November 10, 2000



The FINOVA Group Inc.

4800 North Scottsdale Road

Scottsdale, Arizona 85251



Gentlemen:



         This letter agreement sets forth the principal terms and conditions on

which Leucadia National Corporation or a subsidiary ("Leucadia") would be

willing to invest up to $350 million in The FINOVA Group Inc. ("Finova").



         1. Preferred Stock Investment. Leucadia will purchase 10 million shares

of a new series of convertible preferred stock of Finova at a purchase price of

$25.00 per share (the "PIK Preferred Stock"). The principal terms of the PIK

Preferred Stock will be as follows:



          (a)  Five Year Pay-in-Kind: Cumulative dividends will be payable

               quarterly in additional shares of PIK Preferred Stock at the rate

               of 14% per annum during the first five years after issuance.



          (b)  Coupon: Beginning in the sixth year, at Finova's option,

               cumulative dividends will be payable quarterly either: (i) in

               cash, in an amount equal to the greater of: (x) a rate of 14% per

               annum or (y) ten times the amount of any cash dividend paid or

               payable per share of Common Stock; or (ii) in additional shares

               of PIK Preferred Stock at the rate of 14% per annum.



          (c)  Conversion: For a period from June 30, 2006 until the tenth

               anniversary of the date of issuance of the PIK Preferred Stock,

               each share of PIK Preferred Stock will be convertible, at the

               option of the holder, into ten shares of Common Stock at a

               conversion price of $2.50 per share of Common Stock (which number

               and price will be subject to normal anti-dilution adjustments).



          (d)  Voting: The PIK Preferred Stock will vote as one class with the

               common stock and will have twenty (20) votes per PIK Preferred

               Stock share, subject to New York Stock Exchange approval, or such

               lesser number of votes (but not less than ten votes) per PIK

               Preferred Share, as the New York Stock Exchange requires.



          (e)  Preference Rights: The PIK Preferred Stock will have a

               liquidation preference of $25.00 per share, plus accrued but

               unpaid dividends thereon.



          (f)  Registration Rights: The PIK Preferred Stock will be entitled to

               demand and incidental registration rights.





         2. Rights Offering. As soon as practicable after the closing, Finova

will conduct a rights offering whereby existing shareholders will be permitted

to purchase up to 6 million shares of PIK Preferred Stock at a price of $25.00

per share ($150 million aggregate). The rights shall be transferable, and

Leucadia shall act as standby underwriter of the offering with respect to $100

million of the offering. As compensation for agreeing to act as standby

underwriter, Finova will pay Leucadia $ 5 million upon distribution of the

rights.





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         3. Leucadia Warrant. Leucadia will receive a ten-year warrant to

purchase for an aggregate exercise price of $125 million such number of shares

of Common Stock that will represent 20% of the outstanding shares of Common

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