Document:

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                                                                   EXHIBIT 10.48

                        RECEIVABLES PURCHASE AGREEMENT

                                    between

                            LADCO FUNDING CORP. VI,

                                   "LFC VI"

                                      and

                           LADCO FUNDING CORP. VII,

                                 the "Issuer"

                                 June 1, 2000
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                               TABLE OF CONTENTS

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ARTICLE 1  DEFINITIONS......................................................................................   2
           1.01  Defined Terms..............................................................................   2

ARTICLE 2  ASSIGNMENT OF LEASE RECEIVABLES AND INTERESTS IN
           THE RELATED SECURITY.............................................................................   4
           2.01  Purchase of Lease Receivables..............................................................   4
           2.02  Grant of Security Interest in the Related Security.........................................   4
           2.03  Delivery of Lease Contracts; Filing of Financing Statements................................   4
           2.04  Servicing of Lease Contracts and Equipment.................................................   5
           2.05  Review of Lease Contracts..................................................................   5
           2.06  Nature of Transfer of Lease Receivables....................................................   5

ARTICLE 3  REPRESENTATIONS AND WARRANTIES...................................................................   6
           3.01  Representations and Warranties of LFC VI...................................................   6
           3.02  Representations and Warranties of the Issuer...............................................   9
           3.03  Purchase or Substitution Required Upon Breach of Certain
                 Representations and Warranties.............................................................  10
           3.04  Requirements for Repurchase or Substitution of Lease
                 Receivables and Acquisition of Additional or Substitute Lease
                 Receivables................................................................................  10

ARTICLE 4  COVENANTS OF THE ISSUER AND LFC VI...............................................................  12
           4.01  LFC VI Covenants...........................................................................  12
           4.02  Issuer Covenants...........................................................................  15
           4.03  Assignment of Lease Receivables and Related Security.......................................  15
           4.04  Release of Rights in Related Security......................................................  15

ARTICLE 5  CONDITIONS PRECEDENT.............................................................................  16
           5.01  Conditions to the Issuer's Obligations.....................................................  16
           5.02  Conditions to LFC VI's Obligations.........................................................  16

ARTICLE 6  TERM AND TERMINATION.............................................................................  18
           6.01  Term.......................................................................................  18
           6.02  Default by LFC VI..........................................................................  18
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<TABLE>
<S>                                                                                                          <C>
ARTICLE 7  MISCELLANEOUS....................................................................................  19
           7.01  Amendments.................................................................................  19
           7.02  Governing Law..............................................................................  19
           7.03  Waiver of Jury Trial.......................................................................  19
           7.04  Notices....................................................................................  19
           7.05  Separability Clause........................................................................  19
           7.06  Assignment.................................................................................  19
           7.07  Further Assurances.........................................................................  19
           7.08  No Waivers; Cumulative Remedies............................................................  20
           7.09  Binding Effect; Third Party Beneficiaries..................................................  20
           7.10  Counterparts...............................................................................  20
           7.11  Set-Off....................................................................................  20
           7.12  Consent to Jurisdiction....................................................................  20
</TABLE>

EXHIBIT A  Form of LFC VI Certificate

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     This RECEIVABLES PURCHASE AGREEMENT, dated as of June 1, 2000 (as amended,
supplemented or modified from time to time, the "Agreement"), is between Ladco
Funding Corp. VI, a Delaware corporation ("LFC VI"), and Ladco Funding Corp.
VII, a Delaware corporation ("Issuer").

                             PRELIMINARY STATEMENT

     LFC VI has entered into a Lease Acquisition Agreement dated as of June 1,
2000 (as amended, supplemented or modified from time to time, the "Lease
Acquisition Agreement") with Ladco Financial Group ("LFG"), pursuant to which,
among other things, LFG will assign to LFC VI all of LFG's right, title and
interest in and to certain Lease Assets, including the Lease Contracts, the
Lease Receivables and the Equipment. LFC VI and Issuer are entering into this
Agreement to provide for the purchase by Issuer of all of LFC VI's right, title
and interest in and to the Lease Receivables and a security interest in certain
of the remaining Lease Assets and LFC VI's rights under the Lease Acquisition
Agreement. LFC VI owns all of the Common Stock of Issuer. The Lease Assets, will
be serviced by Ladco Financial Group ("LFG") as further provided in that certain
Servicing Agreement dated as of June 1, 2000 by and between LFG, LFC VI, Issuer,
Norwest Bank Minnesota, National Association, as Indenture Trustee.

     Issuer has entered into an Indenture dated as of June 1, 2000 (as amended,
supplemented or modified from time to time, the "Indenture"), with Norwest Bank
Minnesota, National Association, as Indenture Trustee (in such capacity, the
"Indenture Trustee"), and LFG, as Servicer (the "Servicer"), pursuant to which
Issuer intends to issue its 2000-1 Equipment Lease Backed Notes secured by,
among other things, the Lease Receivables, the interests in the Lease Assets and
the other rights that are acquired by the Issuer under this Agreement.

     Issuer further intends to grant a security interest in all of its rights
against LFC VI under this Agreement to the Indenture Trustee.
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                                   ARTICLE 1

                                  DEFINITIONS

     1.01  Defined Terms. For purposes of this Agreement the following terms
shall have the meanings specified herein. Capitalized terms used herein but not
otherwise defined shall have the respective meanings assigned to such terms in
the Indenture, or if not defined therein, in the Lease Acquisition Agreement or
the Servicing Agreement.

     "Accumulation Period": The meaning set forth in the Indenture.

     "Acquisition Date": The meaning set forth in the Indenture.

     "Amended Lease Collateral Schedule": The list of Lease Contracts attached
to the LFG Certificate, LFC VI Certificate, the Issuer Certificate and the
Indenture Trustee Certificate amending the Lease Collateral Schedule pursuant to
any substitution, repurchase, modification or acquisition of Lease Contracts in
accordance with the terms hereof and the Indenture.

     "Closing Date": The meaning set forth in the Indenture.

     "Common Stock": All of the issued and outstanding shares of Common Stock of
LFC VII, which consists of 1,000 shares having a par value of $.01 per share.

     "Computer Tape": The meaning set forth in the Lease Acquisition Agreement.

     "Eligible Lease Contract": The meaning set forth in the Lease Acquisition
Agreement.

     "Equipment": The meaning set forth in the Lease Acquisition Agreement.

     "Existing Indebtedness": The meaning set forth in the Indenture.

     "Financing Proceeds": All of the proceeds derived by the Issuer from the
issuance of, and fundings by investors under, the Notes, net of transaction
costs related thereto (which shall include any amounts necessary to discharge
Existing Indebtedness pursuant to the related Release Agreement).

     "Geographic Concentration Limits": The meaning set forth in the Lease
Acquisition Agreement.

     "Indenture": The meaning set forth in the Preliminary Statement hereof.

     "Initial Funding Date": The meaning set forth in the Indenture.

     "Initial Lease Collateral Schedule": The meaning set forth in the Lease
Acquisition Agreement.

     "Issuer Address": 555 St. Charles Drive, Suite 200G, Thousand Oaks,
California 91360.

     "Lease Acquisition Agreement": The meaning set forth in the Preliminary
Statement hereof.

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     "Lease Assets": The meaning set forth in the Lease Acquisition Agreement.

     "Lease Contract": The meaning set forth in the Lease Acquisition Agreement.

     "Lease Receivables": All Scheduled Payments and all other proceeds of the
Lease Contracts and any and all payments received on or with respect to the
Lease Contracts (including Guaranty Amounts, Insurance Proceeds and other
Recoveries, but excluding Residual Proceeds) that are due after the applicable
Cut-Off Date.

     "Lease Receivable Repurchase Price": The meaning set forth in the
Indenture.

     "LFC VI Address": 555 St. Charles Drive, Suite 200F, Thousand Oaks,
California 91360.

     "LFG": The meaning set forth in the Preliminary Statement hereof.

     "Lien": The meaning set forth in the Indenture.

     "Notes": The meaning set forth in the Indenture.

     "Person": The meaning set forth in the Indenture.

     "Product Mix Limits": The meaning set forth in the Lease Acquisition
Agreement.

     "Purchase Price": Means, for each Lease Contract, an amount equal to the
IPB of all Lease Receivables related thereto, computed using an assumed discount
rate equal to the related Discount Factor.

     "Related Security": All of LFC VI's right, title and interest in, to and
under (i) the Lease Assets (other than the Lease Receivables), (ii) the Lease
Acquisition Agreement, (iii) the Servicing Agreement, and (iv) all income and
proceeds of the foregoing or relating thereto; provided however, that Related
Security shall not include any Residual Proceeds.

     "Residual Proceeds": With respect to any Lease Contract that has been paid
in full in accordance with its terms, the net proceeds (including Insurance
Proceeds) of any sale or other disposition of the related Equipment (including
any lease renewal and the periodic payment under the Lease Contract for use of
such Equipment after the initial term thereof).

     "Substitute Lease Contract": The meaning set forth in the Indenture and the
Lease Acquisition Agreement.

     "Substitute Lease Receivable": The meaning set forth in the Indenture and
this Agreement.

     "Trust Estate": The meaning set forth in the Indenture.

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                                   ARTICLE 2

         ASSIGNMENT OF LEASE RECEIVABLES AND INTERESTS IN THE RELATED
                                   SECURITY

     2.01 Purchase of Lease Receivables.

     (a)  Subject to the terms and conditions set forth herein, LFC VI shall
from time to time sell to Issuer, and Issuer shall acquire from LFC VI, all of
LFC VI's right, title and interest in and to the Lease Receivables. In
consideration thereof, the Issuer shall pay to or on the direction of LFC VI an
amount equal to the Purchase Price, provided however, that any portion of the
Purchase Price in excess of the Financing Proceeds shall be deemed a
contribution to the Issuer's capital. Each such sale shall be evidenced by
delivery from LFC VI to Issuer of an executed LFC VI Certificate with a Lease
Collateral Schedule attached thereto and shall be effective as of the
Acquisition Date indicated thereon. LFC VI hereby acknowledges that its sale of
the Lease Receivables to the Issuer is absolute and irrevocable, without
reservation or retention of any interest whatsoever by LFC VI. The acquisition
hereunder of all such Lease Receivables and the interests in the Related
Security shall be subject to the approval of the Issuer, and the Issuer shall
have the option to accept or decline any Lease Receivables and the interests in
the Related Security proposed by LFC VI.

     (b)  Subject to all the terms and conditions of this Agreement and in
reliance upon the representations, warranties and covenants set forth in the
Lease Acquisition Agreement and this Agreement, as of the Initial Funding Date
the Issuer is purchasing the Lease Receivables related to the Lease Contracts
listed on the Initial Lease Collateral Schedule attached to the LFC VI
Certificate delivered on such date.

     2.02 Grant of Security Interest in the Related Security.

     (a)  As security for the payment of the Lease Receivables sold to Issuer
from time to time by LFC VI, LFC VI hereby grants to Issuer a security interest
in all of LFC VI's right, title and interest in, to and under the Related
Security, including all Lease Contracts and Equipment related to any of the
Lease Receivables sold to Issuer from time to time by LFC VI, whether now owned
or hereafter acquired. This Agreement shall constitute a security agreement
under applicable law.

     (b)  To the extent that LFG or LFC VI retain possession of any files or
documentation pertaining to the Related Security, they shall hold such documents
in trust for the benefit of Issuer and the Indenture Trustee. The possession of
any documents or files pertaining to the Lease Receivables or the Related
Security by either LFG or LFC VI is for the purpose of servicing of such Lease
Assets. The documents and files retained by LFG or LFC VI, as the case may be,
relating to the Lease Receivables or the Related Security shall be segregated
from the books and records of LFG or LFC VI, as the case may be, and shall be
marked appropriately to reflect clearly the sale of the Lease Receivables and
the pledge of the Related Security to Issuer and the ultimate assignment thereof
to the Indenture Trustee.

     2.03 Delivery of Lease Contracts; Filing of Financing Statements.

     (a)  In connection with the Issuer's acquisition of the Lease Receivables
and the interests in the Related Security, LFC VI shall deliver or cause to be
delivered the original Lease Contracts to the Indenture Trustee so that the
Indenture Trustee may retain possession thereof as "bailee" (within the meaning
of Section

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9-305 of the UCC) for the sole benefit of the Issuer; provided that, upon any
delivery of such Lease Contracts to the Indenture Trustee pursuant to the terms
of the Indenture or Servicing Agreement, the Indenture Trustee shall no longer
act as bailee for the Issuer. In addition, LFC VI agrees to record and file
prior to the Closing Date or within the time period set forth in the Indenture,
at its own expense, financing statements (and thereafter timely continuation
statements with respect to such financing statements) with respect to the Lease
Assets, meeting the requirements of the Indenture.

     (b)  In connection with each acquisition of Lease Receivables hereunder,
LFC VI shall direct that the LFG Database maintained by LFG be marked to show
that the Lease Receivables and a security interest in the Related Security have
been acquired by the Issuer in accordance with this Agreement and that each of
the foregoing have been transferred by the Issuer to the Indenture Trustee in
accordance with the Transaction Documents.

     2.04 Servicing of Lease Contracts and Equipment. LFC VI agrees that the
Servicer shall service the Lease Assets for the benefit of LFC VI and the Issuer
(and their respective successors and assigns) in accordance with the terms and
conditions of the Servicing Agreement and the other Transaction Documents. LFG
shall be permitted to retain the Servicing Files for so long as it is acting as
Servicer under the Servicing Agreement.

     2.05 Review of Lease Contracts. If any party to the Transaction Documents
discovers that any Lease Contracts are missing or defective (that is, mutilated,
damaged, defaced, incomplete, improperly dated, clearly forged or otherwise
physically altered) in any material respect, LFC VI shall enforce its rights
against LFG under the Lease Acquisition Agreement for the benefit of Issuer and
the Indenture Trustee.

     2.06 Nature of Transfer of Lease Receivables.

     (a)  Each sale of Lease Receivables by LFC VI to Issuer pursuant to this
Agreement is intended to be an absolute assignment constituting a "true sale"
for bankruptcy purposes of all of LFC VI's right, title and interest in, to and
under such Lease Receivables, without recourse (except to the Related Security
and as otherwise expressly provided herein), for all purposes. No assignment of
Related Security is intended to constitute an absolute assignment; but rather,
as indicated in Section 2.02, is intended to constitute only a Grant of a
security interest in such assets to secure repayment of the related Lease
Receivables.

     (b)  In the event that the sale of Lease Receivables by LFC VI to the
Issuer pursuant to this Agreement are deemed for any reason to be less than a
transfer of complete legal title of all of LFC VI's right, title and interest
in, to and under such Lease Receivables, the parties hereto intend that this
Agreement operate to transfer all of LFC VI's equitable interests in, to and
under the Lease Receivables to Issuer.

     (c)  In the event that the sale of the Lease Receivables from LFC VI to
Issuer are deemed to be a secured financing, LFC VI shall be deemed hereunder to
have Granted and conveyed to the Issuer, and LFC VI does hereby Grant and convey
to the Issuer, a security interest in all of LFC VI's right, title and interest
in, to and under the Lease Receivables, whether now owned or hereafter acquired.
For purposes of such Grant and conveyance, this Agreement shall constitute a
security agreement under applicable law.

     (d)  The transfers and assignments of Lease Receivables and interests in
the Related Security from LFC VI to Issuer hereunder do not constitute and are
not intended to result in a creation or an assumption by the Issuer of any
obligations of LFC VI under, or in connection with, any of the Lease Assets,

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or any agreement or instrument relating thereto, including, without limitation,
(a) any obligation to any Obligor, (a) any taxes, fees or other charges imposed
by any governmental authority or (c) any insurance premiums which accrued with
respect to any of the Lease Assets at the time that any of the Lease Receivables
or interests in Related Security are conveyed hereunder.

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                                   ARTICLE 3

                        REPRESENTATIONS AND WARRANTIES

     3.01 Representations and Warranties of LFC VI.

     (a)  LFC VI hereby makes the following representations and warranties as
to each Lease Receivable and the interests in the Related Security to the Issuer
and for the benefit of the Indenture Trustee and the Noteholders, on which the
Issuer relies in acquiring the Lease Receivables and the interests in the
Related Security. Such representations and warranties speak as of the Initial
Funding Date with respect to Lease Receivables derived from Lease Contracts
listed on the Initial Lease Collateral Schedule or the related Acquisition Date
with respect to each Additional Lease Receivable unless otherwise indicated, but
shall survive any subsequent transfer, assignment, contribution or conveyance of
the Lease Receivables and the interests in the Related Security. LFC VI makes
these representations and warranties with respect to all Lease Receivables,
whether transferred from LFC VI to the Issuer in accordance with this Agreement
or originated by LFG on behalf of LFC VI, the Issuer or an affiliate thereof:

          (i)  all Lease Receivables sold to the Issuer hereunder are Lease
     Receivables derived from Eligible Lease Contracts; and

          (ii) The Product Mix Limits and Geographic Concentration Limits
     described in the Lease Acquisition Agreement are not exceeded as to the
     Lease Receivables derived from the Initial Lease Contracts and no transfer
     by LFC VI of Additional Lease Receivables to the Issuer will cause the
     Product Mix Limits and Geographic Concentration Limits to be exceeded on
     the related Acquisition Date.

     (b)  LFC VI hereby makes the following representations and warranties on
which the Issuer relies in acquiring the Lease Receivables and interests in the
Related Security and on which the Issuer relies in issuing the Notes. Such
representations and warranties speak as of the Initial Funding Date and each
other Acquisition Date unless otherwise indicated, but shall survive any
subsequent transfer, assignment, contribution or conveyance of the Lease
Receivables and the interests in the Related Security:

          (i)  LFC VI has been duly organized and is validly existing and in
     good standing as a corporation under the laws of the State of Delaware with
     the power and authority to own its properties and to transact the business
     in which it is now engaged, and LFC VI is duly qualified to do business in
     and is in good standing under the laws of each State in which any Equipment
     or any Obligor is located and where it is required under applicable law to
     effect such qualification, except where the failure to so qualify would not
     have a material adverse effect on the ability of LFC VI to perform its
     obligations under any of the Transaction Documents or on any of the Lease
     Contracts, the Lease Receivables or the Equipment.

          (ii) The performance of the obligations of LFC VI under this Agreement
     and the other Transaction Documents and the consummation of the
     transactions herein and therein contemplated will not conflict with or
     result in any breach of any of the terms or provisions of, or constitute
     with or without notice, lapse of time or both, a default under the
     organizational documents of LFC VI, or any material indenture, agreement,
     mortgage, deed of trust or other instrument to which LFC VI is a party or
     by which it is bound, or result in the creation or imposition of any lien,
     charge or

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     encumbrance (except the lien created by the Transaction Documents) upon any
     of the property or assets of LFC VI pursuant to the terms of such
     indenture, mortgage, deed of trust, or other agreement or instrument to
     which LFC VI is a party or by which LFC VI is bound or to which any of LFC
     VI's property or assets is subject, nor will such action result in any
     violation of the provisions of LFC VI's organizational documents or any
     statute or any order, rule or regulation of any court or any regulatory
     authority or other governmental agency or body having jurisdiction over LFC
     VI or any of its properties; and no consent, approval, authorization,
     order, registration or qualification of or with or other action of any
     court, or any such regulatory authority or other governmental agency or
     body is required for consummation of the transactions contemplated by this
     Agreement and the other Transaction Documents except such consents,
     approvals and authorizations which have been obtained or such registrations
     or qualifications which have been made.

          (iii)  This Agreement and any other Transaction Document to which LFC
     VI is a party have been duly authorized, executed and delivered by LFC VI
     by all necessary corporate action and such agreements are the valid and
     legally binding obligations of LFC VI, enforceable against LFC VI in
     accordance with their respective terms, subject to applicable bankruptcy,
     insolvency, reorganization and other similar laws of general applicability
     relating to or affecting creditors' rights generally and to general
     principles of equity regardless of whether enforcement is sought in a court
     of law or equity.

          (iv)   As of the Initial Funding Date, the LFC VI Address is the chief
     executive office, chief place of business and the office where LFC VI keeps
     its records concerning the Lease Contracts, Lease Receivables and the
     Equipment.

          (v)    LFC VI does not believe, nor does it have any reasonable cause
     to believe, that it cannot perform each and every covenant contained in
     this Agreement.

          (vi)   The transactions contemplated by the Transaction Documents are
     being consummated by LFC VI in furtherance of its ordinary business
     purposes, with no contemplation of insolvency and with no intent to hinder,
     delay or defraud any of its present or future creditors.

          (vii)  The Purchase Price and other consideration received by LFC VI
     pursuant to this Agreement is fair consideration having value reasonably
     equivalent to the value of the Lease Receivables and the performance of LFC
     VI's obligations hereunder.

          (viii) At the time of the transactions contemplated by the Transaction
     Documents, both immediately before and after and as a result of the
     transactions, LFC VI will not:

                 (A) be insolvent such that the sum of its debts is greater than
          all of its respective property, at a fair valuation;

                 (B) be engaged in or about to engage in, business or a
          transaction for which any property remaining with LFC VI will be an
          unreasonably small capital or the remaining assets of LFC VI will be
          unreasonably small in relation to its respective business or the
          transaction; or

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                 (C) have intended to incur or believed it would incur, debts
          that would be beyond its respective ability to pay as such debts
          mature or become due.

At all such times, LFC VI's assets and cash flow will enable it to meet its
present obligations in the ordinary course of business as they become due.

          (ix)   Both immediately prior to and immediately following the
     consummation of the transactions contemplated hereby (A) the present fair
     salable value of LFC VI's assets was or will be in excess of the amount
     that will be required to pay its probable liabilities as they then exist
     and as they become absolute and matured; and (B) the sum of LFC VI's assets
     was or will be greater than the sum of its debts, valuing its assets at a
     fair salable value.

          (x)    The acquisition of the Lease Receivables and the interests in
     the Related Security by the Issuer pursuant to this Agreement is not
     subject to the bulk transfer or any similar statutory provisions in effect
     in any applicable jurisdiction.

          (xi)   There are no proceedings or investigations pending, or to the
     knowledge of LFC VI, threatened, against or affecting LFC VI in or before
     any court, governmental authority or agency or arbitration board or
     tribunal (including, but not limited to any such proceeding or
     investigation with respect to any environmental or other liability
     resulting from the ownership or use of any of the Equipment) which,
     individually or in the aggregate, involve the possibility of materially and
     adversely affecting the properties, business, prospects, profits or
     condition (financial or otherwise) of LFC VI, or the ability of LFC VI to
     perform its obligations under any Transaction Document or otherwise. LFC VI
     is not in default with respect to any order of any court, governmental
     authority or agency or arbitration board or tribunal.

          (xii)  All tax returns or extensions required to be filed by LFC VI in
     any jurisdiction have in fact been filed, and all taxes, assessments, fees
     and other governmental charges upon LFC VI, or upon any of the respective
     properties, income or franchises of LFC VI, shown to be due and payable on
     such returns have been, or will be, paid when due. All such tax returns are
     true and correct and LFC VI has no knowledge of any proposed additional tax
     assessment against it in any material amount nor of any basis therefor. The
     provisions for taxes on the books of LFC VI are adequate in accordance with
     generally accepted accounting principles.

          (xiii) LFC VI (i) is not in violation of any laws, ordinances,
     governmental rules or regulations to which it is subject, (ii) has not
     failed to obtain any licenses, permits, franchises or other governmental
     authorizations necessary to the ownership of its property or to the conduct
     of its business, and (iii) is not in violation in any material respect of
     any term of any agreement, charter instrument, bylaw or instrument to which
     it is a party or by which it may be bound which violation or failure to
     obtain might materially adversely affect the business or condition
     (financial or otherwise) of LFC VI or its ability to perform its
     obligations under any Transaction Document.

          (xiv)  It is the intention of LFC VI that the Lease Receivables be
     acquired by the Issuer and that both the title and the beneficial interest
     in and to the Lease Receivables not be part of LFC VI's estate in the event
     of the filing of a bankruptcy petition by or against LFC VI under any
     bankruptcy law.

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          (xv)   Immediately prior to the acquisition of the any Lease
     Receivables and interests in the Related Security by the Issuer pursuant to
     this Agreement, LFC VI was the sole owner of such Lease Assets (with the
     exception of Equipment related to any Lease Contract that is deemed to
     constitute a loan, as to which LFC VI has a valid first perfected security
     interest in the related Equipment) and had good and marketable title
     thereto, free and clear of all liens, claims and encumbrance (except for
     the Existing Indebtedness and related security interests in the Lease
     Assets which in each case shall be terminated on or prior to the related
     Acquisition Date); and the acquisition of the Lease Receivables and the
     interests in the Related Security by the Issuer does not violate the terms
     or provisions of any Lease Contract.

          (xvi)  LFC VI is the registered owner of all of the issued and
     outstanding Common Stock of the Issuer, all of which Common Stock is
     validly issued, fully paid and nonassessable.

          (xvii) LFC VI is exempt from registration as an "investment company"
     under the Investment Company Act of 1940, as amended.

     3.02 Representations and Warranties of the Issuer. The Issuer hereby makes
the following representations and warranties to LFC VI and for the benefit of
the Indenture Trustee and the Noteholders, on which representations and
warranties LFC VI relies in entering into this Agreement with the Issuer. LFC VI
agrees that any breach by Issuer of any such representations and warranties
shall not limit or excuse the full performance of LFC VI's obligations
hereunder. Such representations and warranties speak as of the Initial Funding
Date and each other Acquisition Date unless otherwise indicated, but shall
survive any subsequent transfer, assignment, contribution or conveyance of the
Lease Receivables and the interests in the Related Security:

     (a)  The Issuer has been duly organized and is validly existing in good
standing as a corporation under the laws of the State of Delaware, with the
power and authority to own its properties, perform its obligations hereunder and
under the Transaction Documents and to transact the business in which it is now
engaged or in which it proposes to engage; the Issuer is duly qualified to do
business and is in good standing in each State in which the nature of its
business requires it to be so qualified, except where the failure to so qualify
would not have a material adverse effect on the ability of the Issuer to perform
its obligations hereunder and under the Transaction Documents.

     (b)  The transfer to and receipt by the Issuer of the Lease Receivables and
the interests in the Related Security pursuant to this Agreement and the
consummation of the transactions contemplated herein and in the Transaction
Documents will not conflict with or result in breach of any of the terms or
provisions of, or constitute (with or without notice, lapse of time or both) a
default under the organizational documents of the Issuer or any material
indenture, agreement, mortgage, deed of trust or other instrument to which the
Issuer is a party or by which it is bound, or result in the creation or
imposition of any lien, charge or encumbrance (except for the lien created by
the Indenture) upon any of the property or assets of the Issuer pursuant to the
terms of, such indenture, mortgage, deed of trust, or other agreement or
instrument to which the Issuer is a party or by which it is bound or to which
any of the property or assets of the Issuer is subject, nor will such action
result in any violation of the provisions of the organization documents of the
Issuer or any statute or any order, rule or regulation of any court or
regulatory authority or other governmental agency or body having jurisdiction
over the Issuer or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with or other action
of any court or any such regulatory authority or other

                                       10
<PAGE>

governmental agency or body is required for the acquisition of the Lease
Receivables and the interests in the Related Security hereunder.

     (c)  This Agreement and the Transaction Documents have been duly
authorized, executed and delivered by the Issuer by all necessary action and
constitute valid and legally binding obligations of the Issuer enforceable
against the Issuer in accordance with their terms, subject to bankruptcy,
insolvency, reorganization and other similar laws of general applicability
relating to or affecting creditors' rights generally and to general principles
of equity regardless of whether enforcement is sought in a court of equity or
law.

     (d)  There are no proceedings or investigations to which the Issuer is a
party pending or, to the knowledge of the Issuer, threatened, before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality (i) asserting the invalidity of this Agreement, (ii) seeking to
prevent the issuance of the Notes or the consummation of any of the transactions
contemplated by the Transaction Documents, or (c) seeking any determination or
ruling that would materially and adversely affect the performance by the Issuer
of its obligations under, or the validity or enforceability of, this Agreement
or the Transaction Documents.

     (e)  All approvals, authorizations, consents, orders or other actions of
any Person or of any court, governmental agency or body or official, required in
connection with the execution and delivery of this Agreement and the Transaction
Documents, have been or will be taken or obtained on or prior to the Closing
Date.

     (f)  The Issuer Address is the principal place of business and chief
executive office of the Issuer.

     3.03 Purchase or Substitution Required Upon Breach of Certain
Representations and Warranties. If LFG (i) is required to repurchase any Lease
Contract or (ii) instead elects to assign to LFC VI a Substitute Lease Contract
pursuant to the terms of the Lease Acquisition Agreement, then LFC VI shall
promptly enforce such requirement or election thereunder. Concurrently with
LFG's repurchase of any Lease Contract from LFC VI under the Lease Acquisition
Agreement, LFC VI shall promptly repurchase any Lease Receivable related to any
such Lease Contract from the Issuer at the Lease Receivable Repurchase Price.
Concurrently with LFG's assignment to LFC VI of any Substitute Lease Contract
under the Lease Acquisition Agreement, LFC VI shall promptly assign to the
Issuer the Substitute Lease Receivable derived from such Substitute Lease
Contract and a security interest in the Related Security of such Substitute
Lease Receivable. LFC VI shall provide to the Issuer an officer's certificate
confirming that LFC VI's representations and warranties in Section 3.01 are true
and correct as to any Substitute Lease Receivable. The Lease Receivable
Repurchase Price for a repurchased Lease Receivable shall be paid, and any
Substitute Lease Receivable, the security interest in any Related Security of
such Substitute Lease Receivable and any documentation related thereto shall be
delivered, by LFC VI to the Issuer in accordance with Section 3.04(c) hereof. It
is understood and agreed that if any repurchase or substitution of a Lease
Receivable relates to a cure of a breach under Section 3.01, above, such
repurchase or substitution of such Lease Receivable and any indemnities provided
under Section 4.01(j) hereof or under the Indenture shall constitute the sole
remedy respecting such breach available to the Issuer and its assigns for any
losses, claims, damages and liabilities arising from the Issuer's ownership of
such Lease Receivable or the inclusion of such Lease Receivable and the
interests in the Related Security in the Trust Estate.

                                       11
<PAGE>

     3.04 Requirements for Repurchase or Substitution of Lease Receivables and
Acquisition of Additional or Substitute Lease Receivables.

     (a)  If LFC VI repurchases any Lease Receivable under this Agreement or if
LFC VI or if a Lease Receivable is required to be repurchased under Section 3.09
of the Servicing Agreement, such Lease Receivable shall be repurchased at the
Lease Receivable Repurchase Price. All repurchases shall be accomplished at the
times specified in subsection (c) below.

     (b)  If LFC VI instead elects to substitute any Lease Receivable under this
Agreement, or if a Lease Receivable is substituted under Section 3.09 of the
Servicing Agreement (a "Substitute Lease Receivable"), or (2) conveys to the
Issuer or originates on behalf of the Issuer any Additional Lease Receivable,
each such Substitute Lease Receivable and Additional Lease Receivable shall (i)
derive from an Eligible Lease Contract that satisfies all of the terms,
provisions and requirements of the Lease Acquisition Agreement regarding
Additional Lease Contracts and Substitute Lease Contracts; and (ii) shall be
accompanied by the Grant of security interest in all Related Security relating
to such Substitute Lease Receivable or Additional Lease Receivable.

     Upon the substitution of any Substitute Lease Receivable pursuant to the
provisions of this Section 3.04(b), LFC VI hereby agrees that such Substitute
Lease Receivable and the security interest in the Related Security of such
Substitute Lease Receivable will be subject to all the terms and provisions of
this Agreement, the Lease Acquisition Agreement, the Servicing Agreement, the
Indenture and the other Transaction Documents just as if such the Substitute
Lease Receivable and the security interest in the Related Security of such
Substitute Lease Receivable had been part of the original pool of Lease
Receivables and security interests in Related Security acquired on the related
Acquisition Date. Upon the substitution of a Substitute Lease Receivable
pursuant to this Section 3.04(b), the Issuer and LFC VI shall also comply with
the provisions and limitations set forth in Section 4.05 of the Indenture. All
substitutions shall be accomplished at the time specified in subsection (c)
below.

     (c)  Any repurchase or substitution of a Lease Receivable and any interests
in the Related Security of such Lease Receivable by LFC VI in accordance with
this Agreement shall be made either by remittance of the Lease Receivable
Repurchase Price to the Servicer for deposit into the Collection Account in
accordance with Section 3.03(c) of the Servicing Agreement, by substitution of a
Substitute Lease Receivable and a security interest in the Related Security of
such Substitute Lease Receivable, or a combination thereof, as applicable, on or
prior to the expiration of the time periods set forth in the Lease Acquisition
Agreement relating to the repurchase of the Lease Contract from which such Lease
Receivable derived or the substitution of the Substitute Lease Contract from
which such Substitute Lease Receivable derived.

     (d)  Any voluntary repurchase or substitution of a Lease Receivable by LFC
VI pursuant to the terms of the Indenture in the event of a default or
delinquency with respect to such Lease Receivable shall satisfy the same
requirements for a repurchase or substitution, as the case may be, as are set
forth in this Section 3.04 and in the Indenture.

                                       12
<PAGE>

                                   ARTICLE 4

                      COVENANTS OF THE ISSUER AND LFC VI

     4.01 LFC VI Covenants. LFC VI hereby covenants and agrees with the Issuer
as follows:

     (a)  Except as hereinafter provided, LFC VI will keep in full effect its
existence, rights and franchises as a corporation, and will obtain and preserve
its qualification to do business as a foreign corporation in each jurisdiction
in which such qualification is or shall be necessary to protect the validity and
enforceability of each Transaction Document to which it is a party or any of the
Lease Receivables or Lease Contracts and to perform its duties under each
Transaction Document. LFC VI shall not merge or consolidate with or into any
Person or sell substantially all of its assets to any Person, or permit any
Person to succeed to the business of LFC VI without prior written consent of the
Majority Noteholders.

     (b)  LFC VI, and any director, officer, employee or agent of LFC VI, 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.

     (c)  Each month during the Accumulation Period, LFC VI shall file any
financing statements required to be filed pursuant to Section 4.02(a) of the
Indenture. LFC VI, from time to time, at its own expense, shall execute and file
such additional financing statements (including continuation statements) as may
be necessary to preserve the security interests and liens described in Section
2.03(a) hereof or as may be reasonably requested by the Issuer, the Majority
Noteholders or the Indenture Trustee and are reasonably satisfactory in form and
substance to the Issuer and the Majority Noteholders; provided, however, that
financing statements against Obligors with respect to the Equipment having a
value of less than $5,000 will not be required to be filed. File stamped copies
of such financing statements, or other evidence of filing, shall be provided to
the Noteholders and the Indenture Trustee upon receipt.

     (d)  LFC VI will not change its name, identity or corporate structure in
any manner that would, could, or might make any financing statement or
continuation statement misleading within the meaning of section 9-402 (7) of the
UCC, unless it shall have given the Issuer, the Noteholders and the Indenture
Trustee at least 30 days' prior written notice thereof and shall have filed all
necessary, or reasonably requested by LFC VI, the Issuer, the Majority
Noteholders or the Indenture Trustee amending all previously filed financing or
continuation statements and new financing statements in each case prior to the
effectiveness of such change.

     (e)  LFC VI will give the Issuer, the Noteholders and the Indenture Trustee
at least 30 days prior written notice of any relocation of its principal
executive office and shall have filed all necessary, or reasonably requested by
LFC VI, the Issuer, the Majority Noteholders or the Indenture Trustee amending
all previously filed financing or continuation statements and new financing
statements in each case prior to the effectiveness of such change.

     (f)  LFC VI will duly fulfill all obligations on its part to be fulfilled
under or in connection with each Lease Contract, will not change or modify the
terms of the Lease Contracts except as expressly permitted by the terms of the
Transaction Documents and will do nothing to impair the rights of the Issuer or
the Indenture Trustee in the Lease Receivables or the interests in the Related
Security. In the event that

                                       13
<PAGE>

the rights of LFC VI under any of the Lease Receivables or any of the Related
Security are not assignable to the Issuer or to the Indenture Trustee, LFC VI
will enforce such rights on behalf of the Indenture Trustee.

     (g)  LFC VI will comply, in all material respects, with all acts, rules,
regulations, orders, decrees and directions of any governmental authority
applicable to the Lease Receivables and the interests in the Related Security or
any part thereof; provided, however, that LFC VI may contest any act,
regulation, order, decree or direction in any reasonable manner which shall not
materially and adversely affect the rights of the Issuer or the Indenture
Trustee in the Lease Receivables or in the Related Security.

     (h)  LFC VI will advise the Issuer, the Noteholders and the Indenture
Trustee promptly, in reasonable detail, of the occurrence of any breach by LFC
VI following discovery by LFC VI of such breach of any of its representations,
warranties and covenants contained herein.

     (i)  LFC VI will execute or endorse, acknowledge, and deliver to the
Issuer, the Noteholders and the Indenture Trustee from time to time such
schedules, confirmatory assignments, conveyances, and other reassurances or
instruments and take such further similar actions relating to the Lease
Receivables and the Related Security, and the rights covered by the Transaction
Documents, as the Issuer or the Indenture Trustee may reasonably request to
preserve and maintain title to the Lease Receivables and the security interests
in the Related Security and the rights of the Issuer, the Indenture Trustee and
the Noteholders therein against the claims of all persons and parties.

     (j)  LFC VI agrees to indemnify, defend and hold the Issuer, the Indenture
Trustee and the Noteholders harmless from and against any and all loss,
liability, damage, judgment, claim, deficiency or expense (including interest,
penalties, reasonable attorney's fees and amounts paid in settlement) that is
caused by (i) a breach at any time by LFC VI of its representations, warranties
and covenants contained in Section 3.01 hereof or this Section 4.01 or (ii) any
material information furnished by LFC VI which is set forth in any schedule
delivered hereunder, being untrue in any respect when any such representation
was made or schedule delivered, provided that LFC VI shall not have any
liability with respect to a representation or warranty as to any specific Lease
Receivable or the interests in the Related Security other than to repurchase
such Lease Receivable and such interest in the Related Security of such Lease
Receivable or substitute for such Lease Receivable and the Related Security of
such Lease Receivable in accordance with Section 3.03 hereof unless such breach
of representation or warranty is the result of LFC VI's fraud, gross negligence,
bad faith or willful misconduct. LFC VI shall also indemnify the Issuer, the
Indenture Trustee, the Servicer and the Noteholders for any cost or expenses
incurred by them in the enforcement of this Agreement. The obligations of LFC VI
under this Section 4.01(j) shall be considered to have been relied upon by the
Issuer, the Indenture Trustee and the Noteholders and shall survive the
execution, delivery and performance of the Agreement, regardless of any
investigation made by or on behalf of the Issuer, until termination of the
Indenture. If LFC VI has made any indemnity payments pursuant to this Section
4.01(j) and thereafter the recipient collects any of such amounts from others,
such party will promptly repay the amount collected to LFC VI, without interest.

     (k)  LFC VI will do nothing to disturb or impair the acquisition hereunder
by the Issuer of the Lease Receivables and the interests in the Related
Security.

     (l)  Activities of the LFC VI. LFC VI (i) shall engage in only (A) the
          ------------------------
acquisition, ownership, selling and pledging of the property acquired by it
pursuant to the Lease Acquisition Agreement and (B) the exercise of any powers
permitted to corporations under the corporate law of its applicable state of

                                       14
<PAGE>

incorporation which are incidental to the foregoing or necessary to accomplish
the foregoing and LFC VI shall incur no debt other than trade payables and
expense accruals in connection with its operations in the normal course of
business; (ii) will (A) maintain its books and records separate from the books
and records of any other entity, (B) maintain separate bank accounts and no
funds of the LFC VI shall be commingled with funds of any other entity (except
the Issuer, as necessary in connection with the efficient servicing of the Lease
Assets), (C) keep in full effect its existence, rights and franchises as a
corporation under the laws of its applicable state of incorporation, and will
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Agreement; and (iii) will not
(A) dissolve or liquidate in whole or in part, (B) own any subsidiary (other
than the Issuer) or lend or advance any moneys to, or make an investment in, any
Person (other than the Issuer), (C) incur any debt for money borrowed or make
any capital expenditures, (D)(1) commence any case, proceeding or other action
under any existing or future bankruptcy, insolvency or similar law seeking to
have an order for relief entered with respect to it, or seeking reorganization,
arrangement, adjustment, wind-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, (2) seek appointment of a receiver,
trustee, custodian or other similar official for it or any part of its assets,
(3) make a general assignment for the benefit of creditors, or (4) take any
action in furtherance of, or consenting or acquiescing in, any of the foregoing,
(E) guarantee (directly or indirectly), endorse or otherwise become contingently
liable (directly or indirectly) for the obligations of, or own or purchase any
stock (other than the Common Stock), obligations or securities of or any other
interest in, or make any capital contribution to, any other Person, (F) merge or
consolidate with any other Person, (G) engage in any other action that bears on
whether the separate legal identity of the LFC VI will be respected, including
(1) holding itself out as being liable for the debts of any other party or (2)
acting other than in its corporate name and through its duly authorized officers
or agents, or (H) create, incur, assume, or in any manner become liable in
respect of any indebtedness other than expenses associated with the Closing
Date, and trade payables and expense accruals incurred in the ordinary course of
business in an amount less than $15,000 and which are incidental to its business
purpose. LFC VI shall not amend any article in its Certificate of Incorporation
without the prior written consent of the Majority Noteholders and satisfaction
of the Rating Agency Condition.

     (m)  Directors. LFC VI agrees that at all times, at least two of its
          ---------
directors will not be a director, shareholder, officer or employee of any direct
or ultimate parent or Affiliate of LFG; provided that an independent director or
independent officer may serve in similar capacities for other "special purpose
corporations" formed by LFG and their Affiliates.

     (n)  The Issuer. LFC VI will not (i) take any action that would cause the
          ----------
dissolution or liquidation of the Issuer or (ii) institute against the Issuer,
or join any other person in instituting against the Issuer, any case, proceeding
or other action under any existing or future bankruptcy, insolvency or similar
laws. This subsection (n) shall survive termination of this Agreement.

     (o)  LFC VI shall notify the Issuer and the Indenture Trustee promptly
after becoming aware of any Lien on any Lease Receivable or Related Security.

     (p)  On each date as of which LFC VI substitutes a Substitute Lease
Receivable and a security interest in the Related Security of such Substitute
Lease Receivable in accordance with the terms hereof, or otherwise assigns Lease
Receivables and security interests in Related Security to the Issuer, LFC VI
shall provide to the Issuer an LFC VI Certificate substantially in the form of
Exhibit A hereto subjecting such Lease Receivable and the security interest in
the Related Security to the provisions hereof and providing with

                                       15
<PAGE>

respect to such Lease Receivables and the security interest in such Related
Security the information required in the Amended Lease Collateral Schedule.

     (q)  LFC VI shall pay and discharge as the same shall become due and
payable, all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being contested in good
faith.

     4.02 Issuer Covenants. The Issuer hereby covenants and agrees with LFC VI
as follows:

     (a)  The Issuer hereby acknowledges and agrees that its rights and
interests in the Equipment are expressly subject to the rights of the related
Obligors in such Equipment pursuant to the applicable Lease Contract. The Issuer
covenants and agrees that, so long as an Obligor shall not be in default of any
of the provisions of the applicable Lease Contract, neither the Issuer nor any
Issuer of the Issuer will disturb the Obligor's quiet and peaceful possession of
the related Equipment and the Obligor's unrestricted use thereof for its
intended purpose.

     (b)  If in any enforcement suit or legal proceeding it is held that LFC VI
may not enforce a Lease Contract on the ground that it is not a real party in
interest or holder entitled to enforce the Lease Contract, the Issuer shall, at
the Servicer's expense, take such steps as the Issuer deems necessary to enforce
the Lease Contract, including bringing suit in the Issuer's name.

     4.03 Assignment of Lease Receivables and Related Security. LFC VI
understands that the Issuer intends to Grant to the Indenture Trustee a security
interest in all its right, title and interest to the Lease Receivables, the
Related Security and this Agreement. LFC VI consents to such Grant and further
agrees that all representations, warranties, covenants and agreements LFC VI
made herein shall also be for the benefit of and inure to the Indenture Trustee
and all Noteholders.

     4.04 Release of Rights in Related Security. Once (i) any Lease Contract
related to a Lease Receivable acquired by Issuer hereunder has expired by its
terms and all amounts in respect of such Lease Receivable owing under such Lease
Contract have been paid by the related Obligor or otherwise collected or (ii)
any Lease Contract related to a Lease Receivable acquired by Issuer hereunder is
repurchased or terminated or prepaid in its entirety and all amounts in respect
of such Lease Receivable owing under such Lease Contract have been paid by the
related Obligor or otherwise collected, Issuer, on behalf of itself and its
assigns, will be deemed to have released its interest in the Related Security
for such Lease Receivable. Subject to the limitations contained in the foregoing
paragraph, on or after the occurrence of (i) or (ii) above, Issuer shall and
shall cause its assigns to execute and deliver to LFC VI or its designee any
assignments, bills of sale, termination statements or any other releases or
instruments as LFC VI may reasonably request in order to evidence the release by
Issuer and its assigns of their interests in such Related Security.

                                       16
<PAGE>

                                   ARTICLE 5

                             CONDITIONS PRECEDENT

     5.01 Conditions to the Issuer's Obligations. The obligations of the Issuer
to provide LFC VI with the consideration provided for herein shall be subject to
the satisfaction of the following conditions:

     (a)  All representations and warranties of LFC VI contained in Section
3.01(a) of this Agreement and all information with respect to the Lease
Receivables and the Related Security provided in the Lease Collateral Schedule
or Amended Lease Collateral Schedule, as applicable, shall be true and correct
on the related Acquisition Date, all representations and warranties in Section
3.01(b) hereof, shall be true and correct as of the Initial Funding Date and
each other Acquisition Date, and LFC VI shall have delivered to the Issuer, the
Indenture Trustee and each Noteholder an officer's certificate to such effect;

     (b)  LFC VI shall have delivered all other information theretofore required
or reasonably requested by the Issuer to be delivered by LFC VI hereunder, duly
certified by an officer of LFC VI, and LFC VI shall have substantially performed
all other obligations required to be performed by the provisions of this
Agreement;

     (c)  On or prior to the Initial Funding Date and the applicable Acquisition
Date, LFC VI shall have delivered or caused to be delivered the Lease Contracts
relating to the Lease Receivables to the Indenture Trustee and there shall have
been made all filings, recordings and/or registrations, and there shall have
been given, or taken, any notice or any other similar action, as may be
necessary to meet the requirements in the relevant jurisdiction for perfection
of the transfer to the Issuer and in order to establish and preserve the right,
title and interest of the Issuer in the Lease Receivables and its security
interests in the Related Security, provided however, that with respect to
financing statements only those filings specified in Section 4.02(a) of the
Indenture shall be required to be filed;

     (d)  On or before the Closing Date, LFG, LFC VI, the Issuer, the Servicer
and the Indenture Trustee, as applicable, shall have entered into the Servicing
Agreement, the Lease Acquisition Agreement, the Indenture and this Agreement;

     (e)  All of the Notes shall be issued and sold on the Closing Date and the
Issuer shall receive the full consideration due it upon the issuance of such
Notes.

     5.02 Conditions to LFC VI's Obligations. The obligations of LFC VI to enter
into this Agreement on the Closing Date and any LFC VI Certificate on a
subsequent Acquisition Date shall be subject to the satisfaction of the
following conditions:

     (a)  All representations and warranties of the Issuer contained in this
Agreement shall be true and correct with the same effect as though such
representations and warranties had been made on the Closing Date;

     (b)  The Financing Proceeds set forth herein shall have been paid or
delivered to or at the direction of LFC VI simultaneously with the execution of
this Agreement or the LFC VI Certificate as applicable; and

                                       17
<PAGE>

     (c)  All corporate and legal proceedings and all instruments in connection
with the transactions contemplated by this Agreement shall be satisfactory in
form and substance to LFC VI, and LFC VI shall have received from the Issuer
copies of all documents (including, without limitation, records of corporate
proceedings) relevant to the transactions herein contemplated as LFC VI may
reasonably have requested.

                                       18
<PAGE>

                                   ARTICLE 6

                             TERM AND TERMINATION

     6.01 Term. This Agreement shall commence as of the date of execution and
delivery hereof and shall continue in full force and effect until final payment
with respect to the last Lease Receivable is collected.

     6.02 Default by LFC VI. If LFC VI shall be in default under this Agreement
and such default shall not have been cured for a period of 30 days, or if LFC VI
shall become insolvent or make an assignment for the benefit of its creditors or
have a receiver appointed for all or substantially all of its properties, or if
any proceedings are commenced, or consented to, by LFC VI are not stayed or
dismissed within 60 days after being commenced against LFC VI under any
bankruptcy, insolvency or other law for the relief of debtors, the Issuer shall
have the right, in addition to any other rights it may have under any applicable
law, to terminate this Agreement upon written notice to LFC VI; provided that
any termination of this Agreement shall not release LFC VI from any obligation
under this Agreement with respect to interests in Lease Receivables and Related
Security acquired by Issuer prior to such termination.

                                       19
<PAGE>

                                   ARTICLE 7

                                 MISCELLANEOUS

     7.01 Amendments. This Agreement and the rights and obligations of the
parties hereunder may not be changed orally but only by an instrument in writing
signed by the party against which enforcement is sought. This Agreement may be
amended by the Issuer and LFC VI only with the prior written consent of the
Indenture Trustee and the Majority Noteholders and satisfaction of the Rating
Agency Condition. Promptly after execution by the Issuer and LFC VI of any
amendment pursuant to this Section, the Issuer shall mail to each Noteholder a
copy of such amendment.

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

     7.03 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH
OF THE PARTIES HERETO WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING
ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE
PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS CONTRACT ACQUISITION
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. INSTEAD, ANY SUCH DISPUTE
RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

     7.04 Notices. All demands, notices and communications hereunder shall be in
writing and shall be delivered by telecopy with confirmation of receipt or
mailed by registered or certified United States mail, postage prepaid, and
addressed, in the case of LFC VI, to the LFC VI Address, and in the case of the
Issuer, to the Issuer Address. All notices and demands shall be deemed to have
been given either at the time of the delivery thereof to any officer of the
Person entitled to receive such notices and demands at the address of such
Person for notices hereunder, or on the third day after the mailing thereof to
such address, as the case may be. Any Person may change the address for notices
hereunder by giving notice of such change to the other Person.

     7.05 Separability Clause. Any provisions of this Agreement which are
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     7.06 Assignment. Except as provided in Section 4.01(a) and Section 4.03,
this Agreement may not be assigned or delegated by LFC VI without the prior
written consent of the Issuer, the Majority Noteholders and the Indenture
Trustee and may not be assigned or delegated by the Issuer without the prior
written consent of LFC VI, the Majority Noteholders and the Indenture Trustee.

                                       20
<PAGE>

     7.07 Further Assurances. Each of LFC VI and the Issuer agrees to do such
further acts and things and to execute and deliver to the Issuer, the Indenture
Trustee and the Majority Noteholders such additional assignments, agreements,
powers and instruments as are required by the Issuer, the Indenture Trustee and
the Majority Noteholders to carry into effect the purposes of this Agreement or
to better assure and confirm unto the Issuer, the Indenture Trustee or the
Noteholders their rights, powers or remedies hereunder. If any Obligor shall be
in default under any Lease Contract, upon reasonable request from the Servicer,
LFC VI will take all reasonable steps to assist in enforcing such Lease Contract
and preserving and maintaining title to the Lease Assets and the rights of the
Issuer, the Indenture Trustee and the Noteholders therein against the claims of
all persons and parties to the extent LFC VI is capable of performing such
requested steps and the Servicer reasonably determines that the assistance of
LFC VI is necessary to effect the intent and purposes hereof.

     7.08 No Waivers; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Issuer or LFC VI, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise of any right, remedy, or privilege hereunder preclude any other
or further exercise hereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exhaustive of any rights, remedies, powers and privilege
provided by law.

     7.09 Binding Effect; Third Party Beneficiaries. This Agreement will inure
to the benefit of and be binding upon the parties hereto, the Indenture Trustee,
the Noteholders, and their respective successors and permitted assigns.

     7.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which when taken together shall constitute one and the same
Agreement.

     7.11 Set-Off.

     (a)  LFC VI hereby irrevocably and unconditionally waives all right of set-
off that it may have under contract (including this Agreement), applicable law
or otherwise with respect to any funds or monies of the Issuer at any time held
by or in the possession of LFC VI.

     (b)  The Issuer shall have the right to set-off against LFC VI any amounts
to which LFC VI may be entitled and to apply such amounts to any claims the
Issuer may have against LFC VI from time to time under this Agreement. Upon any
such set-off the Issuer shall give notice of the amount thereof and the reasons
therefor.

     7.12 Consent to Jurisdiction.

     (a)  The parties hereto hereby irrevocable submit to the non-exclusive
jurisdiction of the United States District Court for the Southern District of
New York and any court in the State of New York Located in the City and County
of New York, and any appellate court from any thereof, in any action, suit or
proceeding brought against or by it in connection with this Agreement or for
recognition or enforcement of any judgment relating thereto, and the parties
hereto hereby irrevocably and unconditionally agree that all claims in respect
of any such action or proceeding may be heard or determined in such New York
state court or, to the extent permitted by law, in such federal court. The
parties agree that a final nonappealable

                                       21
<PAGE>

judgment in any such action, suit or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. To the extent permitted by applicable law, the parties hereby
waive and agree not to assert by way of motion, as a defense or otherwise in any
such suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of such courts, that the suit, action or proceeding is brought
in an inconvenient forum, that the venue of the suit, action or proceeding is
improper or that the related documents or the subject matter thereof may not be
litigated in or by such courts.

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

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

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

                                 *  *  *  *  *

                                      22
<PAGE>

     IN WITNESS WHEREOF, the Issuer and LFC VI have caused this Agreement to be
duly executed by their respective duly authorized officers as of the date and
year first above written.

                                        LADCO FUNDING CORP. VI,
                                         LFC VI

                                        By:   /s/ Leon D. Ladd
                                              ----------------------------------
                                        Name:  Leon D. Ladd
                                        Title: President

                                        LADCO FUNDING CORP. VII,
                                         Issuer

                                        By:   /s/ Leon D. Ladd
                                              ----------------------------------
                                        Name:  Leon D. Ladd
                                        Title: President

<PAGE>

                                                                       EXHIBIT A

                          FORM OF LFC VI CERTIFICATE

Ladco Funding Corp. VII
555 St. Charles Drive, Suite 200
Thousand Oaks, CA 91360
Attention: ______________

Norwest Bank Minnesota, National Association
Sixth Street & Marquette Avenue
MAC N9311-161
Minneapolis, MN 55479
Attention: Corporate Trust Services
 /Asset Backed Securities Administration

SunTrust Equitable Securities Corporation
Post Office Box 4418
Atlanta, GA 30302-4418
Attention: _______________

     Re:  Receivables Purchase Agreement, dated as of June 1, 2000 (the
          "Agreement"), between Ladco FCorp. VI ("LFC VI") and Ladco Funding
          Corp. VII ("Issuer")

Ladies and Gentlemen:

1.   This Certificate is being delivered pursuant to Section 2.01 of the
Agreement and Section 3.03 of the Indenture. Capitalized terms used herein shall
have the meanings assigned to such terms in the Agreement.

2.   LFC VI hereby:

     (a)  transfers, assigns, sells and grants to the Issuer, without recourse,
except as provided in the Agreement, as of the date specified below, any and all
of LFC VI's right, title and interest in and to all of the Lease Receivables
relating to each Lease Contract identified on Schedule I attached hereto (the
"Subject Lease Receivables"), whether now existing or hereafter arising;

     (b)  grants to the Issuer a security interest in all of LFC VI's right,
title and interest in and to the Related Security, whether now owned or
hereafter acquired;

     (c)  submits to the Indenture Trustee the original Lease Contract for each
lease of the Subject Lease Receivables, together with the executed Release
Agreement, if applicable; and
<PAGE>

     (d)  represents and warrants to the Issuer and the Indenture Trustee as
secured party for the benefit of the Noteholders that this LFC VI Certificate
has been duly authorized, executed and delivered.

                                        LADCO FUNDING CORP. VI

Date: __________________

                                        By: ______________________________
                                        Name: ____________________________
                                        Title: ___________________________<PAGE>

                                                                   EXHIBIT 10.49

                              SERVICING AGREEMENT

                                     among

                            LADCO FINANCIAL GROUP,
                                  as Servicer

                           LADCO FUNDING CORP. VI,
                                    LFC VI

                           LADCO FUNDING CORP. VII,
                                   as Issuer

                                      and

                           NORWEST BANK MINNESOTA,
                            NATIONAL ASSOCIATION,
                             as Indenture Trustee

                                      and

                           NORWEST BANK MINNESOTA,
                            NATIONAL ASSOCIATION,
                             as Back-up Servicer

                                 June 1, 2000
<PAGE>

                               TABLE OF CONTENTS

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

Section 1.01     Defined Terms...............................................................................   2

                                                             ARTICLE 2
                                             REPRESENTATIONS, WARRANTIES AND COVENANTS

Section 2.01     Representations and Warranties..............................................................   4
Section 2.02     Covenants...................................................................................   5

                                                             ARTICLE 3
                                          ADMINISTRATION AND SERVICING OF LEASE CONTRACTS

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

                                                             ARTICLE 4
                                                ACCOUNTINGS, STATEMENTS AND REPORTS

Section 4.01     Monthly Servicing Reports; Funding Notices..................................................  12
Section 4.02     Financial Statements; Certification as to Compliance; Notice of Default.....................  12
Section 4.03     Annual Independent Accountants' Reports; Annual Federal Tax Lien Search.....................  13
Section 4.04     Access to Certain Information...............................................................  14
Section 4.05     Other Necessary Data........................................................................  15
Section 4.06     Indenture Trustee to Cooperate..............................................................  15

                                                             ARTICLE 5
                                                THE SERVICER, LFC VI AND THE ISSUER

Section 5.01     Servicer Indemnification....................................................................  17
Section 5.02     Corporate Existence; Reorganizations........................................................  17
Section 5.03     Limitation on Liability of the Servicer.....................................................  17
Section 5.04     The Servicer Not to Resign..................................................................  18
Section 5.05     LFC VI and Issuer Indemnification...........................................................  18
</TABLE>

                                       i
<PAGE>

<TABLE>
<CAPTION>
                                                                                                              Page
                                                                                                              ----
 <S>                                                                                                          <C>
                                                             ARTICLE 6
                                                       SERVICING TERMINATION

Section 6.01   Servicing Termination Events..................................................................  19
Section 6.02   Back-up Servicer to Act; Taking of Bids; Appointment of Successor Servicer....................  21
Section 6.03   Notification to Noteholders...................................................................  22
Section 6.04   Waiver of Past Defaults.......................................................................  22
Section 6.05   Effects of Termination of Servicer............................................................  22
Section 6.06   No Effect on Other Parties....................................................................  23

                                                             ARTICLE 7
                                                       THE BACK-UP SERVICER

Section 7.01   Representations of Back-up Servicer...........................................................  24
Section 7.02   Merger or Consolidation of, or Assumption of the Obligations of, Back-up Servicer.............  24
Section 7.03   Back-up Servicer Resignation..................................................................  25
Section 7.04   Oversight of Servicing........................................................................  25
Section 7.05   Back-up Servicer Compensation.................................................................  26
Section 7.06   Duties and Responsibilities...................................................................  26

                                                             ARTICLE 8
                                                     MISCELLANEOUS PROVISIONS

Section 8.01   Termination...................................................................................  27
Section 8.02   Amendments....................................................................................  27
Section 8.03   Governing Law.................................................................................  27
Section 8.04   Notices.......................................................................................  28
Section 8.05   Severability of Provisions....................................................................  28
Section 8.06   Binding Effect................................................................................  28
Section 8.07   Article Headings and Captions.................................................................  28
Section 8.08   Legal Holidays................................................................................  28
Section 8.09   Assignment for Security for the Notes.........................................................  28
Section 8.10   No Servicing Assignment.......................................................................  28
Section 8.11   Counterparts..................................................................................  28
Section 8.12   Nonpetition...................................................................................  29
Section 8.13   Notifications.................................................................................  29
Section 8.14   Back-up Servicer as Successor Servicer........................................................  29
Section 8.15   Consent to Jurisdiction.......................................................................  29
Section 8.16   Waiver of Jury Trial..........................................................................  30
</TABLE>

EXHIBIT A      Form of Monthly Servicing Report
EXHIBIT B      Form of ACH Agreement

                                      ii
<PAGE>

                              SERVICING AGREEMENT

      This SERVICING AGREEMENT ("Agreement"), dated as of June 1, 2000, is by
and among Ladco Financial Group, a California corporation ("LFG" or the
"Servicer"), Ladco Funding Corp. VI, a Delaware corporation ("LFC VI"), Ladco
Funding Corp. VII, a Delaware corporation (the "Issuer") and Norwest Bank
Minnesota, National Association, a national banking association (the "Back-up
Servicer") and Norwest Bank Minnesota, National Association (the "Indenture
Trustee").

                             PRELIMINARY STATEMENT

      The Issuer has entered into an Indenture dated as of June 1, 2000, (the
"Indenture"), with the Indenture Trustee, the Back-up Servicer and the Servicer,
pursuant to which the Issuer intends to issue its 2000-1 Equipment Lease Backed
Notes (the "Notes").

      LFC VI and Ladco Financial Group ("LFG") have entered into a Lease
Acquisition Agreement dated as of June 1, 2000 (the "Lease Acquisition
Agreement"), providing for, among other things, the transfer, assignment and
contribution, from time to time, by LFG to LFC VI of all of LFG's right, title
and interest in and to certain Lease Assets. LFC VI has entered into a
Receivables Purchase Agreement with the Issuer, pursuant to which LFC VI has
sold to the Issuer all of LFC VI's right, title and interest in and to the Lease
Receivables and has granted a security interest in certain of the remaining
Lease Assets to the Issuer, all of which the Issuer will be granting to the
Indenture Trustee, as security for the Notes. The effectiveness of the Lease
Acquisition Agreement and the Receivables Purchase Agreement are conditioned
upon, the Servicer, LFC VI, the Issuer, the Indenture Trustee and the Back-up
Servicer entering into this Agreement to provide for the servicing of the Lease
Assets.

      In order to further secure the Notes, the Issuer is granting to the
Indenture Trustee a security interest in, among other things, the Issuer's
rights under this Agreement, and the Servicer agrees that all covenants and
agreements made by the Servicer herein with respect to the Lease Assets shall
also be for the benefit and security of the Indenture Trustee and all
Noteholders. Further, LFC VI is granting to the Indenture Trustee a security
interest in, among other things, all of LFC VI's rights under this Agreement and
the Lease Acquisition Agreement. For its services under this Agreement, the
Servicer, the Back-up Servicer and the Indenture Trustee will receive the
compensation described herein and in the Indenture.
<PAGE>

                                   ARTICLE 1

                                  DEFINITIONS

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

      "ACH Account": Shall have the meaning set forth in the Indenture.

      "ACH Bank": Shall have the meaning set forth in the Indenture.

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

      "Assignee": Shall mean LFC VI, the Issuer and/or the Indenture Trustee, as
applicable.

      "Back-up Servicer": Initially, Norwest Bank Minnesota, National
Association, until a successor Person shall have become the Back-up Servicer
pursuant to the applicable provisions of this Agreement, and thereafter "Back-up
Servicer" shall mean such successor Person.

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

      "Equipment": Shall have the meaning set forth in the Lease Acquisition
Agreement.

      "Issuer": Ladco Funding Corp. VII.

      "Lease Acquisition Agreement": The Lease Acquisition Agreement, dated as
of June 1, 2000, between LFC VI and LFG.

      "Lease Assets": Shall have the meaning set forth in the Lease Acquisition
Agreement.

      "Lease Collateral": Shall have the meaning set forth in the Indenture.

      "Lease Contract": Shall have the meaning set forth in the Lease
Acquisition Agreement.

      "Lease Receivable": Shall have the meaning set forth in the Receivables
Purchase Agreement.

      "LFC VI": Ladco Funding Corp. VI.

      "Monthly Servicing Report": The report prepared by the Servicer pursuant
to Section 4.01 hereof and Section 11.04 of the Indenture, substantially in the
form of Exhibit A hereto.

                                       2
<PAGE>

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

      "Servicer": Ladco Financial Group until a successor Person shall have
become the Servicer pursuant to the applicable provisions of this Agreement, and
thereafter "Servicer" shall mean such successor Person.

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

      "Servicer Default": Any occurrence or circumstance which with notice or
the lapse of time or both would be a Servicing Termination Event under this
Agreement.

      "Servicer Termination Notice": The notice described in Section 6.01
hereof.

      "Servicing File": Shall mean, with respect to each Lease Contact, the
following documents:

           (i) A copy of the Lease Contract;

           (ii)  Any evidence of insurance and any other documents evidencing or
      related to any Insurance Policy, including, without limitation, a written
      memorandum from LFG evidencing an oral confirmation with the applicable
      insurance company of the existence of such policy, to be followed by
      receipt of such policy or other documentary evidence thereof;

           (iii) Copies of such documents, if any, that LFG keeps on file
      indicating that the Equipment is owned by the lessor in accordance with
      its customary procedures relating to an individual Lease Contract, Obligor
      or Equipment; and

           (iv)  Evidence that the Obligor received the Equipment and that the
      Equipment was in good working order and acceptable to the Obligor at the
      time of receipt by the Obligor.

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

      "Servicing Termination Event": Each of the occurrences or circumstances
enumerated in Section 6.01 hereof.

                                       3
<PAGE>

                                   ARTICLE 2

                   REPRESENTATIONS, WARRANTIES AND COVENANTS

      Section 2.01 Representations and Warranties. The Servicer makes the
following representations and warranties as of the Closing Date, except as
otherwise specified below, which shall survive such date:

      (a) Organization and Good Standing. The Servicer has been duly
          ------------------------------
incorporated and is validly existing and in good standing as a corporation under
the laws of the State of California, with requisite corporate power and
authority to own its properties, perform its obligations under the Transaction
Documents to which it is a party and to transact the business in which it is now
engaged or in which it proposes to engage.

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

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

      (d) No Proceedings. There are no proceedings or investigations pending, or
          --------------
to the knowledge of the Servicer, threatened against or affecting the Servicer
or any subsidiary in or before any court, governmental authority or agency or
arbitration board or tribunal, including but not limited to any such proceeding
or investigation with respect to any environmental or other liability resulting
from the ownership or use of any of the Equipment, which, individually or in the
aggregate, involve the probability of materially and adversely affecting the
properties, business, prospects, profits or condition (financial or otherwise)
of the Servicer and its subsidiaries, or the ability of the Servicer to perform
its obligations under the Transaction Documents to which it is a party. The
Servicer is not in default with respect to any order of any court, governmental
authority or agency or arbitration board or tribunal.

      (e) Approvals. The Servicer (i) is not in violation of any laws,
          ---------
ordinances, governmental rules or regulations to which it is subject, (ii) has
not failed to obtain any licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its property or to the conduct of
its business, and

                                       4
<PAGE>

(iii) is not in violation in any material respect of any term of any agreement,
charter instrument, bylaw or instrument to which it is a party or by which it
may be bound, which violation or failure to obtain materially adversely affect
the business or condition (financial or otherwise) of the Servicer and its
subsidiaries.

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

      (g) Standard of Care. Prior to the date hereof the Servicer has serviced,
          ----------------
and will continue to service, the Lease Assets in a manner consistent with
industry standards for lease contracts and receivables similar to the Lease
Assets, and in any event in a prudent and commercially reasonable manner, and
has conducted its servicing operations in a manner consistent with industry
standards for servicing of financial portfolios.

      Section 2.02 Covenants.

      (a)  The Servicer covenants as to the Lease Assets:

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

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

           (iii) In performing its servicing duties hereunder, the Servicer
      shall collect all payments required to be made by the Obligors under the
      Lease Contracts and the Lease Receivables, enforce all material rights of
      LFC VI and the Issuer under the Lease Assets, including without
      limitation, the Lease Contracts and the Lease Receivables, and defend the
      interests of the Assignees and the Noteholders in the Equipment against
      all Persons, claims and demands whatsoever. The Servicer shall not assign,
      sell, pledge or exchange or in any way encumber or otherwise dispose of
      the Equipment, except as permitted hereunder or in the other Transaction
      Documents.

      (b)  The Servicer will deliver each of the accountings, statements and
reports described in Article IV hereof to each party as set forth herein.

                                       5
<PAGE>

                                   ARTICLE 3

                ADMINISTRATION AND SERVICING OF LEASE CONTRACTS

      Section 3.01 Responsibilities of Servicer.

      (a)  The Servicer, for the benefit of LFC VI, the Issuer and the
Noteholders, shall be responsible for, and shall, in accordance with its
customary servicing procedures, pursue the managing, servicing, administering,
enforcing and making of collections on the Lease Assets, the enforcement of the
Indenture Trustee's security interest in the Lease Assets granted pursuant to
the Indenture, and the sale or the releasing of the Equipment upon the
expiration or other termination of the related Lease Contract (or repossession
thereof without termination), each in accordance with the standards and
procedures set forth in this Agreement and any related provisions of the other
Transaction Documents. The Servicer's responsibilities shall include monitoring
and posting of all payments, responding to inquiries of Obligors, investigating
delinquencies, accounting for collections and furnishing monthly and annual
statements to the Back-up Servicer, the Indenture Trustee and the Noteholders
with respect to payments, making Servicer Advances, providing appropriate
federal income tax information to the Indenture Trustee for use in providing
information to the Noteholders, collecting and remitting sales and property
taxes to taxing authorities, and using its best efforts to maintain the
perfected security interest of the Indenture Trustee in the Trust Estate. The
Servicer (at its expense), acting alone or through a subservicer, shall have
full power and authority, acting at its sole discretion, to do any and all
things in connection with such managing, servicing, administration, enforcement,
collection and such sale of the Equipment that it may deem necessary or
desirable, including the prudent delegation of such responsibilities. Without
limiting the generality of the foregoing, the Servicer, in its own name or in
the name of a subservicer, shall, and is hereby authorized and empowered by the
Indenture Trustee, subject to Section 3.02 hereof, to execute and deliver (on
behalf of itself, the Noteholders, the Indenture Trustee or any of them) any and
all instruments of satisfaction or cancellation, or of partial or full release
or discharge, and all other comparable instruments, with respect to the Lease
Assets. The Servicer, acting alone or through a subservicer, also may, in its
sole discretion, waive any late Servicing Charges or any other fees that may be
collected in the ordinary course of servicing any Lease Asset. Notwithstanding
the foregoing, neither the Servicer, nor any subservicer, shall, except pursuant
to a judicial order from a court of competent jurisdiction, in connection with a
permitted repurchase under the Transaction Documents or as otherwise expressly
provided in this Agreement, release or waive the right to collect the Scheduled
Payments or any unpaid balance on any Lease Contract or Lease Receivable. The
Indenture Trustee shall, at the expense of the Servicer, furnish the Servicer,
or at the request of the Servicer, any subservicer, with any powers of attorney
and other documents necessary or appropriate to enable the Servicer or
subservicer to carry out its servicing and administrative duties hereunder, and
the Indenture Trustee shall not be responsible for the Servicer's or
subservicer's application thereof. Notwithstanding the appointment by the
Servicer of a subservicer hereunder, the Servicer shall remain liable for the
full performance of its obligations hereunder.

      (b)  The Servicer (and any subservicer) shall conduct its management,
servicing, administration, collection or enforcement actions with respect to the
Lease Assets in the following manner:

           (i) The Servicer, as agent for and on behalf of the Assignees, with
      respect to any Defaulted Lease Contract shall follow such practices and
      procedures as are normal and consistent with the Servicer's standards and
      procedures relating to its own lease contracts, lease receivables and
      equipment that are similar to the Lease Assets, and, in any event,
      consistent with the standard

                                       6
<PAGE>

     of care described in Section 3.02 hereof, including without limitation, the
     taking of appropriate actions to foreclose or otherwise liquidate any such
     Defaulted Lease Contract, together with the related Equipment, to collect
     any Guaranty Amounts, and to enforce LFC VI's and the Issuer's rights under
     the Lease Acquisition Agreement and the Receivables Purchase Agreement. All
     Insurance Proceeds, Guaranty Amounts and other Recoveries in respect of any
     such Defaulted Lease Contract and the related Lease Receivables and
     Equipment received by the Servicer shall be remitted to the Indenture
     Trustee for deposit in the Collection Account pursuant to Section 3.03(c)
     hereof;

          (ii)  The Servicer may sue to enforce or collect upon Lease Assets as
     agent for LFC VI, the Issuer and the Indenture Trustee. If the Servicer
     elects to commence a legal proceeding to enforce a Lease Asset, the act of
     commencement shall be deemed to be an automatic assignment of the Lease
     Asset to the Servicer for purposes of collection only. If, however, in any
     enforcement suit or legal proceeding it is held that the Servicer may not
     enforce a Lease Asset on the ground that it is not a real party in interest
     or a holder entitled to enforce the Lease Asset, then the Indenture Trustee
     ,on behalf of the Noteholders (or LFC VI, as applicable) shall, at the
     Servicer's request and expense, take such steps as the Servicer deems
     necessary and instructs them in writing to take to enforce the Lease Asset,
     including bringing suit in its name or the name of the Issuer, as
     beneficial owner of the Lease Receivable, LFC VI as beneficial owner of the
     Equipment, or the names of the Noteholders, as third party beneficiaries
     thereunder, and the Indenture Trustee shall be indemnified by the Servicer
     for any such action taken. Any Lease Contract temporarily released from the
     custody of the Indenture Trustee to the Servicer or its agents shall have
     stamped on it prior to its delivery a legend to the effect that the Lease
     Receivable is the property of the Issuer, the Lease Contract and the
     Equipment is the property of LFC VI and all of the foregoing have been
     pledged to Norwest Bank Minnesota, National Association as Indenture
     Trustee;

          (iii) The Servicer shall exercise any rights of recourse against third
     parties that exist with respect to any Lease Asset in accordance with the
     Servicer's usual practice and, in any event, consistent with the standard
     of care described in Section 3.02 hereof. In exercising recourse rights,
     the Servicer is authorized on the Indenture Trustee's behalf to reassign
     the Lease Asset to the person against whom recourse exists to the extent
     necessary, and at the price set forth in the document creating the
     recourse. The Servicer will not reduce or diminish such recourse rights,
     except to the extent that it exercises such right;

          (iv)  The Servicer may not allow substitutions of Substitute Lease
     Receivables or Substitute Lease Contracts that do not comply with Section
     3.09 hereof, Sections 3.03 and 3.04 of the Lease Acquisition Agreement,
     Sections 3.03 and 3.04 of the Receivables Purchase Agreement and Sections
     4.04 and 4.05 of the Indenture, as applicable. If an Obligor requests a
     financing of an upgrade to any Equipment, the Servicer shall either (A)
     include such upgrade on an existing Lease Contract and treat the Scheduled
     Payments related thereto as an Additional Lease Contract for all purposes
     of the Transaction Documents, or (B) originate a separate lease contract
     for such Obligor;

          (v)   The Servicer may waive, modify or vary any terms of any Lease
     Contract or consent to the postponement of strict compliance with any such
     term if in the Servicer's reasonable and prudent determination such waiver,
     modification or postponement is not materially adverse to the Noteholders;
     provided, however, that (A) the Servicer shall not forgive any payment of
     --------  -------
     rent, and (B) the Servicer shall not permit any modification with respect
     to any Lease Contract that would decrease the Scheduled Payment, defer the
     payment of any principal or interest or any Scheduled

                                       7

<PAGE>

      Payment, reduce the Implicit Principal Balance (except in connection
      with actual payments attributable to such Implicit Principal Balance), or
      prevent the complete amortization of the Implicit Principal Balance from
      occurring by the Calculation Date preceding the Stated Maturity of the
      Notes. The Servicer shall provide the Back-up Servicer and the Indenture
      Trustee with an Amended Lease Collateral Schedule to the related Lease
      Collateral Schedule reflecting any modification of any Scheduled Payment;

           (vi)   Unless the Obligor has paid an amount not less than the IPB
      for such Lease Contract plus any related breakage costs payable by the
      Issuer, the Servicer shall not consent to the termination of any Lease
      Contract in connection with loss of or damage to the related Equipment or
      to the prepayment of any Lease Contract;

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

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

      (c) The Servicer shall use its best efforts to verify that each
computation of Aggregate Eligible IPB and such other related computations made
for purposes of any Funding Notice and Monthly Servicing Report shall be made
using only those Lease Contracts that, if funded on a prior Acquisition Date,
continue to meet as of such date of determination the eligibility criteria set
forth in Section 3.01(a) (other than (a)(vi)) and 3.01(b) of the Lease
Acquisition Agreement; provided however, that the Servicer shall not exclude
from eligibility any Lease Contract solely as a result of the failure of such
Lease Contract to meet, after the close of the Accumulation Period, a percentage
concentration limit that was otherwise satisfied at the close of the
Accumulation Period.

      Section 3.02 Servicer Standard of Care. In managing, administering,
servicing, enforcing and making collections on the Lease Assets pursuant to this
Agreement, the Servicer will exercise that degree of skill and care consistent
with industry standards for servicing of small ticket leasing portfolios, and
that which the Servicer customarily exercises with respect to similar lease
contracts, lease receivables and equipment owned or originated by it, and in any
event, in a prudent and commercially reasonable manner. The Servicer shall
punctually perform all of its obligations and agreements under this Agreement
and shall comply with all applicable federal and state laws and regulations,
shall maintain all state and federal licenses and franchises necessary for it to
perform its servicing responsibilities hereunder, and shall not materially
impair the rights of the Noteholders in any Lease Assets or payments thereunder.

      Section 3.03 ACH Account and Servicer Remittances.

                                       8
<PAGE>

      (a) The Servicer has established an ACH Account at the ACH Bank and will
cause an ACH Agreement to be executed on or before the Initial Funding Date. The
ACH Bank may be removed by the Servicer with the consent of the Indenture
Trustee and the Majority Noteholders if the ACH Bank has failed to perform its
duties to the satisfaction of the Servicer, provided that a successor ACH Bank
                                            --------
is approved by the Majority Noteholders and has executed an ACH Agreement in
form and substance satisfactory to the Majority Noteholders and the Servicer.

      (b) On each Business Day, the Servicer shall, or shall cause the ACH Bank
to, transfer to the Collection Account all amounts on deposit in the ACH Account
which are no longer provisional.

      (c)  The Servicer, as agent of LFC VI and the Issuer, shall remit to the
Indenture Trustee for deposit in the Collection Account by 1:00 p.m. Minneapolis
time on each Tuesday and Thursday that is a Business Day, or if such day is not
a Business Day, on the next Business Day thereafter, the amounts described below
that have been collected by it through 5:00 p.m. California time on the
preceding Business Day so long as such amounts exceed $1,000:

           (i)   all Scheduled Payments, including any prepayment amounts in
      respect thereof, received directly by the Servicer;

           (ii)  all Guaranty Amounts, Insurance Proceeds and other Recoveries,
      to the extent received by the Servicer;

           (iii) the Lease Receivable Repurchase Price of any Lease Receivable
      purchased by LFG, LFC VI, or the Issuer, to the extent received by the
      Servicer; and

           (iv)  any other amounts constituting proceeds of the Lease
      Receivables and Related Security (other than Residual Proceeds), to the
      extent received by the Servicer.

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

      (d)  The Servicer, as agent for LFC VI, shall remit to or at the direction
of LFC VI, all Residual Proceeds (including the excess, if any, of the Lease
Contract Repurchase Price over the Lease Receivable Repurchase Price for a
particular Lease Asset) collected by the Servicer with respect to the Lease
Assets.

      Section 3.04 Servicer Advances. Not later than 1:00 p.m. Minneapolis time
on the Submission Date prior to each Payment Date, the Servicer may make an
advance (a "Servicer Advance") for each Lease Contract which is a Delinquent
Lease Contract on such date by remitting to the Indenture Trustee for deposit in
the Collection Account an amount equal to the Scheduled Payments, or unpaid
portion thereof, which were due in the prior Collection Period but not received
and deposited in the Collection Account on or prior to such Calculation Date;
provided, however, that the Servicer is not be obligated to make any Servicer
--------  -------
Advance pursuant to this Section 3.04 that the Servicer determines in good faith
is unlikely to be eventually repaid by the related Obligor or by way of a
Recovery; and provided, further, that the Servicer may not make a Servicer
              --------  -------
Advance with respect to any Lease Contract once it has become a Defaulted Lease
Contract. On each Submission Date, the Servicer shall deliver to the Back-up
Servicer and the Indenture Trustee the Monthly

                                       9
<PAGE>

Servicing Report, which shall include a listing of the aggregate amount of
Scheduled Payments not received for the immediately prior Collection Period, the
amount of Servicer Advances and the amounts not advanced.

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

      Section 3.06 Maintenance of Insurance Policy; Insurance Proceeds. The
Servicer shall have the obligation to verify, monitor and enforce the
acquisition and maintenance of Insurance Policies in a manner consistent with
past practice and in accordance with the Obligor's requirements under the Lease
Contract, provided that the Servicer shall do so in a manner consistent with
          --------
that practiced by other lessors in the industry with similar lease contracts and
equipment owned or serviced by them, including charging Loss and Damage Waiver
Fees or other noncompliance fees in lieu of requiring an Obligor to maintain an
Insurance Policy. Any Insurance Proceeds shall be remitted to the Indenture
Trustee for deposit in the Collection Account pursuant to Section 3.03(c). With
respect to those Lease Contracts under which the Servicer allows an Obligor to
elect to pay a Loss and Damage Waiver Fee in accordance with the terms thereof,
the Servicer shall maintain an adequate supply of equipment sufficient to
replace, and shall replace in accordance with the provisions of such Lease
Contract, any Equipment that suffers a casualty or other loss.

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

      Section 3.08 Servicing Compensation.

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

                                       10
<PAGE>

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

      Section 3.09 Substitution or Purchase of Lease Contracts.

      (a) The Servicer shall not allow termination of a Lease Contract prior to
the scheduled expiration date or prepayment of any Lease Contract (except as may
be specifically required under such Lease Contract in connection with a casualty
to the related Equipment or under Section 3.01(b)(vi)), unless LFC VI or the
Issuer has (i) pledged to the Indenture Trustee, a Substitute Lease Contract,
the Substitute Lease Receivables related such Substitute Lease Contract and the
Related Security and delivered to the Indenture Trustee the original executed
counterpart of the Substitute Lease Contract or (ii) received a prepayment
amount with respect to such prepaid Lease Asset that is at least equal to the
Lease Receivable Repurchase Price, which prepayment amount has been deposited
into the Collection Account in accordance with Section 3.03(c) hereof; provided,
                                                                       --------
however, that removals and substitutions of Lease Assets pursuant to this
-------
subparagraph (a) shall comply with the requirements of Sections 4.04 and 4.05 of
the Indenture and the criteria set forth in Section 3.04 of the Lease
Acquisition Agreement and Section 3.04 of the Receivables Purchase Agreement, as
applicable.

      (b) The Servicer shall permit LFC VI and the Issuer to (i) remove any
Lease Receivables and Related Security related to any Defaulted Lease Contract
or any Delinquent Lease Contract from the Trust Estate by remittance by LFC VI
or the Issuer to the Servicer, for deposit in the Collection Account in
accordance with Section 3.03(c) hereof, of the applicable Lease Receivable
Repurchase Price or (ii) substitute for any Lease Receivable related to any
Defaulted Lease Contract or any Delinquent Lease Contract, a Substitute Lease
Receivable and a security interest in the Related Security for such Substitute
Lease Receivable and, upon the delivery to the Indenture Trustee of the original
executed counterpart of the Substitute Lease Contract; provided that, removals
and substitutions of Lease Assets pursuant to this subparagraph (b) shall be
permitted under and comply with the requirements of Sections 4.04 and 4.05 of
the Indenture and the criteria set forth in Section 3.04 of the Lease
Acquisition Agreement and Section 3.04 of the Receivables Purchase Agreement.

      (c) Notwithstanding any other provision contained in this Agreement, the
Servicer shall not, with respect to a Defaulted Lease Contract, (i) negotiate or
enter into a new lease with the Obligor relating to the Equipment or the
Obligor's obligations under such Defaulted Lease Contract or (ii) allow the
Obligor thereunder to resume its rights under such Defaulted Lease Contract,
unless LFC VI or the Issuer has removed or made a substitution for the Lease
Receivable related to such Defaulted Lease Contract in the manner set forth in
subsection (b) hereof.

      (d) In the event that LFG is required to repurchase or substitute a Lease
Contract pursuant to Sections 2.05 or 3.03 of the Lease Acquisition Agreement,
the Servicer shall permit such repurchase or substitution only in accordance
with the terms of Sections 3.03 and 3.04 thereof. In the event that LFC VI is
required to repurchase or substitute a Lease Receivable pursuant to Sections
2.05 or 3.03 of the Receivables Purchase Agreement, the Servicer shall permit
such repurchase or substitution only in accordance with the terms of Sections
3.03 and 3.04 thereof.

                                       11
<PAGE>

      Section 3.10 No Offset. The obligations of the Servicer under this
Agreement shall not be subject to any defense, counterclaim or right of offset
that the Servicer has or may have against LFC VI or the Issuer, whether in
respect of this Agreement, any Lease Asset, or otherwise.

                                       12
<PAGE>

                                   ARTICLE 4

                      ACCOUNTINGS, STATEMENTS AND REPORTS

      Section 4.01 Monthly Servicing Reports; Funding Notices. No later than
3:00 p.m. New York time on each Submission Date, the Servicer shall deliver the
Monthly Servicing Report with respect to the activity in the immediately
preceding Collection Period to LFC VI, the Issuer, the Back-up Servicer, the
Indenture Trustee and each Noteholder and shall deliver to the Back-Up Servicer
a Computer Tape in a format acceptable to the Back-up Servicer containing the
information from which the Servicer prepared the Monthly Servicing Report, as
well as information with respect to any Additional Lease Contracts sufficient
for the Back-up Servicer to perform its duties under Section 7.04(d) hereof. In
the course of preparing the Monthly Servicing Report, the Servicer shall seek
direction from the Issuer as to remittance of any funds to be paid pursuant to
Section 11.02(d)(xiv) of the Indenture. In addition, the Servicer shall prepare
the Funding Notice for each Funding to be made in accordance with Section 3.03
of the Indenture.

      Section 4.02 Financial Statements; Certification as to Compliance; Notice
of Default.

      (a) The Servicer (and LFG if it has been terminated as Servicer but the
Lease Acquisition Agreement remains in effect) will deliver to the Indenture
Trustee, the Back-up Servicer and to each Noteholder of Outstanding Notes (and,
upon the request of any Noteholder, to any prospective transferee of any Note
which has executed an agreement with the Issuer and the Servicer containing
terms substantially similar to those set forth in Section 4.04(f) hereof):

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

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

                                       13
<PAGE>

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

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

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

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

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

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

           (vi)   such other information as may be specified in the Indenture;

           (vii)  within 45 days of the end of each fiscal quarter of each of
      NOVA, quarterly, unaudited consolidating balance sheet and income
      statement and consolidated statement of sources and uses of cash for NOVA
      and its subsidiaries; and

           (viii) within 45 days of the end of each fiscal quarter of each of
      LFG, quarterly, unaudited consolidating balance sheet and income statement
      and consolidated statement of sources and uses of cash for LFG and its
      subsidiaries.

      (b)  On or before each April 15, so long as any of the Notes are
outstanding, the Servicer shall furnish to the Indenture Trustee and the
Noteholders an Officer's Certificate either stating that such action has been
taken with respect to the recording, filing, and rerecording and refiling of any
financing statements and continuation statements as necessary to maintain the
interest of the Indenture Trustee created by the Indenture with respect to the
Trust Estate and reciting the details of such action or stating that no such
action is necessary to maintain such interest. Such Officer's Certificate shall
also describe the recording, filing, rerecording and refiling of any financing
statements and continuation statements that will be required to maintain the
interest of the Indenture Trustee in the Trust Estate until the date such next
Officer's Certificate is due.

      Section 4.03 Annual Independent Accountants' Reports; Annual Federal Tax
Lien Search.

      (a) Promptly after the end of the Servicer's fiscal year, commencing with
the fiscal year ending December 31, 2000, the Servicer at its expense shall
cause the Independent Accountants (who may also

                                       14
<PAGE>

render and deliver other services to the Servicer and its Affiliates) to prepare
a statement to the Indenture Trustee and the Noteholders, dated as of the close
of such fiscal year, to the effect that the Independent Accountants have
examined the servicing procedures, manuals, guides and records of the Servicer,
and the accounts and records of the Servicer relating to the Lease Contracts and
any files or documentation pertaining to the Lease Assets (which procedures,
manuals, guides and records shall be described in one or more schedules to such
statement), that such Independent Accountants have compared the information
contained in the Monthly Servicing Reports delivered in the relevant period with
information contained in the accounts and records for such period, and that, on
the basis of such examination and comparison, nothing has come to the
Independent Accountants' attention to indicate that the Servicer has not, during
the relevant period, serviced the Lease Assets in compliance with such servicing
procedures, manual and guides and in the same manner required by the Servicer's
standards and with the same degree of skill and care consistent with that which
the Servicer customarily exercises with respect to similar Lease Assets owned by
it and otherwise in compliance with this Agreement, that such accounts and
records have not been maintained in accordance with Section 4.04 hereof, that
the information contained in the Monthly Servicing Reports does not reconcile
with the information contained in the accounts and records or that such
certificates, accounts and records have not been properly prepared and
maintained in all material respects or in accordance with the requirements of
this Agreement, except in each case for (i) such exceptions as the Independent
Accountants shall believe to be immaterial and (ii) such other exceptions as
shall be set forth in such statement. The Servicer shall deliver to the Back-up
Servicer, the Indenture Trustee and the Noteholders a copy of any such statement
within 120 days of the close of the relevant fiscal year.

      If such independent public accountants require the Indenture Trustee to
agree to the procedures to be performed by such firm in any of the reports
required to be prepared pursuant to this Section 4.03, the Servicer shall direct
the Indenture Trustee in writing to so agree; it being understood and agreed
that the Indenture Trustee will deliver such letter of agreement in conclusive
reliance upon the direction of the Servicer, and the Indenture Trustee has not
made 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.

      (b) Promptly after the end of the Servicer's fiscal year, commencing with
the fiscal year ending December 31, 2000, the Servicer, at its expense, shall
cause a search of any and all federal tax liens against the affiliated group of
which LFG, LFC VI and the Issuer are members within the meaning of Section 1504
of the Code (the "Affiliated Group") as of the end of such fiscal year to be
conducted and shall deliver to the Back-up Servicer, the Indenture Trustee and
the Noteholders on or before January 31 of each year, commencing January 31,
2001, an officer's certificate signed by a Servicing Officer (i) stating that
there are no outstanding federal tax liens filed against any member of the
Affiliated Group or (ii) listing the outstanding federal tax liens filed against
any member of such Affiliated Group. In the event any such certificate shall
disclose any such federal tax liens, the Servicer shall promptly thereafter,
satisfy any such federal tax liens.

      Section 4.04 Access to Certain Information.

      (a) The Servicer shall provide to the Back-up Servicer, the Indenture
Trustee and the Majority Noteholders and their duly authorized representatives,
attorneys or accountants access to any and all documentation regarding the Trust
Estate (including the Lease Collateral Schedule) that the Servicer may possess,
such access being afforded without charge but only upon reasonable request and
during normal business hours so as not to interfere unreasonably with the
Servicer's normal operations or customer or employee relations, at offices of
the Servicer designated by the Servicer.

                                       15
<PAGE>

      (b) At all times during the term hereof, the Servicer shall keep available
at its principal executive office for inspection by the Indenture Trustee, the
Back-up Servicer and the Majority Noteholders a list of all the Lease
Receivables and the interests in Related Security then held as a part of the
Trust Estate, together with a reconciliation of such list to that set forth in
the Lease Collateral Schedules and each of the Monthly Servicing Reports,
indicating the cumulative addition and removal of Lease Receivables and
interests in Related Security from the Trust Estate.

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

      (d) The Servicer will maintain the LFG Database so that, from and after
each Acquisition Date and the grant of the security interest in the related
Lease Contract, Lease Receivables and Equipment to the Indenture Trustee, the
Servicer's accounts and records (including any back-up computer archives) that
refer to any such Lease Contracts, Lease Receivables or Equipment indicate
clearly that the Lease Contracts and the Equipment are owned by LFC VI and
pledged to the Indenture Trustee for the benefit of the Noteholders and that the
Lease Receivables are owned by the Issuer and pledged to the Indenture Trustee
for the benefit of the Noteholders. Indication of the Indenture Trustee's
interest in a Lease Contract or a Lease Receivable will be deleted from or
modified in the LFG Database or elsewhere on the Servicer's accounts and records
when, and only when, the Lease Contract or the Lease Receivable has been paid in
full, replaced with a Substitute Lease Contract or Substitute Lease Receivable,
as applicable, or purchased by LFG, LFC VI or the Issuer or assigned to the
Servicer pursuant to this Agreement.

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

      (f) All information obtained by the Indenture Trustee, the Back-up
Servicer or any Noteholder regarding the Obligors and the Lease Assets, whether
upon exercise of its rights under this Section 4.04 or otherwise, shall be
maintained by the Indenture Trustee, the Back-up Servicer and the Noteholders,
as applicable, in confidence and shall not be disclosed to any other Person,
unless such disclosure shall not violate any applicable law or regulation or any
proprietary rights of LFG, LFC VI, the Issuer or the Servicer or unless ordered
by a court of applicable jurisdiction.

      Section 4.05 Other Necessary Data. The Servicer shall, on request of the
Back-up Servicer, the Indenture Trustee or the Majority Noteholders, (i) on
reasonable notice, furnish the Indenture Trustee or the Noteholders such data
necessary for the administration of the Trust Estate as can be reasonably
generated by the Servicer's existing data processing systems, and (ii) on and
after a Servicing Termination Event, within three Business Days, provide the
Indenture Trustee and the Back-up Servicer with access to the Servicer's
existing data processing systems and any files or records with respect to the
Lease Assets that it may have.

                                       16
<PAGE>

      Section 4.06 Indenture Trustee to Cooperate. Upon payment (including
through application of any Prepayment Amount) in full of any Lease Contract, the
Servicer will notify the Indenture Trustee on the next succeeding Calculation
Date by written certification to the Indenture Trustee (which certification
shall include a statement to the effect that all amounts received in connection
with such payments in full which are required to be deposited in the Collection
Account pursuant to Section 3.03 hereof have been so deposited) of a Servicing
Officer and shall request delivery of the Lease Contract to the Servicer. Upon
receipt of such delivery request, the Indenture Trustee shall within seven days
of such request by the Servicer release such Lease Contract to the Servicer.
Upon release of such Lease Contract, the Servicer is authorized to execute an
instrument in satisfaction of such Lease Contract and to do such other acts and
execute such other documents as it deems necessary to discharge the Obligor
thereunder and, if applicable, release any security interest in the Equipment
related thereto. The Servicer shall determine when a Lease Contract has been
paid in full. Upon the written request of a Servicing Officer and subject to the
Indenture Trustee's rights to indemnity contained herein and in the Indenture,
the Indenture Trustee shall perform such other acts as reasonably requested in
writing by the Servicer and otherwise cooperate with the Servicer in enforcement
of the Noteholders' rights and remedies with respect to Lease Assets.

                                       17
<PAGE>

                                   ARTICLE 5

                      THE SERVICER, LFC VI AND THE ISSUER

      Section 5.01 Servicer Indemnification.

      (a) The Servicer shall indemnify and hold harmless LFC VI, the Issuer, the
Back-up Servicer, the Indenture Trustee, the Trust Estate and the Noteholders,
from and against any loss, liability, claim, expense, damage or injury suffered
or sustained to the extent that such loss, liability, claim, expense, damage or
injury arose out of or was imposed by reason of the failure by the Servicer to
perform its duties under this Agreement or are attributable to errors or
omissions of the Servicer related to such duties, including without limitation,
the inclusion of any Lease Contracts which the Servicer knew or should
reasonably have known were not Eligible Lease Contracts as of such date in any
computations of Aggregate Eligible IPB (and any related computations) made by it
in connection with any Funding Notice or Monthly Servicing Report; provided,
                                                                   --------
however, that the Servicer shall not indemnify any party to the extent that acts
-------
of fraud, gross negligence or breach of fiduciary duty by such party caused such
loss, liability, claim, expense, damage or injury.

      (b) The Servicer shall not be liable for any settlement of any action or
claim effected without its reasonable consent. If the Servicer has made any
indemnity payments to the Indenture Trustee, the Back-up Servicer 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. The provisions of this Section 5.01
shall survive any expiration or termination of this Agreement.

      Section 5.02 Corporate Existence; Reorganizations.

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

      (b) The Servicer shall not (i) (other than pursuant to one or more
additional lease pool financings) convey, transfer or lease substantially all of
its assets as an entirety to any Person, or (ii) merge into or consolidate with
another Person without the consent of the Majority Noteholders.

      Section 5.03 Limitation on Liability of the Servicer. The Servicer and any
officer, director, employee or agent of the Servicer may rely in good faith on
any document of any kind prima facie properly executed and submitted by any
Person with respect to any matters arising hereunder. No implied covenants or
obligations shall be read into this Agreement against the Servicer. In the event
the Servicer performs any activities beyond the requirements of this Agreement,
the Servicer shall have the option but will not be required to perform such
activities in the future.

                                       18
<PAGE>

      Section 5.04 The Servicer Not to Resign.

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

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

      (c) Except as provided in Sections 5.02 and 6.01 hereof, the duties and
obligations of the Servicer under this Agreement shall continue until this
Agreement shall have been terminated as provided in Section 7.01 hereof, and
shall survive the exercise by LFC VI, the Issuer or the Indenture Trustee of any
right or remedy under this Agreement, or the enforcement by LFC VI, the Issuer,
the Indenture Trustee, the Back-up Servicer or any Noteholder of any provision
of the Notes or this Agreement.

      (d) Nothing contained in this Section 5.04 shall impair or restrict the
ability of the Servicer or any successor Servicer to appoint a subservicer.

      Section 5.05 LFC VI and Issuer Indemnification. LFC VI and the Issuer
shall indemnify and hold harmless the Servicer (but solely from the amounts to
be distributed as set forth in Section 11.02(d)(xiv) of the Indenture) from and
against any loss, liability, expense, damage or injury suffered or sustained by
the Servicer, including but not limited to any judgment, award, settlement,
reasonable attorneys' fees and other costs and expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim, which
arises out of the Servicer's activities hereunder; provided, however, that
                                                   --------  -------
neither LFC VI nor the Issuer shall indemnify the Servicer if the Servicer's
activities constituted fraud, willful misconduct, gross negligence (which
includes negligence with respect to the duties of the Servicer which are
explicitly set forth in this Agreement) or breach of fiduciary duty by the
Servicer.

                                       19
<PAGE>

                                   ARTICLE 6

                             SERVICING TERMINATION

     Section 6.01 Servicing Termination Events.

     (a) Any of the following acts or occurrences shall constitute a Servicing
Termination Event:

           (i)   Any failure by the Servicer to deliver to the Indenture Trustee
     for payment to Noteholders any proceeds or payments received from an
     Obligor or in respect of the Trust Estate and required to be so delivered
     under the terms of the Indenture and this Agreement that continues
     unremedied until 1:00 p.m. Minneapolis time on the second following
     Business Day; provided, however, that the Indenture Trustee, upon receiving
                   --------  -------
     actual knowledge of such failure, shall give the Servicer and the
     Noteholders prompt written, telecopied or telephonic notice of such
     failure. Notwithstanding the foregoing, any failure by the Indenture
     Trustee to deliver such notice to the Servicer or the Noteholders shall not
     prevent the occurrence of a Servicing Termination Event; or

           (ii)  Any failure by the Servicer to make a Servicer Advance pursuant
      to Section 3.04 hereof or to deliver a Monthly Servicing Report pursuant
      to Section 4.01 hereof that continues unremedied until 1:00 p.m.
      Minneapolis time the following Business Day; provided, however, that if
                                                   --------  -------
      the Servicer has not delivered the Monthly Servicing Report by 1:00 p.m.
      Minneapolis time on the Submission Date, the Indenture Trustee shall give
      the Servicer notice of such failure. Notwithstanding the foregoing, any
      failure by the Indenture Trustee to deliver such notice to the Servicer
      shall not prevent the occurrence of a Servicing Termination Event; or

           (iii) Any failure on the part of the Servicer to duly observe or
      perform any other material covenants or agreements of the Servicer set
      forth in this Agreement or any other Transaction Document, as the case may
      be, or if any representation or warranty of the Servicer set forth in
      Section 2.01 of this Agreement shall prove to be incorrect, which failure
      or breach (A) materially and adversely affects or could affect the
      interest or rights of LFC VI, the Issuer, the Indenture Trustee, or the
      Noteholders and (B) continues unremedied for a period of 30 days after the
      date on which the Servicer becomes aware of such failure or breach or
      written notice of such failure or breach, requiring the situation giving
      rise to such breach or non-conformity to be remedied, shall have been
      given to a Servicing Officer of the Servicer by LFC VI, the Issuer, the
      Indenture Trustee, or the Back-up Servicer, or to a Servicing Officer of
      the Servicer and the Indenture Trustee by the Majority Noteholders; or

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

                                       20
<PAGE>

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

           (vi) The occurrence of a Rapid Amortization Event.

      (b)  So long as a Servicing Termination Event shall not have been remedied
within the period set forth in (i), (ii), (iii) or (iv) above, as applicable, or
if a Servicing Termination Event described in (v) above occurs, LFC VI, the
Issuer, the Indenture Trustee, or the Noteholders may, by notice (the "Servicer
Termination Notice") then given in writing to the Servicer and the Back-up
Servicer , terminate all, but not less than all, of the rights and obligations
of the Servicer under this Agreement. Notwithstanding the foregoing, a delay in
or failure of performance under Section 6.01(a)(iii) hereof for a period of 30
or more days, shall not constitute a Servicing Termination Event if such delay
or failure could not have been prevented by the exercise of reasonable diligence
by the Servicer and such delay or failure was caused by acts of declared or
undeclared war, public disorder, rebellion or sabotage, epidemics, landslides,
lightning, fire, hurricanes, earthquakes, floods or similar causes. The
preceding sentence shall not relieve the Servicer from using its best efforts to
perform its obligations in a timely manner in accordance with the terms of this
Agreement, and the Servicer shall provide LFC VI, the Issuer, the Indenture
Trustee, the Back-up Servicer and the Noteholders with prompt notice of such
failure or delay by it, together with a description of its efforts to so perform
its obligations.

      (c)  Upon the occurrence of an Event of Default, LFC VI, the Issuer, the
Indenture Trustee, or the Majority Noteholders may, by Servicer Termination
Notice then given in writing to the Servicer and the Back-up Servicer, terminate
all but not less than all of the rights and obligations of the Servicer under
this Servicing Agreement.

      (d)  On or after the receipt by the Servicer of a Servicer Termination
Notice, all authority and power of the Servicer under this Agreement, whether
with respect to the Lease Receivables and interests in the Related Security or
otherwise, shall pass to and be vested in the successor Servicer appointed
pursuant to Section 6.02 hereof, and, without limitation, such successor
Servicer is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer of the Lease Receivables and interests in the Related
Security and related documents, or otherwise. The Servicer agrees to cooperate
with the Indenture Trustee, the Back-up Servicer and the successor Servicer in
effecting the termination of the responsibilities and rights of the Servicer
hereunder, including, without limitation, the transfer to the successor Servicer
for administration by it of all cash amounts that shall at the time be held by
the Servicer for deposit, or have been deposited by the Servicer, in the
Collection Account or thereafter received with respect to any of the Lease
Assets. To assist the successor Servicer in enforcing all rights under the Lease
Assets and the Insurance Policies to the extent they relate to the Lease Assets,
the outgoing Servicer, at its own expense,

                                       21
<PAGE>

shall transfer its records (electronic and otherwise) relating to such Lease
Assets to the successor Servicer in such form as the successor Servicer may
reasonably request and shall transfer the related Servicing Files and all other
records, correspondence and documents relating to the Lease Assets that it may
possess to the successor Servicer in the manner and at such times as the
successor Servicer shall reasonably request. In addition to any other amounts
that are then payable to the Servicer under this Agreement, the Servicer shall
be entitled to receive reimbursements for any unreimbursed Servicer Advance made
during the period prior to the delivery of a Servicer Termination Notice
pursuant to this Section 6.01 which terminates the obligations and right of the
Servicer under this Agreement.

      Section 6.02 Back-up Servicer to Act; Taking of Bids; Appointment of
Successor Servicer.

      (a) (i)  On and after the time the Servicer resigns pursuant to Section
5.04 hereof or receives a Servicer Termination Notice pursuant to Section
6.01(b) hereof, the Back-up Servicer shall, unless prevented by law,
automatically and without further action be the successor Servicer. If the
Back-up Servicer cannot serve as successor Servicer, another firm reasonably
acceptable to the Majority Noteholders and, so long as a Servicer Termination
Event has not occurred, reasonably acceptable LFC VI and the Issuer shall be
appointed by the Issuer as the successor Servicer.

          (ii) The successor Servicer shall be the successor in all respects to
the Servicer in its capacity as Servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions hereof; provided, however, that the successor
                                    --------  -------
Servicer (x) shall not be required to make any Servicer Advance if such Servicer
Advance would be prohibited by applicable law and (y) shall not be liable for
any acts or omissions of the outgoing Servicer or for any breach by the outgoing
Servicer of any of its representations and warranties contained herein or in any
related document or agreement. With the prior written consent of the Majority
Noteholders (which consent shall not be unreasonably withheld), the successor
Servicer may subcontract with another firm to act as subservicer so long as the
successor Servicer remains fully responsible and accountable for performance of
all obligations of the Servicer on and after the time the Servicer receives the
Servicer Termination Notice. The successor Servicer shall be entitled to the
Servicer Fee and any Additional Servicer Fee, subject to the taking of bids as
described in subsection (b) below.

      (b) Solely for purposes of establishing the fee to be paid to the Back-Up
Servicer upon receipt of a Servicer Termination Notice, the Issuer shall solicit
written bids, with a copy to the Noteholders (such bids to include a proposed
servicer fee and servicing transfer costs) from not less than three entities
experienced in the servicing of Lease Assets similar to the Lease Contracts,
Lease Receivables and the Equipment and that are not affiliates of LFC VI, the
Issuer, the Indenture Trustee, the Back-up Servicer or the Servicer and are
reasonably acceptable to the Majority Noteholders. Any such written solicitation
shall prominently indicate that bids should specify any applicable subservicing
fees required to be paid from the Servicer Fee and that any fees and transfer
costs in excess of the Servicer Fee shall be paid only pursuant to Section
11.02(d)(iii) of the Indenture as the Additional Servicer Fee. The successor
Servicer shall act as Servicer hereunder and shall, subject to the availability
of sufficient funds in the Collection Account pursuant to Section 11.02(d)(i)
(up to the Servicer Fee) and Section 11.02(d)(iii) (up to any successor
Servicer's Transition Costs and any Additional Servicer Fee) of the Indenture,
receive as compensation therefor a fee equal to the fee proposed in the bid so
solicited which provides for the lowest combination of servicer fee and
transition costs, as reasonably determined by the Majority Noteholders.
Notwithstanding anything else herein to the contrary, in no event shall either
the Trustee or the Back-up Servicer be liable for any Servicing Fee

                                       22
<PAGE>

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 provided for
herein.

      (c)   The Servicer, the Back-up Servicer, LFC VI, the Issuer, the
Indenture Trustee and each successor Servicer shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
The Back-up Servicer (or the Indenture Trustee or the Noteholders if such
Noteholders have previously reimbursed the Back-up Servicer and the Indenture
Trustee therefor) shall be reimbursed for Transition Costs, if any, incurred in
connection with the assumption of responsibilities of the successor Servicer,
upon receipt of documentation of such costs and expenses and in accordance with
Sections 11.02(d) of the Indenture. The Back-up Servicer shall have no claim
against the Issuer or the Trust Estate for any costs and expenses incurred in
effecting such succession in excess of the amount specified in the definition of
"Transition Costs."

      (d)   If the Back-up Servicer becomes the successor Servicer pursuant
hereto it shall use its best efforts to obtain a replacement Back-up Servicer
acceptable to the Issuer and the Noteholders.

      (e)   Notwithstanding anything contained in this Agreement to the
contrary, absent written notice detailing specific Errors (as defined below) or
other deficiencies, Norwest Bank, Minnesota, National Association ("Norwest"),
as successor Servicer, is authorized to accept and rely on all accounting,
records (including computer records) and work product of the prior Servicer
relating to the Lease Contracts (collectively, the "Predecessor Servicer Work
Product") without any audit or other examination thereof, and Norwest shall have
no duty, responsibility, obligation or liability for the acts and omissions of
the prior Servicer. If any error, inaccuracy, commission or incorrect or
nonstandard practice or procedure (collectively, "Errors") exist in any
Predecessor Servicer Work Product and such Errors make it materially more
difficult to service or should cause or materially contribute to Norwest making
or continuing any Errors (collectively, "Continued Errors"), Norwest shall have
no duty, responsibility, obligation or liability to perform servicing or for
such Continued Errors; provided, however, that Norwest agrees to use its best
efforts to prevent further Continued Errors. In the event that Norwest becomes
aware of Errors or Continued Errors, Norwest shall, with the prior consent of
the Majority Noteholders, use its best efforts to reconstruct and reconcile such
data as is commercially reasonable to correct such Errors and Continued Errors
and to prevent future Continued Errors. Norwest shall be entitled to recover its
costs thereby expended in accordance with Sections 6.08, Clause First, and
Section 11.02(d)(iii) and (xii) of the Indenture, as applicable.

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

      Section 6.04 Waiver of Past Defaults. The Indenture Trustee may, on behalf
of all Noteholders, waive any default by the Servicer in the performance of its
obligations hereunder and its consequences, other than a default with respect to
required deposits and payments in accordance with Article 3 or a default of the
type set forth in clause (iv) or (v) of Section 6.01(a) hereof, which waiver
shall require the consent of each Noteholder. Upon any such waiver of a past
default, such default shall cease to exist, and any Servicing Termination Event
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

                                       23
<PAGE>

thereon except to the extent expressly waived. The Indenture Trustee shall
provide to the Noteholders notification of any such waiver and the basis
therefore.

      Section 6.05 Effects of Termination of Servicer.

      (a)   Upon the appointment of the successor Servicer, the predecessor
Servicer shall remit within 2 Business Days any Scheduled Payments and any other
payments or proceeds that it may receive with respect to the Lease Assets to the
successor Servicer after such date of appointment.

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

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

                                       24
<PAGE>

                                   ARTICLE 7

                             THE BACK-UP SERVICER

      Section 7.01 Representations of Back-up Servicer. The Back-up Servicer
makes the following representations and warranties:

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

      (b)   The Back-up Servicer has the power and authority to execute and
deliver this Agreement and the Indenture and to carry out their respective
terms; and the execution, delivery, and performance of this Agreement and the
Indenture shall have been duly authorized by the Back-up Servicer by all
necessary corporate action.

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

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

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

      Section 7.02 Merger or Consolidation of, or Assumption of the Obligations
of, Back-up Servicer. Any Person (i) into which the Back-up Servicer may be
merged or consolidated, (ii) which may result from any merger or consolidation
to which the Back-up Servicer shall be a party, or (iii) which may succeed to
the properties and assets of the Back-up Servicer substantially as a whole,
which Person in any of the foregoing cases executes an agreement of assumption
to perform every obligation of the Back-up

                                       25
<PAGE>

Servicer hereunder, shall be the successor to the Back-up Servicer under this
Agreement without further act on the part of any of the parties to this
Agreement. In the event that the resulting entity does not meet the eligibility
requirements for the Indenture Trustee set forth in the Indenture, the Back-up
Servicer, upon the written request of Majority Noteholders, shall resign from
its obligations and duties under this Agreement.

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

      Section 7.04 Oversight of Servicing.

      (a)   Prior to each Payment Date, the Indenture Trustee shall review the
Monthly Servicing Report related thereto and shall determine the following:

            (i)    that such Monthly Servicing Report is complete on its face;

            (ii)   that the amount credited to and withdrawn from the ACH
      Account is the same as the amount set forth in the Monthly Servicing
      Report as so credited; and

            (iii)  that the amounts credited to and withdrawn from the
      Collection Account, and the balance of such accounts, as set forth in the
      records of the Indenture Trustee, are the same as the amount set forth in
      the Monthly Servicing Report.

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

            (i)    The Aggregate Implicit Principal Balance and Aggregate
      Eligible IPB as of the most recent Calculation Date;

            (ii)   the Required Swap Amount as of the most recent Calculation
      Date;

            (iii)  the Principal Distribution Amount for the Notes as of the
      most recent Payment Date; and

            (iv)   the Annualized Default Rate, the Delinquency Rate and the
      Overcollateralization Amount for the related Collection Period as set
      forth in the most recent Monthly Servicing Report.

In addition, the Back-up Servicer shall confirm that the items set forth in the
Monthly Servicing Report, other than the items listed in the section entitled
"Amounts Remitted by Servicer" are accurate based upon a comparison to the
Computer Tape referred to above.

                                       26
<PAGE>

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

      (d)   Based solely on the information included in the Lease Collateral
Schedule delivered on each Acquisition Date and the Computer Tapes provided on
the related Submission Date, the Back-up Servicer shall determine that any
Additional Lease Contracts satisfy the criterion set forth in the second
paragraph of Section 3.04(b) of the Lease Acquisition Agreement and that the
acquisition of such Additional Lease Contracts do not violate the Geographic
Concentration Limits and the Product Mix Limits set forth in the Lease
Acquisition Agreement.

      (e)   The Back-up Servicer may, in its sole discretion, make a site visit
to the offices of the Servicer within 120 days of the Closing Date, and annually
thereafter, for the purpose of reviewing the operations of the Servicer. The
reasonable out-of-pocket costs and expenses of the Back-up Servicer incurred in
connection with this Agreement, including without limitation, the site visit
referred to in the preceding sentence will be reimbursed to the Back-up Servicer
by the Servicer.

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

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

      Section 7.05 Back-up Servicer Compensation. As compensation for the
performance of its obligations as Back-up Servicer under this Agreement the
Back-up Servicer shall be entitled to receive the Back-up Servicer Fee.

      Section 7.06 Duties and Responsibilities.

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

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

                                       27
<PAGE>

                                   ARTICLE 8

                           MISCELLANEOUS PROVISIONS

      Section 8.01 Termination.

      (a)   Except with respect to a particular party under Sections 5.01, 5.04,
5.05 or 6.01 hereof, the respective duties and obligations of the Servicer, LFC
VI, the Issuer, the Back-up Servicer and the Indenture Trustee created by this
Agreement shall terminate upon the discharge of the Indenture in accordance with
its terms; and the respective duties and obligations of the Indenture Trustee
shall terminate with respect to the Indenture Trustee in the event the Indenture
Trustee resigns or is replaced under Section 7.09 of the Indenture; provided,
                                                                    --------
however, that no resignation or removal of the Indenture Trustee and no
-------
appointment of a successor Indenture Trustee shall become effective until the
acceptance of appointment by the successor Indenture Trustee under Section 7.10
of the Indenture. Upon the termination of this Agreement pursuant to this
Section 7.01(a), the Servicer shall pay all monies with respect to the Lease
Assets held by the Servicer and to which the Servicer is not entitled to LFC VI
or the Issuer, as they may direct in writing.

      (b)   This Agreement shall not be automatically terminated as a result of
an Event of Default under the Indenture or any action taken by the Indenture
Trustee thereafter with respect thereto, and any liquidation or preservation of
the Trust Estate by the Indenture Trustee thereafter shall be subject to the
rights of the Servicer to service the Lease Receivables and to collect servicing
compensation as provided hereunder.

      Section 8.02 Amendments.

      (a)   This Agreement may be amended from time to time by LFC VI, the
Issuer, the Servicer, the Back-up Servicer and the Indenture Trustee, with the
prior written consent of the Majority Noteholders and satisfaction of the Rating
Agency Condition, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement; if any party to
this Agreement is unable to sign any amendment due to its dissolution, winding
up or comparable circumstances, then the consent of the Majority Noteholders
shall be sufficient to effect such amendment without such party's signature;
provided, however, that no such amendment shall impose on the party that is
unable to provide a signature any obligation or liability in excess of what is
then currently imposed hereunder prior to such amendment; and provided, further,
                                                              --------  -------
that no such amendment shall, without the consent of each Noteholder, (i) alter
the priorities with which any allocation of funds shall be made under this
Agreement, (ii) permit the creation of any lien on the Trust Estate (other than
the lien of the Indenture) or any portion thereof or deprive any such Noteholder
of the benefit of this Agreement with respect to the Trust Estate or any portion
thereof, or (iii) modify this Section 8.02 or Sections 3.03, 5.02, 5.04 or 6.01
hereof.

      (b)   Promptly after the execution of any amendment, the Servicer shall
send to the Indenture Trustee and each Noteholder a conformed copy of each such
amendment.

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

      Section 8.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT

                                       28
<PAGE>

REGARD TO CONFLICT OF LAWS PRINCIPLES AND THE OBLIGATIONS, RIGHTS AND REMEDIES
OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

      Section 8.04 Notices. All demands, notices and communications hereunder
shall be in writing and shall be delivered by telecopy with confirmation of
receipt or mailed by registered or certified United States mail, postage
prepaid, and addressed, in each case as follows: (a) if to LFC VI, at 555 St.
Charles Drive, Suite 200F, Thousand Oaks, California, 91360, Attn: President;
(b) if to the Issuer, at 555 St. Charles Drive, Suite 200G, Thousand Oaks,
California, 91360, Attn: President; (c) if the Servicer, at 555 St. Charles
Drive, Suite 200, Thousand Oaks, California, 91360, Attn: President; (d) if to
the Indenture Trustee and Back-up Servicer, at MAC N9311-161, Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55479, Corporate Trust Services/Asset
Backed Administration and (e) to the Noteholders as provided in the Indenture.
All notices and demands shall be deemed to have been given either at the time of
the delivery thereof to any officer of the Person entitled to receive such
notices and demands at the address of such Person for notices hereunder, or on
the third day after the mailing thereof to such address, as the case may be.

      Section 8.05  Severability of Provisions. If one or more of the provisions
of this Agreement shall be for any reason whatever held invalid, such provisions
shall be deemed severable from the remaining covenants and provisions of this
Agreement, and shall in no way affect the validity or enforceability of such
remaining provisions, the rights of any parties hereto, or the rights of the
Indenture Trustee or any Noteholder. To the extent permitted by law, the parties
hereto waive any provision of law which renders any provision of this Agreement
prohibited or unenforceable in any respect.

      Section 8.06  Binding Effect. All provisions of this Agreement shall be
binding upon and inure to the benefit of the respective successors and assigns
of the parties hereto, and all such provisions shall inure to the benefit of the
Noteholders. This Agreement may not be modified except by a writing signed by
all parties hereto.

      Section 8.07  Article Headings and Captions. The article headings and
captions in this Agreement are for convenience of reference only, and shall not
limit or otherwise affect the meaning hereof. Section 8.08 Legal Holidays. In
the case where the date on which any action required to be taken, document
required to be delivered or payment required to be made is not a Business Day,
such action, delivery or payment need not be made on such date, but may be made
on the next succeeding Business Day.

      Section 8.09  Assignment for Security for the Notes. The Servicer and the
Back-up Servicer understand that LFC VI and the Issuer will assign to and grant
to the Indenture Trustee a security interest in all their right, title and
interest to this Agreement. The Servicer and the Back-up Servicer consent to
such assignment and grant and further agrees that all representations,
warranties, covenants and agreements of the Servicer and the Back-up Servicer
made herein shall also be for the benefit of and inure to the Indenture Trustee
and all Noteholders.

      Section 8.10  No Servicing Assignment. Notwithstanding anything to the
contrary contained herein, except as provided in Sections 5.02 and 5.04 hereof,
this Agreement may not be assigned by LFC VI, the Issuer or the Servicer (except
with respect to the appointment of a subservicer) without the prior written
consent of the Majority Noteholders, the Indenture Trustee, and the Back-up
Servicer.

                                       29
<PAGE>

      Section 8.11  Counterparts. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.

      Section 8.12  Nonpetition. During the term of this Servicing Agreement and
for one year and one day after payment in full of the Notes, none of the parties
hereto or any Affiliate thereof will file any involuntary petition or otherwise
institute any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding or other proceeding under any federal or state bankruptcy or similar
law against LFC VI or the Issuer.

      Section 8.13  Notifications. Notwithstanding any provision to the contrary
contained in this Agreement, all reports, notices, communications and consents
which are required, by the terms of this Agreement, to be delivered by the
Noteholders or Majority Noteholders to the Indenture Trustee, as the context
requires, shall be required to be delivered to the Indenture Trustee in writing.

      Section 8.14  Back-up Servicer as Successor Servicer. Notwithstanding
anything contained in this Agreement to the contrary, the Back-up Servicer shall
only be required to perform its obligations in the time and manner set forth in
this Agreement if, and to the extent, any information which is required to be
delivered to the Back-up Servicer or any information on which the Back-up
Servicer is authorized to rely on, is delivered to the Back-up Servicer in
accordance with provisions of this Agreement or is provided to the Back-up
Servicer in a format that is reasonably acceptable to the Back-up Servicer, as
applicable; provided, however, nothing in this paragraph shall be construed to
relieve the Back-up Servicer of its obligations under this Agreement if the
failure to appropriately deliver or provide any such information to the Back-up
Servicer is remedied or is otherwise reasonably available to the Back-up
Servicer without undue cost or time.

      Section 8.15  Consent to Jurisdiction.

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

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

      (c)   Service on any party hereto may be made by mailing or delivering
copies of the summons and complaint and other process which may be served in any
suit, action or proceeding to such party at its

                                       30
<PAGE>

address listed in herein or in the other Transaction Documents. Such address may
be changed by the applicable party or parties by written notice to each of the
other parties hereto.

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

      Section 8.16  Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE BETWEEN
THE PARTIES HERETO ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE RELATIONSHIP BETWEEN ANY OF THEM IN CONNECTION WITH THIS CONTRACT
ACQUISITION AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. INSTEAD, ANY SUCH
DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

                                *   *  *  *  *

                                       31
<PAGE>

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

                                  LADCO FUNDING CORP. VI

                                  By:  /s/ Leon D. Ladd
                                       ---------------------------------------
                                  Name:  Leon D. Ladd
                                  Title: President

                                  LADCO FUNDING CORP. VII, as Issuer

                                  By:  /s/ Leon D. Ladd
                                       ---------------------------------------
                                  Name:  Leon D. Ladd
                                  Title: President

                                  LADCO FINANCIAL GROUP, as Servicer

                                  By:  /s/ Leon D. Ladd
                                       ---------------------------------------
                                  Name:  Leon D. Ladd
                                  Title: President

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

                                  By:  /s/ Casey P. Kelly
                                       ---------------------------------------
                                  Name:  Casey P. Kelly
                                  Title: Corporate Trust Officer

<PAGE>

                                                                     EXHIBIT A

                       FORM OF MONTHLY SERVICING REPORT
<PAGE>

                                                                       EXHIBIT B

                             FORM OF ACH AGREEMENT

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