Section 7.09.       Assignment for Security for the Notes           25
       Section 7.10.       No Servicing Assignment                         25
       Section 7.11.       Counterparts                                    25
       Section 7.12.       Trustee's Protections Under the Indenture       25
                                                                           25
Signatures                                      
                                                                           26
Exhibit A - Form of Monthly Servicer's Report                              
                                                                           



<PAGE>



                               SERVICING AGREEMENT

       This Servicing Agreement, dated as of November 1, 1996 (the "Agreement"),
is  entered  into  by and  among  SUNRISE  FUNDING  CORPORATION  I, a  Minnesota
corporation  (herein,  together with its permitted  successors and assigns,  the
"Issuer"),   SUNRISE  LEASING  CORPORATION,  a  Minnesota  corporation  (herein,
together  with  its  permitted  successors  and  assigns,  in  its  capacity  as
contributor,   the  "Contributor",   and  in  its  capacity  as  servicer,   the
"Servicer"),  and  NORWEST  BANK  MINNESOTA,  NATIONAL  ASSOCIATION,  as trustee
(herein,  together with its permitted  successors and assigns,  the  "Trustee"),
under the Indenture (defined below).

                              Preliminary Statement

         The Issuer has entered into an Indenture,  dated as of November 1, 1996
(as amended  and  supplemented  from time to time,  the  "Indenture"),  with the
Trustee  and the  Servicer,  pursuant  to which the Issuer  intends to issue its
$20,000,000 Lease Receivables-Backed Notes (the "Notes").

         The  Issuer  and  the  Contributor  have  entered  into a  Contribution
Agreement,  dated  as  of  November  1,  1996  (the  "Contribution  Agreement"),
providing for, among other things,  the  contribution  by the Contributor to the
Issuer  from  time to time of all of its  right,  title and  interest  in and to
certain  Lease Assets.  The Issuer is and will be pledging the Lease  Contracts,
the Lease Receivables, the related Equipment and such other rights as granted by
the  Contributor  to the Issuer to the Trustee as security  for the Notes.  As a
precondition  to  the   effectiveness   of  the  Contribution   Agreement,   the
Contribution  Agreement  requires that the Servicer,  the Issuer and the Trustee
enter into this Agreement to provide for the servicing of the Lease Assets.

         In order to further  secure the Notes,  the Issuer is  granting  to the
Trustee a security interest in, among other things,  the Issuer's rights derived
under this  Agreement and the Servicer  agrees that all covenants and agreements
made by the  Servicer  herein with respect to the Lease Assets shall also be for
the benefit and security of the Trustee and all Holders from time to time of the
Notes.  For its  services  under this  Agreement,  the  Servicer  will receive a
Servicer Fee as provided herein and in the Indenture.

                                    Article 1

                                   Definitions

         Section 1.01.  Defined Terms.  Except as otherwise  specified or as the
context may otherwise require,  the following terms have the respective meanings
set forth below for all purposes of this Agreement,  and the definitions of such
terms are equally applicable both to the singular and plural forms of such terms
and to the  masculine,  feminine and neuter  genders of such terms.  Capitalized
terms used but not otherwise  defined herein shall have the respective  meanings
assigned to such terms in the Indenture.


         "Contribution  Agreement" shall mean the Contribution Agreement between
the  Contributor  and the Issuer dated of even date herewith,  together with the
Lease Asset Assignment executed and delivered in connection therewith.

         "Contributor"  shall mean  Sunrise  Leasing  Corporation,  a  Minnesota
Corporation.

         "Independent  Accountants"  shall  initially mean Arthur  Andersen LLP;
provided,  that such firm is independent with respect to the Servicer within the
meaning of the Securities Act of 1933, as amended.

         "Issuer"  shall  mean  Sunrise  Funding   Corporation  I,  a  Minnesota
corporation.

         "Lease  Assets"  shall have the meaning  specified in the  Contribution
Agreement.

         "Lease  Contract  Files"  shall  have  the  meaning  specified  in  the
Contribution Agreement.

         "Lease Receivable" shall mean the meaning specified in the Contribution
Agreement.

         "Liquidated  Lease  Receivable"  shall mean a Lease Receivable that has
been liquidated pursuant to Section 3.01(b) hereof.

         "Lock Box" shall have the meaning specified in Section 3.03 hereof.

         "Lockbox  Account"  shall mean the account  established by the Servicer
pursuant to Section 3.03 hereof,  into which account shall be deposited payments
related to the Lease Receivables.


<PAGE>

         "Lockbox  Agreement" shall mean the agreement described in Section 3.03
hereof.

         "Lockbox  Bank"  shall  initially  mean  State  Street  Bank and  Trust
Company, and thereafter any successor.

         "Monthly  Servicer's  Report"  shall  mean the report  prepared  by the
Servicer pursuant to Section 4.01 hereof.

         "Officer's Certificate" shall mean a certificate signed by the Chairman
of the Board, the Vice Chairman of the Board,  the President,  a Vice President,
the Treasurer or the Secretary of the Servicer.

         "Opinion of Counsel" shall mean a written  opinion of counsel in a form
that is, and from counsel who is, reasonably acceptable to the person requesting
such opinion.

         "Placement  Agent"  shall  mean  Dougherty   Dawkins,   Inc.,  and  its
successors in interest.

         "Reported  Company"  shall  mean  Sunrise   Resources,   Inc.  and  its
Affiliates  on a  consolidated  basis;  provided,  however,  if Sunrise  Leasing
Corporation is no longer acting as Servicer,  then "Reported Company" shall also
mean any successor Servicer appointed pursuant to this Agreement.

         "Reported  Company's  Financial  Statements" shall include the Reported
Company's audited  consolidated  balance sheet,  income statement,  statement of
cash flows,  auditors opinion letter regarding audited financial  statements and
all notes to the audited financial statements.

         "Servicer"  shall initially mean Sunrise Leasing  Corporation,  until a
successor  Person  shall have become the  Servicer  pursuant  to the  applicable
provisions  of  this  Agreement,  and  thereafter  "Servicer"  shall  mean  such
successor Person.

         "Servicer  Advance"  shall have the meaning  set forth in Section  3.04
hereof.

         "Servicer Default" shall mean any occurrence or circumstance which with
notice or the lapse of time or both would be a Servicer  Event of Default  under
this Agreement.

         "Servicer  Event of  Default"  shall  mean each of the  occurrences  or
circumstances enumerated in Section 6.01 hereof.

         "Servicer  Termination  Notice"  means the notice  described in Section
6.01 hereof.

         "Servicing  Officer" shall mean those officers of the Servicer involved
in, or responsible for, the administration and servicing of the Lease Assets, as
identified  on the list of Servicing  Officers  furnished by the Servicer to the
Trustee and the Noteholders from time to time.
<PAGE>

         "Substitution  Criterion"  shall  have  the  meaning  specified  in the
Contribution Agreement.

         "Trustee"  shall  initially  mean  Norwest  Bank  Minnesota,   National
Association,  until a successor Person shall have become the Trustee pursuant to
the applicable provisions of the Indenture,  and thereafter "Trustee" shall mean
such successor Person.

                                    Article 2

               Servicer Representations, Warranties and Covenants

         Section 2.01.  Representations  and Warranties.  The Servicer makes the
following representations and warranties, which shall survive the Closing Date:

         (a)  Organization  and  Good  Standing.  The  Servicer  has  been  duly
incorporated and is validly existing in good standing as a corporation under the
laws of the State of Minnesota,  with requisite corporate power and authority to
own its  properties,  perform  its  obligations  under  this  Agreement  and the
Indenture and to transact the business in which it is now engaged or in which it
proposes to engage; the Servicer is duly qualified to do business and is in good
standing in each State in which the nature of its business  requires it to be so
qualified,  except where failure to so qualify would not have a material adverse
effect on the  ability of the  Servicer to perform  its  obligations  under this
Agreement and the Indenture.

         (b)  Authorization and Binding  Obligation.  Each of this Agreement and
the Indenture has been duly  authorized,  executed and delivered by the Servicer
and  constitutes  the valid  and  legally  binding  obligation  of the  Servicer
enforceable  against the Servicer in  accordance  with its terms,  subject as to
enforcement to any bankruptcy, insolvency, reorganization and other similar laws
of general  applicability  relating to or affecting  creditors' rights generally
and to general principles of equity regardless of whether  enforcement is sought
in a court of equity or law.

         (c)  No  Violation.  The  entering  into  of  this  Agreement  and  the
Indenture,  the  performance  by the  Servicer  of its  obligations  under  this
Agreement and the Indenture and the consummation of the transactions  herein and
therein  contemplated will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under,  any material  indenture,
agreement,  mortgage, deed of trust or other agreement or instrument to which it
is a party or by which it is bound or to which any of its  property or assets is
subject,  or  result  in the  creation  or  imposition  of any  lien,  charge or
encumbrance upon any of the property or assets of the Servicer  pursuant such an
agreement or  instrument,  nor will such action  result in any  violation of the
provisions  of its Articles of  Incorporation  or Bylaws,  or any statute or any
order,  rule or  regulation  of any court or any  regulatory  authority or other
governmental  agency  or  body  having  jurisdiction  over  it  or  any  of  its
properties;  and no consent,  approval,  authorization,  order,  registration or
qualification of or with any court,  regulatory  authority or other governmental
agency or body is required for the Servicer to enter into this Agreement and the
Indenture.
<PAGE>

         (d) No  Proceedings.  Except as set forth in the  Disclosure  Schedule,
there are no proceedings or investigations  pending,  or to the knowledge of the
Servicer,  threatened  against or affecting the Servicer or any subsidiary in or
before any  court,  governmental  authority  or agency or  arbitration  board or
tribunal, including but not limited to any such proceeding or investigation with
respect to any environmental or other liability  resulting from the ownership or
use of any of the Equipment,  which,  individually or in the aggregate,  involve
the possibility of materially and adversely affecting the properties,  business,
prospects, profits or condition (financial or otherwise) of the Servicer and its
subsidiaries,  or the ability of the Servicer to perform its  obligations  under
this Agreement or the Indenture.  The Servicer is not in default with respect to
any order of any court, governmental authority or agency or arbitration board or
tribunal.

         (e)  Approvals.  The  Servicer  (i) is not in  violation  of any  laws,
ordinances,  governmental rules or regulations to which it is subject,  (ii) has
not failed to obtain any licenses,  permits,  franchises  or other  governmental
authorizations  necessary to the  ownership of its property or to the conduct of
its business,  and (iii) is not in violation in any material respect of any term
of any agreement, charter instrument, bylaw or instrument to which it is a party
or by which it may be bound,  which  violation or failure to obtain as specified
in (i)-(iii)  materially  adversely affects the business or condition (financial
or otherwise) of the Servicer and its subsidiaries.

         (f) Investment Company. The Servicer is not an investment company which
is required to register under the Investment Company Act of 1940, as amended.

         Section  2.02.  Covenants.  (a) The Servicer  covenants as to the Lease
Assets:

                  (i) The Servicer shall not release or assign any Lien in favor
         of the Trustee on any item of Equipment  related to any Lease  Contract
         in whole or in part, except as permitted herein or in the Indenture.

                  (ii) The Servicer  will in all material  respects duly fulfill
         all  obligations  on the  Servicer's  part to be fulfilled  under or in
         connection with the Lease Assets. The Servicer will not amend, rescind,
         cancel  or modify  any Lease  Contract  or term or  provision  thereof,
         except as permitted  herein or in the Indenture,  and the Servicer will
         not  do  anything  that  would  materially  impair  the  rights  of the
         Noteholders in the Lease Assets,  except as  contemplated  herein or in
         the Indenture.

                  (iii) As more  specifically set forth below, in performing its
         servicing  duties  hereunder,  the Servicer  shall collect all payments
         required to be made by the Customers under the Lease Contracts, enforce
         all material  rights of the Issuer under the Lease Contracts and defend
         the Equipment  against all Persons,  claims and demands  whatever.  The
         Servicer  shall not  assign,  sell,  pledge or  exchange  or in any way
         encumber or  otherwise  dispose of the  Equipment,  except as permitted
         hereunder or in the Indenture.

         (b) The Servicer will deliver each of the  accountings,  statements and
reports described in Article 4 hereof to each party as set forth therein.
<PAGE>


                                    Article 3

                 Administration and Servicing of Lease Contracts

         Section 3.01.  Responsibilities of Servicer.  (a) The Servicer, for the
benefit of the  Noteholders,  shall be responsible for, and shall, in accordance
with  its  customary  servicing  procedure,  pursue  the  managing,   servicing,
administering,  enforcing and making of collections on the Lease Contracts,  the
Lease Receivables,  the Equipment and any Insurance Policies, the enforcement of
the Trustee's  security  interest in the Lease Contracts,  the Lease Receivables
and Equipment granted pursuant to the Indenture, and, if applicable, the sale or
the re-leasing of the Equipment upon the expiration or other  termination of the
related Lease Contract (or repossession  thereof without  termination),  each in
accordance  with  applicable  law and the standards and  procedures set forth in
this Agreement and any related  provisions of the Indenture and the Contribution
Agreement. The Servicer's  responsibilities shall include collecting and posting
of  all  payments,   responding   to  inquiries  of   Customers,   investigating
delinquencies,  accounting for  collections  and  furnishing  monthly and annual
statements to the Trustee and the Noteholders  with respect to payments,  making
Servicer Advances and using its best efforts to maintain the perfected  security
interest of the Trustee in the Trust Estate. Subject to the terms and conditions
of this  Agreement,  the  Servicer (at its  expense),  acting alone or through a
subservicer, shall have full power and authority, acting at its sole discretion,
to  do  any  and  all  things  in  connection  with  such  managing,  servicing,
administration,  enforcement,  collection and such  repossession and sale of the
Equipment  that it may deem  necessary or desirable and in the best interests of
the  Noteholders,  including the prudent  delegation  of such  responsibilities.
Without limiting the generality of the foregoing,  the Servicer, in its own name
or in the name of a subservicer,  shall, and is hereby  authorized and empowered
by the Trustee in the Trustee's role as secured  party,  subject to Section 3.02
hereof,  to execute  and  deliver  (on behalf of itself,  the  Noteholders,  the
Trustee or any of them) any and all instruments of satisfaction or cancellation,
or  of  partial  or  full  release  or  discharge,   and  all  other  comparable
instruments,  with respect to the Lease  Contracts and the Lease Contract Files,
in  accordance  with  the  Transaction  Documents.  Subject  to  the  terms  and
conditions  of  this  Agreement,  the  Servicer,   acting  alone  or  through  a
subservicer,  also may, in its sole discretion, waive any late payment charge or
penalty,  or any other  fees that may be  collected  in the  ordinary  course of
servicing  any  Lease  Contract.  Notwithstanding  the  foregoing,  neither  the
Servicer, nor any subservicer, shall, except pursuant to a judicial order from a
court of  competent  jurisdiction,  or as otherwise  expressly  provided in this
Agreement,  release or waive the right to collect the Scheduled  Payments or any
unpaid balance on any Lease  Contract,  except with respect to any Lease Contact
which is entered  into in order to  re-lease  Equipment  relating  to an expired
Lease  Contract,  in which case the Servicer may terminate  such re-lease  lease
contract if the  Servicer  enters into a new  re-lease  contract,  receives  the
related  Equipment  back or receives a payment equal to the fair market value of
such Equipment from the lessee.  The Servicer shall remarket Equipment for which
any Lease Contract has expired in a manner  consistent with the standard of care
set forth in Section 3.02.  The Trustee  shall,  at the expense of the Servicer,
furnish the Servicer, or at the request of the Servicer,  any subservicer,  with
any powers of attorney and other  documents  necessary or  appropriate to enable
the Servicer or subservicer to carry out its servicing and administrative duties
hereunder,  and the  Trustee  shall not be  responsible  for the  Servicer's  or
subservicer's application or use thereof. Notwithstanding the appointment by the
Servicer of a subservicer hereunder,  the Servicer shall remain primarily liable
for the full performance of its obligations hereunder.

         (b)  Notwithstanding any provision to the contrary herein, the Servicer
(or a  subservicer)  shall  conduct any Lease  Contract  management,  servicing,
administration, collection or enforcement actions in the following manner:

                  (i) The  Servicer,  as agent for and on behalf of the  Issuer,
         with  respect  to  any  Defaulted  Lease  Contract  shall  follow  such
         practices  and  procedures  as  are  normal  and  consistent  with  the
         Servicer's   standards  and  procedures   relating  to  its  own  lease
         contracts,  lease  receivables  and  equipment  that are similar to the
         Lease Contracts, Lease Receivables and the Equipment, including without
         limitation, the taking of appropriate actions to foreclose or otherwise
         liquidate any such Defaulted Lease Contract,  together with the related
         Equipment, to collect any Guaranty Amounts, and to enforce the Issuer's
         rights  in or under  the  Contribution  Agreement.  All  Recoveries  or
         Residual  Proceeds  in  respect  of  any  such  Lease  Contract,  Lease
         Receivable and the related Equipment  received by the Servicer shall be
         remitted to the Trustee for deposit in the Collection  Account pursuant
         to Section 3.03(a);
<PAGE>

                  (ii) The  Servicer  may sue to enforce  or collect  upon Lease
         Contracts as agent for the Trustee.  If the Servicer elects to commence
         a legal proceeding to enforce a Lease Contract, the act of commencement
         shall be deemed to be an automatic  assignment of the Lease Contract to
         the Servicer for  purposes of  collection  only.  If,  however,  in any
         enforcement  suit or legal  proceeding it is held that the Servicer may
         not enforce a Lease  Contract on the ground that it is not a real party
         in interest or a holder  entitled to enforce the Lease  Contract,  then
         the Trustee  shall,  at the Servicer's  request and expense,  take such
         steps as the Servicer  deems  necessary  and  instructs  the Trustee in
         writing to take to enforce the Lease Contract,  including bringing suit
         in its name or the name of the Issuer or the names of the  Noteholders,
         and the  Trustee  shall be  indemnified  by the  Servicer  for any such
         action taken;

                  (iii) The  Servicer  shall  exercise  any  rights of  recourse
         against third parties that exist with respect to any Lease  Contract in
         accordance  with the Servicer's  usual practice and applicable  law. In
         exercising recourse rights, the Servicer is authorized on the Trustee's
         behalf to release  the  security  interest  of the Trustee in the Lease
         Contract  to the  person  against  whom  recourse  exists to the extent
         necessary,  and at the  price set forth in the  document  creating  the
         recourse.  The  Servicer  will not  reduce or  diminish  such  recourse
         rights, except to the extent that it exercises such right;

                  (iv) The Servicer may not accept  Substitute  Lease  Contracts
         that do not comply with Section 3.10 hereof,  Sections 3.03 and 3.04 of
         the Contribution Agreement and Section 4.03 of the Indenture;

                  (v)  Without in any way  limiting  the  generality  of Section
         3.01(b)(i),  the  Servicer  may waive,  modify or vary any terms of any
         Lease Contract or consent to the postponement of strict compliance with
         any such term if in the Servicer's reasonable and prudent determination
         such waiver,  modification or postponement is not materially adverse to
         the  Noteholders;  provided,  however,  that (A) the Servicer shall not
         forgive any payment of rent,  and (B) the Servicer shall not permit any
         modification,  waivers,  variation or postponements with respect to any
         Lease  Contract that would  decrease the Scheduled  Payment,  defer the
         payment of any principal or interest or any Scheduled  Payment,  reduce
         the Aggregate  Implicit  Principal  Balance  relating to the Notes,  or
         prevent the complete  amortization of the Aggregate  Implicit Principal
         Balance  relating to the Notes from occurring by the  Calculation  Date
         preceding  the Stated  Maturity.  The Monthly  Servicer's  Report shall
         indicate any modification of any Scheduled Payment;

                  (vi) The Servicer shall not consent to the  termination of any
         Lease  Contract  in  connection  with loss of or damage to the  related
         Equipment  unless  the  Customer  has paid an  amount  not less than an
         amount  equal  to the  sum of  (a)  the  present  value  of the  unpaid
         Scheduled Payments on such Lease Contract,  (discounted at the rate set
         forth in such Lease  Contract or consistent  with the  Servicer's  past
         practice)  and (b) the amount set forth in such Lease  Contract  as the
         purchase  option  price for such  Equipment,  or if less,  the  maximum
         amount legally collectible under the related Lease Contract;

                  (vii) In the event that the Servicer or any subservicer in the
         enforcement  of any Lease  Contract or otherwise (A) acquires  title to
         any item of  Equipment  with  respect  to which  title  was held by the
         Customer or (B) reclaims possession of Equipment from the Customer, the
         Servicer  shall use its best  efforts to sell or re-lease  such item of
         Equipment  promptly and consistent  with the standard of care set forth
         in Section 3.02 hereof.  Any  Recoveries or Residual  Proceeds  related
         thereto shall be deposited in accordance  with Section  3.03(a) hereof;
         and

                  (viii) Notwithstanding any provision to the contrary contained
         in this Agreement,  the Servicer or any subservicer  shall exercise any
         right  under  a Lease  Contract  to  accelerate  the  unpaid  Scheduled
         Payments,  due or to  become  due  thereunder  in such a  manner  as to
         maximize the net proceeds available to the Issuer;  provided,  however,
         that the Servicer  will not  accelerate  any Scheduled  Payment  unless
         permitted  to do so by  the  terms  of  the  Lease  Contract  or  under
         applicable law.
<PAGE>

         Section 3.02.  Servicer  Standard of Care. In managing,  administering,
servicing, enforcing and making collections on the Lease Contracts and Equipment
pursuant to this Agreement,  the Servicer will provide such services in a manner
consistent  with past  practice  and  applicable  law and will not  change  such
practice  in any way  that  would  cause  an  adverse  material  change  in such
practice. In any event, the Servicer warrants that in providing such services it
will  exercise  that degree of skill and care  consistent  with that which other
lessors in the  industry  customarily  exercise  with  respect to similar  lease
contracts and equipment owned or serviced by them. The Servicer shall punctually
perform all of its  obligations  and  agreements  under this Agreement and shall
comply  with all  applicable  federal  and  state  laws and  regulations,  shall
maintain  all state and federal  licenses  and  franchises  necessary  for it to
perform  its  servicing  responsibilities  hereunder,  and shall not  materially
impair  the  rights  of the  Noteholders  in any  Lease  Contracts  or  payments
thereunder.

         Section  3.03.  Lockbox  Account  and  Servicer  Remittances.  (a)  The
Servicer  shall  instruct the  Customers to send all payments  relating to Lease
Receivables  directly to a lock box  maintained  by the Lockbox  Bank (the "Lock
Box") for deposit  into an account (the  "Lockbox  Account")  maintained  at the
Lockbox  Bank in the name of, and at the sole  control  of, the  Trustee for the
benefit of the  Noteholders.  On each Business Day, the Trustee shall,  or shall
cause the Lockbox  Bank,  under the Lockbox  Agreement,  dated as of November 8,
1996, by and among the Servicer and the Lockbox Bank (the "Lockbox  Agreement"),
to transfer all amounts to the Collection Account.

         (b) Except as otherwise  provided in this Agreement,  the Servicer,  as
agent of the Issuer,  shall  remit to the Trustee for deposit in the  Collection
Account by [4:00  p.m.],  Minneapolis  time,  on each  Business  Day the amounts
described  below that have been  collected  by the  Servicer  through 4:00 p.m.,
Minneapolis time, on the preceding Business Day, so long as such amounts, in the
aggregate, exceed $1,000:

                  (i) all payments made under the Lease  Contracts due after the
         Cut-Off Date,  including  prepayments but excluding taxes and Servicing
         Charges, received directly by the Servicer;

                  (ii) all Residual Proceeds and Recoveries;

                  (iii) the Purchase  Price of any Lease  Contract  purchased by
         the Contributor or the Issuer, to the extent received by the Servicer;

                  (iv) all Guaranty Amounts; and

                  (v) all Insurance Proceeds.

         The Servicer  shall hold in trust for the benefit of the Holders of the
Notes any payment it receives relating to items (i) through (v) above until such
time as the  Servicer  transfers  any such payment to the Trustee for deposit in
the Collection Account.

         Section 3.04. Servicer Advances. Not later than 10:00 a.m., Minneapolis
time, on the  Determination  Date prior to each Payment Date, the Servicer shall
make a Servicer  Advance for each Lease  Contract  which is a  Delinquent  Lease
Contract on such date by remitting to the Trustee for deposit in the  Collection
Account an amount equal to the Scheduled  Payments,  or portion  thereof,  which
were  due in the  prior  Due  Period  but  not  received  and  deposited  in the
Collection Account on or prior to such Determination  Date;  provided,  however,
that the Servicer shall not be obligated to make any Servicer  Advance  pursuant
to this  Section  3.04  that  the  Servicer  determines  in good  faith,  and in
accordance with its customary servicing practices,  is unlikely to be eventually
repaid from  Scheduled  Payments  made by or on behalf of the related  Customer;
further provided, that the Servicer may not make a Servicer Advance with respect
to a Lease  Contract  once it has become a  Defaulted  Lease  Contract.  On each
Determination  Date,  the  Servicer  shall  deliver to the  Trustee  the Monthly
Servicer's  Report  listing  the  aggregate  amount of  Scheduled  Payments  not
received for the immediately prior Due Period,  the amount of Servicer Advances,
and  the  amounts  which  it has  determined  in  its  sole  discretion,  and in
accordance  with  its  customary  servicing   practices,   are  unlikely  to  be
recoverable from the related Customers.
<PAGE>

         Section 3.05.  Financing  Statements.  The Servicer  shall,  at its own
expense,  make all UCC filings and recordings as may be required pursuant to the
terms of the Indenture.  The Servicer  shall,  in accordance  with its customary
servicing  procedures and at its own expense,  be responsible  for such steps as
are necessary to maintain  perfection of such  security  interests.  The Trustee
hereby  authorizes the Servicer to re-perfect or to cause the  re-perfection  of
such security interest on its behalf as Trustee, as necessary.

         Section 3.06. Maintenance of Insurance Policy;  Insurance Proceeds. The
Servicer shall verify, monitor and enforce the acquisition and/or maintenance of
Insurance  Policies by a Customer  in a manner  consistent  with past  practice,
provided  that  the  Servicer  shall  do so in a  manner  consistent  with  that
practiced  by other  lessors  in the vendor  leasing  industry  with  respect to
similar lease  contracts and equipment  owned or serviced by them. Any Insurance
Proceeds shall be remitted to the Trustee for deposit in the Collection  Account
pursuant to Section 3.03(a).

         Section 3.07. Personal Property and Sales Taxes. The Servicer shall, on
behalf of the Issuer, pay or cause to be paid all personal  property,  sales and
use taxes on or with respect to the  Equipment,  or the  acquisition  or leasing
thereof,  as and when such taxes  become due, to the extent a Customer  has paid
amounts to the Servicer or into the Lockbox Account for such taxes. The Servicer
shall also cause to be filed in a timely  manner any and all returns and reports
required in connection with the payment of such taxes.

         Section 3.08. No Offset.  Prior to the  termination of this  Agreement,
the obligations of the Servicer under this Agreement shall not be subject to any
defense,  counterclaim  or right of offset  which the  Servicer  has or may have
against the Issuer,  the  Trustee or any  Noteholder  whether in respect of this
Agreement,  the Indenture,  the Notes,  the  Contribution  Agreement,  any Lease
Contract, Lease Receivable, Equipment or otherwise.

         Section  3.09.   Servicing   Compensation.   As  compensation  for  the
performance  of its  obligations  under this  Agreement,  the Servicer  shall be
entitled to receive the Servicer Fee and the Servicing Charges. The Servicer Fee
shall be paid monthly, commencing on the Initial Payment Date and terminating on
the first to occur of (i) the receipt of the last Scheduled  Payment and related
Residual  Proceeds with respect to the last remaining Lease  Contract,  (ii) the
receipt of Recoveries and Insurance  Proceeds with respect to the last remaining
Lease  Contract,  or (iii)  the  date on which  the  Issuer  or the  Contributor
purchases the last remaining Lease Contract or Lease Receivable, as the case may
be. The  Servicer  Fee shall be paid by the Issuer to the  Servicer at the times
and in the priority as set forth in the  Indenture.  The Servicer  shall pay all
expenses incurred by it in connection with its servicing  activities  hereunder,
including,  without  limitation,  payment of the fees and  disbursements  of the
Independent  Accountants,  payment  of  expenses  incurred  in  connection  with
distributions  and reports to the Trustee and the Noteholders and payment of the
Fees of the Lockbox Bank under the Lockbox Agreement,  and shall not be entitled
to reimbursement for such expenses; provided, however, that the Servicer will be
entitled  to prompt  reimbursement  from the  Issuer  for  reasonable  costs and
expenses  incurred by the Servicer  (including  reasonable  attorney's  fees and
out-of-pocket   expenses)  in  connection   with  the   realization,   attempted
realization  or  enforcement  of  rights  and  remedies  upon  Defaulted   Lease
Contracts,  from  amounts  received  as  Recoveries  from  any  Defaulted  Lease
Contracts.

         Section  3.10.  Substitution  or Purchase of Lease  Contracts and Lease
Receivables.  (a) The Servicer  shall not allow  termination of a Lease Contract
prior to the  scheduled  expiration  date or  prepayment  of any Lease  Contract
(except as may be specifically  required under such Lease Contract in connection
with a casualty to the related Equipment),  unless the Issuer has (i) pledged to
the Trustee a Substitute  Lease Contract,  a Substitute Lease Receivable and the
related   Equipment,   and  delivered  to  the  Trustee  the  original  executed
counterpart  of such  Substitute  Lease  Contract or (ii)  remitted the Purchase
Price of such prepaid Lease  Contract and the related  Equipment to the Servicer
for deposit in the Collection Account in accordance with Section 3.03(a) hereof;
provided,  further, that purchases and substitutions of Lease Contracts pursuant
to this  subparagraph  (a) shall comply with the requirements of Section 4.03 of
the  Indenture  and the criteria  set forth in Section 3.04 of the  Contribution
Agreement.
<PAGE>

         (b) The  Servicer  shall permit the Issuer to (i) obtain the release of
the Trustee's  security  interest in any Defaulted  Lease Contract or Delinquent
Lease  Contract by  remittance  by the Issuer to the Servicer for deposit in the
Collection  Account in accordance with Section 3.03(a) hereof or (ii) substitute
for any Defaulted Lease Contract or Delinquent Lease Contract a Substitute Lease
Contract,  a Substitute  Lease  Receivable  and the related  Equipment  upon the
delivery to the Trustee of the original  executed  counterpart of the Substitute
Lease Contract;  provided that,  releases and substitutions of Lease Receivables
pursuant to this  subparagraph (b) shall comply with the requirements of Section
4.03  of the  Indenture  and the  criteria  set  forth  in  Section  3.04 of the
Contribution Agreement.

         (c)  Notwithstanding  any other provision  contained in this Agreement,
the Servicer shall not, with respect to a Defaulted Lease Contract, negotiate or
enter  into a new lease  with the  Customer  relating  to the  Equipment  or the
Customer's obligations under such Defaulted Lease Contract unless the Issuer has
obtained a release of the Trustee's security interest in, or made a substitution
for, the Lease Contract in the manner set forth in subsection (b) hereof.

         (d) In the event that the  Contributor is required,  as a result of the
breach by it of certain  representations  or warranties,  to obtain a release of
the  Trustee's  security  interest in a Lease  Contract or to substitute a Lease
Contract  pursuant to Section 3.03 of the Contribution  Agreement,  the Servicer
shall  permit  such  release or  substitution  in  accordance  with the terms of
Sections 3.03 and 3.04 thereof.

         Section 3.11. Vendor Agreements. The Servicer shall comply at all times
with the terms and  provisions of each Vendor  Agreement to the extent that such
Vendor Agreement applies to any Lease Contract.

                                    Article 4

                       Accountings, Statements and Reports

         Section 4.01.  Monthly  Servicer's  Reports.  No later than 10:00 a.m.,
Minneapolis time, on each Determination  Date, the Servicer shall deliver to the
Issuer,  the  Placement  Agent,  the  Trustee  and each  Noteholder  the Monthly
Servicer's Report in the form attached as Exhibit A with respect to the activity
in the immediately  preceding Due Period. In the course of preparing the Monthly
Servicer's  Report,  the  Servicer  shall seek  direction  from the Issuer as to
remittance  of the funds to be paid  pursuant  to Section  12.02(d)(vii)  of the
Indenture. Lease Contracts and Lease Receivables which have been substituted for
or  purchased by the Company or the Issuer  shall be  identified  by the related
Customer  lease number.  On each Payment Date, the Servicer shall deliver to the
Trustee a computer disk or tape in a format acceptable to the Trustee containing
the information from which the Servicer prepared the Monthly  Servicer's Report,
as well as any additional  information reasonably requested by the Trustee prior
to such Payment  Date.  The Trustee  shall have no  responsibility  to review or
otherwise  examine  the  content  of the  computer  disk or tape,  and holds the
computer disk or tape solely for purposes of easing the  transition to successor
servicer, should such transition be necessitated.

         Section 4.02.  Financial  Statements;  Certification  as to Compliance;
Notice of Default.  (a) The Servicer (and the successor  Servicer if the initial
Servicer is no longer the Servicer) shall deliver to the Trustee,  the Placement
Agent  and  each  Holder  (and,  upon  the  request  of any  Noteholder,  to any
prospective transferee of any Note):

                  (i) within one hundred and twenty  (120) days after the end of
         each  fiscal  year of the  Reported  Company,  a copy  of the  Reported
         Company's   Financial   Statements,   all  in  reasonable   detail  and
         accompanied  by an opinion of a firm of  independent  certified  public
         accountants  stating that such financial  statements present fairly the
         financial  condition  of the  Reported  Company  (or,  in the case of a
         successor Servicer,  such successor Servicer's financial condition) and
         have been prepared in accordance  with  generally  accepted  accounting
         principles  consistently  applied (except for changes in application in
         which  such  accountants  concur),  and  that the  examination  of such
         accountants in connection with such financial  statements has been made
         in  accordance  with  generally   accepted  auditing   standards,   and
         accordingly  included  such tests of the  accounting  records  and such
         other  auditing   procedures  as  were  considered   necessary  in  the
         circumstances;


<PAGE>

                  (ii) with each set of Reported Company's Financial  Statements
         delivered pursuant to subsection (a)(i) above, an Officer's Certificate
         stating  that such  officer  has  reviewed  the  relevant  terms of the
         Indenture, the Contribution Agreement and this Agreement, and has made,
         or caused to be made, under such officer's supervision, a review of the
         transactions  and conditions of the Reported  Company during the period
         covered  by the  Reported  Company's  Financial  Statements  then being
         furnished,  that the  review has not  disclosed  the  existence  of any
         Servicer Default or Servicer Event of Default or, if a Servicer Default
         or a Servicer Event of Default  exists,  describing its nature and what
         action the Servicer has taken and is taking with respect  thereto,  and
         that on the basis of such review the officer  signing such  certificate
         is of the opinion that during such period the Servicer has serviced the
         Lease  Contracts in  compliance  with the  procedures  hereof except as
         disclosed in such certificate;

                  (iii)  immediately upon becoming aware of the existence of any
         condition or event which  constitutes a Servicer  Default or a Servicer
         Event of Default,  a written notice describing its nature and period of
         existence  and what  action the  Servicer  is or  proposes to take with
         respect thereto;

                  (iv) promptly upon the Servicer's becoming aware of:

                           (A) any  proposed or pending  investigation  of it or
                  the Issuer by any governmental authority or agency, or

                           (B) any pending or proposed  court or  administrative
                  proceeding  which  involves or may involve the  possibility of
                  materially and adversely  affecting the properties,  business,
                  prospects,  profits or condition  (financial  or otherwise) of
                  the Servicer, the Contributor or the Issuer,

         a  written  notice  specifying  the  nature  of such  investigation  or
         proceeding  and what action the  Servicer is taking or proposes to take
         with respect thereto and evaluating its merits;

                  (v) with reasonable  promptness any other data and information
         which may be reasonably  requested from time to time, including without
         limitation any information required to be made available at any time to
         any  prospective  transferee  of any  Notes  in order  to  satisfy  the
         requirements of Rule 144A under the Securities Act of 1933, as amended;
         and

                  (vi) quarterly,  unaudited  versions of the Reported Company's
         consolidated balance sheet and income statement.

         (b) On or  before  each  July  31,  so  long  as any of the  Notes  are
outstanding,  the Servicer shall furnish to the Trustee an Officer's Certificate
either  stating that such action has been taken with  respect to the  recording,
filing,   and  rerecording   and  refiling  of  any  financing   statements  and
continuation  statements  as necessary to maintain the security  interest of the
Trustee  created by the Indenture  with respect to the Trust Estate and reciting
the  details  of such  action or stating  that no such  action is  necessary  to
maintain such security interest.  Such Officer's Certificate shall also describe
the recording,  filing, rerecording and refiling of any financing statements and
continuation  statements that will be required to maintain the security interest
of  the  Trustee  in the  Trust  Estate  until  the  date  such  next  Officer's
Certificate is due.
<PAGE>

         Section 4.03.  Independent  Accountants' Reports. After the third month
after the Closing Date and each fiscal year of the Issuer thereafter (commencing
with the fiscal year ending March 31,  1997),  the Servicer at its expense shall
cause  the  Independent  Accountants  (who may also  render  and  deliver  other
services  to  the  Servicer  and  its  Affiliates)  to  prepare  an  agreed-upon
procedures  letter  addressed to the Servicer and the Trustee as of the close of
the  applicable  month  or the  close  of such  year,  to the  effect  that  the
Independent  Accountants have compared the information  contained in the Monthly
Servicer's Reports delivered for the relevant period with information  contained
in the accounts and records for such period, and, where applicable, on the basis
of such procedures and comparison,  report matters which come to the Independent
Accountants' attention to indicate that the information contained in the Monthly
Servicer's  Reports does not  reconcile  with the  information  contained in the
Servicer's  accounts  and  records.  If any letter  delivered  pursuant  to this
Section  4.03  (commencing  with the letter  relating  to the fiscal year ending
March 31, 1997)  discloses  such  exceptions,  the Servicer at its expense shall
cause the Independent  Accountants to deliver an agreed-upon  procedures  letter
addressed  to the  Servicer  and the  Trustee  for each  subsequent  three-month
period. Such obligation shall continue until the Independent Accountants deliver
a letter  relating  to a  three-month  period  that does not  disclose  any such
exceptions.  Thereafter,  the  Servicer  shall  cause a letter  to be  delivered
relating  to each  fiscal  year in  accordance  with the first  sentence of this
Section  4.03.  The  Servicer  shall  deliver to the  Trustee a copy of any such
agreed-upon  procedures  letters  within  ninety  (90)  days of the close of the
relevant period.

         Section 4.04. Access to Certain Documentation and Information.  (a) The
Servicer  shall  provide  to  the  Trustee  or any  Noteholder  and  their  duly
authorized  representatives,  attorneys  or  accountants  access  to any and all
documentation and to any existing data processing  systems  (including,  but not
limited to, any data that can reasonably be generated  therefrom)  regarding the
Trust Estate (including the Lease Schedule) that the Servicer may possess,  such
access being afforded without charge but only upon reasonable request and during
normal  business hours so as not to interfere  unreasonably  with the Servicer's
normal operations or customer or employee relations,  at offices of the Servicer
designated by the Servicer.  Upon the  occurrence of a Servicer Event of Default
(as defined in Article 6 of the  Indenture),  the Servicer  shall provide to the
Trustee  and any  successor  servicer  such  access  to  documentation  and data
processing  systems as is  necessary  to  facilitate  the  transfer of servicing
duties from the Servicer to any successor servicer as soon as possible.

         (b) At all times  during  the term  hereof,  the  Servicer  shall  keep
available at its principal  executive  office for inspection by Noteholders  and
the Trustee a list of all Lease  Contracts  the interests in which are then held
as a part of the Trust Estate,  together with a  reconciliation  of such list to
that set forth in the Lease Schedule and each of the Monthly Servicer's Reports,
indicating the cumulative  addition and removal of the Issuer's  interest in the
Lease Contracts from the Trust Estate.

         (c)  The  Servicer  will  maintain  accounts  and  records  as to  each
respective  Lease  Contract  serviced  by the  Servicer  that are  accurate  and
sufficiently detailed as to permit (i) the reader thereof to know as of the most
recent  Calculation  Date the  status  of such  Lease  Contract,  including  any
payments, Insurance Proceeds, Residual Proceeds and Recoveries received or owing
(and the nature of each) thereon and (ii) the  reconciliation  between payments,
Insurance Proceeds, Residual Proceeds or Recoveries on (or with respect to) each
Lease  Contract  and the amounts from time to time  deposited in the  Collection
Account in respect of such Lease Contract.

         (d) The Servicer  will  maintain all of its  computerized  accounts and
records so that,  from and after the time of the  acquisition  of an interest in
the Lease  Assets by the Issuer and the grant of the  security  interest  in the
Lease Contracts, the Lease Receivables and the related Equipment to the Trustee,
the Servicer's  accounts and records  (including any back-up computer  archives)
that refer to any Lease Contract, Lease Receivable or Equipment indicate clearly
that the Lease Contracts,  the Lease  Receivables and the related  Equipment are
owned by the  Issuer  and are  pledged  to the  Trustee  for the  benefit of the
Noteholders. Indication of the Trustee's interest in a Lease Contract or a Lease
Receivable  will be deleted  from or modified  on the  Servicer's  accounts  and
records when,  and only when,  the related Lease Contract has been paid in full,
replaced with a Substitute Lease Contract or purchased by the Contributor or the
Issuer or assigned to the Servicer  pursuant to this Agreement,  as the case may
be. The  indication  of the  Trustee's  interest in an item of Equipment  may be
deleted  only if such  Equipment  is sold in  accordance  with  the  Transaction
Documents.
<PAGE>

         (e) Nothing in this  Section 4.04 shall  affect the  obligation  of the
Servicer to observe any  applicable  law  prohibiting  disclosure of information
regarding  the  Customers,  and the  failure  to provide  information  otherwise
required by this Section 4.04 as a result of such  observance  by the  Servicer,
shall not constitute a breach of this Section 4.04.

         (f) All information obtained by the Trustee or any Noteholder regarding
the Customers and the Lease Contracts, whether upon exercise of its rights under
this  Section  4.04 or  otherwise,  shall be  maintained  by the  Trustee or the
Noteholder, as applicable, in confidence and shall not be disclosed to any other
Person, unless such disclosure does not violate any applicable law or regulation
or any proprietary  rights of the  Contributor,  the Issuer or the Servicer,  or
unless such  disclosure  is necessary to enforce the rights of the Trustee under
this Servicing Agreement and the Indenture or unless ordered to so disclose by a
court of appropriate jurisdiction.

         Section 4.05.  Trustee to Cooperate.  Upon payment  (including  through
application of any prepayment) in full of any Lease Contract,  the Servicer will
notify the Trustee by written certification (which certification shall include a
statement  to the effect  that all  amounts  received  in  connection  with such
payments in full which are required to be deposited  in the  Collection  Account
pursuant to Section 3.03 hereof have been so deposited)  of a Servicing  Officer
and shall request  delivery of the Lease Contract to the Servicer.  Upon receipt
of such  delivery  request,  the Trustee  shall,  within  seven (7) days of such
request,  in proper form,  by the Servicer,  release such Lease  Contract to the
Servicer.  Upon release of such Lease  Contract,  the Servicer is  authorized to
execute an  instrument  in  satisfaction  of such Lease  Contract and to do such
other acts and execute such other  documents as it deems  necessary to discharge
the Customer thereunder and, if applicable, release any security interest in the
Equipment  related  thereto.  The Servicer shall determine when a Lease Contract
has been paid in full.  Upon the  written  request of a  Servicing  Officer  and
subject  to the  Trustee's  rights  to  indemnity  contained  herein  and in the
Indenture,  the Trustee shall perform such other acts as reasonably requested in
writing by the Servicer and otherwise cooperate with the Servicer in enforcement
of the Noteholders' rights and remedies with respect to Lease Contracts. Subject
to the terms of the Indenture,  the Trustee has no liability for the acts of the
Servicer hereunder.

         Section 4.06.  Oversight of Servicing.  (a) Prior to each Payment Date,
the Trustee shall review the Monthly Servicer's Report related thereto and shall
determine the following:

                  (i) that such  Monthly  Servicer's  Report is  complete on its
         face;

                  (ii) that the amount  deposited  into the  Collection  Account
         from the  Lockbox  Account  is the same as the  amount set forth in the
         Monthly Servicer's Report as so credited; and

                  (iii) that the  amounts  credited  to and  withdrawn  from the
         Collection Account and the Pre-Funding  Account and the balance of such
         account,  as set forth in the records of the  Trustee,  are the same as
         the amount set forth in the Monthly Servicer's Report.

         (b) In the event of any  discrepancy  between the information set forth
in  subparagraph  (a) as  calculated  by the Servicer  from that  determined  or
calculated  by the Trustee,  the Trustee shall  promptly  notify the Servicer of
such  discrepancy.  If within thirty (30) days of such notice being  provided to
the  Servicer,  the  Trustee  and  the  Servicer  are  unable  to  resolve  such
discrepancy,  the Trustee shall promptly notify the Holders of the Notes of such
discrepancy.  The Trustee is not  required to take any other action at such time
unless so directed in writing by the Servicer.

         (c) Based  solely on the  information  included  in the Lease  Schedule
delivered  on the  Delivery  Date and the  electronic  reports  provided on each
Payment Date  thereafter,  the Trustee shall determine that any Substitute Lease
Contracts  delivered  under  Section  3.10  satisfy the  Substitution  Criterion
described in Section 3.04(b) of the Contribution Agreement.

         (d) Other than as  specifically  set forth elsewhere in this Agreement,
the Trustee shall have no obligation to supervise, verify, monitor or administer
the performance of the Servicer and shall have no liability for any action taken
or omitted by the Servicer.
<PAGE>

         (e) The  Trustee  shall  consult  fully  with  the  Servicer  as may be
necessary  from time to time to perform or carry out the  Trustee's  obligations
hereunder.  The  Servicer  hereby  agrees to  cooperate  as  necessary  with the
Trustee.

                                    Article 5

                           The Servicer and the Issuer

         Section  5.01.  Servicer   Indemnification.   (a)  The  Servicer  shall
indemnify  and hold  harmless  the Trustee,  the  Contributor,  the Issuer,  the
Placement Agent and the Trust Estate,  for the benefit of the Noteholders,  from
and against any loss, liability,  claim,  expense,  damage or injury suffered or
sustained to the extent that such loss,  liability,  claim,  expense,  damage or
injury  arose out of or was imposed by reason of the failure by the  Servicer to
perform  its  duties  under  this  Agreement  or are  attributable  to errors or
omissions of the Servicer related to such duties;  provided,  however,  that the
Servicer  shall not indemnify any party to the extent that acts of fraud,  gross
negligence or breach of fiduciary  duty by such party  contributed to such loss,
liability, claim, expense, damage or injury.

         (b)  Indemnification  under this  Section 5.01 shall  include,  without
limitation,  reasonable  fees and expenses of counsel and expenses of litigation
reasonably  incurred.  If the  Servicer has made any  indemnity  payments to the
Trustee,  the Placement  Agent or the  Noteholders  pursuant to this Section and
such party thereafter  collects any of such amounts from others, such party will
promptly repay such amounts  collected to the Servicer,  without  interest.  The
provisions of this Section 5.01 shall survive any  expiration or  termination of
this Agreement.

         Section 5.02.  Corporate Existence;  Reorganizations.  (a) The Servicer
shall keep in full effect its existence  and good  standing as a corporation  in
the state of its incorporation and will obtain and preserve its qualification to
do  business  as a  foreign  corporation  in each  jurisdiction  in  which  such
qualification  is or shall be  necessary  to enable the  Servicer to perform its
duties under this  Agreement,  except where the failure to so qualify  would not
have a  material  adverse  effect on the  Trust  Estate  or the  ability  of the
Servicer to perform its duties hereunder;  provided,  however, that the Servicer
may  reincorporate  in another state, if to do so would be in the best interests
of the  Servicer  and  would  not  have  a  material  adverse  effect  upon  the
Noteholders.

         (b) The  Servicer  shall not (i) (other  than  pursuant  to one or more
additional lease financings) convey,  transfer or lease substantially all of its
assets as an entirety to any Person,  or (ii) merge or consolidate  with another
Person,  unless (A) such Person or the merged or  consolidated  entity  acquires
substantially  all the assets of the  Servicer as an entirety  and  executes and
delivers to the  Contributor,  the Issuer and the Trustee an agreement,  in form
and  substance  reasonably  satisfactory  to the  Contributor,  Issuer  and  the
Trustee,  which  contains an  assumption by such Person or entity of the due and
punctual  performance  and  observance  of each  covenant  and  condition  to be
performed or observed by the Servicer  under this Agreement and (B) the Servicer
has obtained the prior written consent of the Holders of a majority in principal
amount of the Notes Outstanding.

         Section  5.03.  Limitation  on  Liability  of the  Servicer and Others.
Except  as  provided  in  Section  5.01,  neither  the  Servicer  nor any of the
officers,  directors,  employees  or agents of the  Servicer  shall be under any
liability for any action taken or for  refraining  from the taking of any action
in its capacity as Servicer pursuant to this Agreement;  provided, however, that
this  provision  shall not protect the  Servicer or any such person  against any
liability which would otherwise be imposed by reason of willful misconduct,  bad
faith or gross negligence (which includes  negligence with respect to the duties
of the Servicer  explicitly set forth in this  Agreement) in the  performance of
its duties hereunder. The Servicer and any officer, director,  employee or agent
of the  Servicer  may rely in good faith on any document of any kind prima facie
properly  executed  and  submitted  by any Person  with  respect to any  matters
arising  hereunder.  No implied  covenants or obligations shall be read into the
Servicing Agreement against the Servicer. In the event the Servicer performs any
activities  beyond the  requirements of this Agreement,  the Servicer shall have
the option but will not be required to perform such activities in the future.

         Section 5.04.  The Servicer Not to Resign.  (a) The Servicer  shall not
resign from the duties and  obligations  hereby  imposed on it by this Agreement
except upon a  determination  by its Board of Directors that by reason of change
in applicable  legal  requirements,  with which the Servicer  cannot  reasonably
comply,  the  continued  performance  by the  Servicer of its duties  under this
Agreement  would cause it to be in  violation of such legal  requirements,  said
determination  to be evidenced  by a  resolution  from its Board of Directors to
such effect,  accompanied by an Opinion of Counsel to such effect and reasonably
satisfactory to the Trustee.


<PAGE>

         (b) No such  resignation  shall  become  effective  until  a  successor
Servicer shall have assumed the responsibilities and obligations of the Servicer
hereunder.

         (c) Except as provided in Sections 5.02 and 6.01 hereof, the duties and
obligations  of the Servicer  under this  Agreement  shall  continue  until this
Agreement  shall have been  terminated  as provided in Section 8.01 hereof,  and
shall  survive the  exercise by the Issuer or the Trustee of any right or remedy
under this  Agreement,  or the  enforcement  by the  Issuer,  the Trustee or any
Noteholder of any provision of the Notes or this Agreement.

         Section 5.05.  Issuer  Indemnification.  The Issuer shall indemnify and
hold harmless the Servicer (but solely from the amounts to be distributed as set
forth in Section  12.02(d)(vii)  of the  Indenture)  from and  against any loss,
liability,  expense,  damage or injury  suffered or sustained  by the  Servicer,
including  but  not  limited  to any  judgment,  award,  settlement,  reasonable
attorneys'  fees and other costs and expenses  incurred in  connection  with the
defense of any actual or threatened  action,  proceeding or claim,  which arises
out of the Servicer's activities hereunder;  provided,  however, that the Issuer
shall not indemnify the Servicer if the Servicer's activities constituted fraud,
willful misconduct,  gross negligence (which includes negligence with respect to
the duties of the Servicer which are explicitly set forth in this  Agreement) or
breach  of  fiduciary  duty by the  Servicer  or for any  amounts  for which the
Servicer is  obligated  to  indemnify  the Issuer or other  Persons  pursuant to
Section 5.01 hereof.

                                    Article 6

                              Servicing Termination

         Section 6.01. Servicer Events of Default. (a) Any of the following acts
or occurrences shall constitute a Servicer Event of Default:

                  (i) any failure by the  Servicer to deliver to the Trustee for
         payment  to  Noteholders  any  proceeds  or  payments  received  from a
         Customer  or in  respect  of the Trust  Estate  and  required  to be so
         delivered  under the terms of the  Indenture  and this  Agreement  that
         continues  unremedied  until  10:00  a.m.,  Minneapolis  time,  for two
         Business  Days;  provided,  however,  that the Trustee,  upon receiving
         actual  knowledge  of such  failure,  shall  give the  Servicer  prompt
         written,   telecopied   or   telephonic   notice   of   such   failure.
         Notwithstanding  the  foregoing,  any failure by the Trustee to deliver
         such  notice to the  Servicer  shall not prevent  the  occurrence  of a
         Servicer Event of Default; or

                  (ii)  any  failure  by  the  Servicer  to  deliver  a  Monthly
         Servicer's  Report  pursuant  to Section  4.01  hereof  that  continues
         unremedied  until  10:00  a.m.,  Minneapolis  time,  the  Business  Day
         following the date delivery is required; provided, however, that if the
         Servicer has not delivered the Monthly Servicer's Report by 12:00 noon,
         Minneapolis time, on the Determination Date, the Trustee shall give the
         Servicer  notice of such failure.  Notwithstanding  the foregoing,  any
         failure by the Trustee to deliver such notice to the Servicer shall not
         prohibit the occurrence of a Servicer Event of Default; or

                  (iii) any failure by the  Servicer to make a Servicer  Advance
         pursuant  to Section  3.04  hereof or to  deposit  any  Purchase  Price
         received by it that continues unremedied until 10:00 a.m.,  Minneapolis
         time,  the  following  Business  Day  following  the date  delivery  is
         required;  provided,  however,  that if the  Servicer  has not made the
         Servicer  Advance or  deposited  any Purchase  Price  received by it by
         12:00 noon, Minneapolis time, on the Determination Date and the Trustee
         has  received  written  notification  from the  Servicer  by way of the
         Monthly  Servicer's  Report or otherwise that such Servicer  Advance or
         Purchase  Price is to be paid,  the  Trustee  shall  give the  Servicer
         prompt  written,  telecopied  or  telephonic  notice  of such  failure.
         Notwithstanding  the  foregoing,  any failure by the Trustee to deliver
         such  notice to the  Servicer  shall not prevent  the  occurrence  of a
         Servicer Event of Default; or


<PAGE>

                  (iv)  any  failure  by the  Servicer  to make  remittances  or
         deliver  notices  pursuant  to  Section  3.03  hereof,  that  continues
         unremedied until 10:00 a.m.,  Minneapolis time, of the third successive
         Business Day; or

                  (v) any failure on the part of the Servicer duly to observe or
         perform any other  covenants or agreements of the Servicer set forth in
         this  Agreement  or  the  Indenture,   as  the  case  may  be,  or  any
         representation or warranty of the Servicer set forth in Section 2.01 of
         this  Agreement  shall prove to be incorrect  in any material  respect,
         which  failure or breach  continues  unremedied  for a period of thirty
         (30) days after the date on which the  Servicer  becomes  aware of such
         failure  or  breach,  or  written  notice of such  failure  or  breach,
         requiring the situation giving rise to such breach or non-conformity to
         be  remedied,  shall  have been  given to a  Servicing  Officer  of the
         Servicer by the Trustee or the Issuer or to a Servicing  Officer of the
         Servicer and the Trustee by Holders of Notes representing not less than
         25% of the aggregate principal amount of the Notes Outstanding; or

                  (vi) any  assignment  by the  Servicer  to a  delegate  of its
         duties or rights under this Agreement, except as specifically permitted
         hereunder, or any attempt to make such an assignment; or

                  (vii) the  entry of a decree  or order  for  relief by a court
         having  jurisdiction  in respect of the Servicer or a petition  against
         the Servicer in an involuntary case under any federal  bankruptcy laws,
         as now or hereafter in effect,  or any other present or future  federal
         or state  bankruptcy,  insolvency  or  similar  law,  or  appointing  a
         receiver,  liquidator,  assignee, trustee,  custodian,  sequestrator or
         other similar  official for the Servicer or for any substantial part of
         its property,  or ordering the winding up or liquidation of the affairs
         of the  Servicer  and the  continuance  of any  such  decree  or  order
         unstayed and in effect,  or failure for such  petition to be dismissed,
         for a period of 60 consecutive days; or

                  (viii) the  commencement  by the Servicer of a voluntary  case
         under any federal  bankruptcy  laws, as now or hereafter in effect,  or
         any other present or future  federal or state  bankruptcy,  insolvency,
         reorganization  or similar  law, or the consent by the  Servicer to the
         appointment  of  or  taking  possession  by  a  conservator,  receiver,
         liquidator, assignee, trustee, custodian, sequestrator or other similar
         official in any insolvency, readjustment of debt, marshalling of assets
         and  liabilities,  bankruptcy or similar  proceedings of or relating to
         the Servicer or relating to a substantial part of its property,  or the
         making by the Servicer of an  assignment  for the benefit of creditors,
         or the failure by the Servicer generally to pay its debts as such debts
         become due or if the Servicer  shall admit in writing its  inability to
         pay its debts as they become due, or the taking of corporate  action by
         the Servicer in furtherance of any of the foregoing; or

                  (ix) the occurrence of a Trigger Event if the initial Servicer
         is the Servicer.
<PAGE>

         (b) So long as a Servicer Event of Default shall not have been remedied
within the period set forth in  subparagraphs  (i),  (ii),  (iii),  (iv), (v) or
(vii)  above,  as  applicable,  the  Trustee  shall,  by notice  (the  "Servicer
Termination  Notice")  given in writing to the Servicer,  terminate all, but not
less  than all,  of the  rights  and  obligations  of the  Servicer  under  this
Agreement.  Notwithstanding the foregoing,  a delay in or failure of performance
under Sections  6.01(a)(ii) or 6.01(a)(v) hereof for a period of 30 or more days
shall not  constitute a Servicer Event of Default if such delay or failure could
not have been prevented by the exercise of reasonable  diligence by the Servicer
and such delay or failure  was caused by acts of  declared  or  undeclared  war,
public disorder, rebellion or sabotage, epidemics, landslides,  lightning, fire,
hurricanes,  earthquakes,  floods or similar causes; provided,  however, that in
any event, such delay or failure shall constitute a Servicer Event of Default if
it continues unremedied for a period of thirty (30) days. The preceding sentence
shall not  relieve  the  Servicer  from using its best  efforts  to perform  its
obligations in a timely manner in accordance with the terms of this Agreement.

         (c) In the event of the occurrence of a Trigger Event, the Trustee may,
and if  directed  by  Holders  of Notes  representing  at least  66-2/3%  of the
aggregate amount of Notes Outstanding,  shall, by a Servicer  Termination Notice
given in writing  to the  Servicer,  terminate  all but not less than all of the
rights and obligations of the Servicer under this Agreement.

         (d) In  the  event  that  Sunrise  Leasing  Corporation  resigns  or is
terminated as Servicer  pursuant to this  Agreement and a successor  Servicer is
appointed  hereunder,  the Holders of Notes representing at least 66-2/3% of the
aggregate  amount of the Notes  Outstanding  may direct the  Trustee to, and the
Trustee shall,  terminate,  by a Servicer Termination Notice given in writing to
such successor Servicer, all but not less than all of the rights and obligations
of such  successor  Servicer  under this  Agreement  and appoint a new successor
Servicer which has been approved by such Holders.

         (e) On or after the receipt by the  Servicer of a Servicer  Termination
Notice,  all authority and power of the Servicer under this  Agreement,  whether
with respect to the Notes or the Lease  Contracts or otherwise shall pass to and
be vested in the successor  Servicer  appointed pursuant to Section 6.02 hereof,
and,  without  limitation,  such  successor  Servicer is hereby  authorized  and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or  otherwise,  any  and  all  documents  and  other  instruments,  and to do or
accomplish  all other  acts or things  necessary  or  appropriate  to effect the
purposes of such notice of termination,  whether to complete the transfer of the
Lease  Contracts and related  documents,  or otherwise.  The Servicer  agrees to
cooperate  with  the  Trustee  and  the  successor  Servicer  in  effecting  the
termination  of the  responsibilities  and  rights  of the  Servicer  hereunder,
including,  without  limitation,  the  transfer to the  successor  Servicer  for
administration  by it of all cash  amounts that shall at the time be held by the
Servicer for  deposit,  or have been  deposited  by the  Servicer or  thereafter
received with respect to Lease  Contracts.  To assist the successor  Servicer in
enforcing all rights under the Lease Contracts and the Insurance  Polices to the
extent they relate to the Lease  Contracts,  the outgoing  Servicer,  at its own
expense,  shall transfer its records (electronic and otherwise) relating to such
Lease Contracts to the successor Servicer in such form as the successor Servicer
may reasonably  request and shall  transfer the related Lease  Contracts (to the
extent  not held by the  Trustee)  and all  other  records,  correspondence  and
documents  relating to the Lease  Contracts that it may possess to the successor
Servicer  in the  manner  and at such  times  as the  successor  Servicer  shall
reasonably  request.  In addition to any other  amounts that are then payable to
the Servicer  under this  Agreement,  the Servicer  shall be entitled to receive
reimbursements  for any  unreimbursed  Servicer  Advance  made during the period
prior to the delivery of a Servicer  Termination Notice pursuant to this Section
6.01 which  terminates  the  obligations  and rights of the Servicer  under this
Agreement.
<PAGE>

         Section 6.02.  Appointment of Successor Servicer.  (a)

                  (i) On and after the time the  Servicer  resigns  as  Servicer
         pursuant to Section 5.04 hereof or is terminated  as Servicer  pursuant
         to a Servicer  Termination  Notice pursuant to Section 6.01 hereof, the
         Trustee shall appoint a successor Servicer acceptable to the Holders of
         Notes  representing  at least  66-2/3% of the  aggregate  amount of the
         Notes Outstanding.

                  (ii) The  successor  Servicer  shall be the  successor  in all
         respects  to the  Servicer  in its  capacity  as  Servicer  under  this
         Agreement  and the  transactions  set forth or provided  for herein and
         shall be subject to all the  responsibilities,  duties and  liabilities
         relating  thereto  placed on the  Servicer by the terms and  provisions
         hereof; provided, however, that the successor Servicer (x) shall not be
         required to make any Servicer Advance if such Servicer Advance would be
         prohibited by  applicable  law and (y) shall not be liable for any acts
         or omissions of the outgoing Servicer or for any breach by the outgoing
         Servicer of any of its representations and warranties  contained herein
         or in any related document or agreement.  Subject to the consent of the
         Holders  representing  at least 66-2/3% of the aggregate  amount of the
         Notes Outstanding,  the successor Servicer may subcontract with another
         firm to act as  subservicer so long as the successor  Servicer  remains
         fully responsible and accountable for performance of all obligations of
         the Servicer on and after the time the  Servicer  receives the Servicer
         Termination  Notice.  The successor  Servicer  shall be entitled to the
         Servicer Fee in connection with acting as Servicer hereunder.

         (b) The Servicer,  the Issuer,  the Trustee and such successor Servicer
shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such  succession.  Upon such succession,  the successor  Servicer
shall  notify  the  Customers  that it has been  appointed  Servicer  under this
Agreement with respect to the Lease Contracts.

         Section 6.03. Notification to Noteholders.  The Servicer shall promptly
notify the Issuer and the Trustee of any  Servicer  Event of Default upon actual
knowledge  thereof  by  a  Servicing  Officer.   Upon  any  termination  of,  or
appointment  of a successor  to, the  Servicer  pursuant to this  Article 6, the
Trustee shall give prompt  written  notice  thereof to the  Noteholders at their
respective addresses appearing in the Note Register.

         Section  6.04.  Waiver of Past  Defaults.  The  Trustee  shall,  at the
direction  of the  Holders  of  Notes  representing  more  than  66-2/3%  of the
aggregate amount of the Notes Outstanding,  on behalf of all Noteholders,  waive
any default by the Servicer in the performance of its obligations  hereunder and
its  consequences,  other than a default with  respect to required  deposits and
payments  in  accordance  with  Article 3 or a default  of the type set forth in
clause (vii) or (viii) of Section 6.01(a) hereof, which waiver shall require the
consent of each Noteholder. Upon any such waiver of a past default, such default
shall cease to exist, and any Servicer Event of Default arising  therefrom shall
be deemed to have been  remedied for every  purpose of this  Agreement.  No such
waiver  shall  extend to any  subsequent  or other  default  or impair any right
consequent thereon except to the extent expressly waived.


<PAGE>

         Section  6.05.  Effects  of  Termination  of  Servicer.  (a)  Upon  the
appointment of the successor Servicer,  the predecessor Servicer shall remit any
Scheduled  Payments  and any other  payments  or  proceeds  that it may  receive
pursuant to any Lease Contract or otherwise to the successor Servicer after such
date of appointment.

         (b) After the delivery of a Servicer  Termination  Notice, the outgoing
Servicer  shall  have no further  obligations  with  respect to the  management,
administration,  servicing,  enforcement,  custody  or  collection  of the Lease
Contracts, and the successor Servicer shall have all of such obligations, except
that the outgoing Servicer will transmit or cause to be transmitted  directly to
the  successor  Servicer,  promptly  on  receipt  and in the same  form in which
received,  any amounts held by the outgoing  Servicer  (properly  endorsed where
required for the successor  Servicer to collect them)  received as payments upon
or otherwise in connection  with the Lease  Contracts.  The outgoing  Servicer's
indemnification  obligations  pursuant to Section  5.01 hereof will  survive the
termination  of the  Servicer  but will not extend to any acts or omissions of a
successor Servicer.

         Section 6.06. No Effect on Other Parties.  Upon any  termination of the
rights  and  powers  of the  Servicer  pursuant  to  Section  6.01,  or upon any
appointment  of a  successor  Servicer,  all  the  rights,  powers,  duties  and
obligations  of the other  parties  under this  Agreement,  the  Indenture,  the
Contribution  Agreement and the Purchase  Agreement  shall remain  unaffected by
such  termination  or  appointment  and shall  remain in full  force and  effect
thereafter.


                                    Article 7

                            Miscellaneous Provisions

         Section 7.01. Termination of the Servicing Agreement. (a) Other than as
set forth herein,  the respective  duties and  obligations of the Servicer,  the
Issuer  and the  Trustee  created by this  Agreement  shall  terminate  upon the
discharge of the  Indenture in  accordance  with its terms;  and the  respective
duties and  obligations  of the  Trustee  shall  terminate  with  respect to the
Trustee in the event the Trustee  resigns or is replaced  under  Section 7.09 of
the Indenture;  provided, however, that no resignation or removal of the Trustee
and no  appointment  of a successor  Trustee  shall become  effective  until the
acceptance of  appointment  by the  successor  Trustee under Section 7.10 of the
Indenture.  Upon the  termination  of this  Agreement  pursuant to this  Section
7.01(a),  the Servicer shall pay all monies with respect to the Lease Contracts,
the Lease  Receivables  and the related  Equipment held by the Servicer,  and to
which the Servicer is not  entitled,  to the Issuer or upon the Issuer's  order.
The Servicer's indemnification  obligations pursuant to Section 5.01 hereof will
survive the termination of this Agreement.

         (b) This Agreement shall not be automatically terminated as a result of
an Event of  Default  under the  Indenture  or any action  taken by the  Trustee
thereafter  with respect  thereto,  and any  liquidation or  preservation of the
Trust  Estate by the  Trustee  thereafter  shall be subject to the rights of the
Servicer to service the Lease Receivables and to collect servicing  compensation
as provided  hereunder;  provided,  however,  that  nothing in this Section 7.01
shall be  construed  to limit the  Trustee's  right to foreclose on or otherwise
liquidate the Lease Assets in accordance with the Indenture.
<PAGE>

         Section 7.02.  Amendments.  (a) This Agreement may be amended from time
to time by the Issuer, the Servicer and the Trustee,  without the consent of any
of the  Noteholders,  to cure  any  ambiguity,  to  correct  or  supplement  any
provisions  herein that may be inconsistent with any other provisions herein and
therein,  as the  case may be,  or to add or amend  any  other  provisions  with
respect to matters or questions arising under this Agreement; provided, however,
that such action  shall not, as  evidenced  by an Opinion of Counsel,  adversely
affect in any material respect the interests of any Noteholder.

         (b) This  Agreement may also be amended from time to time by the Issuer
and the Servicer,  with the consent of the Trustee,  and the holders of not less
than 66-2/3% in aggregate principal amount of Notes outstanding, for the purpose
of adding any provisions to or changing in any manner or eliminating  any of the
provisions of this Agreement;  provided,  however, that no such amendment shall,
without the consent of each  Noteholder (i) alter the priorities  with which any
allocation of funds shall be made under this Agreement; (ii) permit the creation
of any lien on the Trust Estate  (other than the lien of the  Indenture)  or any
portion  thereof or deprive any such Noteholder of the benefit of this Agreement
with  respect to the Trust Estate or any portion  thereof;  or (iii) modify this
Section 7.02 or Sections 6.02 or 6.04 hereof.

         (c) Promptly after the execution of any  amendment,  the Servicer shall
send to the Trustee  and each Holder of the Notes a conformed  copy of each such
amendment.

         (d) It shall not be necessary, in any consent of Noteholders under this
Section 7.02, to approve the particular form of any proposed  amendment,  but it
shall be sufficient if such consent  shall  approve the substance  thereof.  The
manner of obtaining  such consent and of  evidencing  the  authorization  of the
execution thereof by Noteholders shall be subject to such reasonable regulations
as the Trustee may prescribe.

         (e) Any amendment or modification  effected  contrary to the provisions
of this Section 7.02 shall be void.

         Section  7.03.  Governing  Law.  This  Agreement  shall be construed in
accordance  with the internal laws of the State of Minnesota  without  regard to
conflict of laws  principles  and the  obligations,  rights and  remedies of the
parties hereunder shall be determined in accordance with such laws.

         Section  7.04.  Notices.   All  demands,   notices  and  communications
hereunder  shall be in writing and shall be delivered or mailed by registered or
certified  United  States  mail,   postage   prepaid,   or  via  facsimile  with
confirmation in writing and addressed as follows:

         (a) if to the Issuer,  at 5500  Wayzata  Boulevard,  Suite 725,  Golden
Valley, Minnesota 55416 (telephone (612) 513-3280), Attention: President;

         (b) if to the Contributor, at 5500 Wayzata Boulevard, Suite 725, Golden
Valley, Minnesota 55416 (facsimile (612) 513-3299), Attention: President;

         (c) if to the Servicer,  at 5500 Wayzata  Boulevard,  Suite 725, Golden
Valley, Minnesota 55416 (facsimile (612) 513-3299), Attention: President;

         (d)  if  to  the  Trustee,   at  Sixth  Street  and  Marquette  Avenue,
Minneapolis,  Minnesota (facsimile (612) 667-3539),  Attention:  Corporate Trust
Services-Asset-Backed Administration;
<PAGE>

         (e) if to any Noteholder,  at its address for notices  specified in the
Note Register; and

         Any of the Persons in  subclauses  (a) through (c) above may change the
address for notices  hereunder by giving notice of such change to other Persons.
Any change of address shown on the Note Register  shall,  after the date of such
change,  be effective to change the address for such Noteholder  hereunder.  All
notices and demands shall be deemed to have been given either at the time of the
delivery  thereof to any officer of the Person  entitled to receive such notices
and demands at the address of such Person for notices hereunder, or on the third
day after the mailing thereof to such address, as the case may be.

         Section  7.05.  Severability  of  Provisions.  If  one or  more  of the
provisions of this Agreement shall be for any reason whatever held invalid, such
provisions shall be deemed severable from the remaining covenants and provisions
of this Agreement,  and shall in no way affect the validity or enforceability of
such remaining  provisions,  the rights of any parties hereto,  or the rights of
the  Trustee or any  Noteholder.  To the extent  permitted  by law,  the parties
hereto waive any provision of law which renders any provision of this  Agreement
prohibited or unenforceable in any respect.

         Section 7.06. Binding Effect. All provisions of this Agreement shall be
binding upon and inure to the benefit of the  respective  successors and assigns
of the parties hereto, and all such provisions shall inure to the benefit of the
Noteholders.  This  Agreement may not be modified  except by a writing signed by
all parties hereto.

         Section 7.07.  Article Headings and Captions.  The article headings and
captions in this Agreement are for  convenience of reference only, and shall not
limit or otherwise affect the meaning hereof.

         Section 7.08.  Legal Holidays.  In the case where the date on which any
action  required  to be taken,  document  required  to be  delivered  or payment
required to be made is not a Business Day, such action, delivery or payment need
not be made on such date, but may be made on the next succeeding Business Day.

         Section  7.09.  Assignment  for  Security  for the Notes.  The Servicer
understands  that the Issuer  will assign to and grant to the Trustee a security
interest in all of its right, title and interest to this Agreement. The Servicer
consents   to  such   assignment   and  grant  and   further   agree   that  all
representations,  warranties,  covenants  and  agreements  of the Servicer  made
herein shall also be for the benefit of and inure to the Trustee and all Holders
from time to time of the Notes.

         Section 7.10. No Servicing Assignment.  Notwithstanding anything to the
contrary contained herein,  except as provided in Sections 6.02 and 6.04 hereof,
this  Agreement  may not be  assigned  by the  Issuer,  the  Contributor  or the
Servicer  (except with respect to the appointment of a subservicer)  without the
prior written consent of the Holders of Notes representing not less than 66-2/3%
of the aggregate amount of the Notes Outstanding.

         Section 7.11.  Counterparts.  This  Agreement may be executed in one or
more counterparts all of which together shall constitute one original document.

         Section  7.12.   Trustee's   Protections   Under  the  Indenture.   All
protections,  indemnities  and rights provided to the Trustee under Article 7 of
the  Indenture  with  respect  to the  duties of the  Trustee  duties  under the
Indenture  shall  apply with equal force and effect to the duties of the Trustee
under this Servicing Agreement.
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         In WITNESS WHEREOF,  the Issuer, the Contributor,  the Servicer and the
Trustee  have  caused this  Agreement  to be duly  executed by their  respective
officers thereunto duly authorized as of the date and year first above written.




                                 Sunrise Funding Corporation I, as Issuer

                                  By       /s/ R. Bradley Pike
                                  Name:    R. Bradley Pike
                                  Title:   President

                                 SUNRISE LEASING CORPORATION, as
                                   Contributor and as Servicer

                                   By       /s/ Barry J. Schwach
                                   Name:    Barry J. Schwach
                                   Title:   Chief Financial Officer

                                  NORWEST BANK MINNESOTA, NATIONAL
                                    ASSOCIATION, as Trustee

                                    By       /s/ Thomas Wraalstad
                                    Name:   Thomas Wraalstad
                                    Title:  Corporate Trust Officer