leafassetpuragrmt0607.htm


     

    
      

      

    

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    ASSET
      PURCHASE AGREEMENT

    


        THIS
ASSET
      PURCHASE AGREEMENT (this “Agreement”) is made as of June 19,
      2007, by and among LEAF FUNDING, INC., a Delaware corporation,
LEAF FINANCIAL CORPORATION, a Delaware corporation, and
LEAF COMMERCIAL FINANCE CO., LLC, a Delaware limited
      liability
      company (collectively, the “Buyer,” and whose obligations hereunder shall
      be joint and several); and PACIFIC CAPITAL BANK, N.A., a
      national banking association (“Seller”).  Capitalized terms
      used, but not defined, in this Agreement shall have the meaning ascribed thereto
      in Appendix A attached hereto.

    


        WHEREAS,
      Seller, among other business activities, is engaged in the
      Business;

    


        WHEREAS,
      Seller desires to sell to Buyer, and Buyer desires to purchase from Seller,
      certain of the assets of Seller relating to the Business, on the terms set
      forth
      herein; and

    


        WHEREAS,
      Buyer has agreed to assume certain specific liabilities related to such
      assets.

    


        NOW,
      THEREFORE, in consideration of the premises and the mutual covenants
      and agreements herein contained, and intending to be legally bound hereby,
      the
      parties hereto agree as follows:

    


    1.           Purchase
      and Sale.  Upon the terms and subject to the conditions set forth
      in this Agreement, on the Closing Date, Seller shall irrevocably sell, assign,
      transfer and deliver to Buyer, and Buyer shall purchase, all of Seller’s right,
      title and interest in and to all of the following (collectively, the
“Assets”):

    


    (a)           all
      lease agreements or other contracts for use, conditional sale, loan or financing
      entered into or acquired by Seller as part of the Business, as a lessor, lender
      or financier, that, are set forth on Schedule 1(a) (which schedule shall
      be provided in the form of a read-only computer disc containing a file
      identifying all such leases, and a separate file identifying the Performing
      Leases) (each a “Lease” and collectively, the
“Leases”);

    


    (b)           all
      right, title and interest that Seller has in the Subject Equipment, collateral,
      Related Property or Residual Value with respect to each Lease (subject, however,
      to the possessory rights of lessee therein) and any other collateral that
      secures the obligation of a lessee under each Lease;

     

    (c)           all
      Contract Files pertaining to each Lease;

     

    (d)           the
      rights of Seller with respect to all lease transactions that have been approved,
      but for which no lease has been finally executed as of the Record Date, as
      set
      forth on Schedule 1(d) (which shall be in the form of a read-only
      computer disc, and need not be updated as of the Closing Date) (the
“Backlog”);

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    (e)           all
      of Seller’s rights under any existing Customer agreement relating to any Leases
      or the Backlog;

     

    (f)           all
      of Seller’s intangible rights and property associated exclusively with the
      Business (but excluding anything that is also used in any part of the Seller’s
      business, other than the Business), including but not limited to, all
      trademarks, patents, copyrights, other intellectual property used exclusively
      in
      the Business, going concern value, goodwill, telephone numbers, facsimile
      numbers, processes, business and product names (if any), trade secrets (if
      any),
      industrial models, designs, methodologies, technical information, and know-how
      relating to the origination and servicing of the Leases, but excluding (i)
      trade
      names, logos, slogans, (ii) licenses to software that are not by their terms
      transferable and (iii) telephone numbers, facsimile numbers and post office
      boxes other than those listed on Schedule 1(f);

     

    (g)           all
      rights of Seller in guaranties, collateral accounts, security deposits and
      other
      collateral posted by any person in connection with the Leases;

     

    (h)           those
      items of equipment, furniture, computer hardware and software, leasehold
      improvements, fixtures and other tangible personal property listed on
Schedule 1(h);

     

    (i)           all
      books, records and other documents and information related to the Business
      or
      the Assets, including all Customer, prospect, third party originator and
      distributor lists, sales literature, price lists, quotes and bids, promotional
      programs, product catalogs and brochures, inventory records, product data,
      purchase orders and invoices, sales orders and sales order log books, commission
      records, Customer information, correspondence (but excluding any such items
      that
      relate to the business of Seller other than the Business, and excluding any
      internal analyses by Seller with respect to its decision to sell the Business)
      and all personnel records and other records of Seller related to its employees
      set forth on Schedule 1(i) to the extent their transfer is permitted by
      law;

     

    (j)           all
      insurance benefits related to the Leases and the Subject Equipment, including
      rights and proceeds, arising from or relating to the Assets or Assumed
      Liabilities prior to the Closing Date, unless expended in accordance with this
      Agreement; and

     

    (k)           all
      claims of Seller against third parties relating to the Business or the Assets,
      whether choate or inchoate, known or unknown, contingent or noncontingent,
      including equipment warranties and those claims set forth on Schedule
      1(k), but excluding any claims for reimbursement of taxes advanced or tax
      refunds that relate to periods before the Closing and claims relating to
      Excluded Assets and Retained Liabilities.

     

    Any
      other
      assets not set forth in this Section 1 shall remain the property of Seller
      (the
“Excluded Assets”).

    


    2.           Assumed
      Liabilities.  Upon the terms and subject to the conditions set
      forth herein, Buyer hereby assumes and agrees to pay, perform, discharge or
      otherwise satisfy in accordance with their respective terms, all of the Assumed
      Liabilities.  Buyer shall not assume the Retained
      Liabilities.

    


    
      
        
          
          

        

        
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    3.           Purchase
      Price.  The purchase price of the Assets shall be an amount equal
      to the sum of (i) 104.7643% of the Net Investment in the Performing Leases,
      as
      of the Record Date, which will be reflected on the Closing Date Report, (ii)
      104.7643% of the Net Investment in any Leases that are originated between the
      Record Date and the Closing Date and (iii) accrued interest on the amounts
      in
      (i) and (ii), calculated at the weighted average effective yield of the
      Performing Leases from the Record Date to the date of payment, and (iv)
      $2,000,000 (the “Purchase Price”).

     

    


    4.           Closing.  The
      Closing will take place at the offices of Seller’s counsel at 11355 West Olympic
      Boulevard, Los Angeles, California, commencing at 10:00 a.m. (local time) on
      the
      later of (a) June 22, 2007 or (b) the date that is five (5) Business Days
      following the termination of the applicable waiting period under the HSR Act,
      unless Buyer and Seller otherwise agree (the “Closing
      Date”).

    


    5.           Closing
      Obligations.

    


    (a)           Deliveries
      by Seller.  In addition to any other documents to be delivered
      under other provisions of this Agreement, at the Closing (unless otherwise
      specified below, and except to the extent waived by Buyer), Seller shall deliver
      to Buyer:

    


    (i)           the
      Closing Date Report, to be delivered at least three business days prior to
      the
      Closing Date;

     

    (ii)           a
      Bill of Sale executed by a duly authorized officer of Seller;

     

    (iii)           an
      Interim Servicing Agreement executed by a duly authorized officer of
      Seller;

     

    (iv)           a
      bailment agreement (the “Bailment Agreement”) with respect to the Contract
      Files, in form acceptable to both parties, executed by a duly authorized officer
      of Seller;

     

    (v)           a
      legal opinion of Seller’s counsel in form and substance reasonably acceptable to
      Buyer, in the form attached hereto as Exhibit A;

     

    (vi)           a
      good standing certificate for Seller, issued by the United States Office of
      the
      Comptroller of the Currency, dated not more than thirty (30) days prior to
      the
      Closing Date;

     

    (vii)           a
      certificate of the Secretary of Seller certifying, as complete and accurate
      as
      of the Closing Date, attached copies of its Governing Documents and certifying
      and attaching all requisite resolutions or actions of Seller approving the
      execution and delivery of the Transaction Documents and the consummation of
      the
      Contemplated Transactions and certifying to the incumbency and signatures of
      the
      officers of Seller executing each of the Transaction Documents;

    


    
      
        
          
          

        

        
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    (viii)                 a
      certificate executed by Seller as to the accuracy of its representations and
      warranties as of the date of this Agreement and as of the Closing Date in
      accordance with Section 6 and as to its compliance with and performance of
      its
      covenants and obligations to be performed or complied with on or before the
      Closing Date in accordance with Section 8; and

     

    (ix)           such
      other deeds, bills of sale, assignments, certificates of title, other
      instruments of transfer and conveyance and other documents or certificates
      as
      may reasonably be requested by Buyer, each in form and substance satisfactory
      to
      Buyer and its legal counsel and executed by a duly authorized officer of
      Seller.

     

    (b)           Deliveries
      by Buyer.  At the Closing, Buyer shall deliver to Seller (except
      to the extent waived by Seller):

    


    (i)           an
      amount in cash equal to (A) the portion of the Purchase Price described in
      clauses (i) and (iv) of Section 3(a) and the interest thereon pursuant to clause
      (iii) of Section 3(a), plus (B) all property taxes on the Leases or Subject
      Equipment that have been advanced by Seller and not yet collected from the
      lessees as of the Record Date, less (C) security deposits, and less (D) any
      booked but undisbursed lease fundings, and less (E) property taxes on the Leases
      or Subject Equipment that have been received from lessees (or former lessees)
      as
      of the Record Date, and not yet remitted, as reflected in a closing schedule,
      in
      the form of Schedule 5(b), and less (F) $62,500, in payment of Seller’s
      share of the Hart-Scott-Rodino Act filing fee, as agreed by the parties, which
      amount shall be payable by wire transfer to the account that is identified
      by
      Seller to Buyer at least two (2) Business Days prior to the Closing
      Date;

    


    (ii)           a
      certificate of the Secretary of each Buyer certifying, as complete and accurate
      as of the date hereof, attached copies of the Certificate of Incorporation
      and
      Bylaws of such Buyer and certifying and attaching all requisite resolutions
      or
      actions of such Buyer’s boards of directors approving the execution and delivery
      of this Agreement and the consummation of the transactions contemplated
      hereunder and certifying to the incumbency and signatures of the officers of
      such Buyer executing this Agreement and any other document required to be
      delivered by such Buyer hereunder;

     

    (iii)           a
      duly executed copy of the Interim Servicing Agreement;

     

    (iv)           the
      Bailment Agreement, executed by a duly authorized officer of Buyer;

     

    (v)           a
      good standing certificate for each Buyer, issued by the state in which each
      Buyer is incorporated, dated not more than thirty (30) days prior to the Closing
      Date; and

     

    (vi)           such
      other documents and instruments as may reasonably be requested by Seller, each
      in form and substance satisfactory to Seller and its legal counsel and executed
      by a duly authorized officer of Buyer.

    


    (c)           Post-Closing
      Payments.  In addition, if and to the extent that any Leases are
      originated between the Record Date and the Closing Date, then no later than
      fifteen (15) days after
      the
      Closing Date, Buyer shall pay to Seller an amount in cash equal to the portion
      of the Purchase Price described in clause (ii) of Section 3(a) and the interest
      thereon pursuant to clause (iii) of Section 3(a).

    


    
      
        
          
          

        

        
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    6.           Representations
      and Warranties of Seller.  Seller makes the representations and
      warranties to Buyer set forth in this Section 6.  Except as set forth in
      the next sentence, these representations and warranties are true and correct
      as
      of the date hereof and shall be true and correct as of the Closing
      Date.  Notwithstanding the foregoing, representations and warranties
      with respect to the Leases are true and correct as of the date hereof and shall
      be true and correct as of (i) the Record Date and (ii) except for such changes
      as shall be set forth in amended Schedules to this Agreement (which will be
      delivered to the Buyer not later than three (3) Business Days following the
      Closing Date) and which will not in the aggregate materially adversely affect
      the Assets as a whole or the financial condition, results of operation or
      business of the Business, as of the Closing Date.

    


    (a)           Organization.  Seller
      is a national banking association duly organized, validly existing and in good
      standing under the laws of the United States, with full corporate power and
      authority to conduct its business as it is now being conducted, to own or use
      the properties and assets that it purports to own or use, and to perform all
      its
      obligations under the Leases.  Seller is not required to be qualified
      to do business as a foreign corporation under the laws of any state or other
      jurisdiction in order to conduct its business.

     

    (b)           Authority.  Seller
      has taken all action necessary to approve the Transaction Documents and the
      transactions contemplated thereby.  Seller has all requisite corporate
      power and authority and has taken all action necessary in order to execute,
      deliver and perform its obligations under the Transaction
      Documents.  This Agreement has been duly authorized, executed and
      delivered and, prior to the Closing, the other Transaction Documents will have
      been, duly authorized and at Closing will be duly executed and delivered by
      Seller and, assuming due execution and delivery by Buyer, constitute or (with
      respect to the Transaction Documents other than this Agreement) will at Closing
      constitute, the legal, valid and binding obligations of Seller, enforceable
      in
      accordance their terms, subject to applicable bankruptcy, reorganization,
      insolvency, moratorium or other similar laws affecting creditors’ rights
      generally.

     

    (c)           No
      Conflict.  Neither the execution and delivery of this
      Agreement nor the consummation or performance of any of the transactions
      contemplated in the Transaction Documents will, directly or indirectly (with
      or
      without notice or lapse of time):

    


    (i)          breach
      (A) any provision of any of the Governing Documents of Seller or (B) any
      resolution adopted by the board of directors or the shareholders of
      Seller;

     

    (ii)          give
      any Governmental Authority or other Person the right to prevent any of the
      Contemplated Transactions or to exercise any remedy or obtain any relief under
      any Legal Requirement or any order of any Governmental Authority to which
      Seller, or any of the Assets, may be subject;

     

    (iii)          contravene,
      conflict with or result in a violation or breach of any of the terms or
      requirements of, or give any Governmental Authority the right to revoke,
      withdraw, suspend, cancel, terminate or modify, any Governmental Authorization
      that is held by Seller or that
      otherwise relates to the Assets or to the Business, it being understood that
      no
      representation is being made as to the licensing requirements that may apply
      to
      Buyer as owner and operator of the Business after the
      Closing;

    
      
        
          
          

        

        
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    (iv)          breach
      any provision of, or give any Person the right to declare a default or exercise
      any remedy under, or to accelerate the maturity or performance of, or payment
      under, or to cancel, terminate or modify, any Lease or any of the Backlog;
      or

     

    (v)          result
      in the imposition or creation of any Lien upon or with respect to any of the
      Assets, other than such equitable Lien as may run in favor of Buyer as a result
      of this Agreement.

     

    (d)           Title.  Seller
      owns good and transferable title to all of the Assets free and clear of any
      Liens other than those described on Schedule 6(d).  Seller
      warrants to Buyer that, at the time of Closing, all Assets shall be free and
      clear of all Liens, other than, in the case of Subject Equipment, the Lien
      of
      the Leases themselves, and also subject to those other Liens described on
Schedule 6(d).

    


    (e)           Financial
      Information.  The Closing Date Report will be in accordance with
      Seller’s records and will accurately present the net book value of the Leases as
      of the Record Date.  In preparing the Closing Date Report, Seller will
      not change its accounting practices or methodologies from those used in the
      preparation of any previous reports provided to Buyer.  Since May 1,
      2007, there has been no material adverse change to the Assets or the Business
      as
      a whole, or the financial conditions or operations of the Business, except
      (a)
      as of the date hereof, as set forth on Schedule 6(e), and (b) as of the
      Closing Date, as set forth on an updated Schedule 6(e) delivered at the
      Closing.

    


    (f)           Taxes.  Other
      than as set forth on Schedule 6(f), Seller has filed all United States
      federal income tax returns and all other tax returns (including, but not limited
      to, profits, premium, estimated, excise, sales, use, occupancy, gross receipts,
      franchise, ad valorem, severance, capital levy, production, transfer,
      withholding, employment, and property taxes) which are required as of the date
      hereof to be filed by them, or otherwise obtained appropriate extensions to
      file, and has paid all Taxes due pursuant to such returns or pursuant to any
      assessment received by Seller, except such Taxes that are (i) being contested
      in
      good faith by appropriate proceedings and (ii) are set forth on
Schedule 6(f) attached hereto.  Seller will file all such
      tax returns when due, and pay all Taxes due pursuant to such returns, for all
      periods that include the date hereof.  No Tax lien has been filed and,
      to the knowledge of Seller, no claim is being asserted with respect to any
      such
      Tax, fee or other charge.

    


    (g)           Approvals.  Other
      than as set forth on Schedule 6(g), no authorizations, approvals or
      consents of, and no filings or registrations with, any Governmental Authority
      or
      any other Person are necessary for the execution, delivery or performance by
      Seller of the Transaction Documents or for the validity or enforceability hereof
      or thereof.

    


    (h)           Leases.

     

    (i)           No
      Performing Lease as of the date hereof is, nor as of the Record Date will be
      a
      Past Due Lease, a Suspended Lease, or a Lease that is subject to any pending
      repossession
      action or as to which Seller has received a notice of an event that is, or
      with
      notice and/or lapse of time is likely to constitute, a material default or
      of
      any claim by a lessee or guarantor of a right of offset or counterclaim (as
      referenced in Section 6(h)(x) and identified on Schedule
      6(h)(x)).

    
      
        
          
          

        

        
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    (ii)           Each
      Lease (other than a Charged-Off Lease) is evidenced by a written agreement,
      and
      there are no material understandings, agreements, undertakings or arrangements
      between any of Seller and the lessees or transferees under any Lease which
      are
      not set forth therein or in a written agreement included in the Contract File
      relating to such Lease.  The entries made on Seller’s system and on
      the Closing Date Report with respect to each Lease (other than a Charged-Off
      Lease) are consistent with the Contract Files relating thereto.  Each
      such Lease and any Contract Files pertaining thereto shall be supplied by Seller
      to Buyer as promptly as possible but in any event at the Closing
      Date.

     

    (iii)           No
      payments required to be made under any Lease have been paid in advance of the
      due dates thereof except for payments reflected in the amount of the related
      Lease receivable as shown in the Records.

     

    (iv)           Seller
      has not acted, or failed to act, in a manner which would materially alter or
      reduce any of its rights or benefits under any manufacturers’ or vendors’
warranties or guarantees relating to property covered by any Performing
      Lease.

     

    (v)           Seller
      has properly prepared and filed Financing Statements for each Lease (other
      than
      a Charged-Off Lease) that was over $25,000 at the time of origination, and
      each
      such Financing Statement is current.

     

    (vi)           Each
      Lease (and any related guarantees) is and will continue to be after the date
      hereof a valid, binding and enforceable, non-cancelable obligation of the lessee
      thereunder (and guarantors thereof, if any) in accordance with its terms, except
      as the same may be affected by bankruptcy, insolvency, reorganization,
      moratorium and other similar laws affecting the rights of creditors
      generally.  Each of such lessees and any guarantor is a bona fide
      party thereto and, to the knowledge of Seller, had the requisite legal capacity
      to enter into the respective agreements to which it is a party as of the time
      it
      entered into those agreements.

     

    (vii)           The
      property that is the subject of each Performing Lease has been delivered to
      the
      lessee thereunder, and accepted by such lessee.

     

    (viii)                 Seller
      has absolute, complete and indefeasible title to the property subject to each
      Performing Lease (or a duly perfected first-lien security interest in the
      property subject to such Performing Lease) and all sums due thereunder, free
      and
      clear of any and all Liens or claims of any Person (other than the lessee under
      the Performing Lease itself).  The supplier or vendor of said property
      has received payment in full for said property.

     

    (ix)           Seller
      is not in material breach of any obligation under any of the Performing
      Leases.

     

    (x)           Other
      than as set forth on Schedule 6(h)(x), Seller has received no notice of
      any event which is, or with notice and/or lapse of time is likely to constitute,
      a material default
      under any Performing Lease or of any claim by a lessee or guarantor of a right
      of offset or counterclaim.

    
      
        
          
          

        

        
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    (xi)           None
      of the Performing Leases is a Past Due Lease or has a lessee who is or has
      been
      subject to an Insolvency Event.  No Performing Lease that would
      otherwise be a Past Due Lease has been restructured, and no agreements to defer,
      or change the schedule of, any payments due under any Performing Lease have
      been
      made within such time period.

     

    (xii)           Each
      Performing Lease has a corresponding Contract File, and each Contract File
      includes proof of payment (either by copies of canceled checks or confirmations
      of wire transfers or by such other evidence, all as shall be satisfactory to
      Buyer in its sole discretion) for the Subject Equipment underlying each
      Performing Lease.

     

    (xiii)                 The
      descriptions of each Performing Lease set forth on Schedule 1(a) are, and
      on the Closing Date Report will be, properly coded with respect to each of
      the
      following items of data: (a) the number of payments remaining, (b) the
      periodic payment amount, (c) the security deposit amount, (d) the end of lease
      disposition, (e) the Residual Value or the Final Contractual
      Payment.

     

    (xiv)                 Except
      as set forth on Schedule 6(h)(xiv), the final payment on each Performing
      Lease is a contractual obligation and not an optional payment.

     

    (xv)           All
      payment obligations by any lessee pursuant to each Performing Lease are due
      to
      the Seller, and no payments are due to any third party originator.  No
      Performing Lease requires any current or future payment to a third party
      originator.

     

    It
      is
      understood that Buyer’s acquisition of the Charged-Off Leases is on an as-is,
      where-is basis.  It is further understood that the sole remedy for any
      breach of the representations and warranties with respect to any Lease other
      than a Performing Lease shall be monetary damages, and that the aggregate amount
      of all such damages shall be limited to a maximum of $200,000 for all such
      breaches.

     

    (i)           Compliance.  Seller
      operates the Business in compliance with all applicable federal and state
      statutes and all governmental regulations.  There are no existing
      violations, orders, claims, citations, penalty assessments, orders,
      investigations or proceedings affecting the Assets or the Business.

     

    (j)           Litigation.  Except
      as set forth on Schedule 6(j), there is no action, suit or proceeding
      pending or, to the knowledge of any Seller, threatened against or affecting
      the
      Business or all or any portion of the Assets, in any court or before or by
      any
      Governmental Authority.  To the knowledge of Seller, no event has
      occurred or circumstance exists that is reasonably likely to give rise to or
      serve as a basis for the commencement of any action, suit or proceeding
      affecting the Business.  Seller is not in default with respect to any
      order of any court, Governmental Authority or agency or arbitration board or
      tribunal pertaining to the Business.

     

    
      
        
          
          

        

        
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      (k)           Assignability
        of Relationships.  Except as set forth on Schedule 6(k),
        all of Seller’s written Customer relationships with respect to the Performing
        Leases are assignable to Buyer without notice to or consent of any
        Person.  Seller shall use its Best Efforts to, as promptly as
        practicable but in no event later than the Closing Date, obtain consents
        and
        give notices, to the extent that any are required, in order to assign all
        such
        Customer relationships to Buyer at the Closing.

       

    

    (l)           Brokers.  Except
      for The Alta Group, LLC, whose fee will be paid by Seller out of the proceeds
      of
      the Contemplated Transactions, no Person is entitled to any finder’s fee,
      brokerage commission or similar payment by Seller in connection with or arising
      out of the Contemplated Transactions.

     

    (m)           No
      Misstatements or Omissions.  These representations and warranties,
      the information disclosed in the schedules and exhibits hereto and the
      certificates and other documents delivered by Seller pursuant to this Agreement,
      when considered together and in light of one another, do not contain any untrue
      statement of material fact with respect to the Assets or the Assumed Liabilities
      or omit to state a material fact necessary to make the statements contained
      herein not misleading.  There is no fact of which Seller is aware with
      respect to the Assets or the Assumed Liabilities or the Business that Seller
      has
      not disclosed in writing to Buyer, the existence of which would have a material
      adverse effect on the Assets, considered as a whole.

     

    (n)           Bulk
      Sales Compliance.  The sale of the Assets by Seller to Buyer
      pursuant to this Agreement will not violate any bulk transfer or any similar
      statutory provisions in effect in any applicable jurisdiction.

     

    7.           Representations and Warranties
      of Buyer.  Buyer represents and warrants to Seller as
      follows:

    


    (a)           Organization.  Each
      Buyer is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Delaware.  Each Buyer has full
      corporate power and authority to execute and deliver the Transaction Documents
      and to perform its obligations hereunder and thereunder and to consummate the
      transactions contemplated hereby and thereby.

     

    (b)           Authority.  Buyer
      has taken all action necessary to approve the Transaction Documents and the
      transactions contemplated thereby.  Buyer has all requisite corporate
      power and authority and has taken all action necessary in order to execute,
      deliver and perform its obligations under the Transaction
      Documents.  This Agreement has been duly authorized, executed and
      delivered and, prior to the Closing, the other Transaction Documents will have
      been, duly authorized and at Closing will be duly executed and delivered by
      Buyer and, assuming due execution and delivery by Seller, constitute or (with
      respect to the Transaction Documents other than this Agreement) will at Closing
      constitute, the legal, valid and binding obligations of Buyer, enforceable
      in
      accordance their terms, subject to applicable bankruptcy, reorganization,
      insolvency, moratorium or other similar laws affecting creditors’ rights
      generally.

     

    (c)           No
      Breach.  Except as set forth on Schedule 7(c), neither the
      execution and delivery of the Transaction Documents, nor compliance with the
      terms and provisions thereof, will conflict with or result in a breach of,
      or
      require any consent which has not been obtained as of the date hereof under
      the
      charter or by-laws of either Buyer, or any governmental requirement,
      or any agreement or instrument to which either Buyer is a party or by which
      it
      is bound, or constitute a default under any such agreement or
      instrument.

    
      
        
          
          

        

        
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    (d)           Approvals.  Other
      than as set forth on Schedule 7(d), no authorizations, approvals or
      consents of, and no filings or registrations with, any Governmental Authority
      or
      any other Person are necessary for the execution, delivery or performance by
      either Buyer of the Transaction Documents or for the validity or enforceability
      thereof.

     

    (e)           Previously
      Approved Agreements.  Buyer shall enter into agreements with
      lessees of the Backlog provided such lessees continue to meet all requirements
      set forth in the applicable approval letter and such agreement or lease was
      approved by Seller in accordance with the Policies and Procedures.

     

    (f)           Payment
      of Purchase Price.  Buyer has access to sufficient funds with
      which to pay the Purchase Price on the Closing Date.

     

    8.           Covenants
      of Seller Prior to Closing.

     

    (a)           Access
      and Information.  Between the date of this Agreement and the
      Closing Date, and upon reasonable advance notice received from Buyer, Seller
      shall (a) afford Buyer reasonable access, during regular business hours, to
      Seller’s personnel, properties, and Records for the purpose of preparing for the
      transfer, and understanding the Business, and  (b) afford Buyer access
      to the InfoLease and Shaw System Data Disks for the purpose of confirming data
      ascertained by Buyer during its due diligence; such rights of access to be
      exercised in a manner that does not unreasonably interfere with the operations
      of Seller and does not violate applicable labor and employment laws; and
      (c) otherwise cooperate and assist, to the extent reasonably requested by
      Buyer, with Buyer’s understanding of the Business and the Assets.

     

    (b)           Operation
      of the Business of Seller.  Between the date of this Agreement and
      the Closing, Seller shall, except as otherwise directed by Buyer in
      writing:

     

    (i)           conduct
      the Business only in the Ordinary Course of Business consistent with the
      Policies and Procedures;

     

    (ii)           use
      its Best Efforts to preserve intact the current business organization of the
      Business, keep available the services of the officers, employees and agents
      of
      the Business and maintain the relations and good will of the Business with
      suppliers, Customers, landlords, creditors, employees, agents and others having
      business relationships with it (it being understood, however, that the Seller
      has heretofore informed some employees of the availability of positions in
      other
      parts of Seller’s business, and to the extent that such opportunities were
      communicated prior to May 24, 2007);

     

    (iii)           confer
      with Buyer prior to implementing operational changes of a material nature with
      respect to the Business;

     

    (iv)           otherwise
      report periodically to Buyer concerning the status of the business, operations
      and finances of the Business;

    
      
        
          
          

        

        
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    (v)           keep
      in full force and effect, without amendment, all material rights relating to
      the
      Business;

     

    (vi)           comply
      in all material respects with all Legal Requirements and contractual obligations
      applicable to the operations of the Business;

     

    (vii)           continue
      in full force and effect all material insurance coverage pertaining to the
      Business under its existing policies or substantially equivalent
      policies;

     

    (viii)                 upon
      request from time to time, execute and deliver all documents, make all truthful
      oaths, testify in any Proceedings and do all other acts that may be reasonably
      necessary or desirable in the opinion of Buyer to consummate the Contemplated
      Transactions, all without further consideration;

     

    (ix)           maintain
      all books and Records of Seller relating to the Business in the Ordinary Course
      of Business; and

     

    (x)           notify
      Buyer prior to initiating any new Lease pertaining to equipment having a
      purchase price in excess of $500,000.

     

    (c)           Negative
      Covenant.  Except as otherwise expressly permitted herein, between
      the date of this Agreement and the Closing Date, Seller shall not without the
      prior written consent of Buyer, (a) take any affirmative action, or fail to
      take
      any reasonable action within its control, as a result of which any material
      adverse change, or any event or development which, individually or together
      with
      other such events, could reasonably be expected to result in a material adverse
      change in the Assets or the Business; (b) make any modification to any Lease
      except in the ordinary course of business, or in any Governmental Authorization;
      (c) initiate any new Lease that (i) does not have a credit-risk rating
      of five or better pursuant to the Policies and Procedures, or (ii) does not
      have
      an interest yield of seven percent or higher, calculated based on the cost
      to
      originate such Lease and acquire the Subject Equipment; or (d) enter into any
      compromise or settlement of any litigation, proceeding or governmental
      investigation relating to the Assets, the Business or the Assumed
      Liabilities.

     

    (d)           Required
      Approvals.  Seller has made, or as promptly as practicable after
      the date of this Agreement, Seller shall make all filings required by Legal
      Requirements to be made by it in order to consummate the Contemplated
      Transactions (including all filings under the HSR Act).  Seller and
      Buyer shall cooperate with respect to all filings that Buyer elects to make
      or,
      pursuant to Legal Requirements, shall be required to make in connection with
      the
      Contemplated Transactions, provided, however, that Seller shall not be required
      to dispose of or make any change to its business, expend any material funds
      or
      incur any other unreasonable burden in order to comply with this Section
      8(d).  Seller also shall cooperate with Buyer in obtaining all
      necessary consents (including taking all actions requested by Buyer to cause
      early termination of any applicable waiting period under the HSR
      Act).

     

    (e)           Notification.  Between
      the date of this Agreement and the Closing, Seller shall promptly notify Buyer
      in writing if it becomes aware of (a) any fact or condition that causes or
      constitutes a breach of any of Seller’s representations and warranties made as
      of the date of this Agreement or (b) the occurrence after the date of this
      Agreement of any fact or condition that
      would or be reasonably likely to (except as expressly contemplated by this
      Agreement) cause or constitute a breach of any such representation or warranty
      had that representation or warranty been made as of the time of the occurrence
      of, or Seller’s discovery of, such fact or condition.  During the same
      period, Seller also shall promptly notify Buyer of the occurrence of any breach
      of any covenant of Seller in this Section 8 or of the occurrence of any event
      that may make the satisfaction of the conditions in Section 10 impossible or
      unlikely.

    
      
        
          
          

        

        
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    (f)           No
      Negotiation.  Until such time as this Agreement shall be
      terminated pursuant to Section 12, the Seller shall not directly or indirectly
      solicit, initiate, encourage or entertain any inquiries or proposals from,
      discuss or negotiate with, provide any nonpublic information to or consider
      the
      merits of any inquiries or proposals from any Person (other than Buyer) relating
      to any sale, disposition, merger, business combination or other similar
      transaction with respect to the Business or the Assets.  Seller shall
      notify Buyer of any such inquiry or proposal within twenty-four (24) hours
      of
      receipt or awareness.  It is understood, however, that this Section
      8(f) shall not prohibit Seller or The Alta Group, LLC from communicating with
      entities that have executed confidentiality agreements with Seller prior to
      May
      23, 2007 that the Contemplated Transactions are in process and that they
      preclude negotiation with any other potential purchaser.

     

    (g)           Best
      Efforts.  Seller shall use its Best Efforts to cause the
      conditions in Sections 10 and 11(c) to be satisfied.

     

    9.           Covenants
      of Buyer Prior to Closing.

    


    (a)           Required
      Approvals.  Buyer has made or, as promptly as practicable after
      the date of this Agreement, shall make, or cause to be made, all filings
      required by Legal Requirements (including all filings under the HSR Act) to
      be
      made by it to consummate the Contemplated Transactions.  Buyer also
      shall cooperate with Seller with respect to all filings Seller shall be required
      by Legal Requirements to make, provided, however, that Buyer shall not be
      required to dispose of or make any change to its business, expend any material
      funds or incur any other unreasonable burden in order to comply with this
      Section 9(a).

     

    (b)           Best
      Efforts.  Buyer shall use its Best Efforts to cause the conditions
      in Sections 11 and 10(c) to be satisfied.

     

    10.           Conditions
      Precedent of Buyer’s Obligation to Close Transaction.  Buyer’s
      obligation to purchase the Assets and to take the other actions required to
      be
      taken by Buyer at the Closing is subject to the satisfaction, at or prior to
      the
      Closing, of each of the following conditions (any of which may be waived by
      Buyer, in whole or in part):

    


    (a)           Accuracy
      of Representations

     

    (i)           Each
      of Seller’s representations and warranties in this Agreement that does not
      contain an express materiality qualification shall have been accurate in all
      material respects as of the date of this Agreement, and shall be accurate in
      all
      material respects as of the time of the Closing as if then made (subject,
      however, to updates in the case of scheduled items).

    
      
        
          
          

        

        
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    (ii)           Each
      of Seller’s representations and warranties in this Agreement that contains an
      express materiality qualification, shall have been accurate in all respects
      as
      of the date of this Agreement, and shall be accurate in all respects as of
      the
      time of the Closing as if then made (subject, however, to updates in the case
      of
      scheduled items).

     

    (b)           Seller’s
      Performance.  All of the covenants and obligations that Seller is
      required to perform or to comply with pursuant to this Agreement at or prior
      to
      the Closing (considered collectively), and each of these covenants and
      obligations (considered individually), shall have been duly performed and
      complied with in all material respects.

     

    (c)           Consents.  Each
      of the consents identified on Schedule 10(c) attached hereto shall have
      been obtained and shall be in full force and effect.

     

    (d)           Additional
      Documents.  Seller shall have caused the documents and instruments
      required by Section 5(a) and the following documents to be delivered (or
      tendered subject only to Closing) to Buyer:

     

    (i)           The
      articles of association and all amendments thereto of Seller, duly certified
      as
      of a recent date by the United States Office of the Comptroller of the
      Currency;

     

    (ii)           A
      Contract File for each Lease (which may be held by Seller for Buyer pursuant
      to
      the Bailment Agreement);

     

    (iii)           Releases
      of all Liens on the Assets in favor of any Person other than Seller, and
      assignments of all Liens in favor of Seller to Buyer, including without
      limitation, all necessary amendments to Financing Statements and transfer of
      title in motor vehicles;

     

    (iv)           Certificates
      dated as of a date not earlier than the 30th business
      day prior
      to the Closing as to the good standing of Seller; and

     

    (v)           Such
      other documents as Buyer may reasonably request for the purpose of: (w)
      evidencing the accuracy of any of Seller’s representations and warranties;
      (x) evidencing the performance by Seller of, or the compliance by Seller
      with, any covenant or obligation required to be performed or complied with
      by
      Seller; (y) evidencing the satisfaction of any condition referred to in
      this Section 10; or (z) otherwise facilitating the consummation or performance
      of any of the Contemplated Transactions.

     

    (e)           No
      Proceedings.  Since the date of this Agreement, there shall not
      have been commenced or threatened against Seller or Buyer any Proceeding (a)
      involving any challenge to, or seeking damages or other relief in connection
      with, any of the Contemplated Transactions or (b) that may have the effect
      of preventing, delaying, making illegal, imposing limitations or conditions
      on
      or otherwise interfering with any of the Contemplated Transactions.

     

    11.           Conditions
      Precedent of Seller’s Obligation to Close Transaction.  Seller’s
      obligation to sell the Assets and to take the other actions required to be
      taken
      by Seller at the Closing is subject to the satisfaction, at or prior to the
      Closing, of each of the following conditions (any of which may be waived by
      Seller in whole or in part):

    
      
        
          
          

        

        
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      (a)           Accuracy
      of Representations.  All of Buyer’s representations and warranties
      in this Agreement (considered collectively), and each of these representations
      and warranties (considered individually), shall have been accurate in all
      material respects as of the date of this Agreement and shall be accurate in
      all
      material respects as of the time of the Closing as if then made.

     

    (b)           Buyer’s
      Performance.  All of the covenants and obligations that
      Buyer is required to perform or to comply with pursuant to this Agreement at
      or
      prior to the Closing (considered collectively), and each of these covenants
      and
      obligations (considered individually), shall have been performed and complied
      with in all material respects.

     

    (c)           Consents.  Each
      of the consents identified in Schedule 11(c) shall have been obtained and
      shall be in full force and effect.

     

    (d)           Additional
      Documents.  Buyer shall have caused to be delivered (or tendered
      subject only to Closing) to Seller such documents as Seller may reasonably
      request for the purpose of: (w) evidencing the accuracy of any of Buyer’s
      representations and warranties; (x) evidencing the performance by Buyer of,
      or the compliance by Buyer with, any covenant or obligation required to be
      performed or complied with by Buyer; (y) evidencing the satisfaction of any
      condition referred to in this Section 11; or (z) otherwise facilitating the
      consummation or performance of any of the Contemplated
      Transactions.

     

    (e)           No
      Proceedings.  Since the date of this Agreement, there shall not
      have been commenced or threatened against Seller or Buyer any Proceeding (i)
      involving any challenge to, or seeking damages or other relief in connection
      with, any of the Contemplated Transactions or (ii) that may have the effect
      of
      preventing, delaying, making illegal, imposing limitations or conditions on
      or
      otherwise interfering with any of the Contemplated Transactions.

     

    12.           Termination.

     

    (a)           Termination
      Events.  By notice given prior to or at the Closing, subject to
      Section 12(b), this Agreement may be terminated as follows:

     

    (i)           by
      Buyer if a material breach of any provision of this Agreement has been committed
      by Seller and such breach has not been waived by Buyer or, prior to notice
      of
      termination from Buyer, been cured by Seller;

     

    (ii)           by
      Seller if a material breach of any provision of this Agreement has been
      committed by Buyer and such breach has not been waived by Seller or, prior
      to
      notice of termination from Seller, been cured by Buyer;

     

    (iii)           by
      Buyer if any condition in Section 10 has not been satisfied as of the date
      specified for Closing in the first sentence of Section 4 or if satisfaction
      of
      such a condition by such date is or becomes impossible (other than through
      the
      failure of Buyer to comply with its obligations under this Agreement), and
      Buyer
      has not waived such condition on or before such date;

     

    (iv)           by
      Seller if any condition in Section 11 has not been satisfied as of the date
      specified for Closing in the first sentence of Section 4 or if satisfaction
      of
      such a condition
      by such date is or becomes impossible (other than through the failure of Seller
      to comply with its obligations under this Agreement), and Seller has not waived
      such condition on or before such date;

    
      
        
          
          

        

        
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    (v)           by
      mutual consent of Buyer and Seller;

     

    (vi)           by
      Buyer if the Closing has not occurred on or before July 31, 2007 (or August
      31,
      2007 in the event the applicable waiting period under the HSR Act has not
      expired or been terminated by July 24, 2007), or such later date as the parties
      may agree upon, unless the Buyer is in material breach of this Agreement;
      or

     

    (vii)           by
      Seller if the Closing has not occurred on or before July 31, 2007 (or August
      31,
      2007 in the event the applicable waiting period under the HSR Act has not
      expired or been terminated by July 24, 2007), or such later date as the parties
      may agree upon, unless the Seller is in material breach of this
      Agreement.

     

    (b)           Effect
      of Termination.  Each party’s right of termination under Section
      12(a) is in addition to any other rights it may have under this Agreement or
      otherwise, and the exercise of such right of termination will not be an election
      of remedies.  If this Agreement is terminated pursuant to Section
      12(a), all obligations of the parties under this Agreement will terminate,
      except that the obligations of the parties in this Section 12(b) and Section
      18
      (except for those in Section 18(k)) will survive; provided, however, that,
      if
      this Agreement is terminated because of a breach of this Agreement by the
      nonterminating party or because one or more of the conditions to the terminating
      party’s obligations under this Agreement is not satisfied as a result of the
      party’s failure to comply with its obligations under this Agreement, the
      terminating party’s right to pursue all legal remedies will survive such
      termination unimpaired.

     

    13.           Additional
      Covenants.

     

    (a)           Payment
      of All Taxes Resulting From Sale of Assets by Parties.  Each party
      hereto shall pay in a timely manner all Taxes resulting from or payable in
      connection with the sale of the Assets pursuant to this Agreement, to the extent
      that such Taxes are imposed on such party by Legal Requirements.

     

    (b)           Payment
      of Other Retained Liabilities.  If the failure to make any
      payments with respect to the Retained Liabilities will impair Buyer’s use or
      enjoyment of or title to the Assets or conduct of the Business, Buyer may,
      at
      any time after the Closing Date, elect to make all such payments directly (but
      shall have no obligation to do so) and Seller shall reimburse Buyer for such
      amounts.

     

    (c)           Reports
      and Returns.  Each party hereto shall timely prepare and file such
      reports and returns required by Legal Requirements relating to the Business,
      with respect to the period of time during which that party owned the
      Business.

     

    (d)           Assistance
      in Proceedings.  The parties will cooperate with each other and
      their respective counsel in the contest or defense of, and make available its
      personnel and provide any testimony and access to its books and Records in
      connection with, any Proceeding involving or relating to (a) any Contemplated
      Transaction or (b) any action, activity, circumstance,
      condition, conduct, event, fact, failure to act, incident, occurrence, plan,
      practice, situation, status or transaction involving the
      Business.

    
      
        
          
          

        

        
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    (e)           Noncompetition,
      Non-solicitation and Non-disparagement.

     

    (i)           Noncompetition.  For
      a period of five (5) years after the Closing Date, Seller shall not, other
      than
      through an entity with which Seller engages in a merger or acquisition
      transaction and that already includes such a business at the time of the merger
      or acquisition, anywhere in the United States, directly or indirectly invest
      in,
      own, manage, operate, finance, control, advise, render services to or guarantee
      the obligations of any Person engaged in or planning to become engaged in the
      third party origination business of equipment leases or financings of the size
      and for the equipment of the types for which Seller, as part of the Business,
      currently extends leases or financings (“Competing
      Business”).  Notwithstanding the foregoing, nothing herein shall
      prevent Seller from acquiring, being acquired by or merging with another
      business that includes equipment leasing as part of its larger
      business.

     

    (ii)           Nonsolicitation.  For
      a period of five (5) years after the Closing Date, Seller shall
      not:

     

    a.    solicit
      the
      equipment leasing or equipment financing business of any Person who is a
      third-party vendor or broker of such business;

     

    b.    cause,
      induce
      or attempt to cause or induce a third-party vendor or broker of equipment
      leasing business to cease doing business with Buyer, or in any way interfere
      with its relationship with Buyer;

     

    c.    cause,
      induce
      or attempt to cause or induce a third-party vendor or broker of equipment
      leasing business who has referred to Seller such business that is on the books
      of the Business on the Closing Date, or was on the books of the Business within
      the year preceding the Closing Date, to cease doing business with Buyer, or
      in
      any way interfere with its relationship with Buyer; or

     

    d.    solicit
      for
      employment any employee of Buyer, or any Person set forth on Schedule
      1(i), or in any way interfere with the relationship between Buyer and any of
      its employees, or any Person set forth on Schedule 1(i).

     

    (iii)           Nondisparagement.  After
      the Closing Date, Seller will not disparage the Business, Buyer, Buyer’s
      business or any of Buyer’s shareholders, directors, officers, employees or
      agents.  After the Closing Date, Buyer will not disparage Seller,
      Seller’s business or any of Seller’s shareholders, directors, officers,
      employees or agents.

     

    (iv)           Modification
      of Covenant.  If a final judgment of a court or tribunal of
      competent jurisdiction determines that any term or provision contained in
      Section 13(e) is invalid or unenforceable, then the parties agree that the
      court
      or tribunal will have the power to reduce the scope, duration or geographic
      area
      of the term or provision, to delete specific words or phrases or to replace
      any
      invalid or unenforceable term or provision with a term or provision that is
      valid and enforceable and that comes closest to expressing the intention of
      the
      invalid or unenforceable term or provision.  This Section 13(e)(iv)
      will be enforceable as so modified
      after the expiration of the time within which the judgment may be
      appealed.  This Section 13(e)(iv) is reasonable and necessary to
      protect and preserve Buyer’s legitimate business interests and the value of the
      Assets and to prevent any unfair advantage conferred on Seller.  The
      parties hereto acknowledge and agree that any remedy at law for any breach
      of
      the provisions of this Section 13(e)(iv) would be inadequate, and Seller hereby
      consents to the granting by any court of an injunction or other equitable
      relief, without the necessity of actual monetary loss being proved, in order
      that the breach or threatened breach of such provisions may be effectively
      restrained.

    
      
        
          
          

        

        
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    (f)           Customer
      and Other Business Relationships.  After the Closing, Seller will
      cooperate with Buyer in its efforts to continue and maintain for the benefit
      of
      Buyer those business relationships of Seller existing prior to the Closing
      and
      relating to the Business, including relationships with Customers, employees,
      licensors, suppliers and others, and Seller will satisfy the Retained
      Liabilities in a manner that is not detrimental to any of such
      relationships.  Seller will refer to Buyer all inquiries relating to
      the Leases.  Neither Seller nor any of its officers, employees, agents
      or shareholders shall take any action that would tend to diminish the value
      of
      the Assets after the Closing or that would interfere with the business of Buyer
      to be engaged in after the Closing.  Except for any third party
      equipment leasing or equipment financing origination business in the nature
      of
      the Business, nothing in this section shall require Seller to refer business
      to
      Buyer or preclude Seller from doing business with, or referring business to,
      other leasing companies.

     

    (g)           Retention
      and Access to Records.  After the Closing Date, Buyer shall retain
      for a period of not less than five (5) years, or such longer period as is
      consistent with Buyer’s record-retention policies and practices those Records of
      Seller delivered to Buyer.  Buyer also shall provide Seller reasonable
      access thereto, during normal business hours and on at least five days’ prior
      written notice, to enable them to prepare financial statements or tax returns
      or
      deal with tax audits.  After the Closing Date, Seller shall provide
      Buyer reasonable access to Records that are Excluded Assets and pertain to
      the
      Business, if any, during normal business hours and on at least five days’ prior
      written notice, for any reasonable business purpose specified by Buyer in such
      notice.

     

    (h)           Access
      to Premises.  Until the termination of the Interim Servicing
      Agreement, Seller shall permit Buyer to access the premises of Seller to the
      extent necessary for Buyer to exercise its rights and discharge its obligations
      under the Interim Servicing Agreement, subject to the limitations and
      restrictions stated in the Interim Servicing Agreement.

     

    (i)           Amendments
      of Financing Statements; Transfer of Motor Vehicle Title.  Seller
      shall cooperate reasonably and provide assistance to Buyer to amend any
      Financing Statements and transfer title in any motor vehicles that are the
      subject of a Lease.

     

    (j)           Transfer
      of Electronic Files.  Seller shall cooperate with Buyer in the
      export of any electronic records and data files pertaining to any Leases from
      the Seller’s systems to the Buyer’s systems.

    
      
        
          
          

        

        
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      (k)           Further
        Assurances.  Subject to the proviso in Sections 8(d) and 9(a), the
        parties shall cooperate reasonably with each other in connection with any
        steps
        required to be taken as part of their respective obligations under this
        Agreement, and shall (a) furnish upon request to each other such further
        information; (b) execute and deliver to each other such other documents;
        and (c)
        do such other acts and things, all as the other party may reasonably request
        for
        the purpose of carrying out the intent of this Agreement and the Contemplated
        Transactions.  If Seller receives any payments on, with respect to or
        arising out of the Leases, Seller shall forward such payments to Buyer promptly
        and no less frequently than weekly, either by endorsing and delivering the
        check
        or by depositing the check and delivering a bank check or wire transfer in
        an
        equivalent amount.   If Buyer or an Affiliate of Buyer determines
        that it is required to prepare audited financial statements with respect
        to the
        Business pursuant to Regulation S-X of the Securities and Exchange Commission,
        then Seller shall cooperate with Buyer and provide Buyer with such information
        as Buyer shall reasonably request to enable Buyer to prepare such financial
        statements.  The cost of preparing such financial statements shall be
        borne entirely by Buyer, and Buyer shall reimburse to Seller all out-of-pocket
        expenses and such internal costs as Seller reasonably allocates for its
        employees’ time and overhead incurred by Seller in providing such cooperation
        and information, but as to such internal costs only to the extent that they
        exceed $5,000 in the aggregate.

    

     

    (l)           Taxes
      with Respect to Leases.  Following the Closing, if Buyer receives
      any notice of unpaid property, sales or use taxes that were due prior to the
      Closing, but are alleged to be unpaid, Buyer shall promptly notify Seller,
      and
      Seller shall have the right and obligation of dealing with the taxing authority
      with respect to such allegations, and the obligation to pay such taxes
      (including any interest or penalties) if and to the extent that funds were
      collected from the lessee to cover such taxes.  If and to the extent
      such taxes are owing, but Seller did not collect funds from the lessee to cover
      such taxes, Buyer shall cooperate with Seller in collecting such taxes
      (including any interest or penalties) from the lessee or causing the lessee
      to
      pay such amounts directly to the taxing authority.  Notwithstanding
      the foregoing sentence, in the event the lessee does not pay such amounts to
      the
      taxing authority, Seller shall be liable for the payment of all such amounts
      owed to such taxing authority, and Seller shall thereupon be subrogated to
      the
      rights of Buyer to collect such amounts from the lessee.

     

    (m)           Notice
      to Third Parties.  As soon as practicable following the Closing,
      Buyer shall file notices in all applicable governmental jurisdictions in which
      financing statements or titles are of record with respect to the Leases or
      Subject Equipment, as to the change in ownership of such Assets.  It
      is understood however, that in some instances this is the date on which the
      next
      tax filings are required to be filed in such jurisdictions.

     

    (n)           Assignment
      of Additional Leases.  If any leases or loans are funded by Seller
      in the time period from the day after the Record Date until the Closing Date,
      and such leases or loans otherwise meet all of the requirements set forth in
      this Agreement for a Lease, then Buyer shall pay Seller 104.7643% of the Net
      Investment in such Lease, and immediately upon receipt of such payment, Seller
      shall assign such lease or loan to Buyer and such lease or loan shall become
      a
“Lease” for purposes of this Agreement as if it had been listed on Schedule
      1(a).

     

    (o)           Allocation
      of Purchase Price.  Within thirty (30) days from the Closing Date,
      Seller and Buyer shall agree in writing on the allocation of the Assets and
      Assumed Liabilities (the “Allocation”).  Buyer and Seller agree
      to file Internal Revenue Service Form 8594 in accordance with the agreed upon
      Allocation and that no position inconsistent with the Allocation shall be taken
      by any party hereto before any Governmental Authority.

    
      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

    

     

                  
      14.           Survival
      of Representations, Warranties, Covenants and Agreements.  The
      representations, warranties, covenants and agreements of Seller and Buyer
      contained in this Agreement will survive (a) until the fifth anniversary of
      the
      Closing Date with respect to the representations and warranties contained in
      Sections 6 and 7, except for any representations and warranties related to
      Taxes, which shall survive until the expiration of the relevant statute of
      limitations; (b) until the fifth anniversary of the Closing Date with
      respect to Section 13(e); and (c) in the case of all other representations
      and
      warranties and any covenant or agreement to be performed in whole or in part
      after the date hereof until the fourth anniversary hereof, except that any
      representation, warranty, covenant or agreement that would otherwise terminate
      in accordance with clause (c) will continue to survive if a Claim Notice shall
      have been timely given on or prior to such termination date, until the related
      claim for indemnification has been satisfied or otherwise resolved.

     

    15.           Indemnification.  Seller
      shall indemnify, defend and hold harmless Buyer and its officers, directors,
      employees, agents and Affiliates, and Buyer shall indemnify, defend and hold
      harmless Seller and its officers, directors, employees, agents and Affiliates,
      from any Loss or Losses arising out of or by reason of any breach of any of
      Seller’s, on the one hand, and Buyer’s, on the other hand, covenants,
      representations and warranties set forth herein.  In addition, Seller
      shall indemnify, defend and hold harmless Buyer and its officers, directors,
      employees, agents and Affiliates from any Losses arising out of the Retained
      Liabilities or the Excluded Assets.  Buyer shall indemnify, defend and
      hold harmless Seller and its officers, directors, employees, agents and
      Affiliates from any Losses arising out of the Assumed Liabilities or Assets,
      arising out of events occurring after the date hereof.

     

    16.           Method
      of Asserting Claims.  All claims for indemnification by any
      indemnified party hereunder will be asserted and resolved as
      follows:

     

    (a)             In
      the event of any Third Party Claim, the indemnified party shall deliver written
      notification thereof to the indemnifying party with reasonable promptness,
      enclosing a copy of all papers served, if any, and specifying the nature of
      the
      Third Party Claim, together with the amount or, if not then reasonably
      ascertainable, the estimated amount, determined in good faith, of the Third
      Party Claim (a “Claim Notice”).  The indemnifying party will
      notify the indemnified party as soon as practicable, but in any case within
      30
      days of receipt of a Claim Notice (the “Dispute Period”), whether the
      indemnifying party disputes its liability to the indemnified party and whether
      the indemnifying party desires, at its sole cost and expense, to defend the
      indemnified party against such Third Party Claim.

     

    (b)             If
      the indemnifying party notifies the indemnified party within the Dispute Period
      that the indemnifying party desires to defend the indemnified party with respect
      to the Third Party Claim, then the indemnifying party will have the right to
      defend, with counsel reasonably satisfactory to the indemnified party, at the
      sole cost and expense of the indemnifying party, such Third Party Claim by
      all
      appropriate proceedings, which proceedings will be vigorously and diligently
      prosecuted by the indemnifying party to a final conclusion or will be settled
      at
      the discretion of the indemnifying party (but only with the consent of the
      indemnified party in the case of any settlement that provides for any relief
      other than the payment of monetary damages).


    
      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

    

    


    (c)             If
      the indemnifying party fails to notify the indemnified party within the Dispute
      Period that the indemnifying party desires to defend the Third Party Claim,
      or
      if the indemnifying party gives such notice but fails to prosecute vigorously
      and diligently or settle the Third Party Claim, or if the indemnifying party
      fails to give any notice whatsoever within the Dispute Period, then the
      indemnified party will have the right to defend, at the sole cost and expense
      of
      the indemnifying party, the Third Party Claim by all appropriate proceedings,
      which proceedings will be prosecuted by the indemnified party in a reasonable
      manner and in good faith or will be settled at the discretion of the indemnified
      party.

     

    (d)             If
      the indemnifying party notifies the indemnified party that it does not dispute
      its liability to the indemnified party with respect to the Third Party Claim,
      the Loss in the amount specified in the Claim Notice will be conclusively deemed
      a liability of the indemnifying party and the indemnifying party shall pay
      the
      amount of such Loss to the indemnified party on demand.  If the
      indemnifying party has timely disputed its liability with respect to such claim,
      the indemnifying party and the indemnified party will proceed in good faith
      to
      negotiate a resolution of such dispute, and if not resolved through negotiations
      within a reasonable period of time, such dispute shall be resolved by litigation
      in a court of competent jurisdiction.

     

    (e)             In
      the event any indemnified party has a claim against any indemnifying party
      that
      does not involve a Third Party Claim, the indemnified party shall deliver a
      Claim Notice with reasonable promptness to the indemnifying party.  If
      the indemnifying party notifies the indemnified party that it does not dispute
      the claim described in such Claim Notice or fails to notify the indemnified
      party within the Dispute Period whether the indemnifying party disputes the
      claim, the Loss in the amount specified in the Claim Notice will be conclusively
      deemed a liability of the indemnifying party and the indemnifying party shall
      pay the amount of such Loss to the indemnified party on demand.  If
      the indemnifying party has timely disputed its liability with respect to such
      claim, the indemnifying party and the indemnified party will proceed in good
      faith to negotiate a resolution of such dispute, and if not resolved through
      negotiations within a reasonable period of time, such dispute shall be resolved
      by litigation in a court of competent jurisdiction.

     

    17.           Notices.                      All
      notices and other communications hereunder shall be in writing, hand delivered
      or sent by express mail service or via facsimile, to the addresses or facsimile
      numbers set forth below (or at such other address as a party may hereafter
      designate for itself by notice to the other party as required
      hereby):

     

    If
      to
      Buyer:

     

    LEAF
      Financial Corporation

    1818
      Market Street

    Philadelphia,
      Pennsylvania 19103

    Attn:  Crit
      DeMent

    Fax
      No.:
      (215) 640-6363

    and  Attn:  Miles
      Herman

    Fax
      No.:
      (215) 640-6330


    
      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

    


    with
      a
      copy to:

     

    Ledgewood

    1900
      Market Street

    Philadelphia,
      Pennsylvania  19103

    Attn:  J.
      Baur Whittlesey, Esquire

    Fax
      No.:
      (215) 735-2513

    


    If
      to
      Seller:

     

    Pacific
      Capital Bank, N.A.

    1
      South
      Los Carneros Road

    Goleta,
      California 93117

    Attn:  Frederick
      W. Clough, General Counsel

    Fax
      No.:  (805) 882-3856

     

    with
      a
      copy to:

     

    Manatt,
      Phelps & Phillips, LLP

    695
      Town
      Center Drive

    Costa
      Mesa, California 92626

    Attn:  Ellen
      R. Marshall, Esquire

    Fax
      No.:  (714) 371-2550

     

    


    18.           Miscellaneous.

     

    (a)           Governing
      Law.  This Agreement shall be governed by the law of the State of
      California, and shall bind and inure to the benefit of the parties hereto and
      their respective heirs, executors, administrators, successors, assigns and
      personal representatives.

     

    (b)           Entire
      Agreement; Amendments.  This Agreement, and the Transaction
      Agreements set forth all of the promises, covenants, agreements, conditions
      and
      undertakings between the parties hereto with respect to the subject matter
      hereof, and supersede all prior and contemporaneous agreements and
      understandings, inducements or conditions, express or implied, oral or written,
      except as contained herein.  This Agreement may not be changed orally
      but only by an agreement in writing, duly executed by or on behalf of the party
      or parties against whom enforcement of any waiver, change, modification, consent
      or discharge is sought.

     

    (c)           Binding
      Effect.  All of the terms and provisions of this Agreement shall
      be binding upon, inure to the benefit of, and be enforceable by the parties
      and
      their legal representatives, heirs, successors and permitted assigns, whether
      so
      expressed or not.

     

    (d)           Severability.  If
      any provision of this Agreement or any other agreement entered into pursuant
      hereto is contrary to, prohibited by or deemed invalid under applicable law
      or
      regulation, such provision shall be inapplicable and deemed omitted to the
      extent so contrary, prohibited or invalid, but the remainder hereof shall not
      be
      invalidated thereby and shall be given full force and effect so far as
      possible.  If any provision of this Agreement may be construed in
two
      or more ways, one of which would render the provision invalid or otherwise
      voidable or unenforceable another of which would render the provision valid
      and
      enforceable, such provision shall have the meaning which renders it valid and
      enforceable.


    
      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

    

     

    (e)           Captions.  The
      captions used in this Agreement are for convenience of reference only and shall
      not be considered in the interpretation of the provisions hereof.

     

    (f)           No
      Construction Against Draftsmen.  The parties acknowledge that this
      is a negotiated agreement, and that in no event shall the terms hereof be
      construed against either party on the basis that such party, or its counsel,
      drafted this Agreement.

     

    (g)           Expenses.  Except
      as otherwise provided in this Agreement, each party hereto shall pay the
      expenses incurred by or on behalf of such party in connection with the
      transactions contemplated by this Agreement, including but not limited to,
      expenses in connection with the preparation, authorization, execution and
      performance of this Agreement and all fees and expenses of such party’s brokers,
      finders, agents, representatives, counsel and
      accountants.  Notwithstanding the foregoing, Buyer and Seller will
      each pay one-half of the HSR Act filing fee.

     

    (h)           Knowledge.  Certain
      of the representations and warranties in this Agreement are made “to the
      knowledge” of Seller.  Such phrase shall mean either (i) the actual
      knowledge of any individual set forth on Schedule 18(h); or (ii) any
      knowledge which such persons should have known had they acted in the ordinary
      course of business.

     

    (i)           Assignment.  Neither
      this Agreement nor any right, remedy, obligation or liability arising hereunder
      may be assigned by any party without the consent of the other parties; provided,
      however, that Buyer may (a) assign any or all of its rights and interests
      hereunder to one or more of its Affiliates and (b) designate one or more of
      its
      Affiliates to perform its obligations hereunder (in any or all of which cases
      Buyer nonetheless will remain responsible for the performance of all of its
      obligations hereunder), and (c) make a collateral assignment of its rights
      hereunder to its lender(s).  In the event of an assignment or
      designation pursuant to clauses (a) or (b) of the prior sentence prior to the
      Closing Date, any documents to be delivered by Seller or Buyer pursuant hereto
      shall be appropriately modified to give effect to such assignment or
      designation.

     

    (j)           Waiver
      of Jury Trial.  THE PARTIES HERETO WAIVE EACH OF THEIR RESPECTIVE
      RIGHTS TO A TRIAL BY JURY FOR ANY CAUSE OF ACTION ARISING UNDER OR RELATED
      TO
      THIS AGREEMENT TO THE EXTENT THAT SUCH A WAIVER IS PERMITTED BY
      LAW.

     

    (k)           Counterparts.  This
      Agreement may be executed simultaneously in any number of counterparts, each
      of
      which shall be deemed an original, but all of which together shall constitute
      one and the same instrument.  Confirmation of execution by electronic
      transmission of a facsimile signature page shall be binding upon any party
      so
      confirming.

     

    


    
      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

    

    


    IN
      WITNESS WHEREOF, intending to be
      legally bound hereby, the parties have executed and delivered this Asset
      Purchase Agreement as of the date first above written.

    
 

    


    
      	 	
              SELLER:

              PACIFIC
                CAPITAL BANK, N.A.

               

              
                

              

              By:

              Its:

            
	 	
               

              BUYER:

              LEAF
                FINANCIAL CORPORATION

              
                 

                
                  

                

              

              By:

              Its:

               

            
	 	 
              
              LEAF
                FUNDING, INC.

              
                 

                
                  

                

              

              By:

              Its:

            
	 	 
              
              LEAF
                COMMERCIAL FINANCE CO., LLC

              
                 

                
                  

                

              

              By:

              Its:

            


    

     

    


    


    
      
        
          
          

        

        
          23

          
            

          

        

        
          
          

        

      

    

    
       

      Appendix
        A

      


      


       

      DEFINITIONS
        AND RULES OF CONSTRUCTION

       

      I.           General.

       

      These
        definitional provisions are intended for use in connection with the Transaction
        Documents (as defined herein) and are attached to and made a part of the
        Agreement (as defined herein).

       

      II.           Defined
        Terms.

       

      Unless
        the context requires a different meaning, capitalized terms are used in this
        Appendix A and in each of the other Transaction Documents (as defined herein)
        as
        follows:

       

      “Affiliate”
        means, with respect to any specified Person, another Person that directly,
        or
        indirectly through one or more intermediaries, controls or is controlled
        by or
        is under common control with the Person specified.  For purposes of
        this definition, “control” means the power to direct the management and policies
        of a Person, directly or indirectly, whether through ownership of voting
        securities, by contract or otherwise; and “controlled” and “controlling” have
        meanings correlative to the foregoing.

       

      “Agreement”
        means the Asset Purchase Agreement, dated as of June 20, 2007, between Buyer
        and
        Seller, as amended, supplemented or otherwise modified from time to
        time.

       

      “Assets”
        shall have the meaning set forth in Section 1 of the Agreement.

       

      “Assumed
        Liabilities” means the obligations of lessor (or lender, as applicable)
        pertaining to the Performing Leases, including without limitation all security
        deposits and lessee deposits associated with the Leases appearing on the
        Closing
        Date Report, the obligation to pay property taxes (except as set forth in
        Section 13(l) of the Agreement) and to refund any overpayments of taxes,
        the
        obligation to fund the Backlog and the obligation to fund unfunded disbursements
        on Leases.

       

      “Backlog”
        shall have the meaning set forth in Section 1(d) of the Agreement.

       

      “Bailment
        Agreement” shall have the meaning set forth in Section 5(a)(iv) of the
        Agreement.

       

      “Bankruptcy
        Code” means The Bankruptcy Reform Act of 1978, as amended from time to time,
        and as codified as 11 U.S.C. Section 101 et seq.

       

      “Best
        Efforts” means the efforts that a prudent Person desirous of achieving a
        result would use in similar circumstances to achieve that result as
        expeditiously as possible, provided, however, that a Person required to use
        Best
        Efforts under the Agreement will not be thereby
        required to take actions that would result in a material adverse change in
        the
        benefits to such Person of the Agreement and the Contemplated Transactions
        or to
        dispose of or make any change to its business, expend any material funds
        or
        incur any other material burden.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “Bill
        of Sale” means a bill of sale for all of the Assets in the form of
Exhibit B hereto.

       

      “Business”
        means Seller’s program of equipment leasing and financing in which transactions
        are originated through brokers and other third-parties that is conducted
        under
        the trade name “Pacific Capital Bank” or the predecessor trade name “Santa
        Barbara Bank & Trust.”

       

      “Business
        Day” means any day other than a Saturday, Sunday or other day on which
        commercial banks in the State of California are authorized or required to
        close.

       

      “Charged-Off
        Leases” means those Leases that have been charged-off on Seller’s Records
        prior to the Record Date in accordance with the Policies and
        Procedures.

       

      “Claim
        Notice” shall have the meaning set forth in Section 16(a) of the
        Agreement.

       

      “Closing”
        means the purchase and sale provided for in the Agreement.

       

      “Closing
        Date” shall have the meaning set forth in Section 4 of the
        Agreement.

       

      “Closing
        Date Report” means the net investment trial balance report (which schedule
        shall be provided in the form of a read-only computer disc) prepared in
        accordance with Seller’s reporting systems (or other financial report mutually
        agreed upon by Seller and Buyer) containing information as of the Record
        Date.  The information on the Closing Date Report shall include
        information regarding each Lease for each category that is provided on Schedule
        1(a) of the Agreement.

       

      “Consent”
        means any approval, consent, ratification, waiver or other
        authorization.

       

      “Contemplated
        Transactions” means all of the transactions contemplated by the Agreement
        and the other Transaction Documents.

       

      “Contract
        File” means a file containing each of the following:

       

      I.

       

      (a)           the
        sole original signed Lease (which may be in the form of an equipment finance
        agreement) and, if applicable, Lease schedule;

       

      (b)           an
        original or copy of a delivery and acceptance for leases (which may be part
        of
        the Contract) for Leases with an original cost greater than
        $50,000;

       

      (c)           original
        or copy of an invoice relating to the Subject Equipment;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (d)           evidence
        of insurance for those Leases that are secured by (i) vehicles,
        (ii) Subject Equipment with an original cost greater than $100,000 or (iii)
        logging equipment;

       

      (e)           copies
        of all UCC financing statements, as filed (together with evidence of filing
        with
        the appropriate Governmental Authority) for the Subject Equipment with an
        original cost greater than $25,000 for finance leases and loans and in excess
        of
        $50,000 on all fair market value leases, as determined by the information
        found
        in the Contract File, or if the equipment is titled, an original title is
        present that has the lessee as registered owner and Seller listed as lienholder;
        and

       

      (f)           in
        the case of a third party origination Lease, proof of issuance of payment
        by the
        third party originator for the Subject Equipment.

       

      II.           In
        addition, with respect to any Lease, each of the following may be present
        in the
        Contract File, provided, however, that the absence of any item
        listed in (a) through (e) below shall not be reported as an exception on
        any
        Contract File schedule:

       

      (a)           an
        original or copy of a personal, corporate or other guaranty (which may be
        part
        of the Lease) as required in the original credit approval;

       

      (b)           an
        original or copy of a corporate resolution and secretary’s certificate, as
        appropriate for the transaction;

       

      (c)           an
        original or copy of a bill of sale, in the case of a sale lease back
        transaction;

       

      (d)           copies
        of photo identification; and

       

      (e)           an
        original or copy of a landlord or mortgagee waiver.

       

      III.           Provided,
        with respect to any Lease identified as a loan transaction, the term “Contract
        File”, unless the document quality checklist otherwise indicates (by an asterisk
        or other mark) that additional items shall be required, means the
        following:

       

      (a)           an
        original or certified copy of a loan contract or master loan
        contract;

       

      (b)           an
        original (if not part of the loan contract) of a term note;

       

      (c)           an
        original or certified copy of a security agreement;

       

      (d)           an
        original or copy of a sale agreement between seller and buyer, if there is
        such
        an agreement with respect to the Lease;

       

      (e)           original
        or copy of an invoice relating to the Subject Equipment;

       

      (f)           evidence
        of insurance for contracts with an original cost of greater than
        $100,000;

       

      (g)           copies
        of UCC filings for loans with an original principal balance greater than
        $25,000;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (h)           original
        or copies of titles for all titled equipment with the user of the titled
        equipment listed as owner and Seller listed as the secured party;
        and

       

      (i)           in
        the case of a third party origination contract, proof of issuance of payment
        by
        the third party originator for the Subject Equipment.

       

      IV.           In
        addition, with respect to any loan, the file may contain each of the following,
        which may be noted on the document quality checklist, provided,
however, that the absence of any item listed in (a) through (m)
        below
        shall not be reported as an exception on any Contract File
        schedule:

       

      (a)           an
        original or faxed copy of a personal, corporate or other guaranty (which
        may be
        part of the Lease) as required in the original credit approval;

       

      (b)           an
        original or faxed copy of a corporate resolution and secretary certificate
        as
        appropriate for the transaction;

       

      (c)           an
        original or faxed copy of a bill of sale;

       

      (d)           an
        original or faxed copy of an escrow agreement;

       

      (e)           copies
        of photo identification;

       

      (f)           copies
        of lien searches and applicable releases;

       

      (g)           an
        original or copy of a landlord or mortgagee waiver;

       

      (h)           a
        copy of an office lease or sublease;

       

      (i)           evidence
        of insurance coverage with respect to (a) liability insurance and
        (b) malpractice insurance;

       

      (j)           copies
        of licenses;

       

      (k)           a
        copy of wire instructions for funding proceeds of the loan;

       

      (l)           an
        original or certified copy of the assignment of office lease; and

       

      (m)           a
        copy of the site inspection report.

       

      “Customer”
        means any lessee, obligor, third party originator, client, customer, vendor
        or
        supplier, as applicable, in connection with the Assets.

       

      “Dispute
        Period” shall have the meaning set forth in Section 16(a) of the
        Agreement.

       

      “Dollar”
        and the symbol “$” each means lawful money of the United
        States.

       

      “Equipment”
        means “equipment” as such term is defined in the UCC.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Excluded
        Assets” shall have the meaning set forth in Section 1 of the
        Agreement.

       

      “Final
        Contractual Payment” means a final payment which is a firm, mandatory
        payment made by the obligor under such Lease, and such payment is not the
        Residual Value.

       

      “Financing
        Statements” means the financing statements covering all property subject to
        the Leases necessary to duly perfect a first lien security interest
        therein.

       

      “Governing
        Documents” means the certificate of incorporation or articles of association
        and bylaws.

       

      “Governmental
        Authority” means any nation or government, any state, city, town,
        municipality, county, local or other political subdivision thereof and any
        department, commission, board, bureau, instrumentality, agency or other entity
        exercising executive, legislative, judicial, taxing, regulatory or
        administrative powers or functions of or pertaining to government.

       

      “Governmental
        Authorization” means any permit, license, authorization, plan, directive,
        consent order or consent decree of or from any Governmental
        Authority.

       

      “HSR
        Act” means the Hart-Scott-Rodino Antitrust Improvements Act of
        1976.

       

      “Insolvency
        Event” means, as to any Person:

       

      (a)           (i) a
        court having jurisdiction in the premises shall enter a decree or order for
        relief in respect of such Person in an involuntary case under the Bankruptcy
        Code or any applicable bankruptcy, insolvency or other similar law now or
        hereafter in effect, which decree or order is not stayed, or any other similar
        relief shall be granted under any applicable federal or state law, (ii) an
        involuntary case is commenced against such Person under any applicable
        bankruptcy, insolvency or other similar law now or hereafter in effect which
        remains undismissed, undischarged or unbonded for a period of forty-five
        (45) days or (iii) such Person shall have a decree or an order for
        relief entered with respect to it or commence a voluntary case under the
        Bankruptcy Code or any applicable bankruptcy, insolvency or other similar
        law
        now or hereafter in effect; or

       

      (b)           such
        Person shall consent to the appointment of a conservator or receiver or
        liquidator in any insolvency, readjustment of debt, marshaling of assets
        and
        liabilities or similar proceedings of or relating to all or substantially
        all of
        its property, or a decree or order of a court or agency or supervisory authority
        having jurisdiction in the premises for the appointment of a conservator
        or
        receiver or liquidator in any insolvency, readjustment of debt, marshaling
        of
        assets and liabilities or similar proceedings, or for the winding-up or
        liquidation of its affairs, shall have been entered against such Person;
        or such
        Person shall
        admit in writing its inability to pay its debts generally as they become
        due,
        file a petition to take advantage of any applicable insolvency or reorganization
        statute, make a general assignment for the benefit of its creditors or
        voluntarily suspend payment of its obligations.

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Interim
        Servicing Agreement” means a servicing agreement in the form annexed to the
        Agreement as Exhibit C, pursuant to which, for a period not in excess of
        90 days, Seller will service the Leases.

       

      “Lease”
        shall have the meaning set forth in Section 1(a) of the Agreement.

       

      “Lease
        Receivable” means, with respect to any Lease, (i) all “accounts” (as such
        term is defined in the UCC, together with all proceeds thereon) created by
        or
        that otherwise arise under such Lease and (ii) all Related Property with
        respect
        to accounts.

       

      “Legal
        Requirements” means, with respect to any Person the certificate of
        incorporation or articles of association and by-laws or other organizational
        or
        governing documents of such Person and any law, treaty, rule or regulation,
        or
        determination of any arbitrator or Governmental Authority, in each case
        applicable to or binding upon such Person or any of its property or to which
        such Person or any of its property is subject, whether federal, state, local,
        municipal, foreign, international, multinational or other constitution, law,
        ordinance, principle of common law, code, regulation, statute or
        treaty.

       

      “Lien”
        means any mortgage, deed of trust, pledge, lien (statutory or otherwise),
        security interest, lease, easement, title defect, restriction, levy, execution,
        seizure, attachment, charge or other encumbrance or security or preferential
        arrangement of any nature, including, without limitation, any conditional
        sale
        or title retention arrangement, any capitalized lease and any assignment,
        deposit arrangement or financing lease intended as, or having the effect
        of,
        security.

       

      “Loss”
        or “Losses” shall mean a claim, action, cause of action, liability,
        obligation or expense, including reasonable attorney fees and
        expenses.

       

      “Net
        Investment” with respect to a Lease as of any date shall mean the
        Unamortized Cost of such Lease as recorded in the accounting records of Seller
        and listed on Seller’s report entitled “ls-net-invest” for that
        date.

       

      “Ordinary
        Course of Business” means action that (i) is generally consistent in nature,
        scope and magnitude with the past practices of such Person and is taken in
        the
        ordinary course of the normal, day-to-day operations of such Person;
        (ii) does not require authorization by the board of directors or
        shareholders of such Person (or by any Person or group of Persons exercising
        similar authority), other than the standing authority that has been delegated
        to
        the officers or employees for the conduct of the business, and does not require
        any other separate or special authorization of any nature; and (iii) is
        similar in nature, scope and magnitude to actions customarily taken, without
        any
        separate or special authorization, in the ordinary course of the normal,
        day-to-day operations.

       

      “Past
        Due Lease” means any lease as to which any required payment thereunder is
        more than sixty (60) days past due, as of the Record Date.

       

      “Performing
        Lease” means a Lease that is not (i) a Past Due Lease, (ii) a Suspended
        Lease, or (iii) a Lease that is subject to any pending repossession action
        or
        that is subject to any pending repossession action or as to which Seller
        has
        received a notice of an event that is, or with notice and/or lapse of time
        is
        likely to constitute, a material default or of any claim by a lessee or
        guarantor of a right of offset or counterclaim (as referenced in Section
        6(h)(x)
        and identified on Schedule 6(h)(x)).

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Person”
        means any natural person, corporation, division, business trust, joint venture,
        association, limited liability company, partnership, joint stock company,
        association, estate, trust, unincorporated organization or Governmental
        Authority.

       

      “Policies
        and Procedures” means those policies and procedures of Seller with respect
        to the origination, collection and administration of Leases and as set forth
        in
        Seller’s Policies and Procedures Manual on May 4, 2007.

       

      “Proceeding”
        means any suit in equity, action or law or other judicial or administrative
        proceeding.

       

      “Purchase
        Price”  has the meaning set forth in Section 3(a) of the
        Agreement.

       

      “Record
        Date” means the close of business on the date, four Business Days prior to
        the Closing Date, unless such other date is mutually agreed upon by Buyer
        and
        Seller.

       

      “Records”
        means the Leases and all other documents, books, records and other writings
        and
        information (including, without limitation, computer programs, tapes, disks,
        punch cards, data processing software and related property and rights, but
        excluding any credit profiles and rights in any personally identifiable data
        of
        any lessee) maintained with respect to Leases and the related
        lessees.

       

      “Related
        Property” means, with respect to any Lease:

       

      (a)           all
        “instruments”, “chattel paper”, “accounts”, “general intangibles”, “commercial
        tort claims”, “investment property” and “letter of credit rights” (as each such
        term is defined in the UCC) evidencing or arising under such Lease;

       

      (b)           all
        security interests or liens and property subject thereto from time to time,
        if
        any, purporting to secure payment of such Lease;

       

      (c)           all
        guarantees, indemnities, warranties, insurance (and proceeds thereof) or
        other
        agreements or arrangements of any kind from time to time supporting or securing
        payment of such Lease;

       

      (d)           all
        Records related to such Lease;

       

      (e)           all
        service contracts and other contracts and agreements associated with such
        Lease;
        and

       

      (f)           all
        proceeds of any of the foregoing.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Residual
        Value” means, with respect to any Lease, the value of the Subject Equipment
        to the lessor thereunder at the end of such Lease, as estimated by Seller
        at the
        origination of such Lease in accordance with the Policies and
        Procedures.

       

      “Retained
        Liabilities” means any other liabilities of Seller whatsoever not included
        in the Assumed Liabilities.

       

      “Subject
        Equipment” means, with respect to any Lease, the Equipment subject to such
        Lease.

       

      “Subsidiary”
        means, with respect to any Person (herein referred to as the “parent”), any
        corporation, partnership, association or other business entity (a) of which
        securities or other ownership interests representing more than 50% of the
        equity
        or more than 50% of the ordinary voting power or more than 50% of the general
        partnership interests are, at the time any determination is being made, owned,
        controlled or held by the parent or (b) that is, at the time any
        determination is being made, otherwise controlled, by the parent or one or
        more
        subsidiaries of the parent or by the parent and one or more subsidiaries
        of the
        parent.

       

      “Suspended
        Lease” means a Lease which is classified as “income non-accrual” on the
        records of Seller as of the Record Date, applying the Seller’s Policies and
        Procedures.

       

      “Tax”
        means any present or future tax, levy, impost, duty, assessment, charge,
        fee,
        deduction or withholding of any nature and whatever called, by whomsoever,
        on
        whomsoever and wherever imposed, levied, collected, withheld or assessed;
        provided, “Tax on the overall net income” of a Person shall be construed
        as a reference to a tax imposed by the jurisdiction in which that Person
        is
        organized or in which that Person’s applicable principal office (and/or, in the
        case of a Lender, its lending office) is located or in which that Person
        (and/or, in the case of a Lender, its lending office) is deemed to be doing
        business on all or part of the net income, profits or gains (whether worldwide,
        or only insofar as such income, profits or gains are considered to arise
        in or
        to relate to a particular jurisdiction, or otherwise) of that Person (and/or,
        in
        the case of a Lender, its applicable lending office).

       

      “Third
        Party Claim” means any claim or demand in respect of which an indemnifying
        party might seek indemnity is asserted against or sought to be collected
        from
        such indemnified party by a third party.

       

      “Transaction
        Documents” means, collectively, the Agreement, including this Appendix A,
        the Bill of Sale and the Interim Servicing Agreement.

       

      “UCC”
        means the Uniform Commercial Code as in effect from time to time in the relevant
        jurisdiction.

       

      “Unamortized
        Cost” means an amount equal to the contract balance remaining on a Lease
        less the unearned income on such Lease.

       

      “United
        States” means the United States of America, its fifty States and the
        District of Columbia.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “written”
        or “in writing” means any form of written communication, including,
        without limitation, by means of telex, telecopier device, telegraph, electronic
        mail or messaging systems, the Internet or cable.

       

      III.           Rules
        of Construction.

       

      Except
        as
        otherwise expressly provided herein or in any of the Transaction Documents
        or
        unless the context otherwise clearly requires:

       

      (a)           defined
        terms include, as appropriate, all genders and the plural as well as the
        singular;

       

      (b)           references
        to designated articles, Sections and other subdivisions of a Transaction
        Document refer to the designated article, Section, or other subdivision of
        such
        Transaction Document as a whole and to all subdivisions of the designated
        article, Section or other subdivision;

       

      (c)           references
        to schedules in a particular Transaction Document refer to the schedules
        attached to or delivered together with such Transaction Document;

       

      (d)           the
        words “herein,” “hereof,” “hereto,” “hereunder” and other words of similar
        import refer to the Transaction Document in which such reference is made
        as a
        whole and not to any particular article, Section or other subdivision of
        such
        Transaction Document;

       

      (e)           any
        term that relates to a document, statute, rule or regulation includes any
        amendments, modifications, supplements or any other changes that may have
        occurred since the document, statute, rule or regulation came into being,
        including changes that occur after the date of the Transaction Document in
        which
        such reference is made;

       

      (f)           the
        term “including” and all its variations mean “including but not limited to.”
Except when used in conjunction with the word “either,” the word “or” is always
        used inclusively (for example, the phrase “A or B” means “A or B or both,” not
“either A or B but not both”); and

       

      (g)           in
        the computation of a period of time from a specified date to a later specified
        date or an open-ended period, the word “from” means “from and including” and the
        words “to” or “until” mean “to but excluding, and in setting deadlines or other
        periods, “by” means “on or before,” and “after” means “from and
        after”.