Document:

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                                                                    Exhibit 10.4

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                               SERVICING AGREEMENT

                                      among

                          MICROFINANCIAL INCORPORATED,
                                  as Servicer,

                              MFI FINANCE CORP. I,
                                   as Issuer,

                                       and

                             NORWEST BANK MINNESOTA,
                              NATIONAL ASSOCIATION
                  as Indenture Trustee and as Back-up Servicer

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                            Dated as of March 1, 2000

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                                TABLE OF CONTENTS

<TABLE>
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<S>                                                                                                              <C>
ARTICLE 1 DEFINITIONS.............................................................................................2
                  Section 1.01      Defined Terms.................................................................2
                  Section 1.02      Usage of Terms................................................................3

ARTICLE 2 SERVICER REPRESENTATIONS AND WARRANTIES.................................................................4
                  Section 2.01      Representations and Warranties of the Servicer................................4
                           (a)      Organization and Good Standing................................................4
                           (b)      Authorization and Binding Obligation..........................................4
                           (c)      No Violation..................................................................4
                           (d)      No Proceedings................................................................4
                           (e)      Approvals.....................................................................5
                           (f)      Investment Company............................................................5
                           (g)      Standard of Care..............................................................5
                           (h)      Insurance.....................................................................5
                           (i)      No Default....................................................................5

ARTICLE 3 ADMINISTRATION AND SERVICING OF CONTRACTS...............................................................6
                  Section 3.01      Responsibilities of Servicer..................................................6
                  Section 3.02      Servicer Standard of Care.....................................................8
                  Section 3.03      Servicer Remittances..........................................................9
                  Section 3.04      Servicer Advances.............................................................9
                  Section 3.05      Financing Statements.........................................................10
                  Section 3.06      Maintenance of Insurance Policy; Insurance Proceeds..........................10
                  Section 3.07      Personal Property and Sales Taxes............................................10
                  Section 3.08      Servicing Compensation.......................................................10
                  Section 3.09      Substitution or Purchase of Contracts........................................11
                  Section 3.10      No Offset....................................................................12

ARTICLE 4 ACCOUNTINGS, STATEMENTS AND REPORTS....................................................................13
                  Section 4.01      Monthly Servicer's Reports...................................................13
                  Section 4.02      Financial Statements; Certification as to Compliance; Notice of
                                    Default......................................................................13
                  Section 4.03      Independent Accountants' Reports; Annual Federal Tax Lien
                                    Search.......................................................................15
                  Section 4.04      Access to Certain Documentation and Information..............................15
                  Section 4.05      Other Necessary Data.........................................................16
                  Section 4.06      Indenture Trustee to Cooperate...............................................17

ARTICLE 5 THE SERVICER...........................................................................................18
                  Section 5.01      Servicer Indemnification.....................................................18
                  Section 5.02      Corporate Existence; Reorganizations.........................................18
                  Section 5.03      Limitation on Liability of the Servicer and Others...........................19
                  Section 5.04      The Servicer Not to Resign...................................................19

ARTICLE 6 SERVICING TERMINATION..................................................................................20
                  Section 6.01      Servicer Events of Default...................................................20
</TABLE>

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<TABLE>
<S>                                                                                                              <C>
                  Section 6.02      Back-up Servicer to Act; Taking of Bids; Appointment of Successor
                                    Servicer.....................................................................22
                  Section 6.03      Notification to Noteholders..................................................23
                  Section 6.04      Waiver of Past Defaults......................................................23
                  Section 6.05      Effects of Termination of Servicer...........................................24
                  Section 6.06      No Effect on Other Parties...................................................24

ARTICLE 7 THE BACK-UP SERVICER...................................................................................25
                  Section 7.01      Representations of Back-up Servicer..........................................25
                  Section 7.02      Merger or Consolidation of, or Assumption of the Obligations  of,
                                    Back-up Servicer.............................................................26
                  Section 7.03      Back-up Servicer Resignation.................................................26
                  Section 7.04      Oversight of Servicing.......................................................26
                  Section 7.05      Back-up Servicer Compensation................................................27
                  Section 7.06      Duties and Responsibilities..................................................27

ARTICLE 8 MISCELLANEOUS PROVISIONS...............................................................................29
                  Section 8.01      Termination..................................................................29
                  Section 8.02      Amendments...................................................................29
                  Section 8.03      GOVERNING LAW................................................................30
                  Section 8.04      Notices......................................................................30
                  Section 8.05      Severability of Provisions...................................................30
                  Section 8.06      Binding Effect...............................................................30
                  Section 8.07      Article Headings and Captions................................................30
                  Section 8.08      Legal Holidays...............................................................30
                  Section 8.09      Assignment for Security for the Notes........................................31
                  Section 8.10      No Servicing Assignment......................................................31
                  Section 8.11      Counterparts.................................................................31
                  Section 8.12      Acknowledgment of Multiple Roles.............................................31
</TABLE>

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<TABLE>
<S>                                                                                                             <C>
Section 8.13      Consent to Jurisdiction........................................................................31
</TABLE>

                                    EXHIBITS

Exhibit A         Form of Monthly Servicer's Report
Exhibit B         Form of Agreement Regarding Operating Account
Exhibit C         Form of Blocked Account Agreement
Exhibit D         Agreed Upon Procedures

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                               SERVICING AGREEMENT

         This SERVICING AGREEMENT, dated as of March 1, 2000 (this "Agreement")
is among MicroFinancial Incorporated, a Massachusetts corporation, as Servicer
(the "Servicer"), MFI Finance Corp. I, a Massachusetts corporation, as Issuer
(the "Issuer"), and Norwest Bank Minnesota, National Association, a national
banking association, as Indenture Trustee (in such capacity, the "Trustee") and
as Back-up Servicer (in such capacity, the "Back-up Servicer").

                              PRELIMINARY STATEMENT

         The Issuer has entered into an Indenture, dated as of March 1, 2000
(the "Basic Indenture"), with the Indenture Trustee, the Back-up Servicer and
the Servicer, pursuant to which the Issuer intends to cause the issuance from
time to time of the Issuer's Contract-Backed Notes (the "Notes").

         The Issuer and Leasecomm Corporation (the "Company") have entered into
a Contract Acquisition Agreement dated as of March 1, 2000 (the "Contract
Acquisition Agreement"), providing for, among other things, the contribution and
sale, from time to time, by the Company to the Issuer of all of its right, title
and interest in and to certain Contract Assets which the Issuer is and will be
pledging to the Indenture Trustee, and in which the Issuer will be granting to
the Indenture Trustee a security interest, as security for the Notes. As a
precondition to the effectiveness of such Contract Acquisition Agreement, the
Contract Acquisition Agreement requires that the Servicer, the Issuer, the
Indenture Trustee and the Back-up Servicer enter into this Agreement to provide
for the servicing of the Contract Assets.

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

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                                    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.

         "ACH":  The National Automated Clearinghouse System.

         "ACH Account": Any account maintained by an ACH Bank into which account
shall be deposited electronic debit payments related to the Receivables.

         "ACH Bank": A bank which maintains an ACH Account, if any.

         "Agreement": This Servicing Agreement, dated as of March 1, 2000, among
the Servicer, the Issuer, the Back-up Servicer and the Indenture Trustee.

         "Back-up Servicer":  Norwest Bank Minnesota, National Association.

         "Blocked Account Agreement": An agreement between the ACH Bank and the
Indenture Trustee, substantially in the form attached hereto as Exhibit C, with
respect to control over the ACH Account.

         "Computer Tape": Any computer tape or disk prepared by the Servicer and
distributed to various parties as required herein.

         "Contract Acquisition Agreement": The Contract Acquisition Agreement,
dated as of March 1, 2000, between the Company and the Issuer.

         "Contract Assets": The meaning given in the Contract Acquisition
Agreement.

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

         "Nonrecoverable Advance": A Servicer Advance 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 in accordance with Section 3.04 hereof.

         "Officer's Certificate": 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.

         "Reported Companies": The Servicer and its subsidiaries on a
consolidated basis.

         "Reported Companies' Financial Statements": The Reported Companies'
audited consolidated and consolidating balance sheet and income statements,
consolidated statement of cashflow, auditors' opinion letters regarding audited
financial statements, and all notes to the audited financial statements.

         "Servicer": MicroFinancial Incorporated.

         "Servicer Advance":  The meaning set forth in Section 3.04 hereof.

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         "Servicer Default": 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": The meaning specified in Section 6.01
hereof.

         "Servicer Termination Notice": The meaning specified in Section 6.01
hereof.

         "Servicing Officers": Those officers of the Servicer involved in, or
responsible for, the administration and servicing of the Contracts, as
identified on the list of Servicing Officers furnished by the Servicer to the
Indenture Trustee, the Back-up Servicer, and the Controlling Party from time to
time.

         SECTION 1.02      USAGE OF TERMS.

         (a) Each capitalized term used and not otherwise defined herein has the
meaning assigned to such term in the Indenture or, if not defined therein, in
the Contract Acquisition Agreement.

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

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                                    ARTICLE 2

                     SERVICER REPRESENTATIONS AND WARRANTIES

         SECTION 2.01      REPRESENTATIONS AND WARRANTIES OF THE SERVICER.

         The Servicer makes the following representations and warranties as of
the Initial Delivery Date, except as otherwise specified below, which shall
survive such date:

         (a) ORGANIZATION AND GOOD STANDING. The Servicer has been duly
organized and is validly existing and in good standing as a corporation under
the laws of the Commonwealth of Massachusetts or the laws of such other state as
permitted by Section 5.02(a), with requisite power and authority to own its
properties, perform its obligations under this Agreement and the other
Transaction Documents and to transact the business in which it is now engaged or
in which it proposes to engage.

         (b) AUTHORIZATION AND BINDING OBLIGATION. Each of this Agreement, the
Indenture, the Supplement, the Note Insurance Agreement and any Note Purchase
Agreement to which it is a party for Notes then Outstanding has been duly
authorized, executed and delivered by the Servicer and, assuming the due
authorization, execution and delivery hereof and thereof by each other party
hereto and thereto, constitutes the valid and legally binding obligation of the
Servicer enforceable against the Servicer in accordance with its terms, as such
enforceability may be subject to or limited by any bankruptcy, insolvency,
conservatorship, 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, the Indenture,
the Supplement and the Note Insurance Agreement and the performance by the
Servicer of its obligations under this Agreement, the Indenture, the Supplement
and the Note Insurance Agreement 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, or result in the
creation or imposition of any lien, charge or encumbrance upon any of the
property or assets of the Servicer pursuant to the terms of, any indenture,
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,
nor will such action result in any violation of the provisions of its articles
of organization 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, or any
such regulatory authority or other governmental agency or body is required for
the Servicer to enter into and perform this Agreement, the Indenture, the
Supplement, any Note Purchase Agreement to which it is a party and the Note
Insurance Agreement.

         (d) NO PROCEEDINGS. 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 probability 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, the Indenture, the
Supplement, any Note Purchase Agreement to which it is a party or the Note
Insurance Agreement. 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

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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
materially adversely affects the properties, business, prospects, profits 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.

         (g) STANDARD OF CARE. The Servicer has serviced the Contracts and
Equipment in a manner consistent with industry standards for contracts similar
to the Contracts and Equipment, and in any event in a prudent and commercially
reasonable manner, and conducts its servicing operations in a manner consistent
with industry standards for servicing of financial asset portfolios.

         (h) INSURANCE. The Servicer maintains insurance with respect to its
operations and property which is adequate and customary in light of the
Servicer's operations.

         (i) NO DEFAULT. No Servicer Default or Servicer Event of Default has
occurred and is continuing.

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                                    ARTICLE 3

                    ADMINISTRATION AND SERVICING OF CONTRACTS

         SECTION 3.01      RESPONSIBILITIES OF SERVICER.

         (a) The Issuer hereby appoints the Servicer, for the benefit of the
Issuer, the Note Insurer and the Noteholders, to act as Servicer of the Contract
Assets and, as such, the Servicer shall be responsible for, and shall, in
accordance with its customary servicing procedures and Section 3.02 hereof,
manage, service, administer, enforce and make collections on the Contracts, the
Equipment, the Receivables and any Insurance Policies, defend the Indenture
Trustee's security interest in the Contracts, Receivables and Equipment and
other Collateral Granted pursuant to the Indenture against adverse claims, and
sell or re-lease the Equipment upon the expiration or other termination of the
related Contract (or repossession thereof without termination), each in
accordance with the standards and procedures set forth in this Agreement and any
related provisions of the Indenture and Contract Acquisition Agreement. The
Servicer's responsibilities shall include monitoring and posting of all
payments, responding to inquiries of Customers, investigating delinquencies,
accounting for collections and furnishing monthly and annual statements to the
Back-up Servicer, the Indenture Trustee, the Note Insurer, the Rating Agencies
and the Noteholders with respect to the Receivables, making Servicer Advances,
providing appropriate federal income tax information to the Indenture Trustee
for use in providing information to the Noteholders or the Note Insurer,
collecting and remitting sales and property taxes to taxing authorities, and
maintaining the perfected security interest of the Indenture Trustee in the
Trust Estate. The Servicer (at its expense) 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 and collection and such sale of
the Equipment that it may deem necessary or desirable, including the prudent
delegation of such responsibilities. Without limiting the generality of the
foregoing, the Servicer shall, and is hereby authorized and empowered by the
Indenture Trustee, subject to Section 3.02 hereof, to execute and deliver (on
behalf of itself, the Noteholders, the Indenture 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
Contracts and any files or documentation pertaining to the Contract Assets. The
Servicer 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 Contract. Notwithstanding the foregoing, the Servicer shall not,
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 (including periodic payments accrued under the
terms of any Contract during the first 12 months following the Final Due Date of
such Contract) or any unpaid balance on any Contract. The Issuer and the
Indenture Trustee shall, at the expense of the Servicer, furnish the Servicer
with any powers of attorney and other documents necessary or appropriate to
enable the Servicer to carry out its servicing and administrative duties
hereunder, and the Issuer and the Indenture Trustee shall not be responsible for
the Servicer's application thereof.

         (b) The Servicer shall conduct any Contract management, servicing,
administration, collection or enforcement actions in the following manner:

                  (i) With respect to any Defaulted Contract, the Servicer, as
         agent for and on behalf of the Issuer, the Indenture Trustee, the Note
         Insurer and the Noteholders, shall follow such practices and procedures
         as are normal and consistent with the Servicer's standards and
         procedures relating to its own contracts, receivables and equipment
         that are similar to the Contracts, Receivables and the Equipment, and,
         in any event, consistent with the standard of care described in Section
         3.02 hereof to maximize recoveries thereon, including without
         limitation, the taking of appropriate actions to foreclose or otherwise
         liquidate any such Defaulted Contract, together with the related
         Equipment, to collect any Guaranty Amounts, and to enforce the Issuer's
         rights under the Contract Acquisition Agreement. All Recoveries,
         Insurance Proceeds, Servicing Charges and other amounts, etc. in
         respect of any such

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         Receivable and the related Equipment received by the Servicer shall be
         remitted to the Indenture Trustee in accordance with Section 3.03
         hereof;

                  (ii) The Servicer may sue to enforce or collect upon Contracts
         as agent for the Issuer and the Indenture Trustee on behalf of the
         Noteholders and the Note Insurer. If the Servicer elects to commence a
         legal proceeding to enforce a Contract, the act of commencement shall
         be deemed to be an automatic conveyance of the 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
         Contract on the ground that it is not a real party in interest or a
         holder entitled to enforce the Contract, then the Issuer and/or the
         Indenture Trustee on behalf of the Noteholders and the Note Insurer
         shall, at the Servicer's request and expense, take such steps as the
         Servicer deems necessary and instructs the Issuer and/or the Indenture
         Trustee in writing to take to enforce the Contract, including bringing
         suit in its name or the names of the Noteholders or the Note Insurer,
         and the Issuer and the Indenture Trustee shall be indemnified by the
         Servicer for any such action taken. Any Contract temporarily released
         from the custody of the Indenture Trustee to the Servicer or its agents
         shall have stamped on it prior to its delivery a legend to the effect
         that the Contract is subject to a security interest in favor of the
         Indenture Trustee, and the Servicer shall promptly return all Contracts
         when the need therefore no longer exists;

                  (iii) The Servicer shall exercise any rights of recourse
         against third parties that exist with respect to any Contract in
         accordance with the Servicer's usual practice and, in any event,
         consistent with the standard of care described in Section 3.02 hereof.
         In exercising recourse rights, the Servicer is authorized on the
         Issuer's and the Indenture Trustee's behalf to reconvey the 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 allow substitutions of Substitute
         Contracts that do not comply with Section 3.09 hereof, Sections 3.03
         and 3.04 of the Contract Acquisition Agreement and Section 4.04 of the
         Indenture.

                  (v) The Servicer may waive, modify or vary any terms of any
         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 would not materially
         adversely affect the interests of the Noteholders or the Note Insurer;
         PROVIDED that (A) the Servicer shall not forgive any payment of rent or
         required termination payment, (B) the Servicer shall not permit any
         modification with respect to any Contract that would decrease any
         Scheduled Payment (including periodic payments accrued under the terms
         of any Contract during the first 12 months following the Final Due Date
         of such Contract) or required termination payment, defer the payment of
         any principal or interest or any Scheduled Payment, reduce the Implicit
         Principal Balance (except in connection with actual payments
         attributable to such Implicit Principal Balance), or prevent the
         complete amortization of the Implicit Principal Balance from occurring
         by the Calculation Date immediately preceding the Stated Maturity Date,
         and (C) except as otherwise specifically provided herein, the Servicer
         shall not waive or modify the requirement that a Customer maintain
         insurance with respect to the related Equipment unless the related
         Contract provides for a Loss and Damage Waiver Fee. The Servicer shall
         provide the Back-up Servicer, the Controlling Party and the Indenture
         Trustee with an Amended Contract Schedule to the Contract Schedule
         reflecting any modification of any Scheduled Payment and shall report
         the same in the Monthly Servicer Report;

                  (vi) The Servicer shall not consent to the termination of any
         Contract in connection with loss of or damage to the related Equipment
         unless the Customer has paid an amount not less than the

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         Purchase Price for such Contract or, if less, the maximum amount
         legally collectible under the related Contract;

                  (vii) Upon termination of a Contract after payment of the last
         Scheduled Payment due thereunder or in the event that the Servicer in
         the enforcement of any Contract 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
         on market value terms promptly and consistent with the standard of care
         set forth in Section 3.02 hereof. Any Insurance Proceeds, Recoveries or
         Residual Proceeds related thereto shall be deposited in accordance with
         Section 3.03 hereof;

                  (viii) Notwithstanding any provision to the contrary contained
         in this Agreement, the Servicer or any subservicer shall exercise any
         right under a 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 Trust Estate; provided that the Servicer
         shall not accelerate any Scheduled Payment unless permitted to do so by
         the terms of the Contract or under applicable law, and provided,
         further, that the Servicer shall not declare a Customer to be in
         default under a Contract or exercise any other remedies under such
         Contract based solely on a default by such Customer under any other
         obligation of such Customer to the Company if such Customer is not also
         in default under such Contract unless it concludes that declaring such
         default is in the best interest of the Note Insurer and the
         Noteholders, and provided, further, that should the Servicer declare a
         Customer to be in default under a Contract or exercise any other
         remedies under such Contract based solely on a default by such Customer
         under any other obligation of such Customer to the Company whether or
         not such Customer is also in default under such Contract in accordance
         with the preceding provision of this sub-paragraph (viii), then the
         Servicer shall use any proceeds realized pursuant to such declaration
         of default or other remedy first to satisfy the obligation of the
         Customer under such Contract and only after such obligation is
         satisfied in full shall the Servicer apply any of such proceeds to
         satisfy any other obligation of such Customer to the Company or the
         Issuer.

                  (ix) The Servicer shall maintain insurance with respect to its
         operations and property which is adequate and customary in light of the
         Servicer's operations; and

                  (x) The Servicer shall comply with and not modify its credit
         and collection policies with respect to the Contracts in any manner
         that would materially adversely affect the interests of the Note
         Insurer or the Noteholders.

         SECTION 3.02      SERVICER STANDARD OF CARE.

         Except as otherwise specifically provided herein, in managing,
administering, servicing, enforcing and making collections on the Contracts and
Equipment pursuant to this Agreement, the Servicer will (x) exercise that degree
of skill and care that the Servicer customarily exercises with respect to
similar contracts and equipment owned or originated by its affiliates, and (y)
in any event, act in a prudent and commercially reasonable manner when doing so,
consistent with industry standards for servicing of micro to medium ticket
equipment leasing portfolios. The Servicer shall punctually perform all of its
obligations and agreements under this Agreement and shall comply in all material
respects 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 Note Insurer or the Noteholders in any Contract or
Scheduled Payments thereunder.

         SECTION 3.03      SERVICER REMITTANCES.

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         (a) The Servicer, as agent of the Issuer, shall remit to the Indenture
Trustee for deposit in the Collection Account (or as otherwise provided in the
Indenture) by 12:00 noon (Central time) on the first Business Day of each week,
the amounts described below that have been collected by the Servicer through
4:00 p.m. (Central time) on the preceding Business Day so long as such amounts
in the aggregate exceed $1,000; PROVIDED that if such amounts in the aggregate
are less than $1,000, the Servicer shall hold all such amounts in trust until
they reach an aggregate amount of $1,000, at which time the Servicer shall remit
such amounts to the Indenture Trustee in accordance with the provisions of this
Section 3.03:

                  (i) all payments made under the Contracts by or on behalf of
         the Customers relating to the Receivables, including, without
         limitation, Scheduled Payments, Servicing Charges, prepayments and
         periodic payments made under the terms of any Contract following the
         Final Due Date of such Contract , but excluding taxes received by the
         Servicer and paid by the Servicer directly to the applicable taxing
         authority prior to the applicable date of deposit for such funds;

                  (ii) all Residual Proceeds and Recoveries;

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

                  (iv) all Guaranty Amounts; and

                  (v) all Insurance Proceeds.

         (b) The Servicer (i) shall cause amounts on deposit in the ACH Account
that represent ACH debits relating to the Receivables to be transferred to the
Operating Account at least weekly and (ii) within 30 days of the Delivery Date,
shall cause the ACH Bank to enter into a Blocked Account Agreement with the
Indenture Trustee. The Servicer shall hold in trust for the benefit of the
Holders of the Notes and the Note Insurer any amounts it receives relating to
items (i) through (v) above until such time as the Servicer transfers any such
amounts to the Indenture Trustee for application in accordance with the
Indenture.

         (c) Notwithstanding the foregoing, upon termination of the initial
Servicer pursuant to Section 6.01(b) hereof, the Indenture Trustee shall (i)
establish a lockbox account, (ii) promptly instruct the Customers to send all
payments relating to Receivables directly to such lockbox account and (iii)
deliver written notice in accordance with the Blocked Account Agreement to the
ACH Bank thereunder instructing the ACH Bank to direct all ACH debits relating
to Receivables directly to such lockbox account, and the Servicer agrees that
daily sweeps of the Operating Account may commence. The Indenture Trustee shall
be entitled to reimbursement for (i) any expenses associated with (a) the
establishment of such lockbox and (b) the sending of the notices required to be
sent under this section 3.03 and (ii) any fees required to be paid under any
lockbox agreement relating to such lockbox from Section 12.02(d)(ii) of the
Indenture.

                                       9
<PAGE>   14

         SECTION 3.04      SERVICER ADVANCES.

         Not later than 10:00 a.m. (Central time) on the Determination Date
prior to each Payment Date, the Servicer shall make an advance (a "Servicer
Advance") on such date by remitting to the Indenture Trustee for deposit in the
Collection Account an amount equal to the Scheduled Payments or portion thereof
for each Contract which is a Delinquent Contract and 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 that such deposit shall equal the lesser of
(i) the Scheduled Payments or portion thereof for each Contract which is a
Delinquent Contract and which were due in the prior Due Period but not received
and deposited in the Collection Account on or prior to such Determination Date
and (ii) the shortfall, if any, between (a) the amounts on deposit in the
Collection Account as of such Determination Date and (b) the amounts required to
be paid on the related Payment Date pursuant to clauses (i) through (xi) of
Section 12.02(d) of the Indenture; provided, that the Servicer shall not make a
Servicer Advance with respect to a Contract once it has become a Defaulted
Contract; and provided, further, should Norwest Bank Minnesota, National
Association, become the successor Servicer it shall not have any obligation to
make Servicer Advances.

         SECTION 3.05      FINANCING STATEMENTS.

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

         SECTION 3.06      MAINTENANCE OF INSURANCE POLICY; INSURANCE PROCEEDS.

         The Servicer shall have the obligation to verify, monitor and enforce
the acquisition and maintenance of a Customer's Insurance Policies in a manner
consistent with its standard practice and consistent with that practiced by
other lessors in the industry with similar contracts and equipment owned or
serviced by them. In the event that a Customer fails to maintain an Insurance
Policy as required by the terms of the related Contract, the Servicer shall
procure and maintain such insurance in an amount not less than the amount
required by such Contract. The Servicer may satisfy its obligations under this
Section 3.06 by (i) providing for a Loss and Damage Waiver Fee, (ii) obtaining
"forced placed insurance" and charging the Customer therefor or (iii)
maintaining a blanket insurance policy covering all of the Equipment. Any
Insurance Proceeds shall be remitted to the Indenture Trustee for deposit in the
Collection Account pursuant to Section 3.03.

         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 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.

                                       10
<PAGE>   15

         SECTION 3.08      SERVICING COMPENSATION.

         (a) As compensation for the performance of its obligations under this
Agreement, the Servicer shall be entitled to receive the Servicer Fee and the
Additional Servicer Fee, if applicable. The Servicer Fee with respect to any
Contract shall be paid monthly, commencing on the related 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
Contract, (ii) the receipt of Recoveries and Insurance Proceeds with respect to
the last remaining Contract, or (iii) the date on which the Issuer obtains a
release from the Indenture Trustee for the last remaining Contract or the Note
Insurer redeems the Notes pursuant to Article 10 of the Indenture. The Servicer
Fee shall be paid 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
and payment of expenses incurred in connection with distributions and reports to
the Indenture Trustee, the Back-up Servicer, the Note Insurer, the Rating
Agencies and Noteholders and shall not be entitled to reimbursement for such
expenses except as provided elsewhere herein or in the Indenture; provided that
the Servicer shall be entitled to withhold its reasonable costs and expenses
(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 Contracts, in calculating the amounts received as
Recoveries related to such Defaulted Contracts.

         (b) In connection with any transfer of the servicing obligations to a
successor Servicer in accordance with Section 6.02 hereof, the Back-up Servicer
shall be entitled to reimbursement of Transition Costs as provided therein and
in the Indenture.

         SECTION 3.09      SUBSTITUTION OR PURCHASE OF CONTRACTS.

         (a) The Servicer shall not allow termination of a Contract prior to the
scheduled expiration date or prepayment of any Contract (except as may be
specifically required under such Contract in connection with a casualty to the
related Equipment), unless (i) the Customer has paid an amount at least equal to
the Purchase Price for the Contract, (ii) the Customer has paid an amount less
than the Purchase Price for such Contract and such funds have been remitted to
the Indenture Trustee and the Issuer has remitted to the Indenture Trustee the
related Prepayment Differential, if any, to the Indenture Trustee or (iii) the
Issuer has (A) obtained from the Company and Granted to the Indenture Trustee a
Substitute Contract, the Receivables under such Substitute Contract and the
Issuer's interest in the related Equipment and delivered to the Indenture
Trustee the original executed counterpart of the Substitute Contract or (B)
removed such prepaid Contract and the related Equipment from the Trust Estate by
remittance of the Purchase Price to the Servicer for deposit in the Collection
Account in accordance with Section 3.03 hereof; provided that removals and
substitutions of Contracts pursuant to this subparagraph (a) shall comply with
the requirements of Section 4.04 of the Indenture, with particular reference to
Section 4.04(d) thereof, and the criteria set forth in Section 3.04 of the
Contract Acquisition Agreement.

         (b) The Servicer shall permit the Issuer to (i) remove any Defaulted
Contract or Delinquent Contract from the Trust Estate by remittance by the
Issuer to the Servicer, for deposit in the Collection Account in accordance with
Section 3.03 hereof, of the Purchase Price for such Contract or (ii) substitute
for any Defaulted Contract or Delinquent Contract, a Substitute Contract and the
Receivables under such Substitute Contract and the Issuer's interest in the
related Equipment; provided that removals and substitutions of Contracts
pursuant to this subparagraph (b) shall comply with the requirements of Section
4.04 of the Indenture, with particular reference to Section 4.04(d) thereof, and
the criteria set forth in Section 3.04 of the Contract Acquisition Agreement.

         (c) Notwithstanding any other provision contained in this Agreement,
the Servicer shall not, with respect to a Defaulted Contract, (i) negotiate or
enter into a new contract with the Customer relating to the

                                       11
<PAGE>   16

Equipment or the Customer's obligations under such Defaulted Contract or (ii)
allow the Customer thereunder to resume its rights under such Defaulted
Contract, unless the Issuer has removed or made a substitution for such
Defaulted Contract in the manner set forth in subsection (b) hereof.

         (d) In the event that the Company is required to repurchase or
substitute a Contract pursuant to Section 3.03 of the Contract Acquisition
Agreement, the Servicer shall permit such repurchase or substitution only in
accordance with the terms of Sections 3.03 and 3.04 of the Contract Acquisition
Agreement and Section 4.04 of the Indenture.

         SECTION 3.10      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 that the Servicer has or may have against the Issuer, the
Indenture Trustee, the Note Insurer or any Noteholder, whether in respect of
this Agreement, the other Transaction Documents, any Contract, Receivable,
Equipment or otherwise.

                                       12
<PAGE>   17

                                    ARTICLE 4

                       ACCOUNTINGS, STATEMENTS AND REPORTS

         SECTION 4.01      MONTHLY SERVICER'S REPORTS.

         No later than 10:00 a.m. (Central time) on each Determination Date, the
Servicer shall deliver the Monthly Servicer's Report to the Issuer, the Back-up
Servicer and the Indenture Trustee, and, no later than 11:00 a.m. (Central time)
on each Payment Date, the Indenture Trustee shall deliver the Monthly Servicer's
Report to the Note Insurer, each Noteholder and the Rating Agencies. Each
Monthly Servicer's Report shall be substantially in the form attached hereto as
Exhibit A, and shall reflect 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 any funds to be paid to
the Issuer pursuant to Section 12.02(d)(xii) of the Indenture or otherwise.
Contracts which have been substituted for or purchased by the Company or the
Issuer shall be identified by Customer contract number on the Monthly Servicer's
Report. On each Payment Date, the Servicer shall deliver to the Back-up Servicer
and the Controlling Party a Computer Tape in a format acceptable to the Back-up
Servicer containing the information from which the Servicer prepared the Monthly
Servicer's Report, as well as any additional information reasonably requested by
the Back-up Servicer prior to such Payment Date.

         SECTION 4.02      FINANCIAL STATEMENTS; CERTIFICATION AS TO COMPLIANCE;
                           NOTICE OF DEFAULT.

         (a) The Servicer (or MicroFinancial Incorporated, if the initial
Servicer is no longer the Servicer) shall deliver to the Indenture Trustee, the
Note Insurer, each Noteholder, the Back-up Servicer and the Rating Agencies
(and, upon the request of any Noteholder, to any prospective transferee of any
Note that has executed an agreement with the Issuer and the Servicer containing
terms substantially similar to those set forth in Section 4.04(f) hereof):

                  (i) within 120 days after the end of each fiscal year of the
         Reported Companies, a copy of the Reported Companies' Financial
         Statements, all in reasonable detail and accompanied by an opinion of a
         firm of Independent Accountants stating that such financial statements
         present fairly the financial condition of the Reported Companies (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 Independent 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;

                  (ii) within 45 days after the end of each fiscal quarter,
         unaudited versions of the Reported Companies' consolidated and
         consolidating balance sheet and income statement; and

                  (iii) accompanying each set of Reported Companies' 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 Contract Acquisition Agreement, the Insurance
         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 Companies during the period covered by the Reported
         Companies 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

                                       13
<PAGE>   18

         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
         Contracts in compliance with the procedures hereof except as disclosed
         in such certificate;

                  (iv) 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 has taken or proposes to take
         with respect thereto;

                  (v) promptly upon the Servicer becoming aware of:

                           (A) any proposed or pending investigation of it or
                  the Issuer by any governmental authority or agency (other than
                  those occurring in the ordinary course of business), or

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

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

                  (vi) with reasonable promptness, any other data and
         information with respect to the Servicer or the Contract Assets 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; and

                  (vii) such other information as may be specified in the
         Indenture.

         (b) So long as any of the Notes are Outstanding, upon the written
request of the Controlling Party or the Indenture Trustee, the Servicer shall
furnish to such requesting party an Officer's Certificate, stating either (i)
that such action has been taken with respect to the recording, filing, and
rerecording and refiling of any financing statements and continuation statements
as is necessary to maintain the interest of the Indenture Trustee for the
benefit of the Noteholders and the Note Insurer created by the Indenture with
respect to the Trust Estate and reciting the details of such action or (ii) that
no action is necessary to maintain such interest; provided that the Servicer
shall not be required to furnish more than one such Officer's Certificate
annually. 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 interest of the Indenture Trustee for the
benefit of the Noteholders and the Note Insurer in the Trust Estate until the
date such next Officer's Certificate is due.

                                       14
<PAGE>   19

         SECTION 4.03      INDEPENDENT ACCOUNTANTS' REPORTS; ANNUAL FEDERAL TAX
                           LIEN SEARCH.

         (a) Promptly at the end of each fiscal year, the Servicer at its
expense shall cause the Independent Accountants to prepare a statement to the
Back-up Servicer, the Indenture Trustee, the Note Insurer, each Noteholder and
the Rating Agencies, dated as of the close of such period, to the effect that
the Independent Accountants have examined the servicing procedures, manuals,
guides and records of the Servicer, and the accounts and records of the Servicer
relating to the Contracts and any files or documentation pertaining to the
Contract Assets pursuant to the agreed upon procedures set forth in Exhibit D
hereto and that, on the basis of such examination and comparison, nothing has
come to the Independent Accountants' attention to indicate that the Servicer has
not, during the relevant period, serviced the Contracts in compliance with such
servicing procedures, manual and guides and in the same manner required by the
Servicer's standards and with the same degree of skill and care consistent with
that which the Servicer customarily exercises with respect to similar contracts
owned by it and otherwise in compliance with this Agreement, that such accounts
and records have not been maintained in accordance with Section 4.04 hereof,
that the information contained in the Monthly Servicer's Reports does not
reconcile with the information contained in the accounts and records or that
such certificates, accounts and records have not been properly prepared and
maintained in all material respects or in accordance with the requirements of
this Agreement, except in each case for (i) such exceptions as the Independent
Accountants shall believe to be immaterial and (ii) such other exceptions as
shall be set forth in such statement. The Servicer shall deliver to the Back-up
Servicer, the Indenture Trustee, the Rating Agencies, each Noteholder and the
Note Insurer a copy of any such statement within 120 days of the close of the
relevant period. Notwithstanding the foregoing, if the Outstanding Principal
Amount for all Series then Outstanding is less than $10,000,000, the Controlling
Party, upon the Servicer's request, may waive the requirements of this Section
4.03(a). The parties hereto acknowledge that neither the Indenture Trustee nor
the Back-up Servicer has reviewed the procedures set forth in Exhibit D hereto
and the Indenture Trustee and the Back-up Servicer will have no obligation to
review the content of any report required to be delivered pursuant to this
Section 4.03(a).

         (b) Promptly after the end of the Servicer's fiscal year, commencing
with the fiscal year ending December 31, 2000, the Servicer, at its expense,
shall cause a search to be conducted for any and all federal tax liens and any
and all state tax liens levied or imposed by the Commonwealth of Massachusetts
("State Tax Liens") against the Company and the Issuer as of the end of such
fiscal year and shall deliver to the Back-up Servicer, the Indenture Trustee,
each Noteholder and the Note Insurer on or before January 31 of each year,
commencing January 31, 2001, an officer's certificate signed by a Servicing
Officer (i) stating that there are no outstanding federal tax liens or State Tax
Liens filed against any portion of the Trust Estate, the Company or the Issuer
or (ii) listing the outstanding federal tax liens and State Tax Liens filed
against any portion of the Trust Estate, the Company or the Issuer. In the event
any such officer's certificate shall disclose any such federal tax liens or
State Tax Liens, the Servicer shall promptly thereafter, satisfy or cause the
satisfaction of any such federal tax liens and State Tax Liens; provided that if
the initial Servicer is no longer the Servicer, (y) the Company shall provide
the above described officer's certificates with respect to the Company and shall
be responsible for the satisfaction of any federal tax liens and State Tax Liens
against the Company and (z) the Issuer shall provide the above described
officer's certificates with respect to the Issuer and shall be responsible for
the satisfaction of any federal tax liens and State Tax Liens against the
Issuer.

         SECTION 4.04      ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION.

         (a) The Servicer shall provide to the Back-up Servicer, each
Noteholder, the Note Insurer and the Indenture Trustee, or their duly authorized
representatives, attorneys or accountants access to any and all documentation
regarding the Trust Estate (including the Contract 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.

                                       15
<PAGE>   20

         (b) At all times during the term hereof, the Servicer shall keep
available at its principal executive office for inspection by the Indenture
Trustee, the Back-up Servicer, the Note Insurer and each Noteholder a list of
all Contracts then held as a part of the Trust Estate, together with a
reconciliation of such list to that set forth in the Contract Schedule and each
of the Monthly Servicer's Reports, indicating the cumulative addition and
removal of Contracts from the Trust Estate.

         (c) The Servicer shall maintain accounts and records as to each
respective 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 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 made, and Insurance
Proceeds, Residual Proceeds or Recoveries received on (or with respect to) each
Contract and the amounts from time to time deposited in the Collection Account
in respect of such Contract.

         (d) The Servicer shall maintain all of its computerized accounts and
records so that, from the Initial Delivery Date and after each Acquisition Date
and the Grant of the related Contract, Receivables and Equipment to the
Indenture Trustee, the Servicer's accounts and records (including any back-up
computer archives) that refer to any such Contracts, Receivables or Equipment
indicate clearly that the Contracts, Receivables and Equipment are owned by the
Indenture Trustee for the benefit of the Noteholders and the Note Insurer.
Indication of the Indenture Trustee's interest in a Contract may be deleted from
or modified on the Servicer's accounts and records only after the Contract has
been paid in full, replaced with a Substitute Contract or purchased by the
Company or the Issuer or conveyed to the Servicer pursuant to this Agreement.

         (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 Indenture Trustee, the Back-up
Servicer, the Note Insurer or any Noteholder regarding the Customers and the
Contracts, whether upon exercise of its rights under this Section 4.04 or
otherwise, shall be maintained by the Indenture Trustee, the Back-up Servicer,
the Note Insurer or the Noteholder, as applicable, in confidence and shall not
be disclosed to any other Person, unless such disclosure shall not violate any
applicable law or regulation or any proprietary rights of the Company, the
Issuer or the Servicer, unless such party is ordered by a court of applicable
jurisdiction to make such disclosure; provided that the Note Insurer may make
disclosures with respect to any of the above matters to the Rating Agencies, any
reinsurer or any entity having regulatory authority over the Note Insurer; and
provided further that a Noteholder may disclose such information to the extent
permitted by the applicable Purchase Agreement.

         SECTION 4.05      OTHER NECESSARY DATA.

         (a) The Servicer shall, on request of the Back-up Servicer, the
Indenture Trustee or the Controlling Party, on reasonable notice, furnish such
requesting party such data necessary for the administration of the Trust Estate
as can be reasonably generated by the Servicer's existing data processing
systems.

         (b) Within five Business Days after the occurrence of a Servicer Event
of Default, the Servicer shall provide the Indenture Trustee and the Back-up
Servicer with access to the Servicer's existing data processing systems and any
files or records with respect to the Contract Assets that it may have.

         SECTION 4.06      INDENTURE TRUSTEE TO COOPERATE.

         If a Contract and the related Contract Assets are permitted to be
released from the lien of the Indenture under Section 4.06 of the Indenture, the
Servicer shall notify the Indenture Trustee by written certification (which

                                       16
<PAGE>   21

certification shall include a statement to the effect that all amounts which are
required to be deposited in the Collection Account with respect to such Contract
pursuant to Section 3.03 hereof or Section 4.04 of the Indenture have been so
deposited) of a Servicing Officer and shall request delivery of the Contract to
the Servicer. Upon receipt of such delivery request, the Indenture Trustee shall
within seven calendar days of such request by the Servicer release such Contract
to the Servicer. Upon release of such Contract, the Servicer may execute an
instrument in satisfaction of such Contract and do such other acts and execute
such other documents as it deems necessary to discharge the Customer thereunder
and, if applicable, to release any security interest in the Equipment related
thereto. The Servicer shall determine when a Contract has been paid in full.
Upon the written request of a Servicing Officer and subject to the Indenture
Trustee's rights to indemnity contained herein and in the Indenture, the
Indenture Trustee shall perform such other acts as reasonably requested in
writing by the Servicer and otherwise cooperate with the Servicer in enforcement
of the rights and remedies of the Noteholders and the Note Insurer with respect
to Contracts.

                                       17
<PAGE>   22

                                    ARTICLE 5

                                  THE SERVICER

         SECTION 5.01      SERVICER INDEMNIFICATION.

         (a) The Servicer shall indemnify and hold harmless the Indenture
Trustee, the Issuer, the Back-up Servicer, the Note Insurer and 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 in accordance with the terms of this Agreement or are
attributable to errors or omissions of the Servicer related to such duties or a
breach of the representations and warranties made by the Servicer in Section
2.01 hereof; provided 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) The Servicer shall not be liable for any settlement of any action
or claim effected without its consent. If the Servicer has made any indemnity
payments to the Note Insurer, the Indenture Trustee, the Back-up Servicer or any
Noteholder 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 initial Servicer shall keep in full effect its existence and
good standing as a corporation in the Commonwealth of Massachusetts, and shall
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 initial 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 initial Servicer to perform its duties hereunder;
provided that the initial Servicer may reorganize as a corporation in another
state provided that the initial Servicer has provided to the Indenture Trustee
and the Controlling Party an Officer's Certificate to the effect that (i) such
action will not cause the initial Servicer to breach any obligation under this
Agreement and (ii) such action would be in the best interests of the initial
Servicer and would not have a material adverse effect on the Noteholders or the
Note Insurer.

         (b) The initial Servicer shall not (i) 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) either the initial Servicer is the
survivor or such Person or the merged or consolidated entity acquires
substantially all the assets of the initial Servicer as an entirety, has
adequate servicing skills and personnel, is substantially involved in the
equipment financing lease business and executes and delivers to the Issuer, the
Controlling Party and the Indenture Trustee an agreement, in form and substance
reasonably satisfactory to the Issuer, the Controlling Party and the Indenture
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant, condition and obligation to be
performed or observed by the initial Servicer under this Agreement, (B) no
Servicer Default or Servicer Event of Default has occurred and is continuing,
and (C) the Controlling Party shall have given its prior written consent. The
initial Servicer shall provide prompt written notice of such event to the Rating
Agencies and shall provide to the Indenture Trustee, for the benefit of the Note
Insurer and the Noteholders, an Opinion of Counsel confirming the enforceability
of such assumption agreement.

         SECTION 5.03      LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.

         Except as provided in Section 5.01 hereof, none of the officers,
directors, employees or agents of the Servicer shall have any liability for any
action taken or refrained from having been taken in its capacity as Servicer

                                       18
<PAGE>   23

pursuant to this Agreement; provided that this provision shall not protect 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; PROVIDED, HOWEVER, that
this provision shall not protect the Servicer against any breach of warranties
or representations made herein, or failure to perform its obligations in strict
compliance with this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
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 this Agreement against the Servicer. In the event
the Servicer performs any activities beyond the requirements of this Agreement,
the Servicer may but shall 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 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 is 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 Indenture Trustee and the Controlling
Party.

         (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 Indenture Trustee of any right
or remedy under this Agreement, or the enforcement by the Issuer, the Note
Insurer, the Indenture Trustee or any Noteholder of any provision of the Notes
or this Agreement.

                                       19
<PAGE>   24

                                    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 Indenture
         Trustee for payment to Noteholders any collections on Receivables or
         any other proceeds or payments 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. (Central time) on
         the Business Day following the date such remittance is required;
         provided that the Indenture 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 Indenture 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. (Central time) the following Business Day;
         provided that if the Servicer has not delivered the Monthly Servicer's
         Report by 12:00 noon (Central time) on the Determination Date, the
         Indenture Trustee shall give the Servicer notice of such failure.
         Notwithstanding the foregoing, any failure by the Indenture Trustee to
         deliver such notice to the Servicer shall not prevent the occurrence of
         a Servicer Event of Default; or

                  (iii) Any failure by the Servicer to make a Servicer Advance
         when required pursuant to Section 3.04 hereof or to deposit in the
         Collection Account when required any Purchase Price received by it that
         continues unremedied until 10:00 a.m. (Central time) the following
         Business Day; provided that if the Servicer has not made such Servicer
         Advance or deposited such Purchase Price in the Collection Account
         received by it by 12:00 noon (Central time) on related Determination
         Date and the Indenture 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 Indenture
         Trustee shall give the Servicer prompt written, telecopied or
         telephonic notice of such failure. Notwithstanding the foregoing, any
         failure by the Indenture Trustee to deliver such notice to the Servicer
         shall not prevent the occurrence of a Servicer Event of Default; or

                  (iv) Any failure on the part of the Servicer in its capacity
         as such duly to observe or perform in any material respect any other
         covenants or agreements of the Servicer set forth in this Agreement or
         the Indenture, as the case may be, or if any representation or warranty
         of the Servicer set forth in Section 2.01 of this Agreement and in the
         other Transaction Documents to which the Servicer is a party shall
         prove to be incorrect, which failure or breach (A) in the case of any
         such representation or warranty, materially and adversely affects the
         interest or rights of the Note Insurer, the Indenture Trustee, or the
         Noteholders and (B) continues unremedied for a period of 30 days after
         the earlier of (x) the date on which the Servicer becomes aware of such
         failure or breach and (y) 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 Indenture Trustee, the Controlling Party, the Issuer or
         the Back-up Servicer; or

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

                                       20
<PAGE>   25

                  (vi) 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
         conservator, receiver, liquidator, assignee, trustee, custodian,
         sequestrator or other similar official for the Servicer 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 for a period of 60
         consecutive days; or

                  (vii) 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, marshaling 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

                  (viii) the occurrence of an event of default under the Credit
         Agreement that is not cured, remedied or waived in writing, in
         accordance with the terms of the Credit Agreement, within 30 days of
         the date of initial occurrence of such event of default; or

                  (ix) the ratio of consolidated indebtedness to consolidated
         Tangible Net Worth of the Reported Companies is greater than 6.5 to
         1.0; or

                  (x) the allowance for bad debt of the Reported Companies is
         less than 7.0% of the gross lease installments; or

                  (xi) for any fiscal quarter, the fixed charge ratio of the
         Reported Companies is less than 1.25 to 1.0; or

                  (xii)    the occurrence of a Trigger Event.

         (b) If a Servicer Event of Default occurs, the Indenture Trustee shall,
at the direction of the Controlling Party, by notice (the "Servicer Termination
Notice") then given in writing to the Servicer and the Back-up Servicer,
terminate all, but not less than all, of the rights and obligations of the
Servicer under this Agreement.

         (c) Upon 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 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 Contracts and
related documents, or otherwise. The Servicer agrees to cooperate with the
Indenture Trustee, the Back-up Servicer 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, in the Collection
Account or thereafter received with respect to any of the

                                       21
<PAGE>   26

Contracts. To assist the successor Servicer in enforcing all rights under the
Contracts and the Insurance Polices to the extent they relate to the Contracts,
the outgoing Servicer, at its own expense, shall transfer its records
(electronic and otherwise) relating to such Contracts to the successor Servicer
in such form as the successor Servicer may reasonably request and shall transfer
the related Contracts and Contract Files (to the extent not held by the
Indenture Trustee) or the servicing copies thereof maintained by the outgoing
Servicer, and all other records, correspondence and documents relating to the
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 right of the Servicer under this Agreement.

         SECTION 6.02      BACK-UP SERVICER TO ACT; TAKING OF BIDS; APPOINTMENT
                           OF SUCCESSOR SERVICER.

         (a)(i) Except as provided in Section 6.02(d) hereof, on and after the
time the Servicer resigns pursuant to Section 5.04 hereof or receives a Servicer
Termination Notice pursuant to Section 6.01(b) or (c) hereof, the Back-up
Servicer shall, unless prevented by law, automatically and without further
action succeed to the rights and obligations of the successor Servicer
hereunder. If the Back-up Servicer cannot serve as successor Servicer, the
Indenture Trustee shall appoint a successor Servicer acceptable to it and the
Controlling Party.

         (ii) The successor Servicer shall, upon the execution of a written
agreement to be bound by all of the provisions of this Agreement, 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 that the
successor Servicer (x) shall not be required to make any Servicer Advance 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; and
provided, further, that such successor Servicer shall provide financial and
other information consistent with the provisions of Section 4.02 hereof. With
the prior written consent of the Controlling Party (which consent shall not be
unreasonably withheld), the successor Servicer may subcontract with another
Person 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 and any Additional
Servicer Fee, subject to the taking of bids as described in subsection (b)
below.

         (b) Solely for purposes of establishing the fee to be paid to the
successor Servicer, upon receipt of a Servicer Termination Notice, the Back-up
Servicer shall solicit written bids, with a copy to each Noteholder and the Note
Insurer (such bids to include a proposed servicer fee and servicing transfer
costs) from not less than three Persons experienced in the servicing of
contracts similar to the Contracts and that are not affiliates of the Indenture
Trustee, the Back-up Servicer, the Servicer or the Issuer and are reasonably
acceptable to the Controlling Party. The Issuer may also solicit additional bids
from other such entities. Any such written solicitation shall prominently
indicate that bids should specify any applicable subservicing fees required to
be paid from the Servicer Fee and that any fees and transfer costs in excess of
the Servicer Fee shall be paid only pursuant to Section 12.02(d)(viii) of the
Indenture as the Additional Servicer Fee. The successor Servicer shall act as
Servicer hereunder and shall, subject to the availability of sufficient funds in
the Collection Account pursuant to Section 12.02(d)(i) (up to the Servicer Fee)
and Section 12.02(d)(iii) (up to any successor Servicer's Transition Costs) and
Section 12.02(d)(viii) (up to any Additional Servicer Fee and any additional
transition costs in excess of the Transition Costs) of the Indenture, receive as
compensation therefor a fee equal to the fee proposed in the bid so solicited
which provides for the lowest combination of servicer fee and transition costs,
as reasonably determined by the Controlling Party.

                                       22
<PAGE>   27

         (c) The Servicer, the Back-up Servicer, the Issuer, the Indenture
Trustee and such successor Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. The Back-up
Servicer (or any other Person if such Person has previously reimbursed the
Back-up Servicer) shall be reimbursed for Transition Costs, if any, incurred in
connection with the assumption of responsibilities of the successor Servicer,
upon receipt of documentation of such costs and expenses and in accordance with
Section 12.02(d)(iii) of the Indenture. The Back-up Servicer shall have no claim
against the Issuer, the Trust Estate or the Note Insurer for any costs and
expenses incurred in effecting such succession except for amounts specified in
the definition of "Transition Costs" incurred by it in becoming the successor
Servicer.

         (d) Upon written notification to the Indenture Trustee that on any
Determination Date following the solicitation of bids provided for in Section
6.02(b) hereof, the sum of the aggregate Implicit Principal Balance for all
Contracts plus any amount on deposit in the Cash Collateral Account is less than
the lesser of (1) $50,000 or (2) the proposed servicing transfer costs set forth
in the lowest bid solicited pursuant to Section 6.02(b) hereof, then the Back-up
Servicer shall be relieved of its obligation under Section 6.02(a)(i) hereof,
and the Issuer shall appoint a successor Servicer.

         SECTION 6.03      NOTIFICATION TO NOTEHOLDERS.

         The Servicer shall promptly notify the Back-up Servicer, the Note
Insurer, each Noteholder, the Issuer, the Rating Agencies and the Indenture
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 Indenture Trustee shall give prompt
written notice thereof to the Rating Agencies.

         SECTION 6.04      WAIVER OF PAST DEFAULTS.

         The Indenture Trustee shall, at the direction of the Controlling Party,
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 (vi) or (vii) of Section 6.01(a) hereof, which waiver shall
require the consent of each Noteholder and the Note Insurer. 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. The Indenture Trustee shall provide to the Rating Agencies
notification of any such waiver.

         Notwithstanding anything contained in this Agreement to the contrary,
absent written notice detailing specific Errors (as defined below) or other
deficiencies, Norwest Bank, Minnesota, National Association ("Norwest"), as
successor Servicer, is authorized to accept and rely on all accounting, records
(including computer records) and work product of the prior Servicer relating to
the Contracts (collectively, the "Predecessor Servicer Work Product") without
any audit or other examination thereof, and Norwest shall have no duty,
responsibility, obligation or liability for the acts and omissions of the prior
Servicer. If any error, inaccuracy, commission or incorrect or nonstandard
practice or procedure (collectively, "Errors") exist in any Predecessor Servicer
Work Product and such Errors make it materially more difficult to service or
should cause or materially contribute to Norwest making or continuing any Errors
(collectively, "Continued Errors"), Norwest shall have no duty, responsibility,
obligation or liability to perform servicing or for such Continued Errors;
provided, however, that Norwest agrees to use its best efforts to prevent
further Continued Errors. In the event that Norwest becomes aware of Errors or
Continued Errors, Norwest shall, with the prior consent of the Note Insurer, use
its best efforts to reconstruct and reconcile such data as is commercially
reasonable to correct such Errors and Continued Errors and to prevent future
Continued Errors. Norwest shall be entitled to recover its costs thereby
expended in accordance with Sections 6.08, Clause Third, and Section
12.02(d)(viii) of the Indenture, as applicable.

                                       23
<PAGE>   28

         SECTION 6.05      EFFECTS OF TERMINATION OF SERVICER.

         (a) Upon the appointment of the successor Servicer, the predecessor
Servicer shall remit to the successor Servicer any Scheduled Payments and any
other payments, proceeds or other amounts that it may receive pursuant to any
Contract or otherwise 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 Contracts
and the successor Servicer shall have all of such obligations, except that the
outgoing Servicer shall cooperate in effecting the transition of Servicing to
the successor Servicer as described in Sections 6.01 and 6.02 hereof and shall
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
Contracts, together with any standard pleading forms used in the enforcement of
Defaulted Contracts, a list of counsel used by such predecessor Servicer in
bringing collection actions and a list of collection actions currently in
progress. The outgoing Servicer's indemnification obligations pursuant to
Section 5.01 hereof will survive the termination of the Servicer but shall 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 hereof, or upon any appointment of a successor Servicer, all the
rights, powers, duties and obligations of the other parties under this
Agreement, the Indenture and the Contract Acquisition Agreement shall remain
unaffected by such termination or appointment and shall remain in full force and
effect thereafter.

                                       24
<PAGE>   29

                                    ARTICLE 7

                              THE BACK-UP SERVICER

         SECTION 7.01      REPRESENTATIONS OF BACK-UP SERVICER.

         The Back-up Servicer makes the following representations and
warranties:

         (a) The Back-up Servicer has been duly organized and is validly
existing as a national banking association in good standing under the laws of
the United States of America, with power and authority to own its properties and
to conduct its business as such properties shall be currently owned and such
business is presently conducted.

         (b) The Back-up Servicer has the power and authority to execute and
deliver this Agreement, the Indenture and the Insurance Agreement and to perform
its obligations under each of the foregoing, and the execution, delivery, and
performance of this Agreement, the Indenture and the Insurance Agreement has
been duly authorized by the Back-up Servicer by all necessary corporate action.

         (c) Assuming the due authorization, execution and delivery by each
other party thereto, each of this Agreement, the Indenture and the Insurance
Agreement constitutes the legal, valid, and binding obligation of the Back-up
Servicer enforceable in accordance with its respective terms, except as
enforceability may be subject to or limited by bankruptcy, insolvency,
conservatorship, reorganization or other similar laws affecting the enforcement
of creditors' rights in general and by general principles of equity, regardless
of whether such enforceability shall be considered in a proceeding in equity or
at law.

         (d) The consummation of the transactions contemplated by this
Agreement, the Indenture and the Insurance Agreement and the fulfillment of the
terms hereof and thereof shall not conflict with, result in any breach of any of
the terms and provisions of, nor constitute (with or without notice or lapse of
time) a default under, the organizational documents of the Back-up Servicer, or
any indenture, agreement, or other instrument to which the Back-up Servicer is a
party or by which it shall be bound; nor result in the creation or imposition of
any Lien upon any of its properties pursuant to the terms of any such indenture,
agreement, or other instrument; nor violate any law or any order, rule, or
regulation applicable to the Back-up Servicer of any court or of any federal or
state regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Back-up Servicer or its properties.

         (e) There are no proceedings or investigations pending or, to the
Back-up Servicer's knowledge, threatened before any court, regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction
over the Back-up Servicer or its properties (i) asserting the invalidity of this
Agreement, the Indenture or the Insurance Agreement, (ii) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement, the
Indenture or the Insurance Agreement, or (iii) seeking any determination or
ruling that might materially adversely affect the performance by the Back-up
Servicer of its obligations under, or the validity or enforceability of, this
Agreement, the Indenture or the Insurance Agreement.

                                       25
<PAGE>   30

         SECTION 7.02      MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
                           OBLIGATIONS OF, BACK-UP Servicer.

         Any Person (i) into which the Back-up Servicer may be merged or
consolidated, (ii) which may result from any merger or consolidation to which
the Back-up Servicer shall be a party, or (iii) which may succeed to the
properties and assets of the Back-up Servicer substantially as a whole, which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Back-up Servicer hereunder, shall be the
successor to the Back-up Servicer under this Agreement without any further act
on the part of any of the parties to this Agreement. In the event that the
resulting entity does not meet the eligibility requirements for the Indenture
Trustee set forth in the Indenture, the Back-up Servicer, upon the written
request of the Controlling Party, shall resign from its obligations and duties
under this Agreement.

         SECTION 7.03      BACK-UP SERVICER RESIGNATION.

         The Back-up Servicer shall not resign from its obligations and duties
under this Agreement, the Indenture or the Insurance Agreement except (i) as
provided in Section 7.02 above, or (ii) upon a determination that the
performance of its duties shall no longer be permissible under applicable law
(any such determination permitting the resignation of the Back-up Servicer shall
be evidenced by an Opinion of Counsel to such effect delivered to the Indenture
Trustee, the Issuer and the Controlling Party). Upon the Back-up Servicer's
resignation or termination pursuant to Section 7.02 hereof or this Section 7.03,
notice thereof shall be provided to the Rating Agencies and the Controlling
Party, and the Back-up Servicer shall comply with the provisions of this
Agreement until the acceptance of a successor Back-up Servicer.

         SECTION 7.04      OVERSIGHT OF SERVICING.

         (a) Prior to each Payment Date, the Back-up Servicer 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; and

                  (ii) that the amounts credited to and withdrawn from the
         Collection Account and the Cash Collateral Account and the balance of
         such accounts, as set forth in the records of the Back-up Servicer, are
         the same as the corresponding amounts set forth in the Monthly
         Servicer's Report.

         (b) The Back-up Servicer shall, within 30 days of the receipt thereof,
load the Computer Tape received from the Servicer pursuant to Section 4.01
hereof, verify such Computer Tape is in readable form and shall recalculate and
confirm the following:

                  (i) the Aggregate IPB as of the most recent Calculation Date;

                  (ii) the Principal Distribution Amount for each Outstanding
         Series of Notes as of the most recent Payment Date; and

                  (iii) the Annualized Default Rate and the Delinquency Rate for
         the related Due Period as set forth in the most recent Monthly
         Servicer's Report.

         In addition, the Back-up Servicer shall confirm that the items set
forth in the Monthly Servicer's Report, other than the items listed in the
section entitled "Deposits by or on behalf of the Servicer" are accurate based
solely on a comparison to the Computer Tape referred to above.

                                       26
<PAGE>   31

         (c) In the event of any discrepancy between the information set forth
in subparagraphs (a) and (b) as reported by the Servicer from that determined or
calculated by the Back-up Servicer, the Back-up Servicer shall promptly notify
the Servicer, the Indenture Trustee and the Controlling Party of such
discrepancy. If within 30 days of such notice being provided to the Servicer,
the Back-up Servicer and the Servicer are unable to resolve such discrepancy,
the Back-up Servicer shall promptly notify the Rating Agencies and the
Noteholders (if the Note Insurer is the Controlling Party) of such discrepancy.

         (d) Based solely on the information included in the Series Contract
Schedule delivered on each Acquisition Date and the Computer Tapes provided each
Payment Date thereafter, the Back-up Servicer shall determine that any
Additional Contracts satisfy the criterion set forth in Section 3.04(b) of the
Contract Acquisition Agreement and that the acquisition of such Additional
Contracts does not violate the Concentration Limits set forth therein.

         (e) The Back-up Servicer shall make a site visit to the offices of the
Servicer on an annual basis if the Back-up Servicer in its sole discretion
determines that such a site visit is necessary, advisable or convenient for the
purpose of reviewing the operations of the Servicer. The reasonable
out-of-pocket costs and expenses of the Back-up Servicer incurred in connection
with this Agreement, including without limitation the site visit referred to in
the preceding sentence, shall be reimbursed to the Back-up Servicer by the
Servicer.

         (f) Other than as specifically set forth in this Agreement, the Back-up
Servicer 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.

         (g) The Back-up Servicer shall consult fully with the Servicer as may
be necessary from time to time to perform or carry out the Back-up Servicer's
obligations hereunder, including the obligation to succeed at any time to the
duties and obligations of the Servicer under Section 6.02 hereof.

         SECTION 7.05      BACK-UP SERVICER COMPENSATION.

         As compensation for the performance of its obligations as Back-up
Servicer under this Agreement, the Back-up Servicer shall be entitled to receive
the Back-up Servicer Fee. In connection with any transfer of the servicing
obligations to a successor Servicer in accordance with Section 6.02 hereof, the
Back-up Servicer shall be entitled to reimbursement of Transition Costs as
provided therein and in the Indenture.

         SECTION 7.06      DUTIES AND RESPONSIBILITIES.

         (a) The Back-up Servicer shall perform only such duties as are
specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Back-up Servicer.

         (b) In the absence of bad faith or negligence on its part, the Back-up
Servicer may conclusively rely as to the truth of the statements and the
correctness of the opinions expressed therein, upon Officer's Certificates or
Opinions of Counsel furnished to the Back-up Servicer and conforming to the
requirements of this Agreement and the Indenture; but in the case of any such
Officer's Certificates or Opinions of Counsel, which by any provision hereof are
specifically required to be furnished to the Back-up Servicer, the Back-up
Servicer shall be under a duty to examine the same and to determine whether or
not they conform to the requirements of this Agreement.

                                       27
<PAGE>   32

                                    ARTICLE 8

                            MISCELLANEOUS PROVISIONS

         SECTION 8.01      TERMINATION.

         (a) Except with respect to a particular party under Sections 5.01,
5.04, 6.01, 7.02 or 7.03 hereof, the respective duties and obligations of the
Servicer, the Issuer, the Back-up Servicer and the Indenture Trustee created by
this Agreement shall terminate upon the discharge of the Indenture in accordance
with its terms. Upon the termination of this Agreement pursuant to this Section
8.01(a), the Servicer shall pay all monies with respect to the Contract Assets
held by the Servicer and to which the Servicer is not entitled to or upon the
order of the Issuer.

         (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 Indenture
Trustee thereafter with respect thereto, and any liquidation or preservation of
the Trust Estate by the Indenture Trustee thereafter shall be subject to the
rights of the Servicer to service the Contracts and the Receivables and to
collect servicing compensation as provided hereunder and under the Indenture.

         SECTION 8.02      AMENDMENTS.

         (a) Subject to paragraph (b) of this Section 8.02, this Agreement may
be amended from time to time by the Issuer, the Servicer, the Back-up Servicer,
and the Indenture Trustee, to cure any ambiguity, or to correct or supplement
any provisions herein that may be inconsistent with any other provisions herein,
as the case may be.

         (b) The provisions of this Agreement may be waived from time to time
and this Agreement may be amended from time to time by the Issuer, the Servicer
and the Back-up Servicer, with the written consent of the Indenture Trustee and
the Controlling Party, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Agreement; provided
that no such amendment or waiver shall, without the consent of each Noteholder
affected thereby, (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, (iii) modify this Section 8.02 or (iv)
modify any of the items referred to in clauses (i) through (viii) of Section
9.02 (a) of the Indenture.

         (c) Promptly upon the execution of any amendment, the Servicer shall
send to the Indenture Trustee, the Note Insurer, each Holder of Notes and each
Rating Agency a conformed copy of each such amendment.

         (d) Any amendment or modification effected contrary to the provisions
of this Section 8.02 shall be void.

         (e) The manner of obtaining any consents from the Noteholders and of
evidencing the authorization of the execution thereof by Noteholders shall be
subject to such reasonable regulations as the Indenture Trustee may prescribe.

         (f) If any party to this Agreement is unable to sign any amendment due
to its dissolution, winding up or comparable circumstances, then the consent of
the Noteholders representing at least 51% in Outstanding Principal Amount of all
Notes of all Series shall be sufficient to effect such amendment without such
party's signature; provided, however, that no such amendment shall impose on the
party that is unable to provide a

                                       28
<PAGE>   33

signature any obligation or liability in excess of what is then currently
imposed hereunder prior to such amendment.

         SECTION 8.03      GOVERNING LAW.

         THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO
BE PERFORMED THEREIN, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS OF ANY
STATE THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF A STATE OTHER THAN NEW
YORK.

         SECTION 8.04      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, and addressed, in each case as follows: (a) if to the Issuer,
at 950 Winter Street, Suite 4100B, Waltham, Massachusetts 02451; (b) if to
Servicer, at 950 Winter Street, Suite 4200, Waltham, Massachusetts 02451; (d) if
to the Indenture Trustee or the Back-up Servicer, at Sixth Street and Marquette
Avenue, MAC N9311-161, Minneapolis, Minnesota 55479; (e) if to the Note Insurer,
at One State Street Plaza, New York, New York 10004; or (f) if to the
Noteholders, at the respective address set forth on the Note Register. 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 8.05      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 Indenture Trustee, the Note Insurer 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 8.06      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 and the Note
Insurer. This Agreement may not be modified except in accordance with Section
8.02 hereof.

         SECTION 8.07      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 8.08      LEGAL HOLIDAYS.

         In any case in which 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, then (notwithstanding any other provision of this Agreement) such
action, document delivery or payment need not be taken or made on such date, but
may be taken or made on the next succeeding Business Day with the same force and
effect as if taken or made on the nominal date of any such action, document
delivery or payment and, assuming such action, document delivery or payment is
actually taken or made on such subsequent Business Day, such action, document
delivery or

                                       29
<PAGE>   34

payment shall be deemed made on the nominal date and no additional interest
shall accrue on any amount so paid for the period from and after any such
nominal date.

         SECTION 8.09      ASSIGNMENT FOR SECURITY FOR THE NOTES.

         The Servicer and the Back-up Servicer acknowledge and agree that the
Issuer will Grant to the Indenture Trustee all of the Issuer's rights under this
Agreement. The Servicer and the Back-up Servicer consent to such Grant and
further agree that all representations, warranties, covenants and agreements of
the Servicer and the Back-up Servicer made herein shall also be for the benefit
of and inure to the Indenture Trustee and all Holders from time to time of the
Notes and the Note Insurer.

         SECTION 8.10      NO SERVICING ASSIGNMENT.

         Except as expressly provided in Sections 5.02, 5.04 and 8.09 hereof,
neither this Agreement nor the duties and obligations of any party hereto may
not be assigned by the Issuer, the Servicer or the Back-up Servicer without the
prior written consent of the Controlling Party.

         SECTION 8.11      COUNTERPARTS.

         This Agreement may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument. Delivery of an
executed counterpart of a signature page to this Indenture by telecopier shall
be as effective as delivery of manually executed counterpart of this Agreement.

         SECTION 8.12      ACKNOWLEDGMENT OF MULTIPLE ROLES.

         The parties expressly acknowledge and consent to Norwest Bank
Minnesota, National Association, acting in the possible dual capacity of Back-up
Servicer or successor Servicer and in the capacity as Indenture Trustee. Norwest
Bank Minnesota, National Association, may, in such dual capacity, discharge its
separate functions fully, without hindrance or regard to conflict of interest
principles, duty of loyalty principles or other breach of fiduciary duties to
the extent that any such conflict or breach arises from the performance by
Norwest Bank Minnesota, National Association, in any of such capacities, of
express duties set forth in this Agreement, all of which defenses, claims or
assertions are hereby expressly waived by the other parties hereto except in the
case of negligence (other than errors in judgment) and willful misconduct by
Norwest Bank Minnesota, National Association.

         SECTION 8.13      CONSENT TO JURISDICTION.

                  (a) The parties hereto hereby irrevocably submit to the
non-exclusive jurisdiction of the United States District Court for the Southern
District of New York and any court in the State of New York Located in the City
and County of New York, and any appellate court from any thereof, in any action,
suit or proceeding brought against or by it in connection with this Agreement or
for recognition or enforcement of any judgment relating thereto, and the parties
hereto hereby irrevocably and unconditionally agree that all claims in respect
of any such action or proceeding may be heard or determined in such New York
state court or, to the extent permitted by law, in such federal court. The
parties agree that a final nonappealable judgment in any such action, suit or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. To the extent
permitted by applicable law, the parties hereby waive and agree not to assert by
way of motion, as a defense or otherwise in any such suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of such courts,
that the suit, action or proceeding is brought in an inconvenient forum, that
the venue of the suit, action or proceeding is improper or that the related
documents or the subject matter thereof may not be litigated in or by such
courts.

                                       30
<PAGE>   35

         (b) To the extent permitted by applicable law, the parties shall not
seek and hereby waive the right to any review of the judgment of any such court
by any court of any other jurisdiction which may be called upon to grant an
enforcement of such judgment.

         (c) Service on any party hereto may be made by mailing or delivering
copies of the summons and complaint and other process which may be served in any
suit, action or proceeding to such party at its address listed in herein or in
the other Transaction Documents. Such address may be changed by the applicable
party or parties by written notice to each of the other parties hereto.

         (d) Nothing contained in this Agreement shall limit or affect any
party's right to serve process in any other manner permitted by law or to start
legal proceedings relating to its rights under other agreements or against any
other party or its properties in the courts of any jurisdiction.

                                       31
<PAGE>   36

         IN WITNESS WHEREOF, the Issuer, the Servicer, the Indenture Trustee and
the Back-up Servicer have caused this Agreement to be duly executed by their
respective officers thereunto duly authorized as of the date and year first
above written.

                                             MFI FINANCE CORP. I, as Issuer

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

                                             MICROFINANCIAL INCORPORATED, as
                                             Servicer

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

                                             NORWEST BANK MINNESOTA,
                                             NATIONAL ASSOCIATION, as Indenture
                                             Trustee and as Back-up Servicer

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

<PAGE>   37

                                    EXHIBIT A

                        Form of Monthly Servicer's Report

                                 [see attached]

<PAGE>   38

                                    EXHIBIT B

                  Form of Agreement Regarding Operating Account

                                 [see attached]

<PAGE>   39

                                    EXHIBIT C

                        Form of Blocked Account Agreement

                                 [see attached]

<PAGE>   40

                                    EXHIBIT D

                             Agreed Upon Procedures

    (Can be changed with mutual agreement of Controlling Party and Servicer)

         1. The Independent Accountant will determine the aggregate amount of
all collections received by the Servicer during three Due Periods selected by
Independent Accountant per year (each such Due Period referred to herein as a
"REVIEW PERIOD"). Such amounts will be compared against the amounts specified in
the Monthly Servicer Reports and to the aggregate amount of collections
indicated on the Servicer's or the Issuer's automated lease accounting systems
or a "tape" derived from the lease accounting system ("LEASE ACCOUNTING
SYSTEMS") noting any exceptions. Independent Accountant will review and
recalculate Monthly Servicer Report for accuracy.

         2. Independent Accountant will select to perform these procedures on a
total of 50 individual cash receipts posted to the Collection Account during the
Review Periods (each such cash receipt being a "SELECTED RECEIPT"). Using
information contained on a copy of the check and the remittance advice relating
to such Selected Receipts, the Independent Accountant will determine the amount
of contract payments included in each such Selected Receipt. Such amounts will
be compared against the amounts reflected on the Lease Accounting Systems noting
any exceptions.

         3. For each of the Selected Receipts, the Independent Accountant will
compare the amount of the contract payment posted to the Lease Accounting
Systems to the amount of the contract payment indicated in the relevant Contract
and the Contract Files maintained by the Issuer or the Servicer, noting any
exceptions. The Independent Accountant will verify that any related Servicing
Charges in respect of sample Contracts are also being posted to the Collection
Account.

         4. For any of the Selected Receipts which indicate a remittance of
sales tax, the Independent Accountant will determine whether such sales tax
remittances are included in a schedule prepared by the management of the Issuer
or the Servicer (the "MANAGEMENT SCHEDULE") detailing tax payments received by
tax jurisdiction, noting any exceptions. Independent Accountant will also
determine whether the sales tax remittance is included in the supporting
schedules included in the applicable sales tax return, noting any exceptions.
Independent Accountant will recalculate the summation amounts on three of the
ten largest sales tax returns and additionally determine that the dates on the
Issuer's or the Servicer's checks remitting payment to the respective states is
within the required filing period.

         5. Independent Accountant will recalculate the interest expense by
using (i) the outstanding principal balance of each Series of Notes at the
beginning of one Review Period, (ii) the amount shown as the interest due for
such Series with respect to the Payment Date relating to such Review Period. The
amount of interest expenses so recalculated will be compared against the
information provided in the Monthly Servicer Reports noting any exceptions.
Independent Accountant will compare the stated outstanding principal amounts of
each series of Notes as set forth in the related Monthly Servicer Report and
confirm with Indenture Trustee's records.

<PAGE>   41

         6. Independent Accountant will confirm the amount of early pay-offs
received during each Review Period using information contained in the relevant
Monthly Servicer Reports.

         7. Management Schedule will include a list of all early pay-off
Contracts during each of the Review Periods. Independent Accountant will select
a total of five Contracts listed as "early pay-offs" from the Management
Schedule. For each Contract so selected, Independent Accountant will compare the
amount deposited into the Collection Account in respect of such Contract with
the amount of early pay-off specified in the Management Schedule, noting any
exceptions.

         8. Using the dates reflected on the copy of the check (or top portion
of the check) and remittance advice, Independent Accountant will determine if
the respective Selected Receipt posting or effective date related to the
underlying contract transaction in the Lease Accounting Systems is the same
month as reflected on the copy of the check (or top portion of the check) and
the remittance advice noting any exceptions.

         9. Independent Accountant will compare the Implicit Principal Balance
of each Contract which has become a Defaulted Contract during each Review
Period, using information from the related Monthly Servicer Reports, the
Management Schedule and/or the Lease Accounting Systems, noting any exceptions.

         10. Using information contained in the bank reconciliation for the
Collection Account. Independent Accountant will recalculate the amounts listed
in the bank reconciliation and compare to Monthly Servicer Report, noting any
exceptions.

         11. The Independent Accountant will select one monthly bank
reconciliation for the ACH Account and the Operating Account. Using information
contained in the bank reconciliations, Independent Accountant will recalculate
the amounts listed in the bank reconciliations and compare to Monthly Servicer
Report, and will verify that required cash sweeps pursuant to the Servicing
Agreement are being done on a timely basis as required.

         12. Independent Accountant will verify whether the Servicer has
procedures in place to monitor and make or cause to be made UCC financing or
continuation statements, based on reasonable details provided by the Servicer.

         13. The Independent Accountant will determine the Aggregate Implicit
Principal Balance of the Contracts as of the close of business on the last day
of each Review Period and will compare such amount to the information indicated
in the Lease Accounting Systems, noting any exceptions.

         14. The Independent Accountant will determine whether the Lease
Accounting Systems correctly identifies the ownership interest of the Issuer in
the related receivables for the Selected Receipts.

         15. The Independent Accountant will verify or recalculate the numeric
information used in determining whether a Trigger Event or financial covenant
violation exists as set forth in the Servicer's records and the related Monthly
Servicer Report.

<PAGE>   42

         16. Independent Accountant will compare 50 Contracts by delinquency
category against the information in the Lease Accounting Systems for accuracy.

         17. The Independent Accountant will compare the number of Contracts
indicated in the related Monthly Servicer Report against the information
indicated in the Lease Accounting Systems.

         18. The Independent Accountant will compare the stated balances in the
Collection Account and the Cash Collateral Account on the related Monthly
Servicer Reports against the information indicated in the related to bank
statements and investment statements.

         19. The Independent Accountant will check the Monthly Servicer Reports
for adherence to the 10% substitution limit.<PAGE>   1
                                                                    EXHIBIT 10.9

                          REGISTRATION RIGHTS AGREEMENT

         This Registration Rights Agreement (the "Agreement"), is made and
entered into as of the 9th day of February, 2000, by and between LEXON
Technologies Inc., a Delaware corporation (the "Company"), and Anthony Perino,
an individual and resident of the State of Illinois (the "Stockholder").

                                   WITNESSETH:

         WHEREAS, in connection with the execution and delivery of that certain
Stock Purchase Agreement (the "Purchase Agreement"), dated February 7, 2000 by
and between the Company and the Stockholder, the Company has agreed to issue,
and as of the date hereof has issued, to the Stockholder (i) a Common Stock
Purchase Warrant A ("Warrant A") to acquire up to 2,600,000 shares of the
Company's common stock, .001 par value per share (the "Common Stock"), (ii) a
Common Stock Purchase Warrant B ("Warrant B") to acquire up to 1,000,000 shares
of the Common Stock, and (iii) a Common Stock Purchase Warrant C ("Warrant C")
to acquire up to 500,000 shares of the Common Stock (with Warrant A, Warrant B
and Warrant C being hereinafter collectively referred to as the "Warrants");

         WHEREAS, it is a condition precedent to the obligations of the
Stockholder under the Purchase Agreement that the Company execute and deliver
this Agreement.

         NOW, THEREFORE, in consideration of the foregoing, the mutual promises
and covenants hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

<PAGE>   2

                                    ARTICLE I

                               CERTAIN DEFINITIONS

         The following terms shall have the definitions set forth below:

         "Commission" shall mean the United States Securities and Exchange
Commission and any successor commission or agency having similar powers.

         "Control" (including the terms "controlling," "controlled by" and
"under common control with") shall mean the possession, direct or indirect, of
the power to direct or cause the direction of the management and policies of a
corporation or partnership (including, without limitation, the power to direct
the voting of any securities held by such corporation or partnership), whether
through the ownership of voting securities, by contract, or otherwise, unless
the context indicates otherwise.

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

         "Registerable Stock" shall mean those shares of the Company's Common
Stock received by the Stockholder upon exercise of any of the Warrants, provided
that such shares shall no longer be Registerable Stock once such shares are (i)
sold pursuant to a registration statement declared effective by the Commission
under the Securities Act, or (ii) sold pursuant to Rule 144 (or any successor
rule) promulgated under the Securities Act.

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

         "Stockholder" shall mean Anthony Perino. The term "Stockholder" shall
also include such Stockholder's successors and assigns, legal representatives
and executors or administrators when the context so requires.

                                        2

<PAGE>   3

                                   ARTICLE II

                          REGISTRATION OF COMMON STOCK

         Section 2.1 Required Registration. At any time after February 7, 2001,
the Holder may request that the Company register the resale by him of all or any
portion of the Registerable Stock (such request a "Demand Request"). The Demand
Request shall specify the number of Shares of Registerable Stock as to which
such Demand Request relates and the manner in which the Stockholder proposes to
sell such Registerable Stock, including, if applicable, the name of any
underwriters to be employed by the Stockholder in connection with such sale. If
such Demand Request is made, the Company will cause the resale of the
Registerable Stock specified in the Demand Request to be registered on such form
of registration statement under the Securities Act as is appropriate to allow
the resale of such Registerable Stock in the manner specified in the Demand
Request.

         Notwithstanding anything herein to the contrary, the Company shall not
be obligated to effect, or to take any action to effect, any registration
pursuant to this Section 2.1 after the Company has effected two (2)
registrations (meaning that the registration statements relating thereto have
been declared effective by the Commission) at the request of the Holder,
provided, however, that if the Holder requests that such registration be
accomplished through the filing and effectiveness of a registration statement on
Form S-3 (or such other form of registration statement then available for
registering the resale of the Registerable Stock under the Securities Act that
permits significant incorporation by reference of the Company's subsequent
periodic reports filed with the Commission pursuant to the Exchange Act), the
Company shall be obligated to effect the registration so requested unless (i)
the proposed offering of the Registerable Stock does not then qualify for
registration on

                                        3

<PAGE>   4

Form S-3, or (ii) the Company has already effected the two (2) registrations
(whether on Form S-3 or otherwise) at the request of the Holder during the
twelve (12) month period preceding the date of such request.

         The Company may delay the filing of any registration statement pursuant
to this Section 2.1 for up to three (3) months after the original request for
registration if (i) the filing of the registration statement would cause the
Company to disclose information which would not have to be disclosed at such
time absent the filing of the registration statement and the Board of Directors
of the Company determines in good faith that the disclosure of such information
would be materially adverse to the Company, or (ii) the delay in filing the
registration statement would eliminate the need for the Company to file the
registration statement utilizing interim financial statements.

         Section 2.2 Incidental Registration. If the Company at any time
proposes to register any of its Common Stock under the Securities Act for sale
to the public, whether for its own account or for the account of other security
holders or both (except with respect to registration statements on Forms S-4 or
S-8 or another form of registration statement not available for registering
Common Stock for sale to the public generally), it will give written notice of
such proposed registration to the Stockholder no later than thirty (30) days
prior to filing a registration statement. The Stockholder shall have ten(10)
days from receipt of such notice from the Company to deliver a written request
to the Company (such request , a "Piggy-back Request") that the resale by the
Stockholder of all or a portion of the Registerable Stock be registered pursuant
to the registration statement proposed to be filed by the Company. The
Piggy-back Request shall state the number of shares of Registerable Stock as to
which such Piggy-back Request relates and the manner in which the Stockholder
proposes to sell such Registerable Stock. If such Piggy-back Request is made,
the Company will

                                        4

<PAGE>   5

use its best efforts to cause the resale of the Registerable Stock specified in
the Piggy-back Request to be registered for resale in the manner specified in
the Piggy-back Request.

         In the event that any registration pursuant to this Section 2.2 shall
be, in whole or in part, an underwritten public offering (a) the number of
shares of Registerable Stock to be included in such an underwriting may be
reduced if and to the extent that the managing underwriter shall be of the
written opinion that such inclusion would adversely affect the marketing of the
securities to be sold by the Company in the proposed registration, and (b) in
addition to the foregoing, the Company's obligation to register the Registerable
Stock specified in the Piggy-back Request shall be contingent upon (i) the
Stockholder's agreement to include such Registerable Stock in the underwriting
on the same terms and conditions as the shares of Common Stock otherwise being
sold through underwriters under such registration, and (ii) upon the
Stockholder's execution of any agreements customarily requested by underwriters
in such offerings.

         Notwithstanding anything to the contrary contained herein, in the event
that there is a firm commitment underwritten public offering of Common Stock and
the Stockholder does not elect to sell its Registerable Stock to the
underwriters in connection with such offering, the Stockholder shall refrain
from selling any shares of Registerable Stock during the period of distribution
of the Company's securities by such underwriters and the period in which the
underwriting syndicate participates in the after market; provided, however, that
the Stockholder shall, in any event, be entitled to sell its Registerable Stock
commencing on the 90th day after the effective date of such registration
statement.

                                        5

<PAGE>   6

         Section 2.3 Registration Procedures. (a) If and whenever the Company is
required by the provisions of Sections 2.1 or 2.2 hereof to effect the
registration of any of the Registerable Stock under the Securities Act, the
Company will, as expeditiously as possible:

         (i)      prepare and file with the Commission a registration statement
                  with respect to the Registerable Stock and use its best
                  efforts to cause such registration statement to (A) become
                  effective, and (B) remain effective for so long as all of the
                  shares of Registerable Stock covered by such registration
                  statement remain Registerable Stock.

         (ii)     prepare and file with the Commission such amendments and
                  supplements to such registration statement and the prospectus
                  used in connection therewith as may be necessary to keep such
                  registration statement effective for the period specified in
                  paragraph (i) above and to comply with the provisions of the
                  Securities Act and the Exchange Act with respect to the
                  disposition of all Registerable Stock covered by such
                  registration statement for such period;

         (iii)    furnish to the Stockholder such number of copies of the
                  prospectus forming a part of such registration statement
                  (including each preliminary prospectus) as the Stockholder may
                  reasonably request in order to facilitate the public sale or
                  other disposition of the Registerable Stock covered by such
                  registration statement;

         (iv)     use its best efforts to register or qualify the Registerable
                  Stock covered by such registration statement under the
                  securities or blue sky laws of such states as any underwriter
                  or the Stockholder may reasonably request;

         (v)      notify the Stockholder and its counsel of any stop order
                  threatened or issued by the Commission or any state securities
                  regulatory authority, or a trading halt threatened

                                        6

<PAGE>   7

                  or issued by the exchange or over-the-counter market in which
                  the Common Stock is publicly traded, and take all actions
                  required to prevent the entry of such stop order or the
                  imposition of such trading halt or to remove such stop order
                  or trading halt if entered or imposed;

         (vi)     notify the Stockholder at any time when a prospectus relating
                  to the Registerable Stock is required to be delivered under
                  the Securities Act, of the happening of any event as a result
                  of which the prospectus, or any document incorporated by
                  reference in the registration statement of which such
                  prospectus forms a part, contains an untrue statement of
                  material fact or omits to state any fact necessary to make the
                  statements therein in the circumstances under which they were
                  made not materially misleading, and prepare a supplement or
                  amendment to such prospectus or any such document incorporated
                  by reference in such registration statement so that, as
                  thereafter delivered to the purchasers of such Registerable
                  Stock, such prospectus or document will not contain an untrue
                  statement of a material fact or omit to state any fact
                  necessary to make the statements therein in the circumstances
                  under which they were made not materially misleading; and

         (vii)    cause all such Registerable Stock to be listed on the exchange
                  or market in which the Common Stock is then listed.

         (b) In connection with each registration hereunder, the Stockholder
will furnish to the Company in writing such information with respect to itself
and the proposed distribution by it as shall be reasonably necessary in order to
assure compliance with Federal and applicable state securities laws.

                                        7

<PAGE>   8

         Section 2.4 Expenses. The Company shall pay all of the expenses in
connection with any registration hereunder, regardless of whether such
registration becomes effective, including in each case, without limitation, all
registration and filing fees, legal, accounting, disbursements, printing,
messenger and delivery expenses, and fees and expenses of any other person
retained by the Company. The Stockholder's attorney and other professional fees,
if any, and brokers' or other selling commissions with respect to the
Registerable Stock will be borne by the Stockholder.

         Section 2.5 Indemnification. (a) In the event of a registration of any
of the Registerable Stock under the Securities Act, the Company will indemnify
and hold harmless the Stockholder and any underwriter(s) retained by the
Stockholder with respect to the disposition of the Registerable Stock, and each
other person, if any, who controls the Stockholder or underwriter, against any
losses, claims, damages or liabilities, joint or several, to which the
Stockholder or underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which such Registerable Stock was registered
under the Securities Act, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing, and shall reimburse
the Stockholder, the underwriter(s) and each such controlling person for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the Company shall not be liable in any such case if and
to the extent that any such loss, claim,

                                        8

<PAGE>   9

damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in any document made in
reliance upon and in conformity with information furnished by the Stockholder or
such underwriter or such controlling person in writing specifically for use in
the preparation of such documents.

         (b) In the event of a registration of any of the Registerable Stock
under the Securities Act, the Stockholder will indemnify and hold harmless the
Company and each officer of the Company, each director of the Company and each
person who controls the Company against all losses, claims, damages or
liabilities to which the Company or any such officer, director or controlling
person may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or omissions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement under
which such Registerable Stock was registered under the Securities Act, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereof, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing, and shall reimburse the Company and each such
officer, director and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Stockholder shall be liable hereunder in any such case if and only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission in any document was made in reliance upon and in conformity with
information furnished to the Company by or on behalf of the Stockholder in
writing specifically for use in the preparation of such documents; and provided,

                                        9

<PAGE>   10

further, however, that the liability of the Stockholder hereunder shall be
limited to the proportion of any such loss, claim, damage, liability or expense
which is equal to the proportion that the public offering price of shares sold
by the Stockholder under such registration statement bears to the total public
offering price of all securities sold thereunder, but not to exceed the proceeds
actually received by the Stockholder from the sale of Registerable Stock covered
by such registration statement.

         (c) Promptly, but in no event more than five (5) business days, after
receipt by an indemnified party hereunder of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is to be
made against the indemnifying party hereunder, notify the indemnifying party in
writing thereof. The failure to so notify the indemnifying party shall not
relieve the indemnifying party from its obligations hereunder, except to the
extent that the indemnifying party is actually prejudiced thereby. In case any
such action shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in and, unless in such indemnified party's reasonable
judgment a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such claim, to assume and undertake the defense
thereof with counsel reasonably satisfactory to such indemnified party, and,
after notice from the indemnifying party to such indemnified party of its
election so to assume and undertake the defense thereof, except in the case of a
conflict of interest, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof, other than reasonable
costs of investigation. No indemnifying party shall be liable for any settlement
of any action or proceeding effected without its written consent. No
indemnifying

                                       10

<PAGE>   11

party shall, without the consent of the indemnified party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such claim or
proceeding.

         (d) If the indemnification provided for in subparagraphs (a) or (b) of
this Section 2.5 shall for any reason be held by a court to be unavailable to an
indemnified party under such subparagraphs in respect of any losses, claims,
damages or liabilities or actions in respect thereof referred to therein, then
each indemnifying party shall in lieu of indemnifying such indemnified party
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or actions in such proportion as
appropriate to reflect the relative fault of the Company, on the one hand, and
the Stockholder, on the other, in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or actions, as well
as any other relevant equitable considerations, or if the allocation provided by
the immediately preceding clause is not permitted by applicable law, in such
proportion as shall be appropriate to reflect the relative benefits received by
the Company and the Stockholder from the offering of the securities hereunder.
No person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who is not guilty of such fraudulent misrepre sentation. In addition, no
individual or entity shall be obligated to contribute hereunder any amounts in
payment for any settlement of any action or proceeding effected without such
individual's or entity's consent.

                                       11

<PAGE>   12

         (e) The indemnification and contribution required by this Section 2.5
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.

         Section 2.6 Assignment. The Registration Rights contained in this
Agreement shall be transferable by the Stockholder to any person or entity to
whom the Stockholder transfers any share of Registerable Stock in a transaction
which does not remove the shares so transferred from the definition of
Registerable Stock hereunder.

         Section 2.7 Underwriters. The Company shall have no obligation to
obtain an underwriter on behalf of the Stockholders but shall be obligated to
cooperate with any underwriter who has agreed to underwrite the public sale of
any Registerable Stock, including, but not limited to, furnishing such
underwriter with such information as it may reasonably request and the execution
of any agreements customarily requested by underwriters in such offerings.

                                   ARTICLE III
                                  MISCELLANEOUS

         Section 3.1 Survival of Agreement; Term. This Agreement shall not be
terminated or amended, nor any provision hereof waived, unless the Stockholder
and the Company agree in writing to such termination, amendment or waiver.

         Section 3.2 Notices. All notices to be given by any party hereunder
shall be in writing and shall be deemed to have been duly given if mailed, by
certified or registered mail, return receipt requested, five (5) business days
after deposit in the United States Mail, or if telexed or telecopied,

                                       12

<PAGE>   13

sent by telegram, or delivered, when confirmation is received, to the relevant
party at its address set forth below:

         If to the Company:

                                    Lexon Technologies Inc.
                                    1401 Brook Drive
                                    Downers Grove, Illinois 60515
                                    Attn: Chief Executive Officer

         If to the Stockholder:

                                    Anthony Perino
                                    720 Plainfield Road
                                    Suite 200
                                    Willowbrook, Illinois 60521

         The parties may change their respective addresses for purposes of
notice hereunder by giving notice of such change to all other parties in the
manner provided in this Section.

         Section 3.3 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the permitted successors and assigns of the parties
hereto.

         Section 3.4 Complete Agreement. This Agreement represents the entire
agreement among the Stockholder and the Company with respect to the matters set
forth herein.

         Section 3.5 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which taken
together are deemed to be one agreement.

         Section 3.6 Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be a part of this Agreement.

         Section 3.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to its conflicts of law doctrine.

                                       13

<PAGE>   14

         IN WITNESS WHEREOF, the parties hereto have executed, or caused their
duly authorized representatives to execute, this Agreement as of the day and
year first above written.

                                 THE COMPANY

                                 LEXON TECHNOLOGIES INC.

                                 By:  /s/   Steven J. Peskaitis
                                    ------------------------------------------
                                 Its: /s/   President
                                    ------------------------------------------

                                 THE STOCKHOLDER

                                      /s/ Anthony Perino
                                 ---------------------------------------------
                                 ANTHONY PERINO

                                       14

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