Document:

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                                                                   Exhibit 10.21

                                                                       EXHIBIT A

                                  FORM OF NOTE

THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OR THE
SECURITIES LAWS OF ANY STATE. NO TRANSFER OF THIS NOTE SHALL BE MADE UNLESS THAT
TRANSFER IS MADE IN A TRANSACTION WHICH DOES NOT REQUIRE REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES ACT OR UNDER APPLICABLE STATE SECURITIES OR
"BLUE SKY" LAWS. IN THE EVENT THAT A TRANSFER IS TO BE MADE, THE PROSPECTIVE
TRANSFEREE OF THE HOLDER HEREOF SHALL DELIVER TO THE INDENTURE TRUSTEE (I) AN
INVESTMENT LETTER SUBSTANTIALLY IN THE FORM SET FORTH IN AN EXHIBIT TO THE
INDENTURE OR (II) AN OPINION OF COUNSEL THAT THE TRANSFER IS EXEMPT FROM SUCH
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES ACT (WHICH OPINION SHALL NOT
BE AT THE EXPENSE OF THE ISSUER, THE INDENTURE TRUSTEE, THE SERVICER OR THE
TRUST ESTATE). NEITHER THE ISSUER NOR THE INDENTURE TRUSTEE IS OBLIGATED TO
REGISTER OR QUALIFY THE NOTES UNDER THE SECURITIES ACT OR ANY OTHER SECURITIES
LAW. THE PURCHASER OF THIS NOTE AGREES THAT IT WILL, AND EACH SUBSEQUENT
TRANSFEREE IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE OF THE RESALE
RESTRICTIONS REFERRED TO ABOVE.

DUE TO THE PROVISIONS FOR THE PAYMENT OF PRINCIPAL CONTAINED HEREIN, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE MAY BE LESS THAN THE AMOUNT SHOWN ON
THE FACE HEREOF. ANYONE PURCHASING THIS NOTE MAY ASCERTAIN THE OUTSTANDING
PRINCIPAL AMOUNT HEREOF BY INQUIRY OF THE INDENTURE TRUSTEE.

No. _                                                            $ ___________

CUSIP NO.   [___________]

                              MFI FINANCE II, LLC
                 [____]% ASSET-BACKED NOTE, SERIES [__________]

            Registered Owner: ______________________________________

DELIVERY DATE:   [___________]           STATED MATURITY DATE:   [___________]

      MFI Finance II, LLC, a limited liability company duly organized and
existing under the laws of the State if Delaware (the "Issuer," which term
includes any successor entity under the Indenture referred to below), for value
received, hereby promises to pay to the Registered Owner, or its registered
assigns, the principal sum of _____________________ DOLLARS ($______________) in
monthly installments beginning on [___________], and to pay interest monthly in
arrears on the unpaid portion of said principal sum (and, to the extent that the
payment of such interest shall be legally enforceable, on any overdue
installment of interest on this Note) on the sixteenth day of each calendar
month or, if such sixteenth day is not a Business Day, the Business Day
immediately following (each, a "Payment Date"), for the period from and
including the Delivery Date set forth above through [___________], and
thereafter, monthly from and including the most recent Payment Date through the
day immediately preceding the applicable Payment

                                      A-1
<PAGE>
Date, until the last day preceding the Final Payment Date, at the rate of [___]%
per annum (calculated on the basis of [__________________]).

      The principal of this Note shall be payable in installments ending no
later than the Stated Maturity Date hereof unless this Note becomes due and
payable at an earlier date by declaration of acceleration, call for redemption
or otherwise. All reductions in the principal amount of a Note effected by
payments of installments of principal made on any Payment Date shall be binding
upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not such payment is noted on this Note. Each installment of principal
payable on this Note shall be in an amount equal to this Noteholder's pro-rata
share of the Principal Distribution Amount and the Additional Principal Amount,
if any, available to be paid to Noteholders of this Series in accordance with
the priorities of Sections 12.02(d) and 6.08 of the Indenture. The principal
payable on this Note shall be paid on each Payment Date beginning on the Initial
Payment Date and ending on the applicable Final Payment Date. All payments of
principal with respect to all of the Notes of a Series shall be made on a pro
rata basis based upon the ratio that the Outstanding Principal Amount of a Note
bears to the Outstanding Principal Amount of all Notes of such Series; provided,
however, that if as a result of such proration a portion of such principal would
be less than $.01, then such payment shall be decreased to the nearest whole
cent, and no subsequent adjustment shall be made in respect thereof.

      The principal and interest on this Note are payable by wire transfer in
accordance with the terms of the Indenture.

      This Note is one of a duly authorized issue of Notes of the Issuer
designated as its [___]% Asset-Backed Notes, Series [_______], Due [___________]
(herein called the "Notes") issued and to be issued under the Indenture, dated
as of September 1, 2001, and the Supplement to Indenture, Asset-Backed Notes,
Series [_______] (together, the "Indenture"), among the Issuer, MicroFinancial
Incorporated, as Servicer, and Wells Fargo Bank Minnesota, National Association,
as Indenture Trustee (the "Indenture Trustee," which term includes any successor
Indenture Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Indenture Trustee and the Holders of the
Notes, and the terms upon which the Notes are, and are to be, authenticated and
delivered. Each capitalized term used and not otherwise defined herein has the
meaning assigned thereto in the Indenture. This Note is issued under and is
subject to the terms, provisions and conditions of the Indenture to which the
Holder of this Note by virtue of the acceptance hereof assents and by which such
Holder is bound.

      The property of the Trust Estate includes certain Contract Assets,
Underlying Notes and certain other assets described in the Indenture. The Series
[_______] Notes and all other Series of Notes are payable out of the Trust
Estate pari passu among such Noteholders equally and ratably without prejudice,
priority or distinction between any Note by reason of time of issue or
otherwise.

      Unless earlier declared due and payable by reason of an Event of Default,
the Notes are payable only at the time and in the manner provided in the
Indenture and are not redeemable or prepayable at the option of the Issuer
before such time, except that the Notes shall be redeemable at the option of the
Issuer in whole but not in part at any time after the Outstanding Principal
Amount of the Notes declines below 10% of the Outstanding Principal Amount as of
the Closing Date at the applicable Redemption Price plus any fees due under the
Indenture. If an Event of Default as defined in the Indenture shall occur and be
continuing, the principal of all the Notes may become or be declared due and
payable in the manner and with the effect provided in the Indenture.

                                      A-2
<PAGE>
      As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note may be registered on the Note Register of
the Issuer upon surrender of this Note for registration of transfer at the
office or agency of the Issuer in the United States of America maintained for
such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Issuer and the Indenture Trustee and duly
executed by the holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Notes with the same Stated Maturity Date of authorized
denominations and for the same initial aggregate principal amount will be issued
to the designated transferees.

      Prior to due presentment for registration of transfer of this Note, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee shall treat the Person in whose name this Note is registered as the
owner hereof for the purpose of receiving payment as herein provided and for all
other purposes whether or not this Note be overdue, and neither the Issuer, the
Indenture Trustee, nor any such agent shall be affected by notice to the
contrary.

      The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer, the Trustee, the Back-up Servicer and the Servicer without
the consent of the Holders of the Notes. The Indenture also contains provisions
permitting the Noteholders to waive compliance by the Issuer with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver shall be conclusive and binding
upon the Holder of this Note and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange herefor or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note.

      The Notes are issuable only in registered form without coupons in such
authorized denominations as provided in the Indenture and subject to certain
limitations therein set forth.

      This Note and the Indenture shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
conflicts of laws principles.

      No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note,
but solely from the assets of the Trust Estate pledged to the Indenture Trustee
under the Indenture at the times, place and rate, and in the coin or currency,
herein prescribed.

                                      A-3
<PAGE>
                                                                       EXHIBIT B

                         FORM OF SUPPLEMENT TO INDENTURE
                         ASSET-BACKED NOTES, SERIES [ ]

      This SUPPLEMENT TO INDENTURE, dated as of ______________ (this
"Supplement"), is among MFI Finance II, LLC, a Delaware limited liability
company, as Issuer (the "Issuer"), MicroFinancial Incorporated, a Massachusetts
corporation, as Servicer (the "Servicer"), Wells Fargo Bank Minnesota, National
Association, a national banking association, as Indenture Trustee (in such
capacity, the "Indenture Trustee") and as Back-up Servicer (in such capacity,
the "Back-up Servicer").

      This Supplement incorporates by reference all of the provisions (including
all defined terms) of the Indenture, dated as of September 1, 2001 (the "Basic
Indenture"), among the Issuer, the Servicer, the Indenture Trustee and the
Back-up Servicer. Reference is further made to (i) the Servicing Agreement,
dated as of September 1, 2001 (the "Servicing Agreement"), among the Servicer,
the Issuer, the Indenture Trustee and the Back-up Servicer, and (ii) the
Contract Acquisition Agreement, dated as of September 1, 2001 (the "Contract
Acquisition Agreement"), between the Issuer and Leasecomm Corporation, as the
Originator (the "Originator").

      The Issuer has duly authorized the execution and delivery of this
Supplement to provide for the issuance of the Issuer's __% Asset-Backed Notes,
Series ________ (the "Series ______ Notes"), in an aggregate principal amount of
$_____________________, issuable as provided in the Indenture. Pursuant to
Section 2.02 of the Indenture, this Supplement sets forth the following
additional terms applicable to the Series ___________ Notes.

SECTION 1.  SUPPLEMENTAL DEFINITIONS.

      "Account Administration Fee" means, with respect to the Series __________
Notes and the Initial Payment Date, __________________.

      "Account Administration Fee Rate" means, with respect to the Series
__________ Notes, ____%.

      "Accrual Date" means, with respect to the Series __________ Notes,
__________________.

      "Cash Collateral Account Factor" means, with respect to the Series _____
Notes, [the sum of (i) one and (ii) the decimal equivalent of a fraction, the
numerator of which is the Discount Rate and the denominator of which is twelve].

      "Collateralization Percentage" means, with respect to the Series _____
Notes, ____%.

      "Cut-Off Date" means, with respect to the Series _____ Notes,
____________________.

      "Delivery Date" means, with respect to the Series _____ Notes,
____________________.

      "Discount Rate" means, with respect to the Series ______ Notes, ____%.

      "Initial Cash Collateral Account Deposit" means, with respect to the
Series ______ Notes, $_______.

                                      B-1
<PAGE>
      "Initial Payment Date" means, with respect to the Series _____ Notes,
____________________.

      "Initial Reserve Account Deposit" means, with respect to the Series
_____ Notes, ____________________.

      "Interest Calculation Convention" means, with respect to the Series
_____ Notes, _________________.

      "Note Interest Rate" means, with respect to the Series _____ Notes,
____%.

      "Note Purchase Agreement" means, with respect to the Series _____
Notes, _________________.

      "Placement Agent" means, with respect to the Series _____ Notes,
Rothschild Inc.

      "Private Placement Memorandum Date" means, with respect to the Series
______ Notes, ____________________.

      "Series Required Reserve Amount" means, with respect to the Series
______ Notes, __________.

      "Stated Maturity Date" means, with respect to the Series _____ Notes,
____________________.

      "Targeted Balance" means, with respect to the Series ______ Notes and
any Payment Date, ____________________.

      "Targeted Principal Distribution Amount" means, with respect to the
Series ______ Notes, ____________________.

      "Transaction Documents Date" means, with respect to (i) any of the
Transaction Documents related to the Series _____ Notes, as of _________, and
(ii) the Private Placement Memorandum, ____________________.

      "Underlying Indenture" means, with respect to the Series _____ Notes,
___________________.

      "Underlying Note" means, with respect to the Series _____ Notes,
___________________ issued by ______________ in the name of the Issuer or its
nominee.

      "Underlying Note Purchase Agreement" means, with respect to the Series
_____ Notes, ___________________.

SECTION 2.  REQUIRED PROVISIONS.

      (a)   The Series of Notes to be issued under this Supplement shall be
designated as the Issuer's "Asset-Backed Notes, Series ______."

      (b)   The maximum aggregate principal amount of Series _____ Notes that
may be issued is $________________________.

                                      B-2
<PAGE>
      (c)   There are no additional Trigger Events applicable to the Series
_____ Notes.

SECTION 3.  ADDITIONAL PROVISIONS.

      [insert, if any]

SECTION 4.  MISCELLANEOUS.

      (a) As supplemented by this Supplement, the Indenture is in all respects
ratified and confirmed and the Indenture as so supplemented shall be read, taken
and construed as one and the same instrument. In the event that any term or
provision contained herein shall conflict with or be inconsistent with any term
or provision contained in the Indenture, the terms and conditions of the
Supplement shall be controlling.

      (b) This Supplement 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.

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

                                      B-3
<PAGE>
      IN WITNESS WHEREOF, the Issuer, the Servicer, the Indenture Trustee and
the Back-up Servicer have caused this Supplement to be duly executed by their
respective officers thereunto duly authorized as of the date and year first
above written.

                                      MFI FINANCE II, LLC, as Issuer

                                      By:_____________________________________
                                         Name:
                                         Title:

                                      MICROFINANCIAL INCORPORATED, as
                                      Servicer

                                      By:_____________________________________
                                         Name:
                                         Title:

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION, as Indenture
                                      Trustee

                                      By:_____________________________________
                                         Name:
                                         Title:

                                      WELLS FARGO BANK MINNESOTA,
                                      NATIONAL ASSOCIATION, as Back-up
                                      Servicer

                                      By:_____________________________________
                                         Name:
                                         Title:

                                      B-4
<PAGE>
                                   SCHEDULE A

                               SERIES _____ NOTES
                                CONTRACT SCHEDULE

                                   SCHEDULE B

                               SERIES _____ NOTES
                 [SCHEDULE OF TARGETED BALANCES - IF APPLICABLE]

                                      B-5
<PAGE>
                                                                       EXHIBIT C

                            FORM OF INVESTMENT LETTER

                               MFI FINANCE II, LLC
 $[___________] [___]% ASSET-BACKED NOTES, SERIES [___], DUE [_______________]

MFI Finance II, LLC
950 Winter Street, Suite 4100C
Waltham, Massachusetts 02451

Wells Fargo Bank Minnesota, National Association,
  as Indenture Trustee
Sixth Street & Marquette Avenue
MAC N9311-161
Minneapolis, Minnesota  55479

Ladies and Gentlemen:

      Terms used herein and not otherwise defined shall have the meanings given
to them in the Indenture, dated as of September 1, 2001 (the "Indenture"), among
MFI Finance II, LLC, as Issuer (the "Issuer"), MicroFinancial Incorporated, as
Servicer, and Wells Fargo Bank Minnesota, National Association, as Indenture
Trustee (the "Indenture Trustee") and as Back-up Servicer. The undersigned
hereby certifies on behalf of the Purchaser named below (the "Purchaser") as
follows:

      1.    I ______________, am the chief financial officer, a person
fulfilling an equivalent function or other executive officer of the Purchaser.

      [2. I am familiar with the provisions of Rule 144A ("Rule 144A")
promulgated under the Securities Act of 1933, as amended (the "1933 Act").

            a.    The Purchaser is a "qualified institutional buyer," as
      defined in Rule 144A.

            b. The Purchaser is aware that the Issuer may rely on the exemption
      from the registration requirements of the 1933 Act provided by Rule 144A.

            c. The Purchaser acknowledges that the Purchaser has (i) received
      such information regarding the Issuer's [___]% Asset-Backed Notes, Series
      [___], due [_______________], as the Purchaser may require pursuant to
      Rule 144A or (ii) the Purchaser has determined not to request such
      information.]

      [2. I am familiar with the provisions of Regulation D promulgated under
the Securities Act of 1933 (the "1933 Act").

            a. The Purchaser is an "accredited investor" within the meaning of
      Rule 501(a)(1), (2), (3), or (7) of Regulation D under the 1933 Act.

                                      C-1
<PAGE>
            b. In the normal course of the Purchaser's business the Purchaser
      invests in or purchases securities similar to the Series [ ] Notes, has
      such knowledge and experience in financial and business matters that the
      Purchaser is capable of evaluating the merits and risks of its investment
      in the Series [ ] Notes.

            c.    The Purchaser is capable of bearing the economic risks of
      an investment in the Series [     ] Notes.]

      [2. I am familiar with the provisions of Regulation S ("Regulation S")
promulgated under the Securities Act of 1933 (the "1993 Act") and the entity
that has offered or sold the Notes to the Purchaser has executed the "Regulation
S Acknowledgment" appearing after the Purchaser's signature to this investment
letter.(1) The Purchaser is acquiring the Notes pursuant to and in compliance
with all requirements of the exemption from registration under the 1933 Act
provided by Rule 904 of Regulation S, and in conjunction with such
determination, the following information is correct:

            a. The Purchaser is not a "U.S. person" within the meaning of Rule
            902(k) of Regulation S.

            b. The Purchaser is not (i) the International Monetary Fund, the
            International Bank for Reconstruction and Development, the
            Inter-American Development Bank, the Asian Development Bank, the
            African Development Bank, the United Nations, or any of their
            respective agencies, affiliates or pension plans, or (ii) any other
            similar international organization, or any of their respective
            agencies, affiliates or pension plans.

            c. The Purchaser is not any discretionary account or similar account
            (other than an estate or trust) held for the benefit or account of a
            non-U.S. person by a dealer or other professional fiduciary
            organized, incorporated, or (if an individual) resident in the
            United States; unless such Purchaser is also excluded from the
            definition of U.S. person pursuant to another exemption from such
            definition.

            d. The offer and sale of the Notes was made in an "offshore
            transaction" within the meaning of Rule 902(h) of Regulation S, and,
            in particular:

                  (i)   the offer was not made to the Purchaser or any of its
                        agents in the United States, and

                  (ii)  either, (x) at the time the buy order was originated,
                        the Purchaser was outside the United States or (y) the
                        transaction was executed in, on or through the
                        facilities of a designated offshore securities market
                        described in Rule 902(b) of Regulation S

            e. The Purchaser acknowledges receipt of the following notice for
            purposes of Rule 904(b) of Regulation S:

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

      (1) [NOTE: In order to use this representation, attached Regulation S
Acknowledgment must also be executed and delivered by the selling Noteholder or
its agent.]

                                      C-2
<PAGE>
                  THE NOTES MAY BE OFFERED AND SOLD DURING THE DISTRIBUTION
                  COMPLIANCE PERIOD ONLY IN ACCORDANCE WITH THE PROVISIONS OF
                  REGULATION S (RULE 901 THROUGH RULE 905, AND THE PRELIMINARY
                  NOTES); PURSUANT TO REGISTRATION OF THE NOTES UNDER THE
                  SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT TO AN
                  AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
                  SECURITIES ACT OF 1933, AS AMENDED.]

      3. The Purchaser is acquiring the Series [ ] Notes for its own account and
the account of its affiliated entities for the purpose of investment or resale
under Rule 144A or another exemption from registration available under the 1933
Act and not with a view to the distribution thereof.

      4. The Purchaser understands that it is the expressed intent of the Issuer
that the Series [ ] Notes are being issued only in transactions not involving
any public offering within the meaning of the 1933 Act and that the Series [ ]
Notes will bear a legend substantially as set forth in the form of the Series
[ ] Note attached to the Indenture.

      5. The Purchaser has no present intention of selling, negotiating or
otherwise disposing of the Series [ ] Notes; provided, however, that it is
understood that the disposition of the Purchaser's property shall at all times
be and remain within its control and without prejudice, however, to its right at
all times to sell or otherwise dispose of all or any part of the Series [ ]
Notes in accordance with the Indenture under a registration statement under the
1933 Act, or under an exemption from such registration available under the 1933
Act.

      6. [Each Purchaser of a Series [ ] Note represents that each source of
funds to be used by such Purchaser to acquire the Series [ ] Notes does not
include assets of any employee benefit plan, other than a plan exempt from the
coverage of the U.S. Employee Retirement Income Security Act of 1974, as amended
("ERISA").

      As used in this Section 6, the term "employee benefit plan" has the
meaning assigned to such term in Section 3 of ERISA.

      7. The Purchaser acknowledges that transfer of a Series [ ] Note may only
be effected in accordance with the Indenture.

                                      C-3
<PAGE>
      The representations and warranties contained herein shall be binding upon
the heirs, executors, administrators and other successors of the undersigned. If
there is more than one signatory hereto, the obligations, representations,
warranties and agreements of the undersigned are made jointly and severally.

      Executed at _______________________, ___________________, this _____
day of____________.

___________________________________________________________________
Purchaser's Name and Title (Print)        Signature of Purchaser

________________________________
Address of Purchaser

________________________________
Purchaser's Taxpayer Identification (if applicable)

                                      C-4
<PAGE>
                    SELLER'S REGULATION S ACKNOWLEDGMENT(2)

      I _________________, am the chief financial officer, a person fulfilling
an equivalent function, or other executive officer of the registered owner of
the Notes to be sold to the Purchaser. I hereby certify that I am familiar with
the provisions of Regulation S promulgated under the Securities Act of 1933, as
amended (the "Act"), and that such registered owner and, if different, any
beneficial owner of such Notes (collectively, the "Seller") is offering and
selling such Notes pursuant to and in compliance with all requirements of the
exemption from registration under the Act provided by Rule 904 of Regulation S,
and conjunction with such determination, certify that I have reviewed the
following information with any person or entity assisting the Seller in offering
and selling the Notes, and, after making a reasonable investigation to confirm
the facts below, hereby certify to you that the following information is true:

(a)   The Seller is not:

      (1)   the issuer,

      (2)   any distributor of the Notes (meaning any underwriter, dealer, or
            other person or entity who participates, pursuant to a contractual
            arrangement, in the sale of the Notes from the Seller to the
            Purchaser pursuant to Regulation S),

      (3)   any affiliate of any of the persons or entities described in clauses
            (1) through (3) (other than any officer or director who is an
            affiliate solely by virtue of holding such position), or

      (4)   any person acting on behalf of any of the persons or entities
            described in clauses (1) through (3);

(b)   The offer and sale of the Notes has been made in an "offshore transaction"
      within the meaning of Regulation S and more specifically:

      (1)   the offer and sale was not made to a person in the United States,
            and

      (2)   either:

            (i)   at the time the buy order was originated, the buyer was
                  outside the United States, or the Seller and any person acting
                  on its behalf reasonably believed that the buyer was outside
                  the United States, or

            (ii)  the transaction is being executed in, on or through the
                  facilities of a designated offshore securities market
                  described in paragraph (b) of Rule 902 of Regulation S and
                  neither the Seller nor any person acting on its behalf knows
                  that the transaction has been pre-arranged with a buyer in the
                  United States;

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

      (2)  Delivered only when transfer is made pursuant to Reg. S.

                                      C-5
<PAGE>
      (3)   neither the Seller nor any person or entity acting on its behalf
            targeted offers or sales of the Notes pursuant to this
            transaction at identifiable groups of U.S. citizens abroad (or
            entities acting on their behalf); and

      (4)    the Notes are not being offered or sold to:

            (i)   the International Monetary Fund, the International Bank for
                  Reconstruction and Development, the Inter-American Development
                  Bank, the Asian Development Bank, the African Development
                  Bank, or the United Nations or any of their respective
                  agencies, affiliates or pension plans, or

            (iii) any other similar international organizations or their
                  respective agencies, affiliates or pension plans.

(c)   In connection with such offer and sale, none of the Seller, any
      affiliate of the Seller, or any person or entity acting on their behalf
      has made "directed selling efforts" within the meaning of Regulation S
      (including without limitation any activity undertaken for the purpose
      of, or that could reasonably be expected to have the effect of,
      conditioning the market in the United States for any of the Notes, or
      placing an advertisement in a publication with a general circulation in
      the United States that refers to the offering of Notes being made in
      reliance upon Regulation S);

(d)   Neither the Seller nor any person or entity acting on its behalf knows
      that the offeree or buyer of the securities is a "U.S. person" (within
      the meaning of Rule 902(k) of Regulation S); and

(e)   If the offer or sale of the Notes is by an officer or director of the
      issuer or a distributor, who is an affiliate of the issuer or distributor
      solely by virtue of holding such position, no selling concession, fee or
      other remuneration is being paid in connection with such offer or sale
      other than the usual and customary broker's commission that would be
      received by a person executing such transaction as agent.

      The representations and warranties contained in this Acknowledgement shall
be binding upon the heirs, executors, administrators and other successors of the
undersigned. If there is more than one signatory hereto, the obligations,
representations, warranties and agreements of the undersigned are made jointly
and severally.

      Executed at _______________________, ___________________,
      this _____ day of____________.

______________________________________
      Seller's Name and Title (Print)

______________________________________
      Signature of Seller

                                      C-6
<PAGE>
                                                                       EXHIBIT D

                           FORM OF MFC II CERTIFICATE
               (PURSUANT TO SECTION [4.01/4.02] OF THE INDENTURE)

      Pursuant to the Indenture, dated as of September 1, 2001 (the
"Indenture"), among the undersigned, MicroFinancial Incorporated, as Servicer,
and Wells Fargo Bank Minnesota, National Association, as Indenture Trustee and
as Back-up Servicer, attached hereto as Schedule I is an [Initial/Amended]
Contract Schedule, which includes information regarding Contract Assets that are
hereby assigned, transferred and delivered by the Issuer to the Indenture
Trustee in accordance with the Indenture (the "Transfer"). Each capitalized term
used and not otherwise defined herein shall have the meaning ascribed thereto in
the Indenture.

      MFI Finance II, LLC hereby certifies:

1.    no Default, Event of Default or Trigger Event exists or shall result
      from the Transfer;

2.    the Contracts identified on the attached Schedule I are Eligible
      Contracts;

3.    after giving effect to such Transfer, the Concentration Limits shall
      not be exceeded; and

4.    all of the terms of the Contract Acquisition Agreement have been
      satisfied.

                                          MFI FINANCE II, LLC

                                          By:__________________________________
                                          Name:
                                          Title:

                                      D-1
<PAGE>
                                                                    SCHEDULE I

                      [INITIAL / AMENDED] CONTRACT SCHEDULE

                                      D-2
<PAGE>
                                                                       EXHIBIT E

                             FORM OF RELEASE REQUEST

      Pursuant to Section 4.03(e) of the Indenture, dated as of September 1,
2001 (the "Indenture"), among MFI Finance II, LLC, as Issuer, MicroFinancial
Incorporated, as Servicer, and Wells Fargo Bank of Minnesota, National
Association, as Indenture Trustee and as Back-up Servicer, the Servicer hereby
requests that the Indenture Trustee temporarily release the contracts listed on
Exhibit A attached hereto (the "Released Contracts") for the purpose of
servicing such Released Contracts. The Servicer shall return such Released
Contracts in accordance with the Indenture. Each capitalized term, used but not
otherwise defined herein has the meaning ascribed thereto in the Indenture.

                                            MICROFINANCIAL INCORPORATED

                                            By:_________________________________
                                            Name:
                                            Title:

 Acknowledged and agreed to:

 WELLS FARGO BANK MINNESOTA,
 NATIONAL ASSOCIATION

 By:_________________________________
 Name:
 Title:

                                      E-1
<PAGE>
                                    EXHIBIT A

                               RELEASED CONTRACTS

                                      E-2
<PAGE>
                                                                       EXHIBIT F

                        FORM OF CERTIFICATE OF THE ISSUER
                 (PURSUANT TO SECTION 4.06(a) OF THE INDENTURE)

      Pursuant to Section 4.06(a) of the Indenture, dated as of September 1,
2001 (the "Indenture"), among MFI Finance II, LLC, as Issuer, MicroFinancial
Incorporated, as Servicer, and Wells Fargo Bank of Minnesota, National
Association, as Indenture Trustee and as Back-up Servicer, the Issuer hereby
requests the release from the lien of the Indenture of the Contracts and the
related Contract Assets listed on the attached Schedule I (the "Released
Contracts"). The Issuer hereby certifies to the Indenture Trustee the following
(each capitalized term, used but not otherwise defined herein has the meaning
ascribed thereto in the Indenture):

      A)    The amount of $____________________ will be deposited in the
            Collection Account with respect to the Released Contracts, which
            amount equals [the Purchase Price of the Released Contracts] [the
            entire amount of Insurance Proceeds or Recoveries received with
            respect to such Released Contracts].

                                           MFI FINANCE II, LLC

                                           By:_________________________________
                                           Name:
                                           Title:
<PAGE>
                                                                       EXHIBIT G

                        FORM OF NOTEHOLDER CERTIFICATION
                                     [date]

Wells Fargo Bank Minnesota, National
  Association, as Indenture Trustee
Sixth Street and Marquette Avenue
MAC N9311-161
Minneapolis, MN  55479

MFI Finance II, LLC
950 Winter Street, Suite 4100C
Waltham, Massachusetts 02451

Attn: Corporate Trust Services - Asset-Backed Administration
      MFI Finance II, LLC Asset-Backed Notes

      In accordance with Section 4.01 of the Servicing Agreement, dated as of
September 1, 2001 (the "Agreement"), by and among MicroFinancial Incorporated,
as Servicer, MFI Finance II, LLC, as Issuer, and Wells Fargo Bank Minnesota,
National Association, as Indenture Trustee (in such capacity, the "Indenture
Trustee") and as Back-Up Servicer, with respect to the MFI Finance II, LLC
Asset-Backed Notes, Series [] (the "Notes"), the undersigned hereby certifies
and agrees as follows:

      1. The undersigned is a beneficial owner of $[] in principal balance of
the Notes.

      2. The undersigned is requesting a password pursuant to Section 4.01 of
the Agreement for access to certain information (the "Information") on the
Indenture Trustee's website.

      3. In consideration of the Indenture Trustee's disclosure to the
undersigned of the Information, or the password in connection therewith, the
undersigned will keep the Information confidential (except from such outside
persons as are assisting it in connection with the related Notes, from its
accountants and attorneys, and otherwise from such governmental or banking
authorities or agencies to which the undersigned is subject), and such
Information will not, without the prior written consent of the Indenture
Trustee, be otherwise disclosed by the undersigned or by its officers,
directors, partners, employees, agents or representatives (collectively, the
"Representatives") in any manner whatsoever, in whole or in part.

      4. The undersigned will not use or disclose the Information in any manner
which could result in a violation of any provision of the Securities Act of
1933, as amended (the "Securities Act"), or the Securities Exchange Act of 1934,
as amended, or would require registration of any Note pursuant to Section 5 of
the Securities Act.

      5. The undersigned shall be fully liable for any breach of this agreement
by itself or any of its representatives and shall indemnify the Issuer and its
affiliates and the Indenture Trustee for any

                                      G-1
<PAGE>
loss, liability or expense incurred thereby with respect to any such breach by
the undersigned or any of its representatives.

      6. Capitalized terms used but not defined herein shall have the respective
meanings assigned thereto in the Agreement.

                                      G-2
<PAGE>
      IN WITNESS WHEREOF, the undersigned has caused its name to be signed
hereby by its duly authorized officer, as of the day and year written above.

                                        _____________________________________
                                        Beneficial Owner

                                        By:__________________________________
                                        Title:_______________________________
                                        Company:_____________________________
                                        Phone:_______________________________

                                      G-3<PAGE>
                                                                   Exhibit 10.22

                               SERVICING AGREEMENT

                                      among

                          MICROFINANCIAL INCORPORATED,
                                  as Servicer,

                              MFI FINANCE II, LLC,
                                   as Issuer,

                                       and

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

                          Dated as of September 1, 2001
<PAGE>
                                TABLE OF CONTENTS

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

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

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

ARTICLE 4         ACCOUNTINGS, STATEMENTS AND REPORTS............................................................    13
                  Section 4.01      Monthly Servicer's Reports...................................................    13
                  Section 4.02      Financial Statements; Certification as to Compliance; Notice of
                                    Default......................................................................    13
                  Section 4.03      Independent Accountants' Reports; Annual Federal Tax Lien Search.............    14
                  Section 4.04      Access to Certain Documentation and Information..............................    16
                  Section 4.05      Other Necessary Data.........................................................    16
                  Section 4.06      Indenture Trustee to Cooperate...............................................    17

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

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

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

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

ARTICLE 8         MISCELLANEOUS PROVISIONS.......................................................................    28
                  Section 8.01      Termination..................................................................    28
                  Section 8.02      Amendments...................................................................    28
                  Section 8.03      GOVERNING LAW................................................................    29
                  Section 8.04      Notices......................................................................    29
                  Section 8.05      Severability of Provisions...................................................    29
                  Section 8.06      Binding Effect...............................................................    29
                  Section 8.07      Article Headings and Captions................................................    29
                  Section 8.08      Legal Holidays...............................................................    30
                  Section 8.09      Assignment for Security for the Notes........................................    30
                  Section 8.10      No Servicing Assignment......................................................    30
                  Section 8.11      Counterparts.................................................................    30
                  Section 8.12      Acknowledgment of Multiple Roles.............................................    30
                  Section 8.13      Consent to Jurisdiction......................................................    31
</TABLE>

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

                                       ii
<PAGE>
                               SERVICING AGREEMENT

         This SERVICING AGREEMENT, dated as of September 1, 2001 (this
"Agreement"), is among MicroFinancial Incorporated, a Massachusetts corporation,
as Servicer (the "Servicer"), MFI Finance II, LLC, a Delaware limited liability
company, as Issuer (the "Issuer"), and Wells Fargo Bank Minnesota, National
Association, a national banking association, as Indenture Trustee (in such
capacity, the "Indenture Trustee") and as Back-up Servicer (in such capacity,
the "Back-up Servicer").

                              PRELIMINARY STATEMENT

         The Issuer has entered into an Indenture, dated as of September 1, 2001
(the "Basic Indenture"), with the Indenture Trustee, the Back-up Servicer and
the Servicer, pursuant to which the Issuer intends to cause the issuance from
time to time of the Issuer's 8.00%Asset-Backed Notes (the "Notes").

         The Issuer and Leasecomm Corporation (the "Company") have entered into
a Contract Acquisition Agreement dated as of September 1, 2001 (the "Contract
Acquisition Agreement"), providing for, among other things, the contribution and
sale, from time to time, by the Company to the Issuer of all of its right, title
and interest in and to certain Contract Assets which the Issuer is and will be
pledging to the Indenture Trustee, and in which the Issuer will be granting to
the Indenture Trustee a security interest, as security for the Notes. As a
precondition to the effectiveness of such Contract Acquisition Agreement, the
Contract Acquisition Agreement requires that the Servicer, the Issuer, the
Indenture Trustee and the Back-up Servicer enter into this Agreement to provide
for the servicing of the Contract Assets.

         In order to further secure the Notes, the Issuer is granting to the
Indenture Trustee a security interest in, among other things, the Issuer's
rights derived under this Servicing Agreement and the Servicer agrees that all
covenants and agreements made by the Servicer herein shall also be for the
benefit of and enforceable by the Indenture Trustee and the holders from time to
time of the Notes.

                                       1
<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.

         "ACH": The National Automated Clearinghouse System.

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

         "ACH Bank": A bank which maintains an ACH Account.

         "Agreement": This Servicing Agreement, dated as of September 1, 2001,
among the Servicer, the Issuer, the Back-up Servicer and the Indenture Trustee.

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

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

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

         "Contract Acquisition Agreement": The Contract Acquisition Agreement,
dated as of September 1, 2001, between the Company and the Issuer.

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

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

         "Nonrecoverable Advance": A Servicer Advance that the Servicer
determines in good faith, and in accordance with its customary servicing
practices, is unlikely to be eventually repaid from Scheduled Payments made by
or on behalf of the related Customer in accordance with Section 3.04 hereof.

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

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

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

         "Servicer": MicroFinancial Incorporated unless and until the
termination thereof in accordance with Article 6 hereof, then the successor
Servicer appointed pursuant to Article 6 hereof.

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

                                       2
<PAGE>
         "Servicer Default": Any occurrence or circumstance which with notice or
the lapse of time or both would be a Servicer Event of Default under this
Agreement.

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

         "Servicer Standard of Care": A Standard of Care consistent with Section
3.02 hereof.

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

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

         SECTION 1.02 USAGE OF TERMS.

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

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

                                       3
<PAGE>
                                    ARTICLE 2

                     SERVICER REPRESENTATIONS AND WARRANTIES

         SECTION 2.01 REPRESENTATIONS AND WARRANTIES OF THE SERVICER.

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

         (a) Organization and Good Standing. The Servicer has been duly
organized and is validly existing and in good standing as a corporation under
the laws of the Commonwealth of Massachusetts, with requisite power and
authority to own its properties, perform its obligations under this Agreement
and the other Transaction Documents and to transact the business in which it is
now engaged or in which it proposes to engage.

         (b) Authorization and Binding Obligation. Each of this Agreement and
any other Transaction Document to which it is a party has been duly authorized,
executed and delivered by the Servicer and, assuming the due authorization,
execution and delivery hereof and thereof by each other party hereto and
thereto, constitutes the valid and legally binding obligation of the Servicer
enforceable against the Servicer in accordance with its terms, as such
enforceability may be subject to or limited by any bankruptcy, insolvency,
conservatorship, reorganization and other similar laws of general applicability
relating to or affecting creditors' rights generally and to general principles
of equity regardless of whether enforcement is sought in a court of equity or
law.

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

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

                                       4
<PAGE>
adversely affects the properties, business, prospects, profits or condition
(financial or otherwise) of the Servicer and its subsidiaries.

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

         (g) Standard of Care. The Servicer has serviced the Contract Assets in
a manner consistent with industry standards for contract assets similar to the
Contracts and Equipment, and in any event in a prudent and commercially
reasonable manner, and conducts its servicing operations in a manner consistent
with industry standards for servicing of microticket leasing and financing
portfolios generally.

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

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

                                       5
<PAGE>
                                    ARTICLE 3

                    ADMINISTRATION AND SERVICING OF CONTRACTS

         SECTION 3.01 RESPONSIBILITIES OF SERVICER.

         (a) The Issuer hereby appoints the Servicer, for the benefit of the
Issuer and the Noteholders, to act as Servicer of the Contract Assets and, as
such, the Servicer shall be responsible for, and shall, in accordance with its
customary servicing procedures and Section 3.02 hereof, manage, service,
administer, enforce and make collections on the Contracts, the Equipment, the
Receivables and any Insurance Policies, defend the Indenture Trustee's security
interest in the Contracts, Receivables and Equipment and other Collateral
Granted pursuant to the Indenture against adverse claims, and sell or re-lease
the Equipment upon the expiration or other termination of the related Contract
(or repossession thereof without termination), each in accordance with the
standards and procedures set forth in this Agreement and any related provisions
of the Indenture and Contract Acquisition Agreement. The Servicer's
responsibilities shall include monitoring and posting of all payments,
responding to inquiries of Customers, investigating delinquencies, accounting
for collections and furnishing monthly and annual statements to the Back-up
Servicer, the Indenture Trustee, the Rating Agencies and the Noteholders with
respect to the Receivables, verifying, monitoring and enforcing the acquisition
and maintenance of customers' insurance policies relating to the Equipment (or
charging and collecting a loss and damage waiver fee in lieu thereof), providing
replacement Equipment to Customers upon loss or destruction thereof, making
Servicer Advances, providing appropriate federal, state and local 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 maintaining the perfected security interest of the Indenture
Trustee in the Trust Estate. The Servicer (at its expense) shall have full power
and authority, acting at its sole discretion, to do any and all things in
connection with such managing, servicing, administration, enforcement and
collection and such sale of the Equipment that it may deem necessary or
desirable, including the prudent delegation of such responsibilities. Without
limiting the generality of the foregoing, the Servicer shall, and is hereby
authorized and empowered by the Indenture Trustee, subject to Section 3.02
hereof, to execute and deliver (on behalf of itself, the Noteholders, the
Indenture Trustee or any of them) any and all instruments of satisfaction or
cancellation, or of partial or full release or discharge, and all other
comparable instruments, with respect to the Contracts and any files or
documentation pertaining to the Contract Assets. The Servicer also may, in its
sole discretion, waive any late payment charge or penalty, or any other fees
that may be collected in the ordinary course of servicing any Contract.
Notwithstanding the foregoing, the Servicer shall not, except pursuant to a
judicial order from a court of competent jurisdiction, or as otherwise expressly
provided in this Agreement, release or waive the right to collect the Scheduled
Payments (including periodic payments accrued under the terms of any Contract
during the first 12 months following the Final Due Date of such Contract) or any
unpaid balance on any Contract. The Issuer and the Indenture Trustee shall, at
the expense of the Servicer, furnish the Servicer with any powers of attorney
and other documents necessary or appropriate to enable the Servicer to carry out
its servicing and administrative duties hereunder, and the Issuer and the
Indenture Trustee shall not be responsible for the Servicer's application
thereof.

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

                  (i) With respect to any Defaulted Contract, the Servicer, as
         agent for and on behalf of the Issuer, the Indenture Trustee and the
         Noteholders, shall follow such practices and procedures as are
         consistent with the Servicer's standards and procedures relating to its
         own contracts, receivables and equipment that are similar to the
         Contracts, Receivables and the Equipment, and, in any event, consistent
         with the standard of care described in Section 3.02 hereof to maximize
         recoveries thereon in a cost effective manner, including without
         limitation, the taking of appropriate actions to foreclose

                                       6
<PAGE>
         or otherwise liquidate any such Defaulted Contract, together with the
         related Equipment, to collect any Guaranty Amounts, and to enforce the
         Issuer's rights under the Contract Acquisition Agreement. All
         Recoveries, Insurance Proceeds, Servicing Charges and other amounts
         collected in respect of any such Contract Assets by the Servicer shall
         be remitted to the Indenture Trustee in accordance with Section 3.03
         hereof (net of amounts reimbursable to the Servicer for reasonable
         costs incurred by it in obtaining such Recoveries, Insurance Proceeds
         and Servicing Charges);

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

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

                  (iv) The Servicer may not allow substitutions of Substitute
         Contracts that do not comply with Section 3.09 hereof, Sections 3.03
         and 3.04 of the Contract Acquisition Agreement and Section 4.04 of the
         Indenture.

                  (v) The Servicer may waive, modify or vary any terms of any
         Contract or consent to the postponement of strict compliance with any
         such term if in the Servicer's reasonable and prudent determination
         such waiver, modification or postponement would not materially
         adversely affect the interests of the Noteholders; provided that (A)
         the Servicer shall not forgive any payment of rent or required
         termination payment, (B) the Servicer shall not permit any modification
         with respect to any Contract that would decrease any Scheduled Payment
         (including periodic payments accrued under the terms of any Contract
         during the first 12 months following the Final Due Date of such
         Contract) or required termination payment, defer the payment of any
         principal or interest or any Scheduled Payment, reduce the Discounted
         Contract Balance (except in connection with actual payments
         attributable to such Discounted Contract Balance), or prevent the
         complete amortization of the Discounted Contract Balance from occurring
         by the Calculation Date immediately preceding the Stated Maturity Date,
         (C) with respect with any Contract that is a Defaulted Contract, the
         Servicer may in connection with a final settlement, agree to any
         modification with respect to such Contract that would decrease any
         Scheduled Payment, defer the payment of any principal or interest or
         any Scheduled Payment, or reduce the Discounted Contract Balance, so
         long as (i) the Servicer determines in good faith that such
         modification, deferment, or reduction will maximize Recoveries
         available with respect to such Contract or (ii) such modification is
         required pursuant to a judicial order of a competent

                                       7
<PAGE>
         jurisdiction, and (D) except as otherwise specifically provided herein,
         the Servicer shall not waive or modify the requirement that a Customer
         maintain insurance with respect to the related Equipment unless the
         related Contract provides for a Loss and Damage Waiver Fee. The
         Servicer shall provide the Back-up Servicer, the Majority Holders and
         the Indenture Trustee with an Amended Contract Schedule to the Contract
         Schedule reflecting any modification of any Scheduled Payment and shall
         report the same in the Monthly Servicer's Report;

                  (vi) The Servicer shall not consent to the termination of any
         Contract in connection with loss of or damage to the related Equipment
         unless the Customer has paid an amount not less than the Purchase Price
         for such Contract or, if less, the maximum amount legally collectible
         under the related Contract;

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

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

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

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

                                       8
<PAGE>
         SECTION 3.02 SERVICER STANDARD OF CARE.

         Except as otherwise specifically provided herein, in managing,
administering, servicing, enforcing and making collections on the Contract
Assets pursuant to this Agreement, the Servicer will follow its credit and
collection policies and procedures, except as otherwise specifically required
herein. To the extent this Agreement and the Servicer's credit and collection
policies and procedures are silent as to a particular matter, the Servicer shall
exercise the degree of skill and care consistent with industry standards for
servicing of micro-ticket equipment leasing portfolios and, if no clear industry
standard exists, then in a reasonable manner. Notwithstanding the foregoing, the
Servicer shall not be required to incur costs or pursue any collection efforts
with respect to a Defaulted Contract if it reasonably believes that the
Recoveries received with respect to such Defaulted Contract will be insufficient
to reimburse the Servicer for the costs and expenses incurred by it in
connection therewith. The Servicer shall punctually perform all of its
obligations and agreements under this Agreement and shall comply in all material
respects with all applicable federal and state laws and regulations, shall
maintain all state and federal licenses and franchises necessary for it to
perform its servicing responsibilities hereunder.

         SECTION 3.03 SERVICER REMITTANCES.

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

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

                  (ii) all Recoveries (net of amounts reimbursable to the
         Servicer for costs incurred by it in obtaining such Recoveries) and all
         Residual Proceeds;

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

                  (iv) all Guaranty Amounts; and

                  (v) all Insurance Proceeds.

         (b) The Servicer (i) shall cause amounts on deposit in the ACH Account
that represent ACH debits relating to the Receivables to be transferred to the
Operating Account at least weekly and (ii) within 10 days of the Delivery Date,
shall cause the ACH Bank to enter into a Blocked Account Agreement with the
Indenture Trustee. The Servicer shall hold in trust for the benefit of the
Holders of the Notes and any amounts it receives relating to items (i) through
(v) above until such time as the Servicer transfers any such amounts to the
Indenture Trustee for application in accordance with the Indenture.

         (c) Notwithstanding the foregoing, upon termination of the initial
Servicer pursuant to Section 6.01(b) hereof, the Indenture Trustee shall (i)
establish a lockbox account, (ii) promptly instruct the Customers

                                       9
<PAGE>
to send all payments relating to Receivables directly to such lockbox account
and (iii) deliver written notice in accordance with the Blocked Account
Agreement to the ACH Bank thereunder instructing the ACH Bank to direct all ACH
debits relating to Receivables directly to such lockbox account, and the
Servicer agrees that daily sweeps of the Operating Account may commence. The
Indenture Trustee shall be entitled to reimbursement for (i) any expenses
associated with (a) the establishment of such lockbox and (b) the sending of the
notices required to be sent under this section 3.03 and (ii) any fees required
to be paid under any lockbox agreement relating to such lockbox from Section
12.02(d)(ii) of the Indenture.

         SECTION 3.04 SERVICER ADVANCES.

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

         SECTION 3.05 FINANCING STATEMENTS.

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

         SECTION 3.06 MAINTENANCE OF INSURANCE POLICY; INSURANCE PROCEEDS.

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

         SECTION 3.07 PERSONAL PROPERTY AND SALES TAXES.

         The Servicer shall cause to be paid, on behalf of the Issuer, all
personal property, sales and use taxes on or with respect to the Equipment, or
the acquisition or leasing thereof, as and when such taxes become due, to the
extent a Customer has paid amounts to the Servicer for such taxes (computing by
first allocating amounts

                                       10
<PAGE>
collected under a Contract to tax reimbursements or payments due from the
Customer and then to other amounts due under the applicable Contract). 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 and the
Additional Servicer Fee, if applicable, in the priority as set forth in Sections
12.02(d) and 6.08 of the Indenture. The Servicer Fee with respect to any
Contract shall be paid monthly, commencing on the related Initial Payment Date
and terminating on the first to occur of (i) the receipt of the last Scheduled
Payment and related Residual Proceeds with respect to the last remaining
Contract, (ii) the receipt of Recoveries and Insurance Proceeds with respect to
the last remaining Contract, or (iii) the date on which the Issuer obtains a
release from the Indenture Trustee for the last remaining Contract or the Issuer
redeems the Notes pursuant to Article 10 of the Indenture. The Servicer Fee
shall be paid to the Servicer at the times and in the priority as set forth in
the Indenture. The Servicer shall pay all expenses incurred by it in connection
with its servicing activities hereunder, including, without limitation, payment
of the fees and disbursements of the Independent Accountants and payment of
expenses incurred in connection with distributions and reports to the Indenture
Trustee, the Back-up Servicer, the Rating Agencies and Noteholders and shall not
be entitled to reimbursement for such expenses except as provided elsewhere
herein or in the Indenture; provided that the Servicer shall be entitled to
withhold its reasonable costs and expenses (including reasonable attorney's fees
and out-of-pocket expenses) in connection with the realization, attempted
realization or enforcement of rights and remedies upon Defaulted Contracts, in
calculating the amounts received as Recoveries related to such Defaulted
Contracts.

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

         SECTION 3.09 SUBSTITUTION OR PURCHASE OF CONTRACTS.

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

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

                                       11
<PAGE>
with particular reference to Section 4.04(d) thereof, and the criteria set forth
in Section 3.04 of the Contract Acquisition Agreement.

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

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

         SECTION 3.10 NO OFFSET.

         Prior to the termination of this Agreement, the obligations of the
Servicer under this Agreement shall not be subject to any defense, counterclaim
or right of offset that the Servicer has or may have against the Issuer, the
Indenture Trustee or any Noteholder, whether in respect of this Agreement, the
other Transaction Documents, any Contract, Receivable, Equipment or otherwise.

                                       12
<PAGE>
                                    ARTICLE 4

                       ACCOUNTINGS, STATEMENTS AND REPORTS

         SECTION 4.01 MONTHLY SERVICER'S REPORTS.

         No later than 10:00 a.m. (Central time) on each Determination Date, the
Servicer shall deliver the Monthly Servicer's Report to the Issuer, the Back-up
Servicer and the Indenture Trustee, and, no later than 11:00 a.m. (Central time)
on each Payment Date, the Indenture Trustee shall make available the Monthly
Servicer's Report to each Noteholder and the Rating Agencies as provided in
section 12.05 of the Indenture. Each Monthly Servicer's Report shall be
substantially in the form attached hereto as Exhibit A, and shall reflect the
activity in the immediately preceding Due Period. In the course of preparing the
Monthly Servicer's Report, the Servicer shall seek direction from the Issuer as
to remittance of any funds to be paid to the Issuer pursuant to Section
12.02(d)(xii) of the Indenture or otherwise. Contracts which have been
substituted for or purchased by the Company or the Issuer shall be identified by
Customer contract number on the Monthly Servicer's Report. On each Payment Date,
the Servicer shall deliver to the Back-up Servicer a Computer Tape in a format
acceptable to the Back-up Servicer containing the information from which the
Servicer prepared the Monthly Servicer's Report, as well as any additional
information reasonably requested by the Back-up Servicer prior to such Payment
Date.

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

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

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

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

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

                                       13
<PAGE>
         period the Servicer has serviced the Contracts in compliance with the
         procedures hereof except as disclosed in such certificate;

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

                  (v) promptly upon the Servicer becoming aware of:

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

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

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

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

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

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

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

                                       14
<PAGE>
         (a) Promptly at the end of each fiscal year, the Servicer at its
expense shall cause the Independent Accountants to prepare a statement to the
Back-up Servicer, the Indenture Trustee, each Noteholder and the Rating
Agencies, dated as of the close of such period, to the effect that the
Independent Accountants have examined the servicing procedures, manuals, guides
and records of the Servicer, and the accounts and records of the Servicer
relating to the Contracts and any files or documentation pertaining to the
Contract Assets pursuant to the agreed upon procedures set forth in Exhibit D
hereto and that, on the basis of such examination and comparison, nothing has
come to the Independent Accountants' attention to indicate that the Servicer has
not, during the relevant period, serviced the Contracts in compliance with such
servicing procedures, manual and guides and in the same manner required by the
Servicer's standards and with the same degree of skill and care consistent with
that which the Servicer customarily exercises with respect to similar contracts
owned by it and otherwise in compliance with this Agreement, that such accounts
and records have not been maintained in accordance with Section 4.04 hereof,
that the information contained in the Monthly Servicer's Reports does not
reconcile with the information contained in the accounts and records or that
such certificates, accounts and records have not been properly prepared and
maintained in all material respects or in accordance with the requirements of
this Agreement, except in each case for (i) such exceptions as the Independent
Accountants shall believe to be immaterial and (ii) such other exceptions as
shall be set forth in such statement. The Servicer shall deliver to the Issuer,
the Back-up Servicer, the Indenture Trustee, the Rating Agencies and each
Noteholder a copy of any such statement within 120 days of the close of the
relevant period. Notwithstanding the foregoing, if the Outstanding Principal
Amount for all Series then Outstanding is less than $10,000,000, the Majority
Holders, upon the Servicer's request, may waive the requirements of this Section
4.03(a). The parties hereto acknowledge that neither the Indenture Trustee nor
the Back-up Servicer has reviewed the procedures set forth in Exhibit D hereto
and the Indenture Trustee and the Back-up Servicer will have no obligation to
review the content of any report required to be delivered pursuant to this
Section 4.03(a). In the event such Independent 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. The Servicer shall deliver to the Back-up
Servicer, the Indenture Trustee, the Noteholders and the Rating Agencies a copy
of any such statement within a reasonable time after the close of the relevant
period.

         (b) Promptly after the end of the Servicer's fiscal year, commencing
with the fiscal year ending December 31, 2001, the Servicer, at its expense,
shall cause a search to be conducted for any and all federal tax liens and any
and all state tax liens levied or imposed by the States of Delaware, California,
Florida, Texas and New York and the Commonwealth of Massachusetts and any other
state in which the Issuer or the Company reorganizes ("State Tax Liens") against
the Company and the Issuer as of the end of such fiscal year and shall deliver
to the Company, the Issuer, the Back-up Servicer, the Indenture Trustee and each
Noteholder on or before January 31 of each year, commencing January 31, 2002, an
officer's certificate signed by a Servicing Officer (i) stating that there are
no outstanding federal tax liens or State Tax Liens filed against any portion of
the Trust Estate, the Company or the Issuer or (ii) listing the outstanding
federal tax liens and State Tax Liens filed against any portion of the Trust
Estate, the Company or the Issuer. In the event any such officer's certificate
shall disclose any such federal tax liens or State Tax Liens, the Servicer shall
promptly thereafter, satisfy or cause the satisfaction of any such federal tax
liens and State Tax Liens; provided that if the initial Servicer is no longer
the Servicer, (y) the Company shall provide the above described officer's
certificates with respect to the Company and shall be responsible for the
satisfaction of any federal tax liens and State Tax Liens against the Company
and (z) the Issuer shall provide the above described officer's certificates with
respect to the Issuer and shall be responsible for the satisfaction of any
federal tax liens and State Tax Liens against the Issuer.

                                       15
<PAGE>
         SECTION 4.04 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION.

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

         (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 each Noteholder a list of all Contracts then
held as a part of the Trust Estate, together with a reconciliation of such list
to that set forth in the Contract Schedule and each of the Monthly Servicer's
Reports, indicating the cumulative addition and removal of Contracts from the
Trust Estate.

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

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

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

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

         SECTION 4.05 OTHER NECESSARY DATA.

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

                                       16
<PAGE>
         (b) Within five Business Days after the occurrence of a Servicer Event
of Default, the Servicer shall provide the Indenture Trustee and the Back-up
Servicer with access to the Servicer's existing data processing systems and any
files or records with respect to the Contract Assets that it may have.

         SECTION 4.06 INDENTURE TRUSTEE TO COOPERATE.

         If a Contract and the related Contract Assets are permitted to be
released from the lien of the Indenture under Section 4.06 of the Indenture, the
Servicer shall notify the Indenture Trustee by written certification (which
certification shall include a statement to the effect that all amounts which are
required to be deposited in the Collection Account with respect to such Contract
pursuant to Section 3.03 hereof or Section 4.04 of the Indenture have been so
deposited) of a Servicing Officer and shall request delivery of the Contract to
the Servicer. Upon receipt of such delivery request, the Indenture Trustee shall
within seven calendar days of such request by the Servicer release such Contract
to the Servicer. Upon release of such Contract, the Servicer may execute an
instrument in satisfaction of such Contract and do such other acts and execute
such other documents as it deems necessary to discharge the Customer thereunder
and, if applicable, to release any security interest in the Equipment related
thereto. The Servicer shall determine when a Contract has been paid in full.
Upon the written request of a Servicing Officer and subject to the Indenture
Trustee's rights to indemnity contained herein and in the Indenture, the
Indenture Trustee shall perform such other acts as reasonably requested in
writing by the Servicer and otherwise cooperate with the Servicer in enforcement
of the rights and remedies of the Noteholders with respect to Contracts.

                                       17
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                                    ARTICLE 5

                                  THE SERVICER

         SECTION 5.01 SERVICER INDEMNIFICATION.

         (a) The Servicer shall indemnify and hold harmless the Indenture
Trustee, the Issuer, the Back-up Servicer and the Noteholders from and against
any loss, liability, claim, expense, damage or injury suffered or sustained to
the extent that such loss, liability, claim, expense, damage or injury arose out
of or was imposed by reason of the failure by the Servicer to perform its duties
in accordance with the terms of this Agreement or are attributable to errors or
omissions of the Servicer related to such duties or a breach of the
representations and warranties made by the Servicer in Section 2.01 hereof;
provided that the Servicer shall not indemnify any party to the extent that acts
of fraud, gross negligence or breach of fiduciary duty by such party contributed
to such loss, liability, claim, expense, damage or injury.

         (b) The Servicer shall not be liable for any settlement of any action
or claim effected without its consent. If the Servicer has made any indemnity
payments to the Indenture Trustee, the Back-up Servicer or any Noteholder
pursuant to this Section and such party thereafter collects any of such amounts
from others, such party will promptly repay such amounts collected to the
Servicer, without interest. The provisions of this Section 5.01 shall survive
any expiration or termination of this Agreement.

         SECTION 5.02 CORPORATE EXISTENCE; REORGANIZATIONS.

         (a) The initial Servicer shall keep in full effect its existence and
good standing as a corporation in the Commonwealth of Massachusetts, and shall
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to enable
the initial Servicer to perform its duties under this Agreement, except where
the failure to so qualify would not have a material adverse effect on the Trust
Estate or the ability of the initial Servicer to perform its duties hereunder;
provided that the initial Servicer may reorganize as a corporation in another
state provided that the initial Servicer has provided to the Indenture Trustee
and the Majority Holders an Officer's Certificate to the effect that (i) such
action will not cause the initial Servicer to breach any obligation under this
Agreement and (ii) such action would be in the best interests of the initial
Servicer and would not have a material adverse effect on the Noteholders.

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

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<PAGE>
         SECTION 5.03 LIMITATION ON LIABILITY OF THE SERVICER AND OTHERS.

         Except as provided in Section 5.01 hereof, none of the officers,
directors, employees or agents of the Servicer shall have any liability for any
action taken or refrained from having been taken in its capacity as Servicer
pursuant to this Agreement; provided that this provision shall not protect any
such person against any liability which would otherwise be imposed by reason of
willful misconduct, bad faith or gross negligence (which includes negligence
with respect to the duties of the Servicer explicitly set forth in this
Agreement) in the performance of its duties hereunder; provided, however, that
this provision shall not protect the Servicer against any breach of warranties
or representations made herein, or failure to perform its obligations in strict
compliance with this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
Any officer, director, employee or agent of the Servicer may rely in good faith
on any document of any kind prima facie properly executed and submitted by any
Person with respect to any matters arising hereunder. No implied covenants or
obligations shall be read into this Agreement against the Servicer. In the event
the Servicer performs any activities beyond the requirements of this Agreement,
the Servicer may but shall not be required to perform such activities in the
future.

         SECTION 5.04 THE SERVICER NOT TO RESIGN.

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

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

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

                                       19
<PAGE>
                                    ARTICLE 6

                              SERVICING TERMINATION

         SECTION 6.01 SERVICER EVENTS OF DEFAULT.

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

                  (i) Any failure by the Servicer to deliver to the Indenture
         Trustee for payment to Noteholders any collections on Receivables or
         any other proceeds or payments in respect of the Trust Estate and
         required to be so delivered under the terms of the Indenture and this
         Agreement that continues unremedied until 10:00 a.m. (Central time) on
         the Business Day following the date such remittance is required;
         provided that, if such failure is caused by circumstances beyond the
         Servicer's control, no Servicer Event of Default will be deemed to have
         occurred unless such failure continues unremedied until the third
         Business Day following the date such proceeds or payments were required
         to be so delivered; provided further that the Indenture Trustee, upon
         receiving actual knowledge of such failure, shall give the Servicer
         prompt written, telecopied or telephonic notice of such failure.
         Notwithstanding the foregoing, any failure by the Indenture Trustee to
         deliver such notice to the Servicer shall not prevent the occurrence of
         a Servicer Event of Default); or

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

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

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

                                       20
<PAGE>
                  (v) (A) Any assignment or delegation by the Servicer of its
         duties or rights under the Indenture or this Agreement, except as
         specifically permitted thereunder or hereunder, or any attempt to make
         such an assignment; or (B) without the prior written consent of the
         Majority Holders, any "person" or "group" (as such terms are used in
         subsections 13(d) and 14(d) of the Securities Exchange Act of 1934 (as
         amended, the "Exchange Act")) other than one or both of the Key
         Employees is or becomes the "beneficial owner" (as such term is used in
         Rules 13d-3 and 13d-5 under the Exchange Act, except that a person
         shall be deemed to have "beneficial ownership" of all securities that
         such person has the right to acquire, whether such right is exercisable
         immediately or only after the passage of time), directly or indirectly,
         of 100% of the then outstanding voting capital stock of the Servicer;
         or

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

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

                  (viii) the occurrence of a Trigger Event.

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

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

                                       21
<PAGE>
extent not held by the Indenture Trustee) or the servicing copies thereof
maintained by the outgoing Servicer, and all other records, correspondence and
documents relating to the Contracts that it may possess to the successor
Servicer in the manner and at such times as the successor Servicer shall
reasonably request. In addition to any other amounts that are then payable to
the Servicer under this Agreement, the Servicer shall be entitled to receive
reimbursements for any unreimbursed Servicer Advance made during the period
prior to the delivery of a Servicer Termination Notice pursuant to this Section
6.01 which terminates the obligations and right of the Servicer under this
Agreement.

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

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

         (ii) The successor Servicer shall, upon the execution of a written
agreement to be bound by all of the provisions of this Agreement, be the
successor in all respects to the Servicer in its capacity as Servicer under this
Agreement and the transactions set forth or provided for herein and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof; provided that the
successor Servicer (x) shall not be required to make any Servicer Advance and
(y) shall not be liable for any acts or omissions of the outgoing Servicer or
for any breach by the outgoing Servicer of any of its representations and
warranties contained herein or in any related document or agreement; and
provided, further, that such successor Servicer shall provide financial and
other information consistent with the provisions of Section 4.02 hereof. With
the prior written consent of the Majority Holders (which consent shall not be
unreasonably withheld), the successor Servicer may subcontract with another
Person to act as subservicer so long as the successor Servicer remains fully
responsible and accountable for performance of all obligations of the Servicer
on and after the time the Servicer receives the Servicer Termination Notice. The
successor Servicer shall be entitled to the Servicer Fee and any Additional
Servicer Fee, subject to the taking of bids as described in subsection (b)
below.

         (b) Solely for purposes of establishing the fee to be paid to the
successor Servicer, upon receipt of a Servicer Termination Notice, the Back-up
Servicer shall solicit written bids, with a copy to each Noteholder (such bids
to include a proposed servicer fee and servicing transfer costs) from not less
than three Persons experienced in the servicing of contracts similar to the
Contracts and that are not affiliates of the Indenture Trustee, the Back-up
Servicer, the Servicer or the Issuer and are reasonably acceptable to the
Majority Holders. The Issuer may also solicit additional bids from other such
entities. Any such written solicitation shall prominently indicate that bids
should specify any applicable subservicing fees required to be paid from the
Servicer Fee and that any fees and transfer costs in excess of the Servicer Fee
shall be paid only pursuant to Section 12.02(d)(vii) of the Indenture as the
Additional Servicer Fee. The successor Servicer shall act as Servicer hereunder
and shall, subject to the availability of sufficient funds in the Collection
Account pursuant to Section 12.02(d)(i) (up to the Servicer Fee) and Section
12.02(d)(vii) (up to any Additional Servicer Fee and any Transition Costs in
excess of those reimbursed at a higher priority) 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 Holders.

         (c) The Servicer, the Back-up Servicer, the Issuer, the Indenture
Trustee and such successor Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. The Back-up
Servicer (or any other Person if such Person has previously reimbursed the
Back-up Servicer) shall be reimbursed for Transition Costs, if any, incurred in
connection with the assumption of

                                       22
<PAGE>
responsibilities of the successor Servicer, upon receipt of documentation of
such costs and expenses and in accordance with Section 12.02(d)(iii) of the
Indenture. The Back-up Servicer shall have no claim against the Issuer or the
Trust Estate for any costs and expenses incurred in effecting such succession
except for amounts specified in the definition of "Transition Costs" incurred by
it in becoming the successor Servicer.

         SECTION 6.03 NOTIFICATION TO NOTEHOLDERS.

         The Servicer shall promptly notify the Back-up Servicer, each
Noteholder, the Issuer, the Rating Agencies and the Indenture Trustee of any
Servicer Event of Default upon actual knowledge thereof by a Servicing Officer.
Upon any termination of, or appointment of a successor to, the Servicer pursuant
to this Article 6, the Indenture Trustee shall give prompt written notice
thereof to the Rating Agencies.

         SECTION 6.04 WAIVER OF PAST DEFAULTS.

         The Indenture Trustee shall, at the direction of the Majority Holders,
waive any default by the Servicer in the performance of its obligations
hereunder and its consequences, other than a default with respect to required
deposits and payments in accordance with Article 3 or a default of the type set
forth in clause (vi) or (vii) of Section 6.01(a) hereof, which waiver shall
require the consent of each Noteholder. Upon any such waiver of a past default,
such default shall cease to exist, and any Servicer Event of Default arising
therefrom shall be deemed to have been remedied for every purpose of this
Agreement. No such waiver shall extend to any subsequent or other default or
impair any right consequent thereon except to the extent expressly waived. The
Indenture Trustee shall provide to the Rating Agencies notification of any such
waiver.

         Notwithstanding anything contained in this Agreement to the contrary,
absent written notice detailing specific Errors (as defined below) or other
deficiencies, Wells Fargo Bank Minnesota, National Association ("Wells Fargo"),
as successor Servicer, is authorized to accept and rely on all accounting,
records (including computer records) and work product of the prior Servicer
relating to the Contracts (collectively, the "Predecessor Servicer Work
Product") without any audit or other examination thereof, and Wells Fargo 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 Wells Fargo
making or continuing any Errors (collectively, "Continued Errors"), Wells Fargo
shall have no duty, responsibility, obligation or liability to perform servicing
or for such Continued Errors; provided, however, that Wells Fargo agrees to use
its best efforts to prevent further Continued Errors. In the event that Wells
Fargo becomes aware of Errors or Continued Errors, Wells Fargo shall 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. Wells Fargo shall be entitled to recover its costs thereby
expended in accordance with Sections 6.08, Clause Third, and Section
12.02(d)(viii) of the Indenture, as applicable.

         SECTION 6.05 EFFECTS OF TERMINATION OF SERVICER.

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

         (b) After the delivery of a Servicer Termination Notice, the outgoing
Servicer shall have no further obligations with respect to the management,
administration, servicing, enforcement, custody or collection of the Contracts
and the successor Servicer shall have all of such obligations, except that the
outgoing Servicer shall cooperate in effecting the transition of Servicing to
the successor Servicer as described in Sections 6.01 and 6.02 hereof and shall
transmit or cause to be transmitted directly to the successor Servicer, promptly
on receipt and in the same form in which received, any amounts held by the
outgoing Servicer (properly endorsed where

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<PAGE>
required for the successor Servicer to collect them) received as payments upon
or otherwise in connection with the Contracts, together with any standard
pleading forms used in the enforcement of Defaulted Contracts, a list of counsel
used by such predecessor Servicer in bringing collection actions and a list of
collection actions currently in progress. The outgoing Servicer's
indemnification obligations pursuant to Section 5.01 hereof will survive the
termination of the Servicer but shall not extend to any acts or omissions of a
successor Servicer.

         SECTION 6.06 NO EFFECT ON OTHER PARTIES.

         Upon any termination of the rights and powers of the Servicer pursuant
to Section 6.01 hereof, or upon any appointment of a successor Servicer, all the
rights, powers, duties and obligations of the other parties under this
Agreement, the Indenture and the Contract Acquisition Agreement shall remain
unaffected by such termination or appointment and shall remain in full force and
effect thereafter.

                                       24
<PAGE>
                                    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 perform its obligations under
each of the foregoing, and the execution, delivery, and performance of this
Agreement and the Indenture has been duly authorized by the Back-up Servicer by
all necessary corporate action.

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

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

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

                                       25
<PAGE>
         SECTION 7.02 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE
OBLIGATIONS OF, BACK-UP SERVICER.

         Any Person (i) into which the Back-up Servicer may be merged or
consolidated, (ii) which may result from any merger or consolidation to which
the Back-up Servicer shall be a party, or (iii) which may succeed to the
properties and assets of the Back-up Servicer substantially as a whole, which
Person in any of the foregoing cases executes an agreement of assumption to
perform every obligation of the Back-up Servicer hereunder, shall be the
successor to the Back-up Servicer under this Agreement without any further act
on the part of any of the parties to this Agreement. In the event that the
resulting entity does not meet the eligibility requirements for the Indenture
Trustee set forth in the Indenture, the Back-up Servicer, upon the written
request of the Majority Holders, 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 a determination that the performance of its duties shall no
longer be permissible under applicable law (any such determination permitting
the resignation of the Back-up Servicer shall be evidenced by an Opinion of
Counsel to such effect delivered to the Indenture Trustee, the Issuer and the
Majority Holders). Upon the Back-up Servicer's resignation or termination
pursuant to Section 7.02 hereof or this Section 7.03, notice thereof shall be
provided to the Rating Agencies and the Majority Holders, and the Back-up
Servicer shall comply with the provisions of this Agreement until the acceptance
of a successor Back-up Servicer.

         SECTION 7.04 OVERSIGHT OF SERVICING.

         (a) Prior to each Payment Date, the Back-up Servicer shall review the
Monthly Servicer's Report related thereto and shall determine the following:

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

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

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

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

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

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

         (c) In the event of any discrepancy between the information set forth
in subparagraphs (a) and (b) as reported by the Servicer from that determined or
calculated by the Back-up Servicer, the Back-up Servicer shall promptly notify
the Servicer and the Indenture Trustee 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

                                       26
<PAGE>
discrepancy, the Back-up Servicer shall promptly notify the Rating Agencies and
the Noteholders of such discrepancy.

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

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

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

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

         SECTION 7.05 BACK-UP SERVICER COMPENSATION.

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

         SECTION 7.06 DUTIES AND RESPONSIBILITIES.

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

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

                                       27
<PAGE>
                                    ARTICLE 8

                            MISCELLANEOUS PROVISIONS

         SECTION 8.01 TERMINATION.

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

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

         SECTION 8.02 AMENDMENTS.

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

         (b) The provisions of this Agreement may be waived from time to time
and this Agreement may be amended from time to time by the Issuer, the Servicer
and the Back-up Servicer, with the written consent of the Indenture Trustee and
the Majority Holders, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement; provided that
no such amendment or waiver shall, without the consent of each Noteholder
affected thereby, (i) alter the priorities with which any allocation of funds
shall be made under this Agreement, (ii) permit the creation of any Lien on the
Trust Estate (other than the Lien of the Indenture) or any portion thereof or
deprive any such Noteholder of the benefit of this Agreement with respect to the
Trust Estate or any portion thereof, (iii) modify this Section 8.02 or (iv)
modify any of the items referred to in clauses (i) through (viii) of Section
9.02 (a) of the Indenture.

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

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

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

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

                                       28
<PAGE>
provide a signature any obligation or liability in excess of what is then
currently imposed hereunder prior to such amendment.

         (g) 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 Holders 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.

         SECTION 8.03 GOVERNING LAW.

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

         SECTION 8.04 NOTICES.

         All demands, notices and communications hereunder shall be in writing
and shall be delivered or mailed by registered or certified United States mail,
postage prepaid, and addressed, in each case as follows: (a) if to the Issuer,
at 950 Winter Street, Suite 4100C, Waltham, Massachusetts 02451; (b) if to the
Servicer, at 950 Winter Street, Suite 4100, Waltham, Massachusetts 02451; (d) if
to the Indenture Trustee or the Back-up Servicer, at Sixth Street and Marquette
Avenue, MAC N9311-161, Minneapolis, Minnesota 55479, Attention: Corporate Trust
Services/Asset-Backed Administration; or (e) if to the Noteholders, at the
respective address set forth on the Note Register. All notices and demands shall
be deemed to have been given either at the time of the delivery thereof to any
officer of the Person entitled to receive such notices and demands at the
address of such Person for notices hereunder, or on the third day after the
mailing thereof to such address, as the case may be.

         SECTION 8.05 SEVERABILITY OF PROVISIONS.

         If one or more of the provisions of this Agreement shall be for any
reason whatever held invalid, such provisions shall be deemed severable from the
remaining covenants and provisions of this Agreement, and shall in no way affect
the validity or enforceability of such remaining provisions, the rights of any
parties hereto, or the rights of the Indenture Trustee 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 in accordance with Section 8.02 hereof.

         SECTION 8.07 ARTICLE HEADINGS AND CAPTIONS.

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

                                       29
<PAGE>
         SECTION 8.08 LEGAL HOLIDAYS.

         In any case in which the date on which any action required to be taken,
document required to be delivered or payment required to be made is not a
Business Day, then (notwithstanding any other provision of this Agreement) such
action, document delivery or payment need not be taken or made on such date, but
may be taken or made on the next succeeding Business Day with the same force and
effect as if taken or made on the nominal date of any such action, document
delivery or payment and, assuming such action, document delivery or payment is
actually taken or made on such subsequent Business Day, such action, document
delivery or payment shall be deemed made on the nominal date and no additional
interest shall accrue on any amount so paid for the period from and after any
such nominal date.

         SECTION 8.09 ASSIGNMENT FOR SECURITY FOR THE NOTES.

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

         SECTION 8.10 NO SERVICING ASSIGNMENT.

         Except as expressly provided in Sections 5.02, 5.04 and 8.09 hereof,
neither this Agreement nor the duties and obligations of any party hereto may be
assigned by the Issuer, the Servicer or the Back-up Servicer without the prior
written consent of the Majority Holders.

         SECTION 8.11 COUNTERPARTS.

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

         SECTION 8.12 ACKNOWLEDGMENT OF MULTIPLE ROLES.

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

                                       30
<PAGE>
         SECTION 8.13 CONSENT TO JURISDICTION.

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

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

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

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

                                       31
<PAGE>
         IN WITNESS WHEREOF, the Issuer, the Servicer, the Indenture Trustee and
the Back-up Servicer have caused this Agreement to be duly executed by their
respective officers thereunto duly authorized as of the date and year first
above written.

                                MFI FINANCE II, LLC, as Issuer

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

                                MICROFINANCIAL INCORPORATED,
                                as Servicer

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

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

                                By:
                                     -------------------------------------
                                Name:
                                Title:
<PAGE>
                                    EXHIBIT A

                        Form of Monthly Servicer's Report

                                 [see attached]
<PAGE>
                                    EXHIBIT B

                  Form of Agreement Regarding Operating Account

                                 [see attached]
<PAGE>
                                    EXHIBIT C

                        Form of Blocked Account Agreement

                                                              [Date]

Wells Fargo Bank Minnesota, National Association, as Indenture Trustee
6th Street & Marquette Avenue
MAC N9311-161
Minneapolis, MN  55479

Ladies and Gentlemen:

         1. Acknowledgment of Trustee's Relationship. [Bank] (herein the "Bank")
has been advised that you (the "Trustee") have entered into that certain
Indenture (the "Indenture"), dated as of [], 2001, with MFI Finance II, LLC (the
"Issuer") and MicroFinancial Incorporated, as Servicer (the "Servicer"), and
that in connection with such Indenture, (a) the Issuer has granted a security
interest to you in, among other things, certain payments and accounts of Issuer
arising out of leases and other financing agreements (the "Securitization
Collateral"); (b) that you have agreed under such Indenture that certain of the
remittances and credits with respect to such Collateral will be processed
through Automated Clearing House ("ACH") credits in your favor and deposited
into a special account maintained by Leasecomm Corporation ("Leasecomm"), a
wholly owned subsidiary of the Servicer, with the Bank; (c) pursuant to a
Servicing Agreement, dated as of [], 2001, entered into by and among the
Servicer, the Issuer and you, the Servicer is responsible for servicing the
Collateral, including processing the ACH credits; provided that, the Servicer's
right to make ACH entries with respect to the Collateral and to make withdrawals
from the special account is limited as subsequently provided in this letter.

         2. Blocked Account; Deposits to Blocked Account. The Servicer and Bank
hereby confirm to you that a special bank account (the "Blocked Account"),
having account number ______________, has been established by the Servicer with
the Bank. The Servicer is permitted to make withdrawals from the Blocked Account
with respect to the Securitization Collateral upon the terms and conditions
provided herein.

         3. Acknowledgment and Consent. Bank hereby acknowledges and consents to
the assignment to you of all the Servicer's right to control the Blocked Account
and all monies from the Collateral credited from time to time into the Blocked
Account. It is specifically agreed and acknowledged by you and the Servicer that
(i) Bank is not in privity with the Trustee and Bank shall have no duty of
inquiry, or otherwise be obligated to act or refrain from acting, except as
specifically provided herein in connection with the Blocked Account and (ii)
these funds transfer transactions will be subject to and governed by the terms
of this Agreement and the ACH Agreement, dated as of [________], by and between
the Bank and Leasecomm.

         4. Withdrawals Prior to Trustee's Notice. Unless and until written
notice is actually received by Bank pursuant to Paragraph 6 of this Agreement,
entries and withdrawals from the Blocked Account, and all other transactions of
whatever type, nature and extent in connection with the ACH Agreement and
Blocked Account shall be freely conducted by the Servicer.

         5. Wire Transfers. On each Business Day, the Bank will wire transfer to
the Collection Account all amounts on deposit in the Blocked Account that are no
longer provisional.

                                      C-1
<PAGE>
         6. Notice of Block and Trustee Demand for Funds. Under the Indenture
and the Servicing Agreement, you have the right, upon the occurrence of certain
events, to take over control of the Blocked Account and to process credits with
respect to the Collateral. You shall notify the Bank and the Servicer of the
exercise of such rights by delivery to the Bank and the Servicer of a written
notice and certifying therein that under the terms of the Indenture and the
Servicing Agreement that you are authorized to deliver the notice, such notice
to be actually received by the Bank in a time and manner permitting the Bank a
reasonable opportunity to act thereon. Such notice can include your demand for
the transfer of all funds, credits and property in the Blocked Account relating
to the Collateral pursuant to which demand Bank is expressly authorized and
directed by the Servicer to thereafter (i) permit you as Servicer's designee,
with full authority to act in the Servicer's name, to make entries and otherwise
transact business relating to the Collateral and make transfers therefrom to the
Blocked Account or such other account as you shall specify and (ii) to transfer
deposits, credits and/or property in the Blocked Account or made with respect to
Collateral to yourself or to any other party on an ongoing basis. Bank agrees to
act pursuant to such notice, and to accept further instructions from you as if
the same were issued by the Servicer.

         7. Charges and Right of Setoff. Bank agrees that it will not exercise
or claim any right of setoff derived from a claim against the Servicer against
the funds or other property in the Blocked Account, and Bank waives and releases
to you any right or claim which it may have in any of the funds, credits or
other property at any time deposited or to be deposited in the Blocked Account.

         8. Statements. All account statements, if any, generated by the Bank in
connection with the Blocked Account shall be sent directly to the Servicer in
keeping with the Bank's usual procedures. However, you are authorized to obtain
confirmation from Bank at any time concerning the status of the Blocked Account
or the balance thereof. Bank is also authorized to provide to you, upon your
written request, copies of statements, entries, deposits or other information as
processed through or with respect to the Blocked Account, subject to Bank's fee
schedules and service availability.

         9. Reimbursement to Bank. The Bank shall charge back to the Blocked
Account the amount of any check or other instrument of whatever nature ("check")
deposited into the Blocked Account which is returned to the Bank unpaid for any
reason whatsoever, including, without limitation, "insufficient funds,"
"uncollected funds" or otherwise returned for reasons of forgery, alteration,
improper or unauthorized endorsement, lack of good title or any other defect for
which the Servicer may be liable to Bank at law or in equity. The debit advice
for any such returned check will be sent by Bank to the Servicer. If at any time
prior to delivery of notice by the Trustee pursuant to Section 6 hereof, the
Blocked Account is insufficient to reimburse the Bank, the Servicer agrees to
promptly reimburse the Bank accordingly. However, the Servicer's obligations
shall not exceed the amounts paid to you or your designated third party by Bank.
It is understood and agreed that Bank's transfer, to you or your designee, of
funds which are subject to collection, if made in accordance with Bank's normal
practices and procedures and ordinary banking practices, shall not be deemed to
arise out of gross negligence or willful misconduct.

         10. Effect of Legal Process. The Bank agrees to provide you and the
Servicer with notice of the service of any levies, restraining notices, court
order, or other or similar legal process against the Servicer so that you or the
Servicer may have an opportunity within the required time in keeping with
applicable law to apply for relief from such process to the appropriate court,
agency or other applicable party. Bank shall have no obligation to undertake the
defense or to retain counsel to challenge any process served upon Bank.

         11. Indemnity. The Servicer agrees at its sole cost and expense to
defend, indemnify and hold the Bank harmless against all suits, proceedings,
claims, demands, losses, damages, expenses, fees, including legal fees, of every
nature and character that may be necessarily incurred, suffered or assessed
against the Bank arising out of the Bank's acting in accordance with this
Agreement (excepting those arising out of Bank's gross negli-

                                      C-2
<PAGE>
gence or willful misconduct) (a "Loss") and provided that Bank shall give
reasonable prompt notice to the Servicer of its claim for indemnity hereunder
and the circumstances giving rise to such Loss. The Servicer shall have the
right to retain counsel of its choice to represent Bank, provided such choice is
reasonably satisfactory to Bank.

         12. Termination. No party may amend or modify this Agreement without
the express written consent of the other parties. The parties hereto may
terminate this Agreement at any time upon giving at least 30 days' prior written
notice to the other parties. This Agreement shall automatically terminate upon
termination of the Servicing Agreement and discharge of all amounts due under
the Indenture. Any funds, credits, uncollected checks or other instruments or
property remaining in the Blocked Account or with respect to the Collateral will
be transferred upon termination in accordance with the provisions of this
Agreement and no further credits or deposits with respect to the Collateral will
be made into the Blocked Account.

         13. Notice. Any notice hereunder shall be in writing and shall be
delivered in person, by telegram or by United States first class mail, postage
prepaid, and addressed:

                  (i) if to Bank, at [], Attn: [];

                  (ii) if to Wells Fargo Bank Minnesota, National Association,
                  at Sixth Street and Marquette Avenue MAC N9311-161,
                  Minneapolis, Minnesota 55479, Attn: Corporate Trust
                  Services/Asset-Backed Administration;

                  (iii) if to the Servicer, at 950 Winter Street, Suite 4100,
                  Waltham, MA 02451, Attn: President; and

                  (iv) to any party at any other address as such party may, by
                  notice as herein provided, received by the others, designate
                  as its address for all notices under this Agreement.

                                      C-3
<PAGE>
         14. No Waiver; Section Headings. The failure of any party herein to
enforce any rights it has under this Agreement against any other party at any
time shall not be deemed a waiver of its right to enforce such rights at any
other or future time. The section headings herein are for convenience only and
do not defend, limit or construe the contents of such sections.

                                  Very truly yours,

                                  [BANK]

                                  By: _____________________________
                                  Name: ___________________________
                                  Title: __________________________

                                  MICROFINANCIAL INCORPORATED,
                                  as Servicer

                                  By: _____________________________
                                  Name: ___________________________
                                  Title: __________________________

Accepted and Agreed to:

WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
 as Indenture Trustee

By: _____________________________
Name: ___________________________
Title: __________________________

                                      C-4
<PAGE>
                                    EXHIBIT D

                             Agreed Upon Procedures

     (Can be changed with mutual agreement of Majority Holders and Servicer)

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

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

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

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

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

         6. Independent Accountant will confirm the amount of early pay-offs
received during each Review Period and whether such payoffs are at least equal
to the then Discounted Contract Balance using information contained in the
relevant Monthly Servicer's Reports.

         7. Management Schedule will include a list of all early pay-off
Contracts during each of the Review Periods. Independent Accountant will select
a total of five Contracts listed as "early pay-offs" from the Management
Schedule. For each Contract so selected, Independent Accountant will compare the
amount

                                      D-1
<PAGE>
deposited into the Collection Account in respect of such Contract with
the amount of early pay-off specified in the Management Schedule, noting any
exceptions.

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

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

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

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

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

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

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

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

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

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

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

         19. The Independent Accountant will check the Monthly Servicer's
Reports for adherence to the 10% substitution limit.

                                      D-2

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