Document:

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                                                                   EXHIBIT 10.48
                                                                  EXECUTION COPY

                                CUSTODY AGREEMENT

                                      among

 HPSC Equipment Receivables 2000-1 LLC I and HPSC Equipment Receivables 2000-1
                               LLC II, as Issuers

                                       and

                           BNY Midwest Trust Company,

                              as Indenture Trustee

                                       and

                     Iron Mountain Records Management, Inc.,

                                  as Custodian

                                       and

                                   HPSC, Inc.

                                   as Servicer

                          dated as of December 1, 2000
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                                CUSTODY AGREEMENT

         THIS CUSTODY AGREEMENT, dated as of the date set forth on the cover
page hereof, is made and entered into among HPSC Equipment Receivables 2000-1
LLC I and HPSC Equipment Receivables 2000-1 LLC II (each an "Issuer" and
collectively, "Issuers"), BNY Midwest Trust Company, as Indenture Trustee
("Indenture Trustee") under an Indenture (the "Indenture"), dated as of December
1, 2000, among the Issuers, the Servicer, the Indenture Trustee and the
Originators (as defined therein), Iron Mountain Records Management, Inc.
("Custodian"), and HPSC, Inc. ("HPSC" or "Servicer").

                                   DEFINITIONS

         Unless otherwise indicated, capitalized terms, when used in this
Agreement, shall have the meanings set forth in the Annex to the Indenture.

                                    AGREEMENT

                                    RECITALS

WHEREAS, pursuant to the terms of the Transaction Documents, the Issuers are
issuing eight classes of Notes which are secured by Pledged Property;

WHEREAS, the Indenture Trustee holds a security interest in the Pledged Property
for the benefit of the Noteholders;

WHEREAS, the Indenture Trustee wishes to designate the Custodian as its agent
and bailee for purposes of maintaining possession of Contract Files containing
Pledged Property;

WHEREAS, the Custodian is willing to act as custodian and bailee;

NOW, THEREFORE, in consideration of the above Recitals and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto agree as follows:

                                   ARTICLE I.

                              DELIVERY OF DOCUMENTS

         Section 1.1. Documents to be delivered by Issuers to Custodian.

         (a) The Issuers have delivered to Custodian the Contract Files
identified in the schedule of numbered Contract Files attached hereto as
Schedule A ("Initial Contract File Schedule"). The Custodian shall hold, as
custodian and bailee on behalf of Indenture Trustee, the Contract Files
identified in the Initial Contract File Schedule.
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         (b) From time to time after the date hereof, Issuers may deliver to
Custodian additional Contract Files. Additional Contract Files shall be listed
on subsequent schedules of numbered Contract Files (each a "Subsequent Contract
File Schedule") that shall also be delivered to Custodian and Indenture Trustee.

         (c) The Issuers shall designate on the Initial Contract File Schedule
and each Subsequent Contract File Schedule the name of the Issuer which owns the
Contract File.

                                   ARTICLE II.

                              CAPACITY OF CUSTODIAN

         Section 2.1. Custodian as Custodian and Bailee of Indenture Trustee.
Indenture Trustee hereby appoints Custodian, in its independent corporate
capacity, as the custodian and bailee of Indenture Trustee for the benefit of
the Noteholders and their successors and assigns, and Custodian hereby accepts
and agrees to act as custodian and bailee for Indenture Trustee and any
successor to or assignee of Indenture Trustee on behalf of the Purchaser in
accordance with the terms and conditions of this Agreement. With respect to each
Contract File delivered to Custodian, Custodian is solely and exclusively the
custodian and bailee for Indenture Trustee for all purposes (including, but not
limited to, holding the Contract Files for the Indenture Trustee for purposes of
perfection of the Indenture Trustee's security interest therein. Custodian shall
hold in its possession at 1 Old Forge Hill Road, Franklin, MA 02138 or at any
other facility specified in writing to Indenture Trustee, located in the
Commonwealth of Massachusetts from which it provides custodial services, all
Contract Files received by Custodian from Issuers from time to time for the sole
and exclusive use and benefit of Indenture Trustee and, except as otherwise
provided herein, shall make disposition thereof only in accordance with the
written instructions of Indenture Trustee. Custodian shall segregate and
maintain continuous custody of all documents constituting Contract Files
received by it in secure facilities, equipped with fire detection and fire
suppression features, all in accordance with customary standards for such
custody.

                                  ARTICLE III.

                           CERTIFICATION BY CUSTODIAN

         Section 3.1. Contract File Certification. Custodian certifies that it
has received the numbered Contract Files shown on the Initial Contract File
Schedule and will hereafter from time to time, and in any case, with respect to
each Subsequent Contract and each Substitute Contract, prior to the related
Subsequent Transfer Date and Substitute Transfer Date, as applicable, provide
similar certification upon receiving additional Contract Files pursuant to
Subsequent Contract File Schedules.

         Section 3.2. No Further Obligations. Custodian shall have no obligation
to verify or review the contents of any Contract File.

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                                   ARTICLE IV.

                         REPRESENTATIONS AND WARRANTIES:

                             LIMITATION OF LIABILITY

         Section 4.1. Representations and Warranties of Custodian. Custodian
represents and warrants to Indenture Trustee and Issuers that:

         (a) Custodian (i) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and (ii) has
full corporate power and authority to conduct its business and affairs as a
Custodian; and

         (b) Custodian does not control, is not controlled by nor is under
common control with Issuers or any Transferors; and

         (c) This Agreement, when executed and delivered by Custodian, will
constitute the valid, legal and binding obligation of Custodian, enforceable
against Custodian in accordance with its terms, except as the enforcement
thereof may be limited by applicable receivership or similar debtor relief laws
and that certain equitable remedies may not be available regardless of whether
enforcement is sought in equity or at law.

         Section 4.2. Limitation of Liability; No Assignment. The duties and
obligations of Custodian shall be determined solely by the express provisions of
this Agreement. Custodian shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Agreement or as set
forth in a written amendment to this Agreement executed by the parties hereto or
their successors or assigns. Custodian shall not assign, transfer, pledge or
grant a security interest in any of its rights, benefits or privileges
hereunder, nor shall Custodian delegate or appoint any other person or entity to
perform or carry out any of its duties, responsibilities or obligations under
this Agreement. Any act or instrument purporting to effect any such assignment,
transfer, pledge, grant, delegation or appointment shall be void. No
representations, warranties, covenants (other than those expressly made by
Custodian in this Agreement) or obligations of Custodian shall be implied with
respect to this Agreement or Custodian's services hereunder. Without limiting
the generality of the foregoing, Custodian:

         (a) shall have no duties or obligations other than those specifically
set forth herein or as may subsequently be agreed in writing by the parties
hereto and shall use the same degree of care and skill as is reasonably expected
of financial institutions acting in comparable capacities in performance of its
duties hereunder;

         (b) will be regarded as making no representations and having no
responsibilities (except as expressly set forth herein) as to the validity,
sufficiency, value, genuineness, ownership or transferability of any contents
within the Contract Files, and will not be required to and will not make any
representations as to the validity, value or genuineness of such contents;

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         (c) shall not be obligated to take any legal action hereunder that
might in its judgment involve any expense or liability unless it has been
furnished with reasonable indemnity by the Issuers or the Servicer;

         (d) may rely on and shall be protected in acting in good faith upon the
written instructions of Indenture Trustee and such employees and representatives
of Indenture Trustee, as Indenture Trustee may hereinafter designate in writing;

         (e) the Custodian may, in its reasonable judgment, consult with
Custodian's in-house counsel or any other counsel with regard to legal questions
arising out of or in connection with this Agreement, and the advice or opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken, omitted or suffered by the Custodian in reasonable
reliance, in good faith, and in accordance therewith.

         (f) shall not be liable for any error of judgment, or for any act done
or step taken or omitted by it, in good faith, or for any mistake of fact or law
or for anything that it may do or refrain from doing in connection therewith,
except in the case of negligent performance or omission, intentional failure to
perform or intentional omission; and

         (g) shall not be liable for the loss or destruction of, or damage to,
Contracts in its custody unless such loss, damage or destruction is caused by
the negligence of Custodian or its employees or agents; in the event of loss,
damage or destruction due to such negligence, Custodian's liability shall be
limited to $1.00 per Contract.

         (h) may execute any of the rights or powers hereunder or perform any
duties hereunder either directly or through agents or attorneys, provided,
however, that the execution of such trusts or powers by any such agents or
attorneys shall not diminish, or relieve Custodian for, responsibility therefor
to the same degree as if Custodian itself had executed such trusts or powers.

                                   ARTICLE V.

                                  MISCELLANEOUS

         Section 5.1. Release of Documents. In the event that any specific
Contract File is required by the Servicer, either (a) because such Contract File
contains a Contract that has been paid in full, is a Purchased Contract or is a
Contract in respect to which a Substitute Contract has been submitted in its
place and is to be released by the Servicer, to the maker of the Contract, or
(b) to permit the Servicer to foreclose upon the collateral securing the
Contract and to continue default proceedings, or (c) for any other purpose(s)
consistent with the terms hereof, the Servicer shall send to Custodian a Request
for Release in the form of Exhibit 1 ("Request for Release"), appropriately
completed and executed by the Servicer. Custodian shall, on the same day as
received, send by facsimile or overnight courier a copy of such Request for
Release to Indenture Trustee. If such Request for Release is for either of the
purposes set forth in clauses (a) or (b) above, Custodian may release the
Contract File so requested to the Servicer, on the fourth Business Day following
receipt by Custodian of such Request for Release unless Custodian is

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notified by Indenture Trustee of Indenture Trustee's objection to such release
prior to such release by Custodian. If such Request for Release is for a purpose
referred to in clause (c) above, in the event that Indenture Trustee consents in
writing to the release of such Contract File, Indenture Trustee will return a
copy of the applicable Request for Release to Custodian with such consent
indicated thereon. Any such written consent of the Indenture Trustee, if
required hereunder, shall be obtained from Indenture Trustee within twenty (20)
Business Days of receipt of such Request for Release by the Indenture Trustee.
Notwithstanding anything to the contrary herein, Custodian shall in no event
release to the Servicer any Contract Files without the written authorization of
Indenture Trustee if the applicable Request for Release sets forth, as the basis
for such release, any purpose other than one of the purposes set forth in
clauses (a) or (b) above. The Servicer shall promptly return to the Custodian
each requested Contract File when the Servicer's need therefor in connection
with such foreclosure, purchase, substitution or servicing no longer exists,
unless the Contract has been paid in full, is a Purchased Contract or is a
Contract with respect to which a Substitute Contract has been submitted in its
place, in which case, the Servicer may retain such Contract File. Any trust
receipt executed by the Servicer for Contract Files released to Servicer
hereunder shall reflect that the Servicer holds such documents as custodian for
Custodian pursuant to this Agreement.

         Notwithstanding anything to the contrary set forth herein, in no event
shall the Custodian release to the Servicer any Contract File in the event that
Contract Files relating to 10% or more of the Contracts have been previously
released to the Servicer and are still held by Servicer under outstanding
Requests for Release unless the Indenture Trustee has obtained the prior written
consent of the Majority Holders. This limitation shall not apply to the release
of Contract Files pursuant to Clause (a) of this Section 5.1. The Servicer may
hold and hereby acknowledges that it shall hold any Contract Files and all other
Pledged Property that it may from time to time receive hereunder as custodian
for the Custodian. To the extent the Servicer as agent of the Custodian,
Indenture Trustee and the Issuers, holds any Contract File or other Pledged
Property, the Servicer shall do so in accordance with the Servicing Standard as
such standard applies to servicers acting as custodial agents. The Servicer
shall promptly report to the Custodian the loss by it of all or part of any
Contract File previously provided to it by the Custodian and shall promptly take
appropriate action to remedy any such loss. In such custodial capacity, the
Servicer shall have and perform the following powers and duties.

                   5.1.1 hold the Contracts and Contract Files that it may from
time to time receive hereunder from the Custodian for the benefit of the Issuers
and the Noteholders, maintain accurate records pertaining to each Contract to
enable it to comply with the terms and conditions of the Indenture and this
Agreement, and maintain a current inventory thereof;

                   5.1.2 implement policies and procedures in accordance with
the Servicer's normal business practices with respect to the handling and
custody of such Contract Files and consistent with the Servicing Standard so
that the integrity and physical possession of such Contract Files will be
maintained; and

                   5.1.3 take all other actions, in accordance with the
Servicing Standard, in connection with maintaining custody of such Contract
Files on behalf of the Custodian.

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                   5.1.4 Acting as custodian of such Contract Files pursuant to
this Section 5.1.4, the Servicer agrees that it does not and will not have or
assert any beneficial ownership interest in the Contracts or the Contract Files.

                   5.1.5 The Servicer agrees to maintain any Contract Files that
it may from time to time receive from the Custodian at its office located in
Boston, Massachusetts or West Hartford, Connecticut, or at such other offices of
the Servicer as shall from time to time be identified by prior written notice to
the Indenture Trustee, the Custodian and the Noteholders.

         Section 5.2. Custodian's Fees and Expenses. It is understood that
Custodian will charge such fees for its services, the payment of which, together
with Custodian's expenses in connection herewith, shall be solely the obligation
of Issuers. The fees shall include the following:

         (i) reasonable compensation for its services, initially as set forth in
a letter agreement between Custodian and Issuers, it being understood that such
compensation shall be .001% of the initial Aggregate Outstanding Contract
Balance (the "Custodian Fee");

         (ii) reimbursement for its reasonable expenses; and

         (iii) indemnification for loss, liability or expense incurred without
gross negligence or bad faith on its part, arising out of performance of its
duties thereunder ((ii) and (iii) collectively, the "Custodian Expenses").

                   Section 5.2.1 Custodian shall have the right to terminate its
obligations under this Agreement in the event that Issuers fail to pay the
Custodian Fee and Custodian Expenses within 30 days of receiving notice that
such Custodian Fee and Custodian Expenses are overdue and provided further that
Custodian shall provide notice of its intention to terminate to the Indenture
Trustee, which shall have 30 days to pay amounts due to Custodian hereunder in
which case this Agreement shall continue in effect.

         Section 5.3. Discharge of Custodian. Upon thirty (30) days' written
notice, Indenture Trustee, at the written direction of an Issuer, may remove and
discharge Custodian, or any successor Custodian thereafter appointed, from the
performance of its duties under this Agreement by written notice from Indenture
Trustee to Custodian or the successor Custodian, with a copy of such notice to
Issuers. Having given notice of such removal, Indenture Trustee shall promptly
appoint by written instrument a successor Custodian. One original counterpart of
such instrument shall be delivered to Indenture Trustee, one copy shall be
delivered to each Issuer, and one copy shall be delivered to the successor
Custodian. In the event of any such removal, Custodian shall promptly transfer
to the successor Custodian, as directed by Indenture Trustee, all of the
Contract Files being administered under this Agreement.

         Section 5.4. Termination of Custodian's Obligations. Custodian may
terminate its obligations under this Agreement upon at least sixty (60) days'
written notice to Issuers and

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Indenture Trustee. In the event of such termination, Issuers shall appoint a
successor Custodian, subject to approval by Indenture Trustee. If Issuers are
unable to appoint a successor Custodian within a reasonable period of time,
Indenture Trustee, acting at the written direction of the Majority Noteholders,
shall appoint a successor Custodian or Indenture Trustee shall direct Custodian
to deliver the Contract Files to Indenture Trustee itself. The payment of such
successor Custodian's fees and expenses shall be the sole responsibility of
Issuers. Upon such appointment, Custodian shall promptly transfer to the
successor Custodian, as directed, all the Contract Files being administered
under this Agreement. Custodian's obligations hereunder shall not in any event
be terminated until all the Contract Files have been delivered to the successor
Custodian or to Indenture Trustee.

         Section 5.5. Access to Documents. Upon reasonable prior written notice
to Custodian, Indenture Trustee and/or Issuers and their agents, accountants,
attorneys and auditors will be permitted during normal business hours to examine
the Contract Files.

         Section 5.6. Insurance. Custodian shall, at its own expense, maintain
at all times during the existence of this Agreement and keep in full force and
effect (a) crime insurance, including coverage for the theft of documents and
forgery, and (b) professional liability insurance covering the risk of errors
and omissions. The crime insurance shall be in an amount not less than
$2,000,000, and the professional liability insurance shall be in an amount not
less than $5,000,000 with standard coverage and subject to deductibles, as are
customary for insurance typically maintained by custodians in similar
transactions. A certificate of the respective insurer as to each such policy
shall be furnished to Indenture Trustee, containing the insured's statement or
endorsement that such insurance shall not terminate prior to receipt by
Indenture Trustee, by registered mail, of ten (10) days' notice thereof.

         Section 5.7. Contract File Schedules. Upon the request of Indenture
Trustee at any time, Custodian shall provide to Indenture Trustee the Initial
Contract File Schedule and each Subsequent Contract File Schedule.

         Section 5.8. Copies of Contract Files. Upon the request of Indenture
Trustee for a particular numbered Contract File and at the cost and expense of
Indenture Trustee, Custodian shall provide Indenture Trustee with a copy of the
contents of the requested Contract File.

         Section 5.9. Adverse Interests. By execution of this Agreement,
Custodian represents, warrants and covenants that it does not currently hold,
and during the existence of this Agreement shall not hold, any adverse interest,
by way of security or otherwise, in any Contract File, and hereby waives and
releases any such interest that it may have in any Contract File as of the date
hereof. Notwithstanding any other provisions of this Agreement and without
limiting the generality of the foregoing, Custodian shall not at any time
exercise or seek to enforce any claim, right or remedy, including any statutory
or common law rights of setoff, if any, that Custodian may otherwise have
against all or any part of the Contract File or proceeds thereof.

         Section 5.10. Authorized Representatives. Each authorized
representative (an "Authorized Representative") of Indenture Trustee is
authorized to give and receive notices, requests and instructions and to deliver
certificates and documents in connection with this

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Agreement on behalf of Indenture Trustee, and the specimen signature for each
such Authorized Representative of Indenture Trustee initially authorized
hereunder is set forth on Exhibit 2 hereof. From time to time, Indenture Trustee
shall deliver to Custodian a revised Exhibit 2, reflecting changes in the
information previously given, but Custodian shall be entitled to rely
conclusively on the last Exhibit 2 until receipt of a superseding Exhibit 2. To
the extent expressly permitted in this Agreement, each Authorized Representative
of Issuers is authorized to give and receive notices, requests and instructions
and to deliver certificates and documents in connection with this Agreement on
behalf of Issuers and the specimen signature for each such Authorized
Representative of Issuers initially authorized hereunder is set forth on Exhibit
3 hereof. From time to time, Issuers shall deliver to Custodian a revised
Exhibit 3, reflecting changes in the information previously given, but Custodian
shall be entitled to rely conclusively on the last Exhibit 3 until receipt of a
superseding Exhibit 3.

         Section 5.11. Indemnification. Custodian hereby agrees to indemnify and
hold Issuers and Indenture Trustee, the Noteholders, their shareholders,
directors, officers, employees, agents, successors and assigns, harmless from
and against and reimburse them for any and all losses, claims, demands,
obligations, damages, injuries (to persons, property or natural resources),
penalties, stamp or other similar taxes, suits, causes of action, or other legal
proceedings, judgments, costs, liabilities and/or expenses, including all
reasonable attorney's and agent's fees and expenses, incurred by Issuers or
Indenture Trustee of whatever kind or nature regardless of their merit,
demanded, asserted or claimed against the Indenture Trustee and resulting from
Custodian's negligence, willful misconduct or failure to perform its obligations
hereunder, or a breach of any representation or warranty by Custodian contained
in this Agreement. Issuers hereby agree to indemnify and hold Custodian, its
directors, officers, employees, agents, successors and assigns, harmless from
and against any and all losses, claims, demands, damages, causes of action, or
other legal proceedings, judgments, costs, liabilities and/or expenses,
including reasonable attorney's fees incurred by Custodian and resulting from
Issuers' negligence, willful misconduct or failure to perform its obligations
hereunder or other breach by Issuers of this Agreement. The foregoing
indemnifications set forth in this Section 5.11 shall survive any termination of
this Agreement or the earlier resignation or removal of the Custodian. For
purposes of this Agreement and without limitation as to what constitutes
negligence, the Custodian's inability to produce a Contract File within five (5)
Business Days after required or requested by Indenture Trustee hereunder shall
constitute negligence; provided, that (i) such Contract File is not outstanding
pursuant to a Request for Release or otherwise as permitted in this Agreement
and provided that Custodian's inability to produce such Contract File is not due
to events beyond the reasonable control of Custodian (e.g., natural disaster,
transmission failure, war or insurrection).

         Section 5.12. Execution in Counterparts. For the purpose of
facilitating the execution of this Agreement and for other purposes, this
Agreement may be executed simultaneously in any number of counterparts, each of
which shall be deemed to be an original, and together shall constitute and be
one and the same instrument.

         Section 5.13. Assignment by Indenture Trustee. Indenture Trustee shall
have the right, without the consent of Custodian or Issuers, to assign to any
successor trustee, in whole or

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in part, its interests under this Agreement in all of the Contract Files, and
designate any agent or representative to exercise any rights of Indenture
Trustee, hereunder, and the assignee or designee shall succeed to the rights and
obligations hereunder of Indenture Trustee with respect to such Contract Files.
All references to Indenture Trustee shall be deemed to include its assignee or
designee.

         Section 5.14. Termination of this Agreement. This Agreement shall
terminate upon the earlier of the repayment in full of all amount owing to
holders of Notes and the payment of all other amounts required under the
Indenture and under the other Transaction Documents.

         Section 5.15. Waivers. Neither the failure nor any delay on the part of
any party hereto to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or any other right, remedy, power or privilege, nor shall
any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party or parties purportedly granting such
waiver.

         Section 5.16. Effect of Invalidity of Provisions. The provisions of
this Agreement are independent of and severable from each other, and no
provision shall be affected or rendered invalid or unenforceable by virtue of
the fact that for any reason any other provision or provisions may be invalid or
unenforceable in whole or in part.

         Section 5.17. Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties with respect to the matters and
transactions contemplated by this Agreement and supersedes any prior agreement
and understandings with respect to those matters and transactions.

         Section 5.18. Binding Effect: Governing Law. This Agreement shall be
binding and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that neither Issuers nor Custodian
may assign this Agreement or any of its rights or obligations hereunder without
the prior written consent of Indenture Trustee. This Agreement shall be
construed in accordance with, and governed by the laws of the Commonwealth of
Massachusetts, without giving effect to the conflict of law principles thereof

         Section 5.19. Notices. All notices, requests or demands required or
permitted to be given hereunder shall be in writing, and shall be deemed
effective (a) upon hand delivery, if hand delivered; (b) one (1) business day
after such are deposited for delivery via Federal Express or other nationally
recognized overnight courier service; or (c) three (3) business days after such
are deposited in the United States mails, certified or registered mail all with
delivery charges and/or postage prepaid, and addressed as shown below, or to
such other address as either party may, from time to time, designate in writing.
Written notice may be given by facsimile to the facsimile number shown below, or
to such other facsimile number as either party may designate, from time to time,
in writing, provided that such notice shall not be deemed effective unless it is
confirmed within 24 hours by hand delivery, courier delivery or mailing of a
copy of such notice

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in accordance with the requirements set forth above. Notwithstanding the
foregoing, notices and requests in the normal course of business under this
Agreement shall be addressed as the parties shall notify each other from time to
time.

               If to Issuers:
               -------------

               HPSC Equipment Receivables 2000-1 LLC I
               60 State St., Suite 3520
               Boston, MA 02109-1803
               Telephone:  (800) 225-2488 ext. 4003
               Fax:  (617) 723-4786
               Attention:  Stephen Ballou

               HPSC Equipment Receivables 2000-1 LLC II
               60 State St., Suite 3520
               Boston, MA 02109-1803
               Telephone:  (800) 225-2488 ext. 4004
               Fax:  (617) 723-4786
               Attention: Stephen Ballou

               If to Indenture Trustee:

               BNY Midwest Trust Company
               2 North LaSalle St., Suite 1020
               Chicago, IL  60602
               Telephone:  (312) 827-8569
               Fax:  (312) 827-8562
               Attention:  Structured Finance Services

               If to Custodian:
               ---------------

               Iron Mountain Records Management, Inc.
               745 Atlantic Avenue
               Boston, MA 02111
               Telephone:  (617) 535-4766
               Fax:  (617) 350-7881
               Attention:  Garry B. Watzke, Vice President and General Counsel

               If to Servicer:
               --------------

               HPSC, Inc.
               60 State St., Suite 3520
               Boston, MA  02109-1803
               Telephone:  (617) 720-7251
               Fax: (617) 723-4786

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         Attention: Rene Lefebvre

         Section 5.20. Exhibits. The exhibits to this Agreement are hereby
incorporated and made a part hereof and are an integral part of this Agreement.

         Section 5.21. SUBMISSION TO JURISDICTION: WAIVER OF TRIAL BY JURY. WITH
RESPECT TO ANY CLAIM ARISING OUT OF THIS AGREEMENT (A) EACH PARTY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS AND THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
MASSACHUSETTS AND (B) EACH PARTY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY
HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING HERETO BROUGHT IN ANY SUCH COURT, IRREVOCABLY WAIVES
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS
BEEN BROUGHT IN ANY INCONVENIENT FORUM AND FURTHER IRREVOCABLY WAIVES THE RIGHT
TO OBJECT, WITH RESPECT TO SUCH CLAIM, SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY. TO THE
EXTENT PERMITTED BY APPLICABLE LAW, INDENTURE TRUSTEE, PURCHASER, ISSUERS AND
CUSTODIAN EACH IRREVOCABLY WAIVE ALL RIGHT OF TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT
OR ANY MATTER ARISING HEREUNDER.

         Section 5.22. Representation by Counsel. Custodian and Issuers hereby
acknowledge to Indenture Trustee that Custodian and Issuers have been (or have
been finished sufficient opportunity to have been) represented by counsel during
the course of the negotiation of this Custody Agreement and the other
Transaction Documents.

         Section 5.23. Construction. For purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise required:

         (d) the terms defined in this Agreement have the meanings assigned to
them in this Agreement and include the plural as well as the singular, and the
use of any gender herein shall be deemed to include the other gender;

         (e) accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles;

         (f) references herein to "Articles", "Sections", "Subsections",
"Paragraphs", and other subdivisions without reference to a document are to
designated Articles, Sections, Subsections, Paragraphs and other subsections of
this Agreement;

         (g) a reference to a Subsection without further reference to a Section
is a reference to such Subsection as contained in the same Section in which the
reference appears, and this rule shall also apply to Paragraphs and other
subdivisions;

                                       11
<PAGE>   13
         (h) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Agreements as a whole and not to any particular
provision; and

         (i) the term "include" or "including" shall mean without limitation by
reason of enumeration.

         Section 5.24. Rights of the Indenture Trustee. .The Indenture Trustee
shall be afforded the same rights, protections, immunities and indemnities set
forth in the Indenture as if specifically set forth herein.

                                       12
<PAGE>   14
         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                          HPSC Equipment Receivables 2000-1 LLC I

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

                          HPSC Equipment Receivables 2000-1 LLC II

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

                          Iron Mountain Records Management, Inc.

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

                          BNY Midwest Trust Company, not in its
                          individual capacity, but solely as Indenture Trustee

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

                               As to Section 5.1 Acknowledged and
                               Agreed to as of the date first written
                               above:

                               HPSC, Inc., as Servicer

                          By:
                             -------------------------------------------------
                               Name:
                                     -----------------------------------------
                               Title:
                                     -----------------------------------------
<PAGE>   15
                                    EXHIBIT 1

                        REQUEST FOR RELEASE OF DOCUMENTS

To:      Iron Mountain Records Management, Inc.

         Re:      Custody Agreement, dated as of December 1, 2000, among HPSC
                  Equipment Receivables 2000-1 LLC I and HPSC Equipment
                  Receivables 2000-1 LLC II ("Issuers"), BNY Midwest Trust
                  Company ("Indenture Trustee"), Iron Mountain Records
                  Management, Inc. ("Custodian"), and HPSC, Inc. ("Servicer").

                  In connection with the administration of the Contract Files
held by you as Custodian for Indenture Trustee pursuant to the above-captioned
Custody Agreement, we request the release of the Contract File described below,
for the reason indicated.

Contract File Number:

Reason for Requesting File: The undersigned hereby represents and warrants to
Custodian and to Indenture Trustee that the Servicer is hereby requesting the
release of the above-described Contract File for the following reason (check
one):

_____ 1. Contract within Contract File Paid in Full or is a Purchased Contract
or is a Contract in respect to which a Substitute Contract has been submitted in
its place.

_____    2.       Contract within Contract File in Default Proceedings

_____    3.       Other (explain) __________________

         In connection with the release as requested hereby, the undersigned
hereby certify to the Custodian and to the Purchaser that no Event of Default
exists, or would exist after giving effect to the release requested hereby,
under that certain Indenture of even date herewith (as amended, supplemented or
otherwise modified) among the Issuers, the Servicer, the Originators and the
Indenture Trustee.
<PAGE>   16
                                            HPSC, Inc., as Servicer

                                            By:__________________________
                                                  Name:
                                                  Title:
                                                  Date:

Release of documents consented to [Indenture Trustee's consent not required with
respect to releases based upon reasons 1 or 2 above]:

Iron Mountain Records Management, Inc.

By:_________________________________
      Name:
      Title:
      Date:

Consent of Indenture Trustee required with respect to 3:

BNY Midwest Trust Company, as Indenture Trustee

By:_______________________________________
      Name:
      Title:
      Date:
<PAGE>   17
                                    EXHIBIT 2

                    AUTHORIZED OFFICERS OF INDENTURE TRUSTEE

Name                                           Specimen Signature

____________________________________      _____________________________________

____________________________________      _____________________________________

____________________________________      _____________________________________
<PAGE>   18
                                    EXHIBIT 3

                         AUTHORIZED OFFICERS OF ISSUERS

Name                                             Specimen Signature

____________________________________      _____________________________________

____________________________________      _____________________________________
<PAGE>   19
                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
ARTICLE I. - DELIVERY OF DOCUMENTS..........................................  1

   Section 1.1.  Documents to be delivered by Issuers to Custodian..........  1

ARTICLE II. - CAPACITY OF CUSTODIAN.........................................  2

   Section 2.1.  Custodian as Custodian and Bailee of Indenture Trustee.....  2

ARTICLE III. - CERTIFICATION BY CUSTODIAN...................................  2

   Section 3.1.  Contract File Certification................................  2
   Section 3.2.  No Further Obligations.....................................  2

ARTICLE IV. - REPRESENTATIONS AND WARRANTIES LIMITATION OF LIABILITY........  3

   Section 4.1.  Representations and Warranties of Custodian................  3
   Section 4.2.  Limitation of Liability; No Assignment.....................  3

ARTICLE V. - MISCELLANEOUS..................................................  4

   Section 5.1.  Release of Documents.......................................  4
   Section 5.2.  Custodian's Fees and Expenses..............................  6
   Section 5.3.  Discharge of Custodian.....................................  6
   Section 5.4.  Termination of Custodian's Obligations.....................  7
   Section 5.5.  Access to Documents........................................  7
   Section 5.6.  Insurance .................................................  7
   Section 5.7.  Contract File Schedules....................................  7
   Section 5.8.  Copies of Contract Files...................................  7
   Section 5.9.  Adverse Interests..........................................  7
   Section 5.10. Authorized Representatives.................................  8
   Section 5.11. Indemnification............................................  8
   Section 5.12. Execution in Counterparts..................................  9
   Section 5.13. Assignment by Indenture Trustee............................  9
   Section 5.14. Termination of this Agreement..............................  9
   Section 5.15. Waivers ...................................................  9
</TABLE>

                                       i
<PAGE>   20
<TABLE>
<S>                                                                         <C>
   Section 5.16. Effect of Invalidity of Provisions.........................  9
   Section 5.17. Entire Agreement...........................................  9
   Section 5.18. Binding Effect: Governing Law..............................  9
   Section 5.19. Notices ................................................... 10
   Section 5.20. Exhibits .................................................. 11
   Section 5.21. SUBMISSION TO JURISDICTION:  WAIVER OF TRIAL BY JURY....... 11
   Section 5.22. Representation by Counsel.................................. 11
   Section 5.23. Construction............................................... 12
   Section 5.24. Rights of the Indenture Trustee............................ 12
</TABLE>

Exhibit 1:      Request for Release of Documents

Exhibit 2:      Authorized Officers of Indenture Trustee

Exhibit 3:      Authorized Officers of Issuers

                                       ii<PAGE>   1
                                                                   EXHIBIT 10.49

                               SERVICING AGREEMENT

                                  by and among

                     HPSC EQUIPMENT RECEIVABLES 2000-1 LLC I

                                       and

                    HPSC EQUIPMENT RECEIVABLES 2000-1 LLC II

                                   as Issuers,

                                   HPSC, INC.

                                  as Servicer,

                                   HPSC, INC.

                                       and

                     AMERICAN COMMERCIAL FINANCE CORPORATION

                                 as Originators,

                            BNY MIDWEST TRUST COMPANY

                              as Indenture Trustee

                                       and

                            BNY ASSET SOLUTIONS, LLC

                               as Back-Up Servicer

                          Dated as of December 1, 2000

                     HPSC EQUIPMENT RECEIVABLES 2000-1 LLC I

                                       and

                    HPSC EQUIPMENT RECEIVABLES 2000-1 LLC II

                         Equipment Contract Backed Notes
<PAGE>   2
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                     Page
                                                                                                                     ----
<S>                                                                                                                  <C>
ARTICLE 1         DEFINITIONS....................................................................................      1

         Section 1.01     Definitions............................................................................      1
         Section 1.02     General Interpretive Principles........................................................      1

ARTICLE 2         REPRESENTATIONS, WARRANTIES AND COVENANTS......................................................      2

         Section 2.01     Representations, Warranties and Covenants of the Originators...........................      2
         Section 2.02     Representations, Warranties and Covenants of the Servicer..............................      3
         Section 2.03     Representations and Warranties of the Back-up Servicer.................................      8

ARTICLE 3         PERFECTION OF TRANSFER.........................................................................      9

         Section 3.01     Filing; Custody of Files; Contract Files...............................................      9
         Section 3.02     Name Change or Relocation..............................................................     10
         Section 3.03     Chief Executive Offices................................................................     10
         Section 3.04     Costs and Expenses.....................................................................     10
         Section 3.05     Power of Attorney......................................................................     10

ARTICLE 4         ADMINISTRATION AND SERVICING OF CONTRACTS......................................................     11

         Section 4.01     Acceptance of Appointment; Duties of Servicer..........................................     11
         Section 4.02     Collection of Payments.................................................................     13
         Section 4.03     Servicer Advances......................................................................     15
         Section 4.04     Realization Upon Defaulted Contracts...................................................     15
         Section 4.05     Maintenance of Insurance Policies......................................................     16
         Section 4.06     Reserved...............................................................................     17
         Section 4.07     Servicing Compensation; Payment of Certain Expenses and Custodian Fee by
                          Servicer...............................................................................     17
         Section 4.08     Monthly Statement......................................................................     17
         Section 4.09     Annual Certificates as to Compliance...................................................     18
         Section 4.10     Annual Independent Public Accountant's Reports.........................................     18
         Section 4.11     Access to Certain Documentation and Information Regarding the Pledged Property.........     19
         Section 4.12     Financial Statements...................................................................     20
         Section 4.13     Performance of Back-up Servicer's Duties...............................................     20
         Section 4.14     Indemnity for Liability Claims.........................................................     21

ARTICLE 5         THE SERVICER...................................................................................     21

         Section 5.01     Liability of Servicer; Indemnities.....................................................     21
         Section 5.02     Merger, Consolidation, or Assumption of the Obligations of Servicer....................     22
         Section 5.03     Limitation on Liability of Servicer and Others.........................................     23
         Section 5.04     Servicer Not to Resign.................................................................     23

ARTICLE 6         SERVICING TERMINATION..........................................................................     23

         Section 6.01     Events of Servicing Termination........................................................     23
</TABLE>

                                      -i-
<PAGE>   3
<TABLE>
<CAPTION>
                                                                                                                     Page
                                                                                                                     ----
<S>                                                                                                                  <C>
         Section 6.02     Resignation of Servicer; Back-up Servicer; Appointment of Successor;
                          Limitations on Liability...............................................................     26
         Section 6.03     Notification to Noteholders............................................................     28
         Section 6.04     Waiver of Past Defaults................................................................     28
         Section 6.05     Effects of Termination of Servicer.....................................................     28

ARTICLE 7         MISCELLANEOUS PROVISIONS.......................................................................     29

         Section 7.01     Amendment..............................................................................     29
         Section 7.02     Counterparts...........................................................................     29
         Section 7.03     Governing Law..........................................................................     30
         Section 7.04     Waiver of Jury Trial...................................................................     30
         Section 7.05     Notices................................................................................     30
         Section 7.06     Severability of Provisions.............................................................     30
         Section 7.07     Third Party Beneficiaries..............................................................     31
         Section 7.08     Assignment.............................................................................     31
         Section 7.09     Binding Effect.........................................................................     31
         Section 7.10     Survival of Agreement..................................................................     31
         Section 7.11     Captions...............................................................................     31
         Section 7.12     Exhibits...............................................................................     31
         Section 7.13     Calculations...........................................................................     31
         Section 7.14     No Proceedings.........................................................................     31
         Section 7.15     Rights of Indenture Trustee............................................................     31
</TABLE>

                                      -ii-
<PAGE>   4
                  This SERVICING AGREEMENT, dated as of December 1, 2000 (this
"Agreement") is made by and among HPSC, Inc. ("HPSC"), a Delaware corporation,
as servicer (the "Servicer") and as an originator (an "Originator"), American
Commercial Finance CORPORATION ("ACFC"), a Delaware corporation as an originator
(an "Originator", and together with HPSC, the "Originators"), HPSC Equipment
Receivables 2000-1 LLC I and HPSC Equipment Receivables 2000-1 LLC II, each a
Delaware limited liability company, as issuers (each an "Issuer" and
collectively, the "Issuers"), BNY Midwest Trust Company, an Illinois
corporation, not in its individual capacity but solely as indenture trustee (the
"Indenture Trustee") and BNY Asset Solutions, LLC, a Delaware limited liability
company, as back-up servicer (the "Back-up Servicer").

                                   WITNESSETH:

                  WHEREAS, the Issuers have entered into an Indenture, dated as
of the date hereof, with the Servicer, the Originators and the Indenture Trustee
pursuant to which the Issuers have pledged the Pledged Property to the Indenture
Trustee for the benefit of the Noteholders; and

                  WHEREAS, it is contemplated that following such pledge the
Servicer will service the Receivables pursuant to this Agreement for the benefit
of the Noteholders; and

                  WHEREAS, each of the Servicer, the Originators and the Issuers
agrees that all of the respective representations, warranties, covenants and
agreements made by it herein shall also be for the benefit of the Indenture
Trustee and the Noteholders;

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

                                   ARTICLE 1

                                   DEFINITIONS

                  Section 1.01 Definitions. Capitalized terms used and not
defined herein shall have the meanings specified in Annex A hereto.

                  Section 1.02 General Interpretive Principles.

                  For purposes of this Agreement except as otherwise expressly
provided or unless the context otherwise requires:

                           (a) the terms defined in this Agreement have the
meanings assigned to them in this Agreement and include the plural as well as
the singular, and the use of any gender herein shall be deemed to include the
other gender;

                           (b) accounting terms not otherwise defined herein
have the meanings assigned to them in accordance with GAAP as in effect on the
date hereof;

                                      -1-
<PAGE>   5
                           (c) references herein to "Articles", "Sections",
"Subsections", "Paragraphs" and other subdivisions without reference to a
document are to designated Articles, Sections, Subsections, Paragraphs and other
subdivisions of this Agreement;

                           (d) a reference to a Subsection without further
reference to a Section is a reference to such Subsection as contained in the
same Section in which the reference appears, and this rule shall also apply to
Paragraphs and other subdivisions;

                           (e) the words "herein", "hereof", "hereunder" and
other words of similar import refer to this Agreement as a whole and not to any
particular provision; and

                           (f) the term "include" or "including" shall mean
without limitation by reason of enumeration.

                                   ARTICLE 2

                    REPRESENTATIONS, WARRANTIES AND COVENANTS

                  Section 2.01 Representations, Warranties and Covenants of the
Originators. Each of the Originators hereby makes the following representations,
warranties and covenants to the Indenture Trustee, the Servicer, the Issuers and
the Noteholders, on which the Indenture Trustee relies in accepting the Pledged
Property in trust and authenticating the Notes and on which the Noteholders have
relied and will rely in purchasing the Notes. Such representations, warranties
and covenants are made as of the Closing Date, as of each Subsequent Transfer
Date and as of each Substitute Transfer Date and shall survive the pledge,
transfer, and assignment of any Pledged Property to the Indenture Trustee for
the benefit of the Noteholders.

                           (i) Organization and Good Standing. Each of the
Originators is a corporation duly organized, validly existing in good standing
under the laws of the State of Delaware, has the power to own its assets and to
transact the business in which it is presently engaged, and had at all relevant
times and now has the power, authority and legal right to perform its
obligations hereunder and under the other Transaction Documents to which it is a
party.

                           (ii) Due Qualification. Each of the Originators is
duly qualified to do business as a foreign corporation and is in good standing,
and has obtained all necessary licenses and approvals, in all jurisdictions
where the failure to be so qualified and in good standing or obtain such
licenses or approvals would have a material adverse effect on such Originator's
business and operations or on the performance of its obligations under the
Transaction Documents to which it is a party.

                           (iii) Authorization. Each of the Originators has the
power, authority and legal right to execute, deliver and perform this Agreement
and the other Transaction Documents to which it is a party, and the execution,
delivery and performance of this Agreement and the other Transaction Documents
to which it is a party have been duly authorized by each of the Originators by
all necessary corporate action.

                                      -2-
<PAGE>   6
                           (iv) Binding Obligation. Each of this Agreement and
the other Transaction Documents to which it is a party, assuming due
authorization, execution and delivery by the other parties thereto, constitutes
a legal, valid and binding obligation of each of HPSC and ACFC, as applicable,
enforceable against HPSC and ACFC, as applicable, in accordance with its terms,
except that (A) such enforcement may be subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws (whether statutory, regulatory
or decisional) now or hereafter in effect relating to creditors' rights
generally and (B) the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to certain equitable defenses and to
the discretion of the court before which any proceeding therefore may be
brought, whether in a proceeding at law or in equity.

                           (v) No Violation. The consummation by each of HPSC
and ACFC, as applicable, of the transactions contemplated by this Agreement and
the other Transaction Documents to which it is a party and the fulfillment of
the terms hereof and thereof will not conflict with, result in any breach of any
of the terms and provisions of, or constitute (with or without notice, lapse of
time or both) a default under, the articles of incorporation or by-laws of HPSC
or ACFC, as applicable, or any material indenture, agreement, mortgage, deed of
trust or other instrument to which HPSC or ACFC, as applicable, is a party or by
which it is bound, or result in the creation or imposition of any Lien upon any
of its material properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument, other than as
contemplated in any Transaction Document, or violate any law or any order, rule
or regulation applicable to HPSC or ACFC, as applicable, of any court or of any
Governmental Authority having jurisdiction over HPSC or ACFC, as applicable, or
any of its properties.

                           (vi) No Proceedings. There are no Proceedings or
investigations to which HPSC or ACFC, as applicable, or any of their respective
Affiliates, is a party pending or, to the best of HPSC's or ACFC's, as
applicable, knowledge, threatened before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality (A)
asserting the invalidity of this Agreement, the other Transaction Documents or
the Notes, (B) seeking to prevent the issuance of the Notes or the consummation
of any of the transactions contemplated by this Agreement or the other
Transaction Documents or (C) seeking any determination or ruling that is
reasonably likely to materially and adversely affect the performance by HPSC or
ACFC, as applicable, of its obligations under, or the validity or enforceability
of, this Agreement or the other Transaction Documents to which it is a party.

                           (vii) Approvals. All approvals, authorizations,
consents, orders or other actions of any Person or court required on the part of
each of the Originators in connection with the execution and delivery of this
Agreement and the other Transaction Documents to which it is a party have been
or will be taken or obtained on or prior to the Closing Date.

                  Section 2.02 Representations, Warranties and Covenants of the
Servicer. The Servicer hereby makes the following representations, warranties
and covenants to the Indenture Trustee, the Originators, the Issuers and the
Noteholders, on which the Indenture Trustee relies in accepting the Pledged
Property in trust and authenticating the Notes and on which the Noteholders have
relied or will rely in purchasing the Notes. Such representations, warranties

                                      -3-
<PAGE>   7
and covenants are made as of the Closing Date, as of each Subsequent Transfer
Date and as of each Substitute Transfer Date and shall survive the pledge,
transfer, and assignment of any Pledged Property to the Indenture Trustee for
the benefit of the Noteholders.

                  (a) The Servicer represents and warrants as to itself:

                           (i) Organization and Good Standing. The Servicer is a
corporation duly organized, validly existing in good standing under the laws of
the State of Delaware, has the power to own its assets and to transact the
business in which it is presently engaged, and had at all relevant times and now
has the power, authority and legal right to service the Contracts and perform
its obligations hereunder and under the other Transaction Documents to which it
is a party.

                           (ii) Due Qualification. The Servicer is duly
qualified to do business as a foreign corporation and is in good standing, and
has obtained all necessary licenses and approvals, in all jurisdictions where
the failure to be so qualified and in good standing or obtain such licenses or
approvals would have a material adverse effect on the Servicer's business and
operations or the servicing of the Contracts as required by this Agreement or
the performance of its obligations under the Transaction Documents to which it
is a party.

                           (iii) Authorization. The Servicer has the power,
authority and legal right to execute, deliver and perform this Agreement and the
other Transaction Documents to which it is a party, and the execution, delivery
and performance of this Agreement and the other Transaction Documents to which
it is a party have been duly authorized by the Servicer by all necessary
corporate action.

                           (iv) Binding Obligation. Each of this Agreement and
the other Transaction Documents to which it is a party, assuming due
authorization, execution and delivery by the other parties thereto, constitutes
a legal, valid and binding obligation of the Servicer, enforceable against the
Servicer in accordance with its terms, except that (A) such enforcement may be
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws (whether statutory, regulatory or decisional) now or hereafter in effect
relating to creditors' rights generally and (B) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, whether in a proceeding at law or in equity.

                           (v) No Violation. The consummation by the Servicer of
the transactions contemplated by this Agreement and the other Transaction
Documents to which it is a party and the fulfillment of the terms hereof and
thereof will not conflict with, result in any breach of any of the terms and
provisions of, or constitute (with or without notice, lapse of time or both) a
default under, the articles of incorporation or by-laws of the Servicer, or any
material indenture, agreement, mortgage, deed of trust or other instrument to
which the Servicer is a party or by which it is bound, or result in the creation
or imposition of any Lien upon any of its material properties pursuant to the
terms of any such indenture, agreement, mortgage, deed of trust or other
instrument, other than as contemplated in any Transaction Document, or violate

                                      -4-
<PAGE>   8
any law or any order, rule or regulation applicable to the Servicer of any court
or of any Governmental Authority having jurisdiction over the Servicer or any of
its properties.

                           (vi) No Proceedings. There are no Proceedings or
investigations to which the Servicer, or any of the Servicer's Affiliates, is a
party pending or, to the best of the Servicer's knowledge, threatened before any
court, regulatory body, administrative agency or other tribunal or governmental
instrumentality (A) asserting the invalidity of this Agreement or the other
Transaction Documents or the Notes, (B) seeking to prevent the issuance of the
Notes or the consummation of any of the transactions contemplated by this
Agreement or the other Transaction Documents or (C) seeking any determination or
ruling that is reasonably likely to materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement or the other Transaction Documents to which it
is a party.

                           (vii) Approvals. All approvals, authorizations,
consents, orders or other actions of any Person or court required on the part of
the Servicer in connection with the execution and delivery of this Agreement and
the other Transaction Documents to which it is a party have been or will be
taken or obtained on or prior to the Closing Date.

                           (viii) Event of Servicing Termination. No Event of
Servicing Termination has occurred and no condition exists, which, upon the
issuance of the Notes, would constitute an Event of Servicing Termination.

                           (ix) Year 2000 Problems. None of the Servicer, any
major supplier, vendor or customer experienced any "Year 2000 Problem" (that is,
the risk that computer applications used by the Servicer (or suppliers, vendors
and customers) were unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31, 1999)
in any way that materially and adversely affected the performance of the
Servicer.

                  (b) The Servicer additionally covenants as follows as to the
Pledged Property:

                           (i) Contract Management System. The Servicer will, at
its own cost and expense, (A) retain the Contract Management System, or an
alternative system of equal capability, used by the Servicer as a master record
of the Contracts and (B) mark the Contract Management System to the effect that
the Contracts listed thereon have been conveyed to the Issuers pursuant to the
Receivables Transfer Agreement and pledged by the Issuers to the Indenture
Trustee for the benefit of the Noteholders pursuant to the Indenture.

                           (ii) Compliance with Law. The Servicer will comply,
in all material respects, with all acts, rules, regulations, orders, decrees and
directions of any Governmental Authority applicable to the Contracts and the
Equipment or any part thereof; provided, however, that the Servicer may contest
any act, regulation, order, decree or direction in any reasonable manner which
shall not materially and adversely affect the rights of the Noteholders in the
Contracts, the Equipment and any other collateral securing the Contracts; and
provided, further, that such contests shall be in good faith by appropriate
proceedings and as to

                                      -5-
<PAGE>   9
which adequate reserves in accordance with GAAP have been established, but only
so long as such proceedings shall not individually or in the aggregate subject
the Indenture Trustee or any Noteholder to any civil or criminal liability or
involve any risk of loss or decline in the value of any collateral.

                           (iii) Preservation of Security Interest. The Servicer
shall execute and file such continuation statements and any other documents
reasonably requested by the Indenture Trustee or any Noteholder or which may be
required by law (in any case, with respect to the Equipment, subject to the
Filing Requirements) to fully preserve and protect the interest of the Indenture
Trustee on behalf of the Noteholders in and to the Pledged Property.

                           (iv) Obligations with Respect to Contracts. The
Servicer will use commercially reasonable efforts to duly fulfill, and comply in
all material respects with, all obligations on the part of the "lessor" or
"lender," as applicable, to be fulfilled under or in connection with each
Contract, and the Servicer will do nothing to impair the rights of the Indenture
Trustee in the Contracts, the Equipment and any other Collateral; provided,
however, that any successor Servicer will be obligated to use commercially
reasonable efforts to duly fulfill and comply with the obligations on the part
of the "lessor" or "lender," as applicable, under each Contract only to the
extent that any out-of-pocket costs associated with such compliance or
fulfillment are reimbursed.

                           (v) Notification. The Servicer agrees to notify the
Issuers, the Noteholders and the Indenture Trustee in writing as soon as
practicable, but in no event later than three (3) Business Days after the
earlier of the Servicer's discovery or its receipt of notice thereof, of a
material breach of any representation or warranty contained herein, or the
failure of the Servicer to perform its duties hereunder in any material respect.

                           (vi) Lien in Force. The Servicer shall not release or
assign any Lien in favor of the Indenture Trustee on any item of Equipment
related to or Contract or any other Collateral in whole or in part, except in
accordance with its Servicing Standard or as otherwise provided herein. The
Servicer shall use commercially reasonable efforts to remove, or to cause the
related Obligor to remove, any Liens on the Pledged Property other than the Lien
created pursuant to the Indenture or other liens which do not constitute Adverse
Claims.

                           (vii) Fulfill Obligations. The Servicer will in all
material respects duly fulfill all obligations on the Servicer's part to be
fulfilled under or in connection with the Pledged Property. The Servicer will
not amend, rescind, cancel or modify any Contract or term or provision thereof,
except in accordance with the Servicing Standard or as contemplated herein, and
the Servicer will not do anything that would otherwise impair the rights of the
Noteholders in the Pledged Property.

                           (viii) Preservation of the Equipment. As more
specifically set forth in this Agreement, in performing its servicing duties
hereunder, the Servicer shall, in accordance with the Servicing Standard,
collect all payments required to be made by the Obligors under the Contracts,
enforce all material rights of the Issuers under the Contracts and defend the
Equipment and all other Collateral against all Persons, claims and demands
whatsoever. The Servicer shall not assign, sell, pledge, or exchange, or in any
way encumber or

                                      -6-
<PAGE>   10
otherwise dispose of the Equipment, except as permitted under this Agreement and
the Indenture.

                           (ix) Notice of Event of Servicing Termination; Other
Requested Information. The Servicer shall deliver to the Issuers, each
Noteholder, a Responsible Officer of the Indenture Trustee and the Rating
Agencies:

                                    (1) Notice of Event of Servicing
Termination. Immediately upon becoming aware of the existence of any condition
or event which constitutes an Event of Servicing Termination or an Event of
Default, or any event which, with the lapse of time and/or the giving of notice,
would constitute an Event of Servicing Termination or an Event of Default and
which, in each case, has not been waived in writing by the Majority Holders, a
written notice describing its nature and period of existence and, in the case of
an Event of Servicing Termination, the action the Servicer is taking or proposes
to take with respect thereto; and

                                    (2) Requested Information. With reasonable
promptness, any other data and information in the possession of the Servicer
which may be reasonably requested from time to time, including 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, provided that, if the Back-up Servicer becomes a Successor Servicer, such
Successor Servicer may attach any reasonable disclaimer to any information
provided to the Servicer by any third party.

                           (x) Delivery of Contracts. Upon an Event of Servicing
Termination, the Servicer shall promptly deliver to the Custodian any Contract
Files, or portion thereof, as applicable, that may have been delivered to the
Servicer pursuant to Section 3.01(b) hereof.

                           (xi) Prepayments. The Servicer may accept Prepayments
in part or in full; provided, that (1) in the event of a Prepayment in full, the
Servicer may consent to such Prepayment only if an amount not less than the
Prepayment Amount is deposited in the Collection Account and (2) in the event of
a partial Prepayment, the Servicer may consent to such partial Prepayment only
if (x) following such partial Prepayment there are no delinquent amounts then
due from the related Obligor and (y) such partial Prepayment will not reduce (A)
in the case of Contracts which are not Revolving Loans, the Discounted Contract
Balance by more than an amount equal to (I) the amount of such partial
Prepayment, minus (II) unpaid interest at the Discount Rate, accrued through the
end of the Collection Period immediately following such partial Prepayment on
the outstanding Discounted Contract Balance prior to such partial Prepayment and
(B) in the case of Contracts which are Revolving Loans, the Outstanding Revolver
Balance by more than an amount equal to (I) the amount of such partial
Prepayment, minus (II) unpaid interest accrued through the end of the Collection
Period immediately following such partial Prepayment on the Outstanding Revolver
Balance prior to such partial Prepayment. The Servicer shall not accept
Prepayments on Contracts with an Outstanding Contract Balance in excess of 20%
of the Aggregate Outstanding Contract Balance.

                                      -7-
<PAGE>   11
                           (xii) Partial Prepayment Recalculations. In the event
of a partial Prepayment, the Servicer shall recalculate the Discounted Contract
Balance and the Outstanding Revolver Balance, as applicable, and the allocation
of Scheduled Payments to principal and interest.

                           (xiii) No Ownership Interest. The Servicer does not
have any ownership interest in the Pledged Property and will not assert any
ownership interest in the Pledged Property.

                           (xiv) Collection Policies and Procedures. The
Servicer shall not amend, modify or otherwise change its Collection Policies and
Procedures in any manner without providing prior written notice to the Indenture
Trustee and the Noteholders, and without the prior written consent of the
Indenture Trustee and the Majority Holders if such amendment, modification or
change could materially and adversely affect the collectability or the credit
quality of the Contracts. The Servicer shall notify the Indenture Trustee and
the Rating Agencies of any such proposed change and the Indenture Trustee shall
notify the Noteholders and seek the consent of the Majority Holders.

                  Section 2.03 Representations and Warranties of the Back-up
Servicer. The Back-up Servicer hereby makes the following representations and
warranties on which the Originators, the Issuers, the Servicer, the Indenture
Trustee and Noteholders shall be entitled to rely:

                           (i) The Back-up Servicer is a Delaware limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Delaware.

                           (ii) The Back-up Servicer has full power, authority
and legal right to execute, deliver, and perform this Servicing Agreement, and
has taken all necessary action to authorize the execution, delivery, and
performance by it of this Servicing Agreement.

                           (iii) The execution, delivery and performance by the
Back-up Servicer of this Servicing Agreement and any other documents and
transactions in connection herewith to which the Servicer is party do not and
will not (i) violate any of the provisions of the organizational documents of
the Back-up Servicer, (ii) violate any provision of any law, governmental rule
or regulation currently in effect applicable to the Back-up Servicer or its
properties or by which the Back-up Servicer or its properties may be bound or
affected, (iii) violate any judgment, decree, writ, injunction, award,
determination or order currently in effect applicable to the Back-up Servicer or
its properties or by which the Back-up Servicer or its properties are bound or
affected, (iv) conflict with, or result in a breach of, or constitute a default
under, any of the provisions of any material indenture, mortgage, deed of trust,
contract or other instrument to which the Back-up Servicer is a party or by
which it is bound or (v) result in the creation or imposition of any Lien upon
any of its properties pursuant to the terms of any such indenture, mortgage,
deed of trust, contract or other instrument.

                           (iv) The execution, delivery and performance by the
Back-up Servicer of this Servicing Agreement does not require the authorization,
consent, or approval of, the giving of notice to, the filing or registration
with, or the taking of any other action in respect of, any

                                      -8-
<PAGE>   12
governmental authority or agency regulating the banking and corporate trust
activities of the Back-up Servicer.

                           (v) This Servicing Agreement has been duly executed
and delivered by the Back-up Servicer and constitutes the legal, valid, and
binding agreement of the Back-up Servicer, enforceable in accordance with its
terms subject, as to the enforcement of remedies, to bankruptcy, insolvency,
reorganization, moratorium and other similar laws affecting the enforceability
of creditors' rights generally applicable in the event of the bankruptcy,
insolvency or reorganization of the Servicer and to general principles of
equity.

                           (vi) There is no pending or, to the best of the
Back-up Servicer's knowledge, threatened action, suit, proceeding or
investigation before any court, administrative agency, arbitrator or
governmental body against or affecting the Back-up Servicer which, if decided
adversely, would materially and adversely affect (i) the condition (financial or
otherwise), business or operations of the Back-up Servicer, (ii) the ability of
the Back-up Servicer to perform its obligations under, or the validity or
enforceability of, this Servicing Agreement or any other documents or
transactions contemplated hereunder, (iii) any Pledged Property or title of any
Obligor to any Pledged Property or (iv) the Indenture Trustee's ability to
foreclose or otherwise enforce the liens of the Contracts.

                                   ARTICLE 3

                             PERFECTION OF TRANSFER

                  Section 3.01 Filing; Custody of Files; Contract Files.

                           (a) On the Closing Date with respect to the Initial
Receivables, on the related Subsequent Transfer Date with respect to Subsequent
Receivables and on the related Substitute Transfer Date with respect to
Substitute Contracts, the Servicer shall submit the Financing Statements for
filing in the respective filing offices named therein, and upon receipt of the
filed stamped copies thereof, the Servicer shall promptly deliver such filed
stamped copies to the Custodian. From time to time thereafter, the Servicer
shall protect each of the Issuers', the Indenture Trustee's and the Noteholders'
interests, as such interests may appear, in the Pledged Property by the filing
of financing statements, amendments thereto and continuation statements (in each
case, subject to the Filing Requirements), executing transfer instruments and
making notations on or taking possession of all records or documents of title,
and other actions requested by the Indenture Trustee or the Majority Holders, in
each case which would not require the Servicer to incur any out-of-pocket
expenses which are not reimbursable to the Servicer pursuant to this Agreement.

                           (b) Pursuant to the Indenture, the Indenture Trustee,
on behalf of the Issuers, acknowledges the pledge of the Pledged Property by LLC
I and LLC II, as applicable, to the Indenture Trustee and declares that the
Indenture Trustee will hold such Pledged Property, and maintain control of the
Contract Files held by the Custodian, in trust, for the use and benefit of the
Noteholders.

                                      -9-
<PAGE>   13
                  Section 3.02 Name Change or Relocation. If any change is to
occur in an Issuer's name, identity or structure, or in the location of its
principal place of business or chief executive office, then such Issuer shall
deliver thirty (30) days' prior written notice of such change or relocation to
the Servicer, the Indenture Trustee, the Custodian and the Noteholders. No later
than five days after the effective date of such change, the Servicer on behalf
of the Issuers shall file such amendments or statements as may be required to
preserve and protect the Indenture Trustee's interest in the Pledged Property,
and shall deliver copies thereof to the Indenture Trustee.

                  Section 3.03 Chief Executive Offices. During the term of this
Agreement and the Indenture, each of the Originators and the Initial Servicer
will remain incorporated and maintain its chief executive office and principal
place of business in one of the States of the United States.

                  Section 3.04 Costs and Expenses. The Servicer agrees to pay
all costs and disbursements in connection with filing financing statements and
continuation statements, as against all third parties, of the Indenture
Trustee's right, title and interest in and to the Pledged Property (subject to
the Filing Requirements with respect to the Equipment). The Initial Servicer
agrees to pay all taxes (other than net income taxes or taxes imposed in lieu
thereof), if any, owed in connection with ownership, transfer or sale of the
Collateral, together with all taxes required by the terms of the Contracts to be
paid by the Servicer on behalf of the related Obligors. The Initial Servicer
shall not be entitled to reimbursement for any such costs or disbursements,
other than from the Excluded Amounts retained by the Servicer.

                  Section 3.05 Power of Attorney. The Initial Servicer hereby
irrevocably constitutes and appoints the Indenture Trustee, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Issuer and in the name of the
Servicer or in its own name, for the purpose of carrying out the terms of this
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of the
foregoing, the Servicer hereby gives the Indenture Trustee the power and right,
on behalf of the Servicer, without notice to or assent by the Servicer, to do
any or all of the following:

                           (i) after an Event of Default or Event of Servicer
Termination has occurred and is continuing, at any time, in the name of the
Servicer or its own name, or otherwise, to take possession of and indorse and
collect any checks, drafts, notes, acceptances or other instruments, general
intangibles or contracts or with respect to any other collateral and to file any
claim or to take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Indenture Trustee for the purpose of
collecting any and all such moneys due under any account, instrument, general
intangible or contract with respect to the Pledged Property or to any other
collateral whenever payable; and

                           (ii) whether or not an Event of Default or Event of
Servicer Termination has occurred, execute and deliver any and all agreements,
instruments, documents and papers (including, without limitation, UCC Financing
Statements) as the Indenture Trustee or a Noteholder may request to perfect the
Indenture Trustee's security interest in the Pledged

                                      -10-
<PAGE>   14
Property (and subject to the Filing Requirements with respect to the Equipment)
or any other Collateral and the goodwill and general intangibles of such Issuer
relating thereto or represented thereby.

                                   ARTICLE 4

                    ADMINISTRATION AND SERVICING OF CONTRACTS

                  Section 4.01 Acceptance of Appointment; Duties of Servicer.
(a) The Servicer shall service, administer and enforce the Contracts as Servicer
and shall have full power and authority to do any and all things in connection
with such servicing and administration which it may deem necessary or desirable;
provided, that such things are not inconsistent with the terms of this
Agreement. The Servicer will manage, service, administer, and make collections
on the Contracts in accordance with the terms of this Agreement, the Contracts,
the Credit and Collection Policies and Procedures and applicable law and, to the
extent consistent with such terms, in the same manner in which, and with the
same care, skill, prudence and diligence with which, it services and administers
leases and loans of similar credit quality for itself or others, if any, but in
any event, with no less care, skill, prudence and diligence than the customary
and usual standards of practice of prudent institutional small and middle ticket
equipment finance lease, receivable finance and professional practice finance
servicers and, in each case, taking into account its other obligations hereunder
(the "Servicing Standard"). Notwithstanding the prior sentence, the Servicer
shall have previously directed or shall direct, not later than five Business
Days after the Closing Date, the Subsequent Transfer Date, or the Substitute
Transfer Date, as the case may be, each Obligor to make all payments with
respect to the respective Contracts which are due after the related Cut-Off Date
directly to the Lockbox Account. The Servicer's duties shall include collection
and posting of all payments, responding to inquiries of Obligors on the
Contracts, investigating delinquencies, accounting for collections and
furnishing monthly, quarterly and annual statements as provided herein, making
Servicer Advances and using commercially reasonable efforts to maintain the
first priority perfected security interest of the Indenture Trustee for the
benefit of the Noteholders in the Issuers' interest in the Contracts and, in
accordance with the Filing Requirements, in the related Equipment, including,
but not limited to, the filing of any financing or continuation statements
required to be filed pursuant to the UCC, which continuation statements shall be
filed on or before the 60th day prior to the expiration date of such financing
statement; and promptly delivering evidence of all such filings to the
Custodian, with a copy to the Indenture Trustee, with evidence of the filing of
continuation statements being delivered on or before the 30th day before the
expiration of such financing statements. The Servicer shall follow its customary
standards, policies, and procedures as set forth in its Credit and Collection
Policies and Procedures and shall have full power and authority, acting alone,
to do any and all things in connection with such managing, servicing,
administration, and collection that it may deem necessary or desirable, subject
to Section 2.02(b)(x). The Servicer may waive, modify or vary any term of a
Contract in accordance with the Servicing Standard or otherwise as required by
law if the Servicer determines, in its reasonable and prudent judgment, that it
will not materially and adversely affect the Noteholders; provided, that the
Servicer may only make Material Modifications to Contracts having an aggregate
Outstanding Contract Balance (calculated as of the last day of the immediately
preceding Collection Period prior to the date of such modification) not to
exceed $20,000,000.

                                      -11-
<PAGE>   15
In no event shall the Servicer make a Material Modification
to any Contract which would result in (i) the Outstanding Contract Balance of
Contracts modified during any one Collection Period being less than the
aggregate Outstanding Contract Balance of such Contracts immediately prior to
such modification or (ii) the term of such Contract being extended by more than
6 months, provided, that in no event shall any such extension cause the maturity
date of such Contract to be extended beyond a date which is later than 6 months
prior to the latest Stated Maturity Date. With (i) the prior written consent of
(a) Majority Holders and (b) the Rating Agencies, or (ii) the unanimous written
consent of the Noteholders, the Servicer may make Material Modifications in
excess of such $20,000,000 limit. If the Servicer determines that a Material
Modification should be made, the Servicer shall forward such recommendation to
the Indenture Trustee and the Indenture Trustee shall forward such
recommendation to the Noteholders for their consent to such action. If such
consent is not received within 30 days, the Indenture Trustee shall notify the
Servicer and such consent shall be deemed denied. If the Servicer commences a
legal proceeding to enforce a Defaulted Contract pursuant to Section 4.04 hereof
or participates in a legal proceeding (including, without limitation, a
bankruptcy proceeding relating to or involving a Defaulted Contract), the
Indenture Trustee shall thereupon be deemed to have automatically assigned such
Contract to the Servicer solely for purposes of commencing or participating in
any such proceeding as a party or claimant, and the Servicer is authorized and
empowered by the Indenture Trustee, pursuant to this Section 4.01, to execute
and deliver, on behalf of the Indenture Trustee, any and all instruments of
satisfaction or cancellation, or partial or full release or discharge, and all
other notices, demands, claims, complaints, responses, affidavits or other
documents or instruments in connection with any such proceedings (without
representation, warranty or recourse on behalf of the Indenture Trustee). The
Indenture Trustee, the Originators and the Issuers, as applicable, shall furnish
the Servicer, and the Servicer shall furnish any subservicer, with any powers of
attorney and other documents necessary or appropriate to enable the Servicer or
a subservicer, as applicable, to carry out its servicing and administrative
duties under this Agreement. If in any enforcement suit or legal proceeding it
shall be held that the Servicer may not enforce a Contract on the ground that it
shall not be a real party in interest or a holder entitled to enforce the
Contract, the Issuers shall, at the Originators' expense and direction, take
steps to enforce the Contract, including bringing suit in its name or the name
of the Indenture Trustee (prior written notice of which shall be given to the
Indenture Trustee and the Noteholders.

                           (b) Consent to Assignment or Replacement. At the
request of an Obligor, the Servicer may, so long as such action is consistent
with the Servicing Standard, consent to the assignment or sublease of a unit of
Equipment under a Contract provided that the Obligor will remain liable for all
of its obligations under such Contract; provided, however, that such assignee or
sub-lessee must satisfy the credit criteria set forth in the Credit and
Collection Policies and Procedures. Upon the request of any Obligor, the Initial
Servicer may, so long as such action is consistent with the Servicing Standard,
provide for additions and upgrades to a Contract, and the substitution or
replacement of any unit of Equipment for a substantially similar unit of
additional equipment having substantially the same fair market value as the unit
of Equipment that will be replaced or substituted.

                           (c) Maintenance of Credit Files and Contract Files.
The Servicer (i) shall maintain the Credit Files in a manner consistent with the
Servicing Standard and the performance of its obligations as Servicer pursuant
to this Agreement and will not dispose of any

                                      -12-
<PAGE>   16
documents constituting the Contract Files (other than Contract Files which
relate solely to an Early Termination Contract, an Expired Contract or a
Purchased Contract and, to the extent applicable, the related Collateral, but
solely to the extent that the Obligor has paid all amounts due with respect to
such Contract in full), (ii) will use reasonable efforts not to permit any
person other than the Indenture Trustee to maintain any Adverse Claim upon any
Contract File (other than Contract Files which relate solely to an Early
Termination Contract, an Expired Contract or a Purchased Contract and, to the
extent applicable, the related Collateral, but solely to the extent that the
Obligor has paid all amounts due with respect to such Contract in full) and
(iii) except as otherwise permitted pursuant to Section 3.01(b)(ii), will not
permit any person other than the Custodian to maintain possession of any
Contract File (other than Contract Files which relate solely to an Early
Termination Contract, an Expired Contract or a Purchased Contract and, to the
extent applicable, the related Collateral but solely to the extent that all
Scheduled Payments due with respect to such Contract have been deposited in the
Collection Account).

                           (d) Subservicers. The Servicer may enter into
servicing agreements with one or more subservicers to perform all or a portion
of the servicing functions on behalf of the Servicer; provided, that the
Servicer will remain obligated and be liable to the Indenture Trustee and the
Issuers for servicing and administering the Contracts in accordance with the
provisions of this Agreement without diminution of such obligation and liability
by virtue of the appointment of such subservicer, to the same extent and under
the same terms and conditions as if the Servicer alone were servicing and
administering the Contracts. The fees and expenses of the subservicer (if any)
will be as agreed between the Servicer and its subservicer and paid by the
Servicer from its own funds, and neither the Indenture Trustee, the Issuers nor
the Noteholders will have any responsibility therefor. All actions of a
subservicer taken pursuant to such a subservicer agreement will be taken as an
agent of the Servicer with the same force and effect as though performed by the
Servicer. Each subservicing agreement, if any, shall provide that upon the
occurrence of an Event of Servicing Termination, the successor Servicer may
assume or reject such subservicing agreement. The Servicer may engage ACFC as
its subservicer in respect of the Revolving Loans and future advances
thereunder.

                           (e) Further Assurances. The Indenture Trustee, the
Originators and the Issuers will furnish the Servicer, and the Servicer will
furnish any subservicer, with any powers of attorney and other documents
necessary or appropriate to enable the Servicer or a subservicer, as applicable,
to carry out its servicing and administrative duties under this Agreement.

                           (f) Notice to Obligors. The Servicer shall be
required to notify each Obligor in accordance with Section 4.01(a) hereof to
make its payments to the Lockbox Account; provided, however, that in the event
that any Servicer resigns or is replaced, then if the place for payment pursuant
to any Contract is changed, the Successor Servicer must give each related
Obligor prompt written notice of its appointment and the place to which such
Obligor should make payments pursuant to each such Contract.

                  Section 4.02 Collection of Payments. (a) The Servicer shall
use commercially reasonable efforts to collect all payments called for under the
terms and provisions of the Contracts as and when the same shall become due, and
shall follow such collection procedures as it follows with respect to all
comparable Contracts that it services for itself or others in a manner

                                      -13-
<PAGE>   17
consistent with the Servicing Standard. The Servicer may in its reasonable
discretion waive any late payment charge or any other fees that may be collected
in the ordinary course of servicing a Contract.

                           (b) Notwithstanding the terms of any Contract, the
Servicer may in its discretion allow full Prepayments of a Contract by or on
behalf of the Obligor in accordance with Section 2.02(b)(xi) hereof. All
Prepayments, if any, received directly by the Servicer, notwithstanding the
Servicer's notice to each Obligor pursuant to Section 4.01(f) hereof, shall be
deposited in the Collection Account within two Business Days of receipt by the
Servicer.

                           (c) To the extent provided for in any Contract, the
Servicer shall make commercially reasonable efforts to collect all payments with
respect to amounts due for maintenance, taxes or assessments on the Equipment,
any other Collateral or the Contracts and shall remit such amounts to the
appropriate maintenance provider or Governmental Authority on or prior to the
date such payments are due.

                           (d) The Servicer shall withdraw from the Lockbox
Account all Excluded Amounts and may deduct from amounts otherwise payable to
the Collection Account the amounts described in clause (i) and (ii) of the last
sentence of Section 3.01 of the Indenture, and shall deposit or cause the
Lockbox Bank to deposit all Collections received in the Lockbox Account on an as
collected basis by wire transfer into the Collection Account no later than the
second Business Day following the date of receipt of any Collections in the
Lockbox Account or otherwise by the Servicer. The Servicer shall notify the
Indenture Trustee in writing in the Monthly Statement of all amounts transferred
into the Collection Account during the immediately preceding Collection Period.
The Servicer shall deposit on the related Conveyance Date into the Collection
Account all Collections received during the period from the applicable Cut-Off
Date through the Closing Date, the Subsequent Transfer Date or the Substitute
Transfer Date, as the case may be.

                           (e) Based upon the amounts set forth in the Monthly
Statement, the Servicer shall cause the Indenture Trustee to distribute the
Available Funds in the Collection Account according to the priority set forth in
Section 3.04(b) of the Indenture.

                           (f) In the event that the Servicer acquires title to
any item of Equipment in the enforcement of any Contract, the Servicer shall use
commercially reasonable efforts to sell or otherwise dispose promptly of such
item of Collateral, consistent with the Servicing Standard. The Servicer shall
not lease, operate or otherwise manage any such items of Collateral unless prior
thereto, the Servicer remits to the Collection Account the related Prepayment
Amount with respect to such Contract.

                           (g) Any payments (net of Excluded Amounts except
taxes) received from, or on behalf of, an Obligor with respect to a Contract
will be allocated first to amounts then payable under the Contract which became
due and payable first.

                           (h) The Servicer shall not allow an offset of the
amount of any security deposit against any Scheduled Payment under such
Contract.

                                      -14-
<PAGE>   18
                  Section 4.03 Servicer Advances. If on any Determination Date
occurring prior to the payment in full of the Notes, the Servicer determines
that any Scheduled Payments or Final Scheduled Payments due on the Contracts
with respect to the related Collection Period have not been received by such
Determination Date, the Servicer, to the extent that in its good faith business
judgment it determines that it can recoup such Servicer Advance from subsequent
collections or recoveries under the related Contract, shall make a Servicer
Advance up to an amount equal to the amount of such delinquent Scheduled
Payments. The Servicer shall deposit any Servicer Advances into the Collection
Account on such Determination Date in same day funds. The Servicer shall be
reimbursed for any outstanding Servicer Advance pursuant to Article III of the
Indenture from collections on the Contracts or amounts on deposit in the
Collection Account on any Payment Date. If at any time HPSC or any of its
Affiliates is no longer acting as Servicer hereunder, no successor Servicer
shall be required to make any Servicer Advance.

                  Section 4.04 Realization Upon Defaulted Contracts. (a) The
Servicer shall use commercially reasonable efforts, consistent with the
Servicing Standard, to accelerate, repossess, foreclose upon, or otherwise
comparably convert the ownership of any Collateral that it has reasonably
determined should be repossessed or otherwise converted following a default
under the Contract, remarket, either through sale or release, the Collateral
upon the expiration of the term of the related Contract and act as sales and
processing agent for Collateral which it repossesses. The Servicer shall follow
such practices and procedures as are consistent with the Servicing Standard and
as it shall deem necessary or advisable and as shall be customary and usual in
its servicing of contracts similar to the contracts and other actions by the
Servicer in order to realize upon such a Contract, which may include
commercially reasonable efforts to enforce any recourse obligations of Obligors
and repossessing and selling the Collateral at public or private sale. The
foregoing is subject to the provision that, in any case in which the Collateral
shall have suffered damage, the Servicer shall not be required to expend funds
in connection with any repair or towards the repossession of such Collateral
unless it shall determine in its discretion that such repair and/or repossession
will increase the Liquidation Proceeds by an amount greater than the amount of
such expenses.

                           (b) Notwithstanding the foregoing, the Servicer shall
take action to accelerate all amounts due under any Contract immediately after
such Contract becomes a Defaulted Contract and shall, in accordance with its
Credit and Collection Policies and Procedures, bring an action against the
Obligor for all amounts due under the Contract and, to the extent applicable,
institute proceedings to repossess, foreclose upon and sell or re-lease the
Collateral; provided, however, that the Servicer will 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
an Obligor to be in default under a Contract nor exercise any other remedies
under such Contract based solely on a default by such Obligor under any other
obligation of such Obligor to the Originators or either of their Affiliates, if
such Obligor is not also in default under such Contract unless it concludes that
declaring such default is in the best interest of the Noteholders or will
maximize potential recoveries from such Obligor for the Issuers for the benefit
of the Noteholders. To the extent that an escrow account has been established by
the related Obligor to cover defaults on contracts between such Obligor and an
Originator, amounts in such escrow account shall be applied against defaults
under each such contract in the order that such defaults occur with respect to
any such contract.

                                      -15-
<PAGE>   19
                           (c) The Servicer shall remit to the Collection
Account within two Business Days of receipt all Liquidation Proceeds, if any,
received directly by the Servicer, notwithstanding the Servicer's notice to each
Obligor pursuant to Section 4.01(f) hereof, in connection with the sale or
disposition of a Defaulted Contract to the extent such Liquidation Proceeds do
not constitute Excluded Amounts.

                           (d) The Servicer shall remit to the Collection
Account within two Business Days of receipt all payments made directly to the
Servicer, notwithstanding any notice given pursuant to Section 4.01(f) hereof,
with respect to any guaranties of an Obligor's obligations under any Contract.

                  Section 4.05 Maintenance of Insurance Policies. (a) In
connection with its activities as Servicer of the Contracts, the Servicer agrees
to present claims to the insurer under each Insurance Policy, and to settle,
adjust and compromise such claims, in each case, consistent with the terms of
each Contract. The Servicer shall remit to the Collection Account within two
Business Days of receipt all Insurance Proceeds received directly by the
Servicer with respect to any Contract, Equipment or any other Collateral subject
thereto, notwithstanding any notice given pursuant to Section 4.01(f) hereof.

                           (b) In addition to the insurance maintained by the
Obligors with respect to the Equipment or any other Collateral, the Servicer (or
an Affiliate of the Servicer) maintains, and at all times while acting as
Servicer hereunder shall continue to maintain a general liability insurance
policy in the aggregate amount of $2,000,000 and an excess liability insurance
policy in umbrella form in the aggregate amount of $5,000,000. All premiums in
respect of such policies have been paid and shall continue to be promptly paid
as such premiums become due. The Indenture Trustee shall at all times while the
Notes are outstanding be named as an additional insured on such casualty and
liability policies maintained by the Servicer. In the event the Back-up
Servicer, when acting as Servicer hereunder, maintains such insurance policy and
the cost of such insurance policy is in excess of the cost of insurance policies
otherwise maintained by the Back-up Servicer, such cost shall be reimbursed to
the Back-up Servicer in its capacity as Servicer as an expense pursuant to
Section 3.04(b) of the Indenture.

                           (c) The Servicer shall maintain errors and omissions
insurance with respect to the Servicer, its employees and agents, a fidelity
bond and coverage in respect of crime and breaches of fiduciary duty ("Fiduciary
Insurance") in such form and amount as is customary for institutions acting as
custodian of funds in respect of equipment leases, loans or receivables on
behalf of institutional investors. Any such fidelity bond and errors and
omissions insurance shall protect and insure the Servicer and the Indenture
Trustee on behalf of the Noteholders against losses, including forgery, theft,
embezzlement, fraud, errors and omissions and negligent acts of such persons and
shall be maintained in a form and amount that would meet the requirements of
prudent institutional equipment lease and loan servicers. No provision of this
Section 4.05 requiring such fidelity bond, Fiduciary Insurance and errors and
omissions insurance shall diminish or relieve the Servicer from its duties and
obligations as set forth in this Servicing Agreement. The Servicer shall be
deemed to have complied with this provision if one of its respective Affiliates
has such fidelity bond, Fiduciary Insurance and errors and omissions policy
coverage and, by the terms of such fidelity bond, Fiduciary Insurance and errors
and omissions policy, the coverage afforded thereunder extends to the Servicer
and the Indenture

                                      -16-
<PAGE>   20
Trustee on behalf of the Noteholders. The Servicer shall cause each and every
subservicer for it to maintain a policy of insurance covering errors and
omissions and a fidelity bond which would meet such requirements. The Indenture
Trustee, on behalf of the Noteholders, shall be named an additional insured and
upon a request of the Indenture Trustee, the Servicer shall cause to be
delivered to the Indenture Trustee a certification evidencing coverage under
such fidelity bond and insurance policy. Any such fidelity bond or insurance
policy shall not be (i) canceled unless the Servicer has identified a
replacement fidelity bond or (ii) modified in a materially adverse manner
without ten days' prior written notice to the Noteholders, the Indenture Trustee
and the Rating Agencies, and such modification shall not result in the
withdrawal or downgrade of the rating of any class of Notes.

                  Section 4.06 Reserved.

                  Section 4.07 Servicing Compensation; Payment of Certain
Expenses and Custodian Fee by Servicer. Until such time as the Servicer has
received a Servicer Termination Notice (and has been paid all accrued and unpaid
Servicer Fees as of the date of actual termination), as compensation for its
activities, the Servicer shall be entitled to receive the Servicer Fee pursuant
to Section 3.04(b)(I)(iii) of the Indenture. The Servicer shall be required to
pay all expenses incurred by it in connection with its activities hereunder,
including, without limitation, (a) fees and disbursements of the Independent
Public Accountants, (b) taxes imposed on the Servicer (but excluding any sales
taxes imposed on any Obligor, the Originators, the Issuers, the Transferors, any
Noteholder or any other Person), (c) expenses incurred in connection with
distributions and reports to the Noteholders and (d) all other fees and expenses
incurred by the Servicer in connection with performing its duties hereunder, not
expressly stated hereunder to be for the account of the Noteholders or otherwise
reimbursable pursuant to this Agreement or Indenture.

                  On each Payment Date, the Servicer shall pay to the Custodian
the Custodian Fee out of funds retained by the Servicer from Collections to be
used for such purpose pursuant to the Indenture.

                  Section 4.08 Monthly Statement. (a) With respect to each
Payment Date and the related Collection Period, the Servicer will provide to the
Back-up Servicer and the Indenture Trustee, and the Indenture Trustee will
provide to the Noteholders and the Rating Agencies, on each Determination Date,
a monthly statement (a "Monthly Statement"), signed by a Servicing Officer, in
substantially the form of Exhibit A hereto.

                           (b) On each Determination Date, the Servicer will
deliver or cause to be delivered to the Indenture Trustee and the Back-up
Servicer a Computer Tape and a diskette (or any other electronic transmission
reasonably acceptable to the Indenture Trustee) in a format reasonably
acceptable to the Indenture Trustee, containing the information with respect to
the Contracts as of the preceding Collection Period necessary for preparation of
the Monthly Statement relating to the immediately succeeding Determination Date
and necessary to determine the application of Collections as provided in the
Indenture. Other than the duties specifically set forth in the Transaction
Documents, the Indenture Trustee shall have no obligations hereunder, including,
without limitation, to supervise, verify, monitor or administer the performance
of the Servicer or to verify the information contained on the Computer Tape

                                      -17-
<PAGE>   21
delivered pursuant to this Section other than to verify that such Computer Tape
is in a readable format.

                  Section 4.09 Annual Certificates as to Compliance. The
Servicer will provide to the Indenture Trustee and the Rating Agencies, no later
than 120 days following the end of each fiscal year, an Officer's Certificate
stating that (a) a review of the activities of the Servicer, and the Servicer's
performance pursuant to this Agreement, for the period ending on the last day of
the immediately preceding fiscal year has been made under such Person's
supervision, and (b) the Servicer has performed or has caused to be performed in
all material respects all of its obligations under this Agreement throughout
such period and no Event of Servicing Termination has occurred and is continuing
(or, if an Event of Servicing Termination has so occurred and is continuing,
specifying each such event, the nature and status thereof and the steps
necessary to remedy such event, and, if an Event of Servicing Termination
occurred during such fiscal year but is no longer continuing, and no notice
thereof was given to the Indenture Trustee, specifying such Event of Servicing
Termination and the steps which were taken to remedy such event).

                  Section 4.10 Annual Independent Public Accountant's Reports.
The Initial Servicer will cause an Independent Public Accountant (who may also
render other services to the Servicer) to furnish to the Indenture Trustee, the
Noteholders and the Rating Agencies, no later than May 31 of each year,
commencing May 31, 2001, a report relating to the previous calendar year to the
effect that (a) such firm has read the Indenture and this Servicing Agreement,
(b) has examined, in accordance with the uniform Single Attestation Program for
Mortgage Bankers ("USAP") and with certain procedures specified in such
certificate or opinion, the records and calculations set forth in the Monthly
Statements delivered by the Initial Servicer during the reporting period and
certain specified documents and records relating to the servicing of the
Contracts and the reporting requirements with respect thereto and (c) on the
basis of such examination, certifies that the Initial Servicer complied with the
minimum servicing standards identified in USAP, in all material respects, except
for such significant exceptions or errors in records that, in the opinion of
such firm, the USAP requires it to report, and the servicing reporting
requirements have been conducted in compliance with the Indenture and the
Servicing Agreement. In the event such firm requires the Indenture Trustee to
agree to the procedures performed by such firm, the Servicer shall request the
Indenture Trustee in writing to so agree; it being understood and agreed that
the Indenture Trustee will deliver such letter of agreement upon written
direction of the Majority Holders, and the Indenture Trustee shall not make any
independent inquiry or investigation as to, and shall have no obligation or
liability in respect of, the sufficiency, validity or correctness of such
procedures. Delivery of such reports, information and documents to the Indenture
Trustee is for informational purposes only, and the Indenture Trustee's receipt
of such shall not constitute constructive notice of any information contained
therein or determinable from information contained therein, including the
Servicer's compliance with any of its covenants hereunder.

                  In the event the Back-up Servicer is then acting as Servicer,
in lieu of the above, the Back-up Servicer, no later than May 31 of each year,
commencing May 31, 2001, at its expense, shall cause an Independent Public
Accountant to furnish a statement (an "Accountant's Statement") to the Indenture
Trustee and the Noteholders to the effect that (i) such Independent Public
Accountant has obtained a letter of representation regarding certain matters
from the management of the Back-up Servicer, which includes an assertion that
the Back-up Servicer has

                                      -18-
<PAGE>   22
complied with certain minimum mortgage loan servicing standards (to the extent
applicable to commercial and multifamily mortgage loans) identified in USAP,
with respect to the servicing of commercial and multifamily mortgage loans the
during the most recently completed calendar year and (ii) on the basis of an
examination conducted by such Independent Public Accountant in accordance with
standards established by the American Institute of Certified Public Accountants,
such representation is fairly stated in all material respects, subject to such
exceptions and other qualifications that may be appropriate. In rendering its
report such firm may rely, as to matters relating to the direct servicing of
commercial and multifamily mortgage loans by sub-servicers, upon comparable
reports of Independent Public Accountants rendered on the basis of examinations
conducted in accordance with the same standards (rendered within one year of
such report) with respect to those sub-servicers. With respect to any electronic
version of an Accountant's Statement prepared by the reporting person, the
reporting person shall receive written confirmation from the related accountants
that such electronic version is a conformed copy of the original Accountant's
Statement.

                  Section 4.11 Access to Certain Documentation and Information
Regarding the Pledged Property. (a) The Servicer shall provide the Indenture
Trustee, the Noteholders and their respective duly authorized representatives,
agents, attorneys or accountants access to any and all documentation regarding
the Pledged Property (including the List of Initial Contracts, all Lists of
Subsequent Contracts and all Lists of Substitute Contracts) 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.

                           (b) At all times during the term hereof, the Servicer
shall either (i) keep available in physical form at its principal executive
office for inspection by the Indenture Trustee, any Noteholder, or their
respective duly authorized representatives, agents, attorneys or accountants a
list of all Contracts then subject to the lien of the Indenture, together with a
reconciliation of such list to the List of Initial Contracts, all Lists of
Subsequent Contracts and all Lists of Substitute Contracts and each of the
Monthly Statements, indicating the cumulative removals and additions of
Contracts, subject to the lien of the Indenture or (ii) maintain electronic
facilities which allow such list and reconciliation to be generated.

                           (c) The Servicer will maintain accounts and records
as to each respective Contract serviced by the Servicer that are accurate and
sufficiently detailed to permit (i) the reader thereof to know as of the most
recent Calculation Date the status of such Contract, including payments and
recoveries made and payments owing (and the nature of each), and (ii)
reconciliation between payments or recoveries 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 will maintain its Contract
Management System and other computerized records so that, from and after the
time of the pledge under the Indenture of each Contract to the Indenture
Trustee, the Servicer's accounts and records (including any back-up computer
archives) that refer to any Contract indicate clearly that the Contract is
Pledged Property. Indication of a Contract being Pledged Property will be
deleted from or modified on the Servicer's accounts and records when, and only
when such Contract is an Early Termination Contract, an Expired Contract or a
Purchased Contract and all amounts payable under the

                                      -19-
<PAGE>   23
Contract or, in the case of a Purchased Contract, under the Transaction
Documents, have been paid in full.

                           (e) The failure of the Servicer to disclose
information whose disclosure is not permitted by applicable law shall not
constitute a breach of this Section 4.11.

                  Section 4.12 Financial Statements. The Servicer (except if the
Back-up Servicer is acting in such capacity) shall provide to the Indenture
Trustee, the Noteholders and the Rating Agencies (i) quarterly unaudited
financial statements of the Servicer for the then-current fiscal year and (ii)
annual audited financial statements of the Servicer for the most recently
completed fiscal year; provided, that to the extent such information is publicly
available on a website, the Servicer shall only need to notify the Indenture
Trustee, the Noteholders and the Rating Agencies in writing of the availability
of such financial statements and the address for the website where such
financial statements are located.

                  Section 4.13 Performance of Back-up Servicer's Duties. (a) The
Back-up Servicer, prior to becoming the successor Servicer, shall perform the
following duties and obligations:

                                    (i) On or prior to the Business Day
following each related Determination Date, the Back-up Servicer shall review the
summary and settlement report worksheets contained in the Monthly Statement and
will verify that the correct balances have been inserted based solely on the
formulas contained in the Monthly Statement. The Back-up Servicer shall not be
required to review or verify any other information contained in the Monthly
Statement. The Back-up Servicer shall notify the Servicer and the Indenture
Trustee in writing of any disagreements with the summary and settlement
worksheet in the Monthly Statement based on such review not later than the 2nd
Business Day preceding the related Payment Date to the extent such Monthly
Statement was received on or prior to the Business Day following the related
Determination Date and as soon as practicable if it is received after such date.

                                    (ii) If the Servicer disagrees with the
notice provided under paragraph (i) above by the Back-up Servicer or if the
Servicer has not reconciled such discrepancy, the Back-up Servicer agrees to
confer with the Servicer to resolve such disagreement as promptly as practicable
and shall settle such discrepancy with the Servicer if possible, and notify the
Indenture Trustee and the Ratings Agencies in writing of the resolution thereof.
The Servicer hereby agrees to cooperate at its own expense with the Back-up
Servicer in reconciling any discrepancies therein. If after the notification
provided under paragraph (i) above by the Back-up Servicer and prior to the
related Payment Date, such discrepancy is not resolved, the Back-up Servicer
shall promptly notify in writing the Indenture Trustee of the continued
existence of such discrepancy. Following receipt of such notice by the Indenture
Trustee, the Servicer shall deliver to the Indenture Trustee and the Back-up
Servicer no later than two Business Days after such receipt, a certificate
describing the nature and amount of such discrepancies and the actions the
Servicer proposes to take with respect thereto.

                           (b) In the event that the Back-up Servicer shall
become the Servicer hereunder, the Back-up Servicer shall service and administer
the Contracts and perform all of its duties hereunder in accordance with
customary and usual procedures employed by institutions

                                      -20-
<PAGE>   24
servicing commercial loans, which institutions are considered prudent by the
Back-up Servicer, and in accordance with the Back-up Servicer's own customary
practices, or if a higher standard, the highest degree of skill and attention
that the Back-up Servicer exercises with respect to contracts comparable to the
Contacts that the Back-up Servicer services for itself.

                           (c) The Back-up Servicer undertakes to perform only
such duties and obligations as are specifically set forth in this Agreement, it
being expressly understood by all parties hereto that there are no implied
duties or obligations of the Back-up Servicer hereunder. Without limiting the
generality of the foregoing, the Back-up Servicer, except as expressly set forth
herein, shall have no obligation to supervise, verify, monitor or administer the
performance of the Servicer. The Back-up Servicer shall have no liability for
any act or omission of the Servicer. Neither the Back-up Servicer nor any of its
officers, directors, employees or agents shall be liable, directly or
indirectly, for any damages or expenses arising out of the services performed
under this Agreement other than damages or expenses which result from the gross
negligence or willful misconduct of it or them.

                  Section 4.14 Indemnity for Liability Claims. The Issuers shall
indemnify, defend and hold harmless the Back-up Servicer (which shall include
any of its directors, employees, officers and agents) against and from any and
all costs, expenses, losses, damages, claims and liabilities arising out of or
resulting from this Agreement to the extent not paid by the Servicer pursuant to
Section 5.01 of this Agreement. Such amounts shall be paid solely from amounts
on deposit in the Collection Account pursuant to Section 3.04(b)(I)(ii) of the
Indenture and is otherwise non-recourse to the Issuers; provided, that the
Back-up Servicer shall not be entitled to any indemnification for any cost,
expense, loss, damage or liability arising out of or resulting from the willful
misconduct or gross negligence of the Back-up Servicer or its directors,
employees, officers or agents.

                                   ARTICLE 5

                                  THE SERVICER

                  Section 5.01 Liability of Servicer; Indemnities. (a) The
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically undertaken by the Servicer herein. Such obligations
shall include the following:

                                    (i) The Servicer (unless the Back-up
Servicer is then acting as Servicer) shall indemnify, defend and hold harmless
the Indenture Trustee (which shall include any of its directors, employees,
officers and agents), the Issuers, the Originators, the Transferors, the Back-up
Servicer and the Noteholders against and from, and reimburse for, any and all
costs, expenses, losses, liabilities, obligations, damages, claims, injuries (to
persons, property or natural resources), penalties, documentary stamp or similar
taxes, actions, suits and judgments arising out of or resulting from the use,
repossession, foreclosure or operation of any Collateral by the Servicer; and

                                    (ii) The Initial Servicer shall indemnify,
defend and hold harmless the Indenture Trustee (which shall include any of its
directors, employees, officers and agents), the Issuers, the Originators, the
Transferors, the Back-up Servicer and the Noteholders

                                      -21-
<PAGE>   25
against and from, and reimburse for, any and all costs, losses, liabilities,
obligations, expenses (including the reasonable fees and expenses of agents and
counsel) claims, damages, injuries (to persons, property or natural resources),
penalties, documentary stamp or similar taxes, actions, suits and judgments to
the extent that such losses, claims, damages or liabilities arose out of, or
were imposed upon the Indenture Trustee, the Issuers, the Originators, the
Transferors or the Noteholders in connection with or by reason of (a) the acts
of the Initial Servicer or the failure by the Initial Servicer to perform its
duties under this Agreement or under the other Transaction Documents or errors
or omissions of the Initial Servicer related to such duties including the making
of any representations or warranties hereunder which are inaccurate in any
material respect; provided that the Indenture Trustee shall not be entitled to
any indemnification hereunder to the extent that such loss, expense, claim or
liability resulted from the Indenture Trustee's gross negligence or willful
misconduct. The provisions of this Section shall run directly to and be
enforceable by an injured party subject to the limitations hereof, and the
indemnification provided to the Indenture Trustee, the Issuers, the Originators,
the Transferors and the Noteholders pursuant to this Article V by the Initial
Servicer shall survive the payment in full of the Notes, the termination of the
Indenture, and the resignation or removal of the Indenture Trustee.

                           (b) If the Back-up Servicer is acting as Servicer,
the Back-up Servicer will indemnify, defend and hold harmless the Issuers, the
Originators, the Indenture Trustee, the Transferors, the Servicer and the
Noteholders against any and all costs, losses, liabilities, obligations,
expenses, claims, damages, injuries, penalties, actions, suits and judgments
arising out of (i) a breach of the representations and warranties of the Back-up
Servicer hereunder or (ii) arising out of the willful misconduct or gross
negligence of the Back-up Servicer in performing its duties as successor
Servicer hereunder provided, however, that the Back-up Servicer shall have no
obligation to indemnify any Person for any cost, loss, liability, obligation,
expense, claim, damage, injury, penalty, action, suit or judgment arising out of
the gross negligence or willful misconduct of such Person or for any loss or
damage which is in the nature of consequential or indirect loss or damage.

                           (c) The Servicer shall pay any amounts owing pursuant
to Section 5.01(a) hereof directly to the indemnified Person, and such amounts
shall not be deposited in the Collection Account.

                           (d) Indemnification under this Section 5.01 shall
include, without limitation, reasonable fees and expenses of counsel and
expenses of litigation reasonably incurred. If the Servicer has made any
indemnity payments to the Indenture Trustee, the Issuers, the Originators, the
Transferors or the Noteholders pursuant to this Section 5.01 and such party
thereafter collects any of such amounts from others, such party will promptly
repay such amounts collected to the Servicer, without interest.

                  Section 5.02 Merger, Consolidation, or Assumption of the
Obligations of Servicer. Any entity (i) into which the Servicer may be merged or
consolidated, (ii) resulting from any merger or consolidation to which the
Servicer shall be a party or (iii) succeeding to the business of the Servicer,
shall be the successor to the Servicer hereunder, without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, and such entity in any of the
foregoing cases shall execute an

                                      -22-
<PAGE>   26
agreement of assumption, in a form reasonably satisfactory to the Indenture
Trustee and the Noteholders, agreeing to perform every obligation of the
Servicer hereunder; provided, however, that the Initial Servicer shall not merge
or consolidate with any other entity nor discontinue its existence until the
Indenture Trustee has received written confirmation from the Rating Agencies
that such action shall not adversely affect the rating of any Class of Notes.
The Servicer shall provide prompt written notice of any such event to the
Issuers, the Indenture Trustee, the Noteholders and the Rating Agencies.

                  Section 5.03 Limitation on Liability of Servicer and Others.
Neither the Servicer nor any of the directors, officers, employees or agents of
the Servicer shall be under any liability to the Indenture Trustee, the
Originators, the Transferors, the Issuers or the Noteholders, except as
expressly provided herein, for any action taken or for refraining from the
taking of any action pursuant to this Agreement or the Indenture or for errors
in judgment made in good faith; provided, however, that this provision shall not
protect the Servicer or any Person against any liability that would otherwise be
imposed by reason of willful misconduct, bad faith or gross negligence in the
performance of duties hereunder or under the Indenture. The Servicer and any
director or officer or 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 respecting any matters arising hereunder or under the Indenture. Except
as provided herein, the Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its duties to
service the Pledged Property in accordance with this Agreement and that in its
opinion may involve it in any expense or liability.

                  Section 5.04 Servicer Not to Resign. Subject to the provisions
of Section 5.02 hereof, the Servicer shall not resign from the obligations and
duties hereby imposed on it as Servicer except upon consent of the Majority
Holders or a determination that the performance of its duties hereunder is no
longer permissible under applicable law. Any such determination permitting the
resignation of the Servicer shall be evidenced by an Opinion of Counsel to such
effect delivered to the Indenture Trustee, the Noteholders and the Rating
Agencies. No such resignation shall become effective until a successor Servicer
reasonably acceptable to the Majority Holders shall have assumed the
responsibilities and obligations of the Servicer in accordance with Section 6.02
hereof.

                                   ARTICLE 6

                              SERVICING TERMINATION

                  Section 6.01 Events of Servicing Termination. (a) If any of
the following events (each an "Event of Servicing Termination") shall occur and
be continuing:

                                    (i) Any failure by the Servicer (A) to make
a Servicer Advance in accordance with Section 4.03 hereof (for so long as HPSC,
Inc. or any of its Affiliates is acting as Servicer) or (B) to make any payment
or deposit required to be made hereunder that, in either case, continues
unremedied for a period of two Business Days after the date such Servicer
Advance, payment or deposit, as applicable, was due (or with respect to
reimbursable fees and expenses payable to third parties by the Servicer, within
ten Business Days of the date when any such reimbursement was due);

                                      -23-
<PAGE>   27
                                    (ii) Any failure by the Servicer to submit a
Monthly Statement pursuant to Section 4.08 hereof that continues unremedied for
a period of three Business Days after the earlier of the date upon which (A) the
Indenture Trustee or a Noteholder provides written notification to the Servicer
of such failure or (B) any Servicing Officer has actual knowledge that the
Indenture Trustee and the Noteholders have not received a copy of the Monthly
Statement in accordance with the provisions hereof;

                                    (iii) Any failure on the part of the
Servicer duly to observe or perform in any material respect any other covenants
or agreements of the Servicer set forth in this Agreement or any other
Transaction Document to which it is a party or any breach of a representation or
warranty of the Servicer set forth in Section 2.02 of this Agreement, which
failure or breach, individually or taken together with all other failures or
breaches, (A) materially and adversely affects the rights of the Indenture
Trustee, the Noteholders or the Issuers and (B) continues unremedied for a
period of 30 days after the earlier to occur of (x) the date on which written
notice of such failure or breach shall have been given to a Servicing Officer by
the Indenture Trustee, the Issuers or any of the Noteholders or (y) the date on
which any Servicing Officer has actual knowledge, or is required pursuant to the
terms of this Agreement to provide notice to the Noteholders, of any such
failure or breach;

                                    (iv) The Servicer shall consent to the
appointment of a custodian, receiver, trustee or liquidator (or other similar
official) of itself, or of a substantial part of its property, or shall admit in
writing its inability to pay its debts generally as they come due, a court of
competent jurisdiction shall determine that the Servicer is generally not paying
its debts as they come due or the Servicer shall make a general assignment for
the benefit of creditors;

                                    (v) The Servicer shall file a voluntary
petition in bankruptcy or a voluntary petition or an answer seeking
reorganization in a proceeding under any bankruptcy laws (as now or hereafter in
effect) or an answer admitting the material allegation of a petition filed
against the Servicer in any such proceeding, or the Servicer shall, by voluntary
petition, answer or consent, seek relief under the provisions of any now
existing or future bankruptcy or other similar law providing for the
reorganization or winding up of debtors, or providing for an agreement,
composition, extension or adjustment with its creditors;

                                    (vi) A petition against the Servicer in a
proceeding under applicable bankruptcy laws or other insolvency laws, as now or
hereafter in effect, shall be filed and shall not be stayed, withdrawn or
dismissed within 60 days thereafter, or if, under the provisions of any law
providing for reorganization or winding-up of debtors which may apply to the
Servicer, any court of competent jurisdiction shall assume jurisdiction, custody
or control of the Servicer, or any substantial part of its property, and such
jurisdiction, custody or control shall remain in force unrelinquished, unstayed
or unterminated for a period of 60 days;

                                    (vii) Any assignment of rights or
delegations of duties by the Servicer with respect to its duties or rights
hereunder, except as specifically permitted hereunder, or any attempt to make
such an assignment or delegation;

                                    (viii) A Restricting Event shall occur;

                                      -24-
<PAGE>   28
                                    (ix) The occurrence of a change of control
of the Servicer ("control" having the meaning ascribed to it in the rules and
regulations under the Securities Exchange Act of 1934, as amended);

                                    (x) Failure of the Initial Servicer or the
Originators to make one or more payments due with respect to aggregate recourse
debt or other obligations exceeding $1,000,000, after giving effect to any
applicable cure period, so long as such failure shall be continuing and shall
not have been waived by the Person or Persons entitled to performance;

                                    (xi) One or more judgments, decrees or
orders against the Servicer or any Originator for the payment of money
aggregating in excess of $1,000,000 shall exist, and any one of such judgments,
decrees or orders shall have been unsatisfied and in effect for any period of 60
consecutive days without a stay of execution; provided, however that the
foregoing shall not apply to the extent of any judgment which is covered by an
insurance policy (a) provided by an insurance company ranking among the four
highest ratings in Best's Key Rating Guide, (b) with respect to which such
insurance company has acknowledged in writing its payment obligation for such
judgment, and (c) with respect to which such insurance coverage is not subject
to any deductible which is in an amount which would cause the payment to be made
by such insurance company to be insufficient to reduce the outstanding judgment
to below $1,000,000.

                                    (xii) Failure of the Servicer and its
Affiliates, on a consolidated basis, to maintain a minimum tangible net worth of
$35,000,000 million plus (a) 100% of new equity offerings and (b) 75% of
consolidated net income for each fiscal quarter commencing March 31, 2000
(without any offset for any net losses during any such fiscal quarter); or

                                    (xiii) The Initial Servicer and its
Affiliates, on a consolidated basis, shall report negative net income in any two
or more consecutive fiscal quarters;

then, and in each and every case, so long as an Event of Servicing Termination
shall not have been remedied within any applicable period set forth above, the
Indenture Trustee shall, at the written direction of the Majority Holders, by
notice (the "Servicer Termination Notice") then given in writing to the
Servicer, terminate all, but not less than all, of the rights and obligations of
the Servicer under this Agreement. The Indenture Trustee shall furnish a copy of
any Servicer Termination Notice to the Rating Agencies.

                  In the event the Back-up Servicer is acting as Servicer
hereunder, events described in clauses (viii) through (xiii) above shall not
constitute Events of Servicing Termination in respect of the Back-up Servicer
acting as Servicer hereunder.

                           (b) On and after the time the Servicer receives a
Servicer Termination Notice pursuant to this Section 6.01, 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 Back-up Servicer
and, without limitation, the Back-up Servicer is hereby authorized and empowered
(which authority and power are coupled with an interest and are irrevocable) to
execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things

                                      -25-
<PAGE>   29
necessary or appropriate to effect the purposes of such Servicer Termination
Notice, whether to complete the transfer of the Contracts and related documents
or otherwise.

                  The predecessor Servicer agrees to cooperate with the
Indenture Trustee and the successor Servicer in effecting the termination of the
responsibilities and rights of the Back-up Servicer hereunder, including,
without limitation, providing the Back-up Servicer with access to its servicing
system and records with respect to the Contracts, and transferring to the
Back-up Servicer for administration by it of all cash amounts that shall at the
time be held by the predecessor Servicer for deposit, or shall have been
deposited by the predecessor Servicer, in the Collection Account or the Lockbox
Account, or thereafter shall be received with respect to Contracts, and in
accordance therewith, the Indenture Trustee shall have the right to receive
distributions of all Collections on deposit in the Lockbox Account. To assist
the Back-up Servicer in enforcing all rights under the Contracts, the
predecessor Servicer, at its own expense, shall transfer its electronic records
relating to such Contracts to the Back-up Servicer in such electronic form as
the Back-up Servicer may reasonably request and shall transfer the related
Contract Files and all other records, correspondence and documents relating to
the Contracts that it may possess to the Back-up Servicer in the manner and at
such times as the Back-up Servicer shall reasonably request.

                           (c) Following the occurrence of an Event of Servicing
Termination, but without limiting the rights of the Indenture Trustee or the
Majority Holders under any other provisions of the Transaction Documents, the
Majority Holders may direct the Indenture Trustee in writing, to conduct a
review of the Servicer's cash application procedures with respect to Collections
on the Contracts, including, without limitation, transfers from the Lockbox
Account to the Collection Account, and the Indenture Trustee hereby agrees to
conduct such review, or cause a third party to conduct such review, at the
expense of the Servicer on such basis as the Majority Holders shall reasonably
determine.

                  Section 6.02 Resignation of Servicer; Back-up Servicer;
Appointment of Successor; Limitations on Liability.

                           (a) Upon the Servicer's receipt of notice of
termination pursuant to Section 6.01 or the Servicer's resignation pursuant to
Section 5.04, the Back-up Servicer shall be the successor in all respects to the
Servicer in its capacity as servicer under this Servicing Agreement (including
the right to withdraw funds from the Lock-Box Accounts), and shall be subject to
all the responsibilities, duties and liabilities of the Servicer pursuant to
this Servicing Agreement; provided, however, that BNY Asset Solutions, LLC, in
its capacity as Back-up Servicer, shall not be responsible for, and shall have
no liability with respect to, the acts or omissions of the Servicer or any prior
servicer occurring prior to the time that BNY Asset Solutions, LLC, becomes the
Servicer hereunder; and, provided further, that before becoming subject to all
the responsibilities, duties and liabilities of the Servicer hereunder, the
Back-up Servicer may require that satisfactory indemnity or other security be
furnished to protect it against all liability, except liability which is
adjudicated to have resulted from its negligence or willful misconduct. As
compensation therefor, the Back-up Servicer shall be entitled to such
compensation, payable out of the Collection Account, as the Servicer would have
been entitled to under this Servicing Agreement if no such notice of termination
had been given.

                                      -26-
<PAGE>   30
                           (b) Notwithstanding subsection (a) above, BNY Asset
Solutions, LLC, may, if for any reason BNY Asset Solutions, LLC, shall be
unwilling to act as Back-up Servicer, or shall, if it shall be legally unable so
to act, appoint, or petition a court of competent jurisdiction to appoint, any
established financial institution reasonably acceptable to the Majority Holders,
whose regular business shall include the servicing of contracts comparable to
the Contracts and the appointment of which will not cause a downgrade in the
ratings assigned by the Rating Agencies to the Notes, as the successor to the
Servicer under this Servicing Agreement. BNY Asset Solutions, LLC, shall act as
Back-up Servicer until a successor is appointed in accordance herewith. In
connection with such appointment, the Indenture Trustee may make such
arrangements for the compensation of such successor, out of payments on the
Contracts, as it and such successor shall agree; provided, however, that the
Servicing Fee Rate shall not be in excess of 0.75% per annum unless approved in
writing by the Holders of at least 66 2/3 percent of the aggregate outstanding
Note Principal Balance of the Notes. Pending appointment of a successor to the
Servicer hereunder, BNY Asset Solutions, LLC, shall act in such capacity,
subject to the protections afforded BNY Asset Solutions, LLC, in subsections (a)
and (c) of this Section 6.02. The Indenture Trustee and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. Notwithstanding anything else herein to the
contrary, in no event shall the Indenture Trustee be liable for any servicing
fee or for any differential in the amount of the servicing fee paid hereunder
and the amount necessary to induce any successor Servicer to act as successor
Servicer under this Agreement and the transactions set forth or provided for
herein.

                  In the event the Back-up Servicer becomes the successor
Servicer, it may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Servicer, the Issuers, and each
Noteholder, which resignation will not become effective until such time as a
successor Servicer has been appointed in accordance with the provisions of this
Section 6.02. Upon receiving such notice of resignation, the Issuers shall
promptly appoint a successor Servicer, acceptable to the Majority Holders, by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Servicer and one copy to the successor Servicer. If
no successor Servicer shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the Indenture
Trustee shall petition any court of competent jurisdiction for the appointment
of a successor Servicer.

                           (c) Notwithstanding any other provision of this
Agreement, in the event that BNY Asset Solutions, LLC, acts as the servicer in
accordance with this Section 6.02, it shall be entitled to terminate any
existing Subservicing Agreements and perform the duties required of the Servicer
by entering into one or more Subservicing Agreements with a Subservicer selected
by it with reasonable care. The Indenture Trustee shall pay any subservicing
fees to any such Subservicer engaged by it with the Servicing Fee.

                           (d) BNY Asset Solutions LLC, in its capacity as
Back-up Servicer or as Servicer, may resign from the duties and obligations
hereby imposed on it upon at least 60 days written notice to the Indenture
Trustee and the Noteholders; provided that BNY Asset Solutions, LLC may not
resign in its capacity as Servicer until a successor Servicer is appointed
pursuant to Section 6.02 hereof. If no successor Servicer shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the Indenture

                                      -27-
<PAGE>   31
Trustee shall petition any court of competent jurisdiction for the appointment
of a successor Servicer.

                           (e) In its capacity as Back-up Servicer, the Back-up
Servicer shall be entitled to receive the Back-up Servicing Fee.

                           (f) Upon the resignation or termination of the
Initial Servicer and the assumption of its duties by the Back-up Servicer in
accordance with this Section 6.02, the Back-up Servicer shall no longer be
entitled to receive the Back-up Servicing Fee, and shall be entitled to receive
the Servicer Fee which shall be inclusive of all other amounts reimbursable
pursuant to this Agreement.

                  Section 6.03 Notification to Noteholders. The Servicer shall
promptly notify a Responsible Officer of the Indenture Trustee and the
Noteholders in writing of any Event of Servicing Termination. Upon any
termination of, or appointment of a successor to, the Servicer pursuant to this
Article VI, the Indenture Trustee shall give prompt written notice thereof to
the Noteholders at their respective addresses appearing in the Register, the
Issuers and the Rating Agencies.

                  Section 6.04 Waiver of Past Defaults. The Majority Holders
may, on behalf of the Noteholders, with notice to the Indenture Trustee, waive
any default by the Servicer in the performance of its obligations hereunder and
its consequences. Upon any such waiver of a past default, such default shall
cease to exist, and any Event of Servicing Termination 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 Servicer shall
promptly deliver to each of the Rating Agencies notice of any such waiver.

                  Section 6.05 Effects of Termination of Servicer. (a) Upon the
appointment of the successor Servicer, the predecessor Servicer shall
immediately remit any Scheduled Payments, Final Scheduled Payments, Liquidation
Proceeds or other payments that it may receive pursuant to any Contract or
otherwise to the successor Servicer for the benefit of the Indenture Trustee on
behalf of the Noteholders after such date of appointment.

                           (b) Subject to Section 6.02 hereof, after the
delivery of a Servicer Termination Notice, the predecessor Servicer shall have
no further rights or obligations with respect to the management or servicing of
the Pledged Property or the enforcement, custody or collection of the Contracts,
and the successor Servicer shall have all of such obligations, except that the
predecessor Servicer will transmit or cause to be transmitted directly to the
successor Servicer for the benefit of the Noteholders, promptly upon receipt and
in the same form in which received, any amounts held by the predecessor Servicer
(properly endorsed where required for the successor Servicer to collect them)
received as payments upon or otherwise in connection with the Contracts. The
predecessor Servicer's indemnification obligations pursuant to Section 5.01
hereof will survive the termination or resignation of the predecessor Servicer
but will not extend to any acts or omissions of a successor Servicer.

                                      -28-
<PAGE>   32
                           (c) An Event of Servicing Termination shall not
affect the rights and duties of the parties hereunder (including, but not
limited to, the obligations and indemnities of the Servicer pursuant to Article
IV of the Indenture and Section 5.01 hereof) other than those relating to the
management, servicing, custody or collection of the Contracts.

                                   ARTICLE 7

                            MISCELLANEOUS PROVISIONS

                  Section 7.01 Amendment. (a) This Agreement may be amended from
time to time by the Issuers, the Servicer, the Back-up Servicer and the
Indenture Trustee, without the consent of any of the Noteholders, to cure any
ambiguity herein; provided, however, that such action shall not, as evidenced by
an Opinion of Counsel acceptable to the Indenture Trustee, adversely affect in
any respect the interests of any Noteholder.

                           (b) This Agreement may also be amended from time to
time by the Servicer, the Issuers and the Indenture Trustee with the written
consent of the Majority Holders for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Noteholders; provided, however,
that no such amendment shall (i) increase or reduce in any manner the amount of,
or accelerate or delay the timing of, payments that are required to be made on
any Note without the written consent of the Holder of such Note or (ii) reduce
the aforesaid percentage required to consent to any such amendment, without the
written consent of the Holders of all Notes then outstanding.

                           (c) Prior to the effectiveness of any amendment under
Section 7.01(a) or (b) hereof, the Rating Agencies shall have confirmed in
writing their respective ratings of the Notes.

                           (d) Promptly after the execution of any such
amendment, the Indenture Trustee shall furnish a written copy of the text of
such amendment (and any consent required with respect thereto) to each
Noteholder and the Rating Agencies.

                           (e) Approval of the particular form and substance of
any proposed amendment or consent shall be necessary for the consent of the
Noteholders under Section 7.01(b) hereof. The manner of obtaining such consents
and of evidencing the authorization of the execution thereof by the Noteholders
shall be subject to such reasonable requirements as the Indenture Trustee may
prescribe.

                           (f) The Indenture Trustee shall be entitled to
receive an officer's certificate and an Opinion of Counsel to the effect that
all conditions precedent to the amendment of this Agreement have been satisfied.
The Indenture Trustee may, but shall not be obligated to, execute and deliver
any such amendment which affects the Indenture Trustee's rights, powers,
immunities or indemnifications hereunder.

                  Section 7.02 Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any

                                      -29-
<PAGE>   33
number of counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute but one and the same
instrument.

                  Section 7.03 Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS, WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS OF
ANY STATE.

                  Section 7.04 Waiver of Jury Trial. The Issuers, the Servicer,
the Originators and the Indenture Trustee each hereby waive any right to have a
jury participate in resolving any dispute, sounding in contract, tort, or
otherwise arising out of, connected with, related to, or in connection with this
agreement. Instead, any dispute resolved in court will be resolved in a bench
trial without a jury.

                  Section 7.05 Notices. All demands, notices, instructions,
directions and communications hereunder (other than periodic communications of a
routine nature made in connection with the dissemination of information
regarding the Pledged Property, the Servicer and the Issuers required to be
delivered hereunder, which shall be delivered or mailed by first class mail or
facsimile transmission) shall be in writing, personally delivered or mailed by
overnight courier, and shall be deemed to have been duly given upon receipt (a)
in the case of the Servicer, at 60 State Street, Boston, Massachusetts,
02109-1803, (b) in the case of the Originators, if to HPSC, at 60 State Street,
Boston, Massachusetts, 02109-1803 and if to ACFC, at 433 South Main Street, W.
Hartford, Connecticut 06110, (c) in the case of the Issuers, if to LLC I at 60
State Street, Suite ___, Boston, Massachusetts 02109-1803 and if to LLC II at 60
State Street, Suite ___, Boston Massachusetts 02109-1803, with a copy to the
Originators as set forth in clause (b) above, (d) in the case of the Indenture
Trustee, at 2 North LaSalle Street, Chicago, Illinois 60602, (e) in the case of
the Back-up Servicer, at 600 E. Las Colinas Blvd., Suite 1300, Irving, Texas
75039, with a copy to BNY Asset Solutions LLC, 6550 Rock Spring Drive, Suite
280, Bethseda, Maryland 20817, Attention: ABS Servicing, (f) in the case of S&P,
at 55 Water Street, 40th Floor, New York, NY 10041, Attention: Asset Backed
Surveillance, telephone (212) 438-2000, telecopy (212) 438-2661, (g) in the case
of Fitch, at One State Street Plaza, New York, New York 10004, Attention: Asset
Backed Surveillance, telephone (212) 908-0500, telecopy (212) 635-0476, and (h)
in the case of Moody's, at 99 Church Street, New York, New York 10007,
Attention: ABS Monitoring Group, telephone (212) 553-0300, telecopy (212)
298-7139, email: ServiceReport@moodys.com. Any notice required or permitted to
be mailed to a Noteholder shall be given by first class mail or overnight
courier, postage prepaid, at the address of such Noteholder as shown in the Note
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given on the fifth Business Day
following mailing, whether or not the Noteholder receives such notice. A copy of
each notice sent by any party to a Noteholder hereunder shall be promptly sent
by such party to each Rating Agency.

                  Section 7.06 Severability of Provisions. If any one or more of
the covenants, agreements, provisions, or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way

                                      -30-
<PAGE>   34
affect the validity or enforceability of the other provisions of this Agreement
or of the Notes or the rights of the Holders thereof.

                  Section 7.07 Third Party Beneficiaries. The parties hereto
acknowledge and agree that the Noteholders are intended third party
beneficiaries of this Agreement.

                  Section 7.08 Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Section 5.02 hereof, this
Agreement may not be assigned by the Servicer except with prior written consent
of the Majority Holders. Notice of any such assignment received by a Responsible
Officer of the Indenture Trustee shall be given to the Rating Agencies by the
Indenture Trustee.

                  Section 7.09 Binding Effect. This Agreement shall inure to the
benefit of, and shall be binding upon the Servicer, the Originator, the Issuers,
the Indenture Trustee and the Noteholders and their respective successors and
permitted assigns, subject, however, to the limitations contained in this
Agreement. This Agreement shall not inure to the benefit of any Person other
than the Issuers, the Servicer, the Indenture Trustee and the Noteholders.

                  Section 7.10 Survival of Agreement. All covenants, agreements,
representations and warranties made herein and in the other documents delivered
pursuant hereto shall survive the pledge of the Pledged Property and the
issuance of the Notes and shall continue in full force and effect until payment
in full of the Notes and all amounts owing to the Indenture Trustee hereunder
and under the other Transaction Documents, as applicable.

                  Section 7.11 Captions. The captions or headings in this
Agreement are for convenience only and in no way define, limit or describe the
scope or intent of any provisions or sections of this Agreement.

                  Section 7.12 Exhibits. The exhibits to this Agreement are
hereby incorporated herein and made a part hereof and are an integral part of
this Agreement.

                  Section 7.13 Calculations. Except as otherwise provided in
this Agreement, including, without limitation, with respect to the calculation
of interest on the Class A Notes, the Class B1 Notes and the VFN Notes all
interest rate calculations under this Agreement, including those with respect to
the Contracts, will be made on the basis of a 360-day year and twelve 30-day
months and will be carried out to at least seven decimal places.

                  Section 7.14 No Proceedings. The Servicer, each Originator and
the Indenture Trustee each hereby agrees that it will not directly or indirectly
institute, or cause to be instituted, against any of the Issuers or the
Transferors any bankruptcy or insolvency proceeding so long as there shall not
have elapsed one year plus one day since the maturity date of the latest
maturing securities of either of the Issuers.

                  Section 7.15 Rights of Indenture Trustee. The Indenture
Trustee shall be afforded the same rights, protections, immunities and
indemnities set forth in the Indenture as if specifically set forth herein.

                                      -31-
<PAGE>   35
                  IN WITNESS WHEREOF, the Servicer, the Originators, the Issuers
and the Indenture Trustee have caused this Agreement to be duly executed by
their respective officers, all as of the day and year first above written.

                             HPSC EQUIPMENT RECEIVABLES 2000-1 LLC I, as
                                  Issuer

                             By:__________________________________
                                  Name:
                                  Title:

                             HPSC EQUIPMENT RECEIVABLES 2000-1 LLC II, as
                                  Issuer

                             By:__________________________________
                                  Name:
                                  Title:

                             HPSC, INC., as Servicer

                             By:__________________________________
                                  Name:
                                  Title:

                             HPSC, INC., as Originator

                             By:__________________________________
                                  Name:
                                  Title:
<PAGE>   36
                             AMERICAN COMMERCIAL FINANCE
                                  CORPORATION, as Originator

                             By:__________________________________
                                  Name:
                                  Title:

                             BNY MIDWEST TRUST COMPANY, not in its
                                  individual capacity
                                  but solely as Indenture Trustee

                             By:__________________________________
                                  Name:
                                  Title:

                             BNY ASSET SOLUTIONS, LLC, as Back-up Servicer

                             By:__________________________________
                                  Name:
                                  Title:

                     [Signature Page to Servicing Agreement]
<PAGE>   37
                                                                       EXHIBIT A

                            FORM OF MONTHLY STATEMENT

                                      A-1
<PAGE>   38
                                                                       EXHIBIT B

                    FORM OF REQUEST FOR RELEASE OF DOCUMENTS

                                            [Date]

BNY Midwest Trust Company
2 North LaSalle Street, Suite 1020
Chicago, Illinois 60602

         Re:      Servicing Agreement, dated as of December 1, 2000, among HPSC
                  Equipment Receivables 2000-1 LLC I and HPSC Equipment
                  Receivables 2000-1 LLC II, as Issuers, HPSC, Inc., as
                  Servicer, HPSC, Inc. and American Finance Commercial
                  Corporation, as Originators, and BNY Midwest Trust Company, as
                  Indenture Trustee

                  In connection with the administration of the pool of Contracts
held by BNY Midwest Trust Company, as Indenture Trustee, for the benefit of the
Noteholders we request the release, and acknowledge receipt, of the (Contract
File/[specify document]) for the Contract described below, for the reason
indicated.

Obligor's Name, Address & Zip Code:

Contract Number:

Reason for Requesting Documents (check one)

____   1.         Contract Paid in Full.

                           (Servicer hereby certifies that all amounts received
                           in connection therewith have been credited to the
                           Collection Account)

____  2.          Contract Liquidated.

                                      B-1
<PAGE>   39
                           (Servicer hereby certifies that all proceeds of
                           foreclosure, insurance or other liquidation have been
                           received and credited to the Collection Account)

____  3.          Contract in Foreclosure.

____  4.          Contract Purchased. (Servicer hereby certifies that the
                  Purchase Amount has been deposited in the Collection Account)

____  5.          Contract Substituted.

____  6.          Other (explain)_____________________________________________

                  If box 1 or 2 above is checked, and if all or part of the
Contract File was previously released to us, please release to us our previous
receipt on file with you, as well as any additional documents in your possession
relating to the above specified Contract.

                  If box 3, 4, 5 or 6 above is checked, upon our return of all
of the above documents to the Indenture Trustee, please acknowledge your receipt
by signing in the space indicated below, and returning this form.

                                   HPSC, INC., as Servicer

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

Documents returned to Indenture Trustee:

BNY MIDWEST TRUST COMPANY,
    as Indenture Trustee

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

      Date:

                                      B-2

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