exv10w2






Exhibit 10.2




LOAN AND SECURITY AGREEMENT




dated as of May 30, 2008




among




LEAF III B SPE, LLC,




The Lenders Party Hereto,




U.S. BANK NATIONAL ASSOCIATION,

as Paying Agent




and




KEY EQUIPMENT FINANCE INC.,

as Facility Agent and Collateral Agent





 









 








TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS AND CONSTRUCTION
	 	 	1	 
	 
	 	 	 	 
	SECTION 1.01. Definitions
	 	 	1	 
	SECTION 1.02. Construction
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II ADVANCES
	 	 	2	 
	 
	 	 	 	 
	SECTION 2.01. Commitments
	 	 	2	 
	SECTION 2.02. Advances
	 	 	2	 
	SECTION 2.03. Pro Rata Shares; Availability of Funds
	 	 	3	 
	SECTION 2.04. Evidence of Debt; Register; Notes
	 	 	3	 
	SECTION 2.05. Interest
	 	 	4	 
	SECTION 2.06. Default Interest
	 	 	5	 
	SECTION 2.07. Payment of Advances
	 	 	5	 
	SECTION 2.08. Ratable Sharing
	 	 	7	 
	SECTION 2.09. Funding Losses; Breakage Costs
	 	 	7	 
	SECTION 2.10. Increased Costs; Capital Adequacy
	 	 	9	 
	SECTION 2.11. Taxes; Withholding, etc
	 	 	10	 
	SECTION 2.12. Obligation to Mitigate
	 	 	12	 
	SECTION 2.13. [Reserved]
	 	 	12	 
	SECTION 2.14. Incremental Commitments
	 	 	12	 
	SECTION 2.15. Priority of Payments
	 	 	13	 
	SECTION 2.16. Release of Purchased Contracts
	 	 	16	 
	SECTION 2.17. Cash Reserve Account
	 	 	17	 
	SECTION 2.18. Deposits into and Withdrawals from the Cash Reserve Account
	 	 	17	 
	SECTION 2.19. Securities Account
	 	 	18	 
	SECTION 2.20. Hedging Agreements
	 	 	19	 
	 
	 	 	 	 
	ARTICLE III CONDITIONS PRECEDENT
	 	 	20	 
	 
	 	 	 	 
	SECTION 3.01. Closing Date
	 	 	20	 
	SECTION 3.02. Purchase Date
	 	 	22	 
	SECTION 3.03. Representation and Warranty
	 	 	23	 
	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	 	 	23	 
	 
	 	 	 	 
	SECTION 4.01. Representations and Warranties
	 	 	23	 
	 
	 	 	 	 
	ARTICLE V COVENANTS
	 	 	27	 
	 
	 	 	 	 
	SECTION 5.01. Covenants of Borrower
	 	 	27	 
	 
	 	 	 	 
	ARTICLE VI EVENTS OF DEFAULT
	 	 	30	 
	 
	 	 	 	 
	SECTION 6.01. Events of Default
	 	 	30	 
	SECTION 6.02. Remedies
	 	 	31	 
	 
	 	 	 	 
	ARTICLE VII SECURITY AGREEMENT
	 	 	32	 






 









 






	 	 	 	 	 
	 	 	Page	 
	SECTION 7.01. Grant of Security Interest
	 	 	32	 
	SECTION 7.02. Security for Obligations
	 	 	32	 
	SECTION 7.03. Further Assurances
	 	 	32	 
	SECTION 7.04. Power of Attorney
	 	 	33	 
	SECTION 7.05. No Duty on the Part of the Collateral Agent or Secured Parties
	 	 	34	 
	 
	 	 	 	 
	ARTICLE VIII COLLATERAL AGENT
	 	 	34	 
	 
	 	 	 	 
	SECTION 8.01. Appointment
	 	 	34	 
	SECTION 8.02. Powers and Duties
	 	 	34	 
	SECTION 8.03. General Immunity
	 	 	35	 
	SECTION 8.04. Collateral Agent Entitled to Act as Lender
	 	 	36	 
	SECTION 8.05. Lenders’ Representations and Warranties
	 	 	36	 
	SECTION 8.06. Right to Indemnity
	 	 	37	 
	SECTION 8.07. Successor Collateral Agent
	 	 	37	 
	SECTION 8.08. Collateral
	 	 	38	 
	 
	 	 	 	 
	ARTICLE VIIIA FACILITY AGENT
	 	 	38	 
	 
	 	 	 	 
	SECTION 8A.01. Appointment
	 	 	38	 
	SECTION 8A.02. Powers and Duties
	 	 	38	 
	SECTION 8A.03. General Immunity
	 	 	39	 
	SECTION 8A.04. Facility Agent Entitled to Act as Lender
	 	 	40	 
	SECTION 8A.05. Lenders’ Representations and Warranties
	 	 	40	 
	SECTION 8A.06. Right to Indemnity
	 	 	41	 
	SECTION 8A.07. Successor Facility Agent
	 	 	41	 
	 
	 	 	 	 
	ARTICLE IX MISCELLANEOUS
	 	 	42	 
	 
	 	 	 	 
	SECTION 9.01. Costs, Expenses and Taxes
	 	 	42	 
	SECTION 9.02. Assignments; Participations
	 	 	42	 
	SECTION 9.03. Independence of Covenants
	 	 	45	 
	SECTION 9.04. Survival of Representations, Warranties and Agreements
	 	 	45	 
	SECTION 9.05. Marshalling; Payments Set Aside
	 	 	45	 
	SECTION 9.06. Obligations Several; Independent Nature of the Lenders’ Rights
	 	 	45	 
	SECTION 9.07. Headings
	 	 	45	 
	SECTION 9.08. Governing Law, Jurisdiction, Consent to Service of Process, Waiver of Jury Trial
	 	 	46	 
	SECTION 9.09. No Waiver; Cumulative Remedies
	 	 	46	 
	SECTION 9.10. Amendments, Waivers and Consents
	 	 	47	 
	SECTION 9.11. Severability
	 	 	47	 
	SECTION 9.12. Notices: Electronic Communications
	 	 	47	 
	SECTION 9.13. Counterparts
	 	 	49	 
	SECTION 9.14. Termination
	 	 	49	 
	SECTION 9.15. Servicing
	 	 	49	 
	SECTION 9.16. Indemnification; Certain Waivers
	 	 	49	 
	SECTION 9.17. Usury Savings Clause
	 	 	50	 
	SECTION 9.18. No Proceedings
	 	 	51	 
	SECTION 9.19. No Recourse
	 	 	51	 
	SECTION 9.20. Intent of the Parties
	 	 	52	 






 









 






Appendix A Commitments




	 	 	 
	Exhibit A

	 	Note
	Exhibit B

	 	Assignment and Acceptance
	Exhibit C

	 	Dolphin Statement of Credit Policy
	Exhibit D

	 	Dolphin Form Contracts
	Exhibit E

	 	Policy and Procedures







 









 








LOAN AND SECURITY AGREEMENT




     This LOAN AND SECURITY AGREEMENT, dated as of May 30, 2008 (this “Agreement”), among
LEAF III B SPE, LLC, a Delaware limited liability company (“Borrower”), the Lenders party
hereto, U.S. BANK NATIONAL ASSOCIATION, a national banking association organized under the laws of
the United States (together with its successors and assigns, the “Paying Agent”), and KEY
EQUIPMENT FINANCE INC., a Michigan corporation (“KEF”), as facility agent and collateral
agent (together with its permitted successors in such capacities, the “Facility Agent” and
the “Collateral Agent”).



WITNESSETH:




     WHEREAS, capitalized terms used in these recitals shall have the meanings assigned to them in
Article I hereof;



     WHEREAS, pursuant to the Purchase and Contribution Agreement, LEAF III shall from time to time
sell and/or contribute to Borrower, and Borrower shall from time to time purchase from LEAF III,
all of LEAF III’s right, title and interest in, to and under certain Purchased Contracts;



     WHEREAS, pursuant to the terms and conditions hereof, the Lenders have severally agreed to
make Advances to Borrower in order to fund a portion of the Purchase Price of each such Purchased
Contract;



     WHEREAS, pursuant to the terms and conditions hereof, Borrower has agreed to secure its
obligations to the Lenders hereunder by granting to the Collateral Agent, for the benefit of the
Secured Parties, a first priority lien on, among other things, all of Borrower’s right, title and
interest in, to and under the Purchased Contracts; and



     WHEREAS, pursuant to the Servicing Agreement, the Servicer shall service such Purchased
Contracts.



     NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
the parties hereto agree as follows:



ARTICLE I




DEFINITIONS AND CONSTRUCTION




     SECTION 1.01. Definitions. Capitalized terms used in this Agreement and not otherwise defined herein shall have the
meanings assigned to them in the Definitions and Rules of Construction attached as Appendix A
(“Appendix A”) to that certain Purchase and Contribution Agreement, of even date herewith,
by and between LEAF Equipment Leasing Income Fund III, L.P., a Delaware limited partnership, and
Borrower; provided, as used herein, the term “Agreement” means this
Agreement, including all amendments, modifications and supplements and any appendices,
exhibits or schedules to any of the foregoing.



 









 





     SECTION 1.02. Construction. This Agreement shall be subject to the rules of construction set forth in Appendix A.



ARTICLE II




ADVANCES




     SECTION 2.01. Commitments.



          (a) During the Commitment Period, subject to the terms and conditions hereof, each Lender
severally agrees to make Advances to Borrower in an aggregate amount up to but not exceeding such
Lender’s Commitment; provided, after giving effect to the making of any Advances in no event shall
the aggregate principal amount of all outstanding Advances exceed the Credit Limit. Amounts
borrowed pursuant to this Section 2.01 may be repaid or prepaid during the Commitment Period. Each
Lender’s Commitment shall expire on the Commitment Termination Date. The aggregate amount of the
Commitments as of the Closing Date is $131,425,392.23.




          (b) Unless all Lenders otherwise agree, the only Advance pursuant to this Agreement shall be
on the Closing Date and amounts borrowed pursuant to this Agreement shall not be reborrowed if
repaid or prepaid. If additional Advances are permitted after the Closing Date by the Lenders, the
Lenders shall notify the Borrower in writing that such option is available.




     SECTION 2.02. Advances



          (a) Subject to the terms and conditions hereof, each Lender shall make an Advance requested by
a Purchase Date Notice to Borrower on the applicable Purchase Date in an amount equal to such
Lender’s Pro Rata Share of the product of (x) the Advance Rate, times (y) the Contract
Value of all Purchased Contracts to be purchased as of such Purchase Date; provided, the aggregate
minimum amount of all Advances to be made on a Purchase Date shall be $1,000,000.




          (b) Whenever Borrower desires that the Lenders make Advances, Borrower shall deliver to the
Facility Agent at the Notice Office a fully executed and delivered Purchase Date Notice, not later
than 12:00 noon (New York City time) on the date which is no later than three (3) Business Days
prior to the date of a proposed making of Advances. Except as otherwise provided in Section
2.09(b), a Purchase Date Notice shall be irrevocable, and Borrower shall be bound to make a
borrowing in accordance therewith.




          (c) Notice of receipt of each Purchase Date Notice, together with the amount of each Lender’s
Pro Rata Share of the aggregate amount of the Advances requested thereby, shall be provided by the
Facility Agent to each applicable Lender by Approved Electronic Communications with reasonable
promptness, but (provided the Facility Agent shall have received such notice by 12:00 noon (New
York City time)) not later than 3:00 p.m. (New York City time) on the same day as the Facility
Agent’s receipt of such Purchase Date Notice from Borrower; otherwise, by Facility Agent by
12:00 noon (New York City time) on the Business Day immediately following receipt of the Purchase
Date Notice.




- 2 -









 








          (d) Each Lender shall initiate a wire transfer of the amount of its Advance to the Facility
Agent not later than 3:00 p.m. (New York City time) on the applicable Purchase Date by wire
transfer of same day funds in Dollars, at the Payment Office. Except as provided herein, upon
satisfaction or waiver of the conditions precedent specified herein, the Facility Agent shall make
the proceeds of such Advances available to Borrower on the applicable Purchase Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such Advances received by the
Facility Agent from the Lenders to be credited to the account of Borrower at the Payment Office or
such other account as may be designated in writing to the Facility Agent by Borrower.




     SECTION 2.03. Pro Rata Shares; Availability of Funds.



          (a) Pro Rata Shares . All Advances shall be made, and all participations purchased, by the Lenders simultaneously
and proportionately to their respective Pro Rata Shares, it being understood that no Lender shall
be responsible for any default by any other Lender in such other Lender’s obligation to make an
Advance requested hereunder or purchase a participation required hereby nor shall any Commitment of
any Lender be increased or decreased as a result of a default by any other Lender in such other
Lender’s obligation to make an Advance requested hereunder or purchase a participation required
hereby.




          (b) Availability of Funds. Unless the Facility Agent shall have been notified by any Lender prior to the applicable
Purchase Date that such Lender does not intend to make available to the Facility Agent the amount
of such Lender’s Advance requested on such Purchase Date, the Facility Agent may assume that such
Lender has made such amount available to the Facility Agent on such Purchase Date and the Facility
Agent may, in its sole discretion, but shall not be obligated to, make available to Borrower a
corresponding amount on such Purchase Date. If such corresponding amount is not in fact made
available to the Facility Agent by such Lender, the Facility Agent shall be entitled to recover
such corresponding amount on demand from such Lender together with interest thereon, for each day
from such Purchase Date until the date such amount is paid to the Facility Agent, at the customary
rate set by the Facility Agent for the correction of errors among banks for three Business Days and
thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith upon
the Facility Agent’s demand therefor, the Facility Agent shall promptly notify Borrower and
Borrower shall immediately pay such
corresponding amount to the Facility Agent together with interest thereon, for each day from
such Purchase Date until the date such amount is paid to the Facility Agent, at the Base Rate plus
the Program Fee Rate. Nothing in this Section 2.03(b) shall be deemed to relieve any Lender from
its obligation to fulfill its Commitments hereunder or to prejudice any rights that Borrower may
have against any Lender as a result of any default by such Lender hereunder.




     SECTION 2.04. Evidence of Debt; Register; Notes.



          (a) Evidence of Debt. Each Lender shall maintain on its internal records an account or accounts evidencing the
indebtedness of Borrower to such Lender, including the amounts of the Advances made by it and each
repayment and prepayment in respect thereof. Any such recordation shall be conclusive and binding
on Borrower, absent manifest error; provided, that, failure to make any such
recordation, or any error in such recordation, shall not




- 3 -









 







affect any Lender’s Commitments or
Borrower’s Obligations in respect of any applicable Advances; and provided further, in the event of
any inconsistency between the Register and any Lender’s records, the recordations in the Register
shall govern.




          (b) Register. The Facility Agent shall maintain at the Payment Office a register for the recordation of
the names and addresses of the Lenders and the Commitments and Advances of each Lender from time to
time (the “Register”). The Register shall be available for inspection by Borrower or any
Lender (with respect to any entry relating to such Lender’s Advances) at any reasonable time and
from time to time upon reasonable prior notice. The Facility Agent shall record in the Register
the Commitments and the Advances, and each repayment or prepayment in respect of the principal
amount of the Advances, and any such recordation shall be conclusive and binding on Borrower and
each Lender, absent manifest error; provided, failure to make any such recordation, or any
error in such recordation, shall not affect any Lender’s Commitments or Borrower’s Obligations in
respect of any Advance. Borrower hereby designates KEF to serve as Borrower’s agent solely for
purposes of maintaining the Register as provided in this Section 2.04, and Borrower hereby agrees
that, to the extent KEF serves in such capacity, KEF and its officers, directors, employees, agents
and affiliates shall constitute “Indemnified Parties.”




          (c) Notes. If so requested by any Lender by written notice to Borrower (with a copy to the Facility
Agent), Borrower shall execute and deliver to such Lender (and/or, if applicable and if so
specified in such notice, to any Person who is an assignee of such Lender pursuant to Section 9.02,
or otherwise pursuant to a joinder agreement), promptly after Borrower’s receipt of such notice a
Note or Notes (which shall have accompanied such notice) to evidence such Lender’s Advances.




     SECTION 2.05. Interest.



          (a) Except as otherwise set forth herein, the unpaid principal amount of each Advance shall
bear interest on each day during each Accrual Period until the Advances are paid in full at a rate
per annum equal to:





     (i) if an Advance or a portion of an Advance is at the time funded or
maintained by a CP Rate Lender, the CP Rate for the applicable CP Rate Lender on
such day; provided, however, that if such Advance or a portion of such Advance is
funded by a CP Rate Lender for such day through a Swingline Loan, then the portion
of the Advances funded by a CP Rate Lender with proceeds from a Swingline Loan shall
earn a rate equal to the Alternate Rate; or




     (ii) if an Advance or a portion of an Advance is at the time funded or
maintained by a Support Institution, the Alternate Rate.



          (b) Interest payable pursuant to Section 2.05(a) shall be computed on the basis of a 360-day
year, in each case for the actual number of days elapsed in the period during which it accrues. In
computing interest on any Advance, the date of the making of such Advance or the first day of an
Accrual Period applicable to such Advance shall be included, and the date of payment of such
Advance or the expiration date of an Accrual Period applicable to such



- 4 -









 






Advance shall be excluded;
provided, if an Advance is repaid on the same day on which it is made, one day’s interest
shall be paid on that Advance.




          (c) Except as otherwise set forth herein, interest on each Advance shall be payable in arrears
(i) on each Payment Date applicable to that Advance; (ii) any prepayment of that Advance, whether
voluntary or mandatory, to the extent accrued on the amount being prepaid; and (iii) at maturity,
including final maturity.




          (d) Except to the extent otherwise set forth herein or in the Transaction Document providing
for such calculation, interest and periodic fees shall be calculated on the basis of a 360 day year
and the actual number of days elapsed. The CP Rate Lender shall submit to the Facility Agent and
the Borrower (i) five Business Days prior to each Payment Date notice of an estimate of the
applicable CP Rate for the applicable Accrual Period ending on such Payment Date, and (ii)
simultaneously with any demand by the CP Rate Lender therefor, notice of the amount of any Breakage
Costs then payable to the CP Rate Lender. If requested by the Facility Agent or the Borrower, each
such notice shall include reasonable detail supporting the calculations made by the CP Rate Lender
with respect to the foregoing amounts. The Facility Agent shall notify each of the Servicer and
the Borrower of the determination of the Cost of Funds Rate(s) to be used in calculating interest
for each Accrual Period on the Determination Date; provided, that, in the case of the CP Rate, that
the CP Rate Lender has timely provided such information to the Facility Agent. All notices to the
Borrower pursuant to this paragraph may be provided to the Servicer, as agent of the Borrower,
unless (i) the Facility Agent has received written notice from an Authorized Officer of the
Borrower that the Servicer is no longer serving as the Borrower’s agent for such purpose, or (ii)
if LEAF Financial is not the Servicer. The Facility Agent shall promptly deliver any such notice
that it receives to the CP Rate Lender. The failure of the CP Rate Lender or the Servicer to
provide any notice described in this Section 2.05(d) shall not relieve Borrower of any of its
payment obligations hereunder.




     SECTION 2.06. Default Interest. Notwithstanding anything herein to the contrary, upon the occurrence of an Event of Default
each Advance shall bear interest on the principal amount thereof from time to time outstanding,
from the date of such occurrence until such principal amount is paid in full, at a rate per annum
equal to the Default Funding Rate. All interest referred to in this Section 2.06 shall be
calculated on a year of 360 days for the actual number of days elapsed.



     SECTION 2.07. Payment of Advances.



          (a) Borrower hereby unconditionally promises to pay to the Facility Agent for the benefit of
the Lenders, or to the applicable Lender directly, as directed by the Facility Agent, each Lender’s
Pro Rata Share of the then unpaid principal amount of each Advance in such amount as set forth in
the Priority of Payments on each Payment Date, commencing on the first Payment Date following the
Payment Date on which such Advance is made and when due; provided, the aggregate principal
amount of the Advances shall, in any event, be paid in full no later than the Scheduled Maturity
Date; and provided further, that if, at the close of business on any Business Day, the aggregate
principal amount of all outstanding Advances exceeds the Borrowing Base, then the Borrower, not
later than two Business Days thereafter, shall remit to the Collateral Agent for the benefit of the
Lenders, a principal prepayment (to be applied by the



- 5 -









 






Lenders to repay their respective Advances,
pro rata and pari passu), in an amount not less than such excess. Borrower may, without penalty or
premium, prepay the principal of any Advance on any Payment Date, in whole or in part and together
with accrued and unpaid interest thereon, on three (3) Business Days’ prior written notice;
provided, that such payment shall be accompanied (unless waived in writing by such Lender) by
Breakage Costs and any other breakage costs or funding losses authorized under Section
2.09.




          (b) All payments of principal, interest, fees and other Obligations shall be made in Dollars
in same day funds, without defense, setoff or counterclaim, free of any restriction or condition,
and delivered to the Facility Agent or the applicable Lender, as specified by the Facility Agent,
not later than 11:00 a.m. (New York City time) on the date due at the Payment Office for the
account of the Lenders; for purposes of computing interest and fees, funds received by the Facility
Agent or the applicable Lender after that time on such due date shall be deemed to have been paid
by Borrower on the next succeeding Business Day.




          (c) All payments in respect of the principal amount of any Advance shall include payment of
accrued interest on the principal amount being repaid or prepaid, and all such payments (and, in
any event, any payments in respect of any Advance on a date when interest is due and payable with
respect to such Advance) shall be applied to the payment of interest then due and payable before
application to principal.




          (d) The Facility Agent shall promptly distribute to each Lender at such account and/or address
as such Lender shall indicate in writing, such Lender’s applicable Pro Rata Share of all payments
and prepayments of principal and interest due hereunder, together with all other amounts due
thereto, including, without limitation, all fees payable with respect thereto, to the extent
received by the Facility Agent.




          (e) Whenever any payment to be made hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of interest hereunder (but shall not be
included in computing the length of the immediately succeeding accrual period).




          (f) Borrower hereby authorizes the Facility Agent to charge Borrower’s accounts with the
Facility Agent in order to cause timely payment to be made to the Facility Agent of all principal,
interest, fees and expenses due hereunder (subject to sufficient funds being available in its
accounts for that purpose).




          (g) The Facility Agent shall deem any payment by or on behalf of Borrower hereunder that is
not received by the Facility Agent or the applicable Lender in same day funds prior to 11:00 a.m.
(New York City time) on the due date therefor to be a non-conforming payment and the CP Rate Lender
shall deem any payment to which it is entitled hereunder, whether by or on behalf of the Borrower
or the Facility Agent, that is not received by the CP Rate Lender in same day funds prior to 11:00
a.m. (New York City time) on the due date thereof to be a non-conforming payment. Any such payment
shall not be deemed to have been received by the Facility Agent or applicable Lender until the
later of (i) the time such funds become available funds, and (ii) the applicable next succeeding
Business Day. The Facility Agent (or, if applicable, the CP Rate Lender) shall give prompt
telephonic notice to Borrower and each



- 6 -









 






applicable Lender (confirmed in writing) if any payment is
non-conforming. Interest shall accrue on any amount as to which a non-conforming payment is made
until such funds become available funds (but in no event less than the period from the date of such
payment to the next succeeding applicable Business Day) at the rate determined pursuant to
Section 2.06 from the date such amount was due and payable until the date such amount is
paid in full.




          (h) If an Event of Default shall have occurred and the Obligations shall have been
accelerated, all payments or proceeds received by the Facility Agent hereunder in respect of any of
the Obligations shall be applied in accordance with the Priority of Payments.




     SECTION 2.08. Ratable Sharing. The Lenders hereby agree among themselves that, except as otherwise provided herein, if any
of them shall, whether by voluntary payment (other than a voluntary prepayment of Advances made and
applied in accordance with the terms hereof), through the exercise of any right of set-off or
banker’s lien, by counterclaim or cross action or by the enforcement of any right under the
Transaction Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a proportion of the aggregate
amount of principal, interest, fees and other amounts then due and owing to such Lender hereunder
or under the other Transaction Documents (collectively, the “Aggregate Amounts Due” to such
Lender) which is greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater
payment shall (a) notify the Facility Agent and each other Lender of the receipt of such payment
and (b) apply a portion of such payment to purchase participations (which it shall be deemed to
have purchased from each seller of a participation simultaneously upon the receipt by such seller
of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be
shared by all of the Lenders in proportion to the Aggregate Amounts Due to them; provided, if all
or part of such proportionately greater payment received by such purchasing Lender is thereafter
recovered from such Lender upon the bankruptcy or reorganization of Borrower or otherwise, those
purchases shall be rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Lender ratably to the extent of such recovery, but without interest. Borrower
expressly consents to the foregoing arrangement and agrees that any holder of a participation so
purchased may exercise any and all rights of banker’s lien, set-off or counterclaim with respect to
any and all monies owing by Borrower to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder.



     SECTION 2.09. Funding Losses; Breakage Costs.



          (a) The Borrower hereby agrees that upon demand by any Affected Party (which demand shall be
accompanied by a statement setting forth the basis for the calculations of the amount being
claimed, but may be presented by the Facility Agent on behalf of such Affected Party) the Borrower
will indemnify such Affected Party against any out of pocket net loss or expense which such
Affected Party shall sustain or incur (including any out of pocket net loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by such Affected
Party to fund or maintain any Advance made by any Lender to the Borrower or any Swingline Loan made
by any Swingline Lender to the CP Rate Lender), as determined by such Affected Party, as a result
of (i) any payment or prepayment (including any



- 7 -









 






mandatory prepayment) of any Advance or Swingline
Loan on a date other than a Payment Date for such Advance or Swingline Loan, or on Payment Date but
without three (3) Business Days’ notice (it being understood that each Lender’s receipt of a
Servicer Report delivered on the Determination Date immediately preceding such Payment Date will
satisfy such notice requirement to the extent such Servicer Report reflects the payments to be made
on such Payment Date), (ii) any redemption, prepayment or other principal reduction of any Advance
on a Payment Date (other than a December Payment Date) in an amount, of which the CP Rate Lender
shall have received three (3) Business Days’ notice of the payment thereof, exceeding the sum of
(x) fifteen percent (15%) of the aggregate principal amount of all outstanding Advances as of the
end of the immediately preceding Monthly Period and (y) Five Million Dollars ($5,000,000), (iii)
any redemption, prepayment or other principal reduction of any Advance on a December Payment Date
which exceeds the imputed principal component of the payments due from Obligors under the Contracts
during the Monthly Period ending immediately prior to the December Payment Date, as estimated in
the Servicer Report delivered on the Determination Date occurring in November of the same year (a
“November Servicer Report”), if the CP Rate Lender has received the applicable November
Servicer Report setting forth the amount of any such principal payment thirty (30) calendar days
prior to such December Payment Date, (iv) a principal payment to the CP Rate Lender on a December
Payment Date which is less than the amount estimated in the applicable November Servicer Report for
such December Payment Date, (v) any failure of the Borrower to borrow any Advance on a date
specified therefor in a related Purchase Date Notice, unless Borrower timely delivers a Purchase
Date Notice and satisfies each of the conditions to the funding of such Advance and such failure
arises solely as a result of CP Rate Lender’s election not to fund, or any failure of the Borrower
to make a prepayment after having notified the Facility Agent of the Borrower’s intention to make
such a prepayment, or (vi) any change of the Cost of Funds Rate applicable to an Advance or
Swingline Loan accruing
interest at the Alternate Rate as provided in the definition of the term “Cost of Funds Rate”.
Such written statement shall, in the absence of manifest error, be conclusive and binding for all
purposes. Any amounts described in clauses (i), (ii) or (iii) of the first
sentence of this subsection (a) shall be an “Excess Principal Payment”. For the
avoidance of doubt, any prepayment will be out of Collections deposited in the Collection Account
and shall be paid and distributed on the Payment Date such prepayment is received in the manner set
forth in Section 2.15.




          (b) Without limiting the generality of Section 2.09(a), but without duplication of
amounts payable thereunder, if the CP Rate Lender receives an Excess Principal Payment, and a
Reduction Excess Amount exists with respect to such Excess Principal Payment, the Borrower shall,
on the day on which such Excess Principal Payment is made, and in addition to the amount of any
Excess Principal Payment, pay to the CP Rate Lender any Breakage Costs and any other breakage costs
or funding losses authorized under Section 2.09(a).




          (c) A statement as to any amounts referred to in this Section 2.09 payable to an
Affected Party, submitted to the Borrower (with a copy to the Facility Agent) by such Affected
Party (or submitted by the Facility Agent to the Borrower on behalf of an Affected Party), setting
forth the calculation thereof in reasonable detail, shall, in the absence of manifest error, be
conclusive and binding for all purposes. Failure on the part of any Affected Party to demand
compensation for any amount to this Section 2.09 with respect to any period shall not



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constitute a waiver of such Affected Party’s right to demand compensation with respect to such
period.




     SECTION 2.10. Increased Costs; Capital Adequacy.



          (a) Compensation For Increased Costs and Taxes. Subject to the provisions of Section 2.11 (which shall be controlling with respect to the
matters covered thereby), in the event that any Lender (which term shall include any Support
Institution of such Lender for all purposes of this Section 2.10(a)) shall determine (which
determination shall, absent manifest error, be final and conclusive and binding upon all parties
hereto) that any law, treaty or governmental rule, regulation or order, or any change therein or in
the interpretation, administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination of a Governmental
Authority, in each case that becomes effective after the date hereof, or compliance by such Lender
with any guideline, request or directive issued or made after the date hereof by any central bank
or other Governmental Authority (whether or not having the force of law): (i) subjects such Lender
(or its applicable lending office) to any additional Tax (other than any Tax on the overall net
income of such Lender) with respect to this Agreement or any of the other Transaction Documents or
any of its obligations hereunder or thereunder or any payments to such Lender (or its applicable
lending office) of principal, interest, fees or any other amount payable hereunder; (ii) imposes,
modifies or holds applicable any reserve (including any marginal, emergency, supplemental, special
or other reserve), special deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of, or advances or loans by,
or other credit extended by, or any other acquisition
of funds by, any office of such Lender (other than any such reserve or other requirements with
respect to Advances bearing interest at the LIBO Rate that are reflected in the definition of LIBO
Rate); or (iii) imposes any other condition (other than with respect to a Tax matter) on or
affecting such Lender (or its applicable lending office) or its obligations hereunder or the London
interbank market; and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Advances hereunder or to reduce any amount received or
receivable by such Lender (or its applicable lending office) with respect thereto; then, in any
such case, Borrower shall promptly pay to such Lender, upon receipt of the statement referred to in
the next sentence, such additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as may be necessary to compensate such Lender for any such increased cost or reduction
in amounts received or receivable hereunder. Such Lender shall deliver to Borrower (with a copy to
the Facility Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Lender under this Section 2.10(a), which statement
shall be conclusive and binding upon all parties hereto absent manifest error. Each Lender seeking
compensation under this Section 2.10(a) shall make reasonable efforts to notify Borrower of its
cost or expense within sixty (60) days of the incurrence of such cost or expense for which such
Lender demands compensation, but a Lender’s failure to make such demand within said sixty (60) day
period shall not constitute a waiver of its right to such indemnification for such cost or expense.




          (b) Capital Adequacy Adjustment. In the event that any Lender (which term shall include any Support Institution of such
Lender for all purposes of this Section 2.10(b))



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shall have determined that the adoption,
effectiveness, phase-in or applicability after the Closing Date of any law, rule or regulation (or
any provision thereof) regarding capital adequacy, or any change therein or in the interpretation
or administration thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender (or its applicable
lending office) with any guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with reference to, such Lender’s
Advances or Commitment, or participations therein or other obligations hereunder with respect to
the Advances to a level below that which such Lender or such controlling corporation could have
achieved but for such adoption, effectiveness, phase-in, applicability, change or compliance
(taking into consideration the policies of such Lender or such controlling corporation with regard
to capital adequacy), then from time to time, within five Business Days after receipt by Borrower
from such Lender of the statement referred to in the next sentence, Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender or such controlling
corporation on an after-tax basis for such reduction. Such Lender shall deliver to Borrower (with a
copy to the Facility Agent) a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to Lender under this Section 2.10(b), which statement shall
be conclusive and binding upon all parties hereto absent manifest error. Each Lender seeking
compensation under this Section 2.10(b) shall make reasonable efforts to notify Borrower of its
cost or expense within sixty (60) days of the incurrence of such cost or expense for which such
Lender demands compensation, but a Lender’s
failure to make such demand within said sixty (60) day period shall not constitute a waiver of
its right to such indemnification for such cost or expense.




     SECTION 2.11. Taxes; Withholding, etc.



          (a) Payments to Be Free and Clear. All sums payable by Borrower hereunder and under the other Transaction Documents shall
(except to the extent required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income of any Lender)
imposed, levied, collected, withheld or assessed by or within the United States or any political
subdivision in or of the United States or any other jurisdiction from or to which a payment is made
by or on behalf of Borrower.




          (b) Withholding of Taxes. If Borrower or any other Person is required by law to make any deduction or withholding on
account of any such Tax from any sum paid or payable by Borrower to the Facility Agent or any
Lender under any of the Transaction Documents: (i) Borrower shall notify the Facility Agent of any
such requirement or any change in any such requirement as soon as Borrower becomes aware of it;
(ii) Borrower shall pay any such Tax before the date on which penalties attach thereto, such
payment to be made (if the liability to pay is imposed on Borrower) for its own account or (if that
liability is imposed on the Facility Agent or such Lender, as the case may be) on behalf of and in
the name of the Facility Agent or such Lender; (iii) (unless Borrower shall have paid such Tax
pursuant to the prior clause (ii)) the sum payable by Borrower in respect of which the relevant
deduction, withholding or payment is required shall be increased to the extent necessary to ensure
that, after the making of that deduction, withholding or payment, the Facility Agent or such
Lender, as the case may be,



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receives on the due date with respect thereto a net sum equal to what
it would have received had no such deduction, withholding or payment been required or made; and
(iv) within thirty (30) days after paying any sum from which it is required by law to make any
deduction or withholding, and within thirty (30) days after the due date of payment of any Tax
which it is required by clause (ii) above to pay, Borrower shall deliver to the Facility Agent
evidence satisfactory to the other affected parties of such deduction, withholding or payment and
of the remittance thereof to the relevant taxing or other authority; provided, no such
additional amount shall be required to be paid to any Lender under clause (iii) above except to the
extent that any change after the date hereof (in the case of each Lender listed on the signature
pages hereof on the Closing Date) or after the effective date of the Assignment Agreement pursuant
to which such Lender became a Lender (in the case of each other Lender) in any such requirement for
a deduction, withholding or payment as is mentioned therein shall result in an increase in the rate
of such deduction, withholding or payment from that in effect at the date hereof or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such Lender.




          (c) Evidence of Exemption From U.S. Withholding Tax. Each Lender
that is not a United States Person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. federal income tax purposes (a “Non-US Lender”)
shall deliver to the Facility Agent for transmission to Borrower, on or prior to the Closing Date
(in the case of each Lender listed on the signature pages hereof on the Closing Date) or on or
prior to the date of the Assignment Agreement pursuant to which it becomes a Lender (in the case of
each other Lender), and at such other times as may be necessary in the determination of Borrower or
the Facility Agent (each in the reasonable exercise of its discretion), (i) two original copies of
Internal Revenue Service Form W-8BEN or W-8ECI (or any successor forms), properly completed and
duly executed by such Lender, and such other documentation required under the Code and reasonably
requested by Borrower to establish that such Lender is not subject to deduction or withholding of
United States federal income tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Transaction Documents, or (ii) if such
Lender is not a “bank” or other Person described in Section 881(c)(3) of the Code and cannot
deliver either Internal Revenue Service Form W-8BEN or W-8ECI pursuant to clause (i) above, a
Certificate re Non-Bank Status together with two original copies of Internal Revenue Service Form
W-8 (or any successor form), properly completed and duly executed by such Lender, and such other
documentation required under the Code and reasonably requested by Borrower to establish that such
Lender is not subject to deduction or withholding of United States federal income tax with respect
to any payments to such Lender of interest payable under any of the Transaction Documents. Each
Lender that is a United States person (as such term is defined in Section 7701(a)(30) of the Code)
for United States federal income tax purposes (a “U.S. Lender”) shall deliver to Facility
Agent and Borrower on or prior to the Closing Date (or, if later, on or prior to the date on which
such Lender becomes a party to this Agreement) two original copies of Internal Revenue Service Form
W-9 (or any successor form), properly completed and duly executed by such Lender, certifying that
such U.S. Lender is entitled to an exemption from United States backup withholding tax, or
otherwise prove that it is entitled to such an exemption. Each Lender required to deliver any
forms, certificates or other evidence with respect to United States federal income tax withholding
matters pursuant to this Section 2.11(c) hereby agrees, from time to time after the initial
delivery by such Lender of such forms, certificates or other evidence, whenever a lapse in time or
change in circumstances renders such forms, certificates or other evidence obsolete or inaccurate
in any material respect, that such Lender shall promptly





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deliver to the Facility Agent for
transmission to Borrower two new original copies of Internal Revenue Service Form W-8BEN or W-8ECI,
or a Certificate re Non-Bank Status and two original copies of Internal Revenue Service Form W-8BEN
(or any successor form), as the case may be, properly completed and duly executed by such Lender,
and such other documentation required under the Code and reasonably requested by Borrower to
confirm or establish that such Lender is not subject to deduction or withholding of United States
federal income tax with respect to payments to such Lender under the Transaction Documents, or
notify the Facility Agent and Borrower of its inability to deliver any such forms, certificates or
other evidence. Borrower shall not be required to pay any additional amount to any Non-US Lender
under Section 2.11(b)(iii) if such Lender shall have failed (1) to deliver the forms,
certificates or other evidence referred to in the second sentence of this Section 2.11(c),
or (2) to notify the Facility Agent and Borrower of its inability to deliver any such forms,
certificates or other evidence, as the case may be; provided, if such Lender shall have
satisfied the requirements of the first sentence of this Section 2.11(c) on the Closing
Date or on the date of the Assignment Agreement pursuant to which it became a Lender, as
applicable, nothing in this last sentence of Section 2.11(c) shall relieve Borrower of
its obligation to pay any additional amounts pursuant to this Section 2.11 in the
event that, as a result of any change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation, administration or application thereof,
such Lender is no longer properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender is not subject to withholding as described
herein.




     SECTION 2.12. Obligation to Mitigate. Each Lender agrees that, as promptly as practicable after the officer of such Lender
responsible for administering its Advances becomes aware of the occurrence of an event or the
existence of a condition that would entitle such Lender to receive payments under Section 
2.10 or 2.11, it will, to the extent not inconsistent with the internal policies of
such Lender and any applicable legal or regulatory restrictions, use reasonable efforts to
(a) make, issue, fund or maintain its Advances through another office of such Lender, or (b) take
such other measures as such Lender may deem reasonable, if as a result thereof the circumstances
which would cause the additional amounts which would otherwise be required to be paid to such
Lender pursuant to Section 2.10 or 2.11 would be materially reduced and if, as
determined by such Lender in its sole discretion, the making, issuing, funding or maintaining of
such Commitments or Advances through such other office or in accordance with such other measures,
as the case may be, would not otherwise adversely affect such Commitments or Advances or the
interests of such Lender; provided, such Lender will not be obligated to utilize such other
office pursuant to this Section 2.12 unless Borrower agrees to pay all incremental expenses
incurred by such Lender as a result of utilizing such other office as described above. A
certificate as to the amount of any such expenses payable by Borrower pursuant to this
Section 2.12 (setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender to Borrower (with a copy to the Facility Agent) shall be conclusive absent
manifest error.



     SECTION 2.13. [Reserved].



     SECTION 2.14. Incremental Commitments.



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          (a) Prior to the Commitment Termination Date, Borrower may, by written notice to the Facility
Agent, request an increase to the existing Commitments (any such increase, any “Incremental
Commitment”).




          (b) No increase to the existing Commitments shall occur, and no Person may provide an
Incremental Commitment, in each case, without the prior written consent of the Facility Agent and
each Lender, which consent shall be in the sole discretion of the Facility Agent and the Lenders
(each approved Person, if any, an “Incremental Lender”).




          (c) No Lender or any other Person shall have any obligation to provide any or all of the
Incremental Commitments until such time such Person becomes an Incremental Lender, and any Lender
may elect or decline, in its sole discretion, to provide an Incremental Commitment.




          (d) Each Incremental Commitment shall become effective as of the date agreed to among
Borrower, the Facility Agent and the applicable Incremental Lenders (the “Incremental Increase
Date”), so long as (i) no Event of Default shall exist on such Incremental Increase Date before
or after giving effect to such Incremental Commitments; (ii) the Incremental Commitments shall be
effected pursuant to one or more joinder agreements, in form and substance satisfactory to the
Facility Agent and the Lenders, and each of which shall be recorded in the Register and shall be
subject to the requirements set forth in Section 2.11(c); and (iii) Borrower shall deliver or cause
to be delivered any legal opinions or other documents reasonably requested by the Facility Agent in
connection with any such transaction.




          (e) On any Incremental Increase Date, subject to the satisfaction of the foregoing terms and
conditions, (i) each Lender having an existing Commitment shall assign to each of the Incremental
Lenders having a Commitment, and each such Incremental Lender shall purchase from each such Lender,
at the principal amount thereof (together with accrued interest), such interests in the Advances
outstanding on the Incremental Increase Date as shall be necessary in order that, after giving
effect to all such assignments and purchases, such Advances will be held by such Lenders having
existing Commitments and Incremental Lenders ratably in accordance with their Commitments after
giving effect to the addition of such Incremental Commitments to the Commitments; (ii) each
Incremental Commitment shall be deemed for all purposes a Commitment and each Advance made
thereunder (an “Incremental Advance”) shall be deemed, for all purposes, an Advance and
(iii) each Incremental Lender shall become a Lender with respect to the Incremental Commitment and
all matters relating thereto.




          (f) The Facility Agent shall notify the Lenders, promptly upon determination of any
Incremental Increase Date, of (i) the Incremental Commitments and the Incremental Lenders, and
(ii) in the case of each notice to any Lender having Exposure, the respective interests in such
Lender’s Advances, in each case subject to the assignments contemplated by this Section 2.14.




          (g) The terms and provisions of the Incremental Advances shall be identical to the Advances.




     SECTION 2.15. Priority of Payments



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          (a) On each Payment Date, the funds that have been deposited in the Collection Account during
the immediately preceding Monthly Period shall be distributed by the Paying Agent pursuant to the
monthly Servicer Report and Section 7 of the Paying Agent Agreement in the following order of
priority (the “Priority of Payments”):





     (i) to the Partnership for payment of any taxes, governmental fees or other
amounts (such as late fees and documentation fees) that were not included in
calculating the Contract Value of any Purchased Contract and which are due and
payable under the Purchased Contract but that have not been paid by the related
Obligor;




     (ii) to the Partnership, any unreimbursed Partnership Advances;




     (iii) to the Partnership, for forwarding to the Servicer, an amount equal to
the Servicing Fee and any out-of-pocket Servicer expenses then due and payable and,
if LEAF Financial is no longer the Servicer, then to the applicable Successor
Servicer;




     (iv) on a pari passu basis, (w) to the Back-up Servicer, an amount equal to any
Transfer Expenses and One-Time Successor Servicer Fee then due and payable, (x) to
the Back-up Servicer, an amount equal to the Back-up Servicing Fee and any
reasonable attorneys’ fees then due and payable, and any out-of-pocket expenses due
to the Back-up Servicer in accordance with the Transaction Documents, unless the
Back-up Servicer is the Servicer; (y) to the Custodian, an amount equal to the
Custodian Fee and any reasonable attorneys’ fees then due and payable, and any
out-of-pocket expenses due to the Custodian in accordance with the Transaction
Documents and (z) to the Paying Agent, an amount equal to the Paying Agent Fee and
any reasonable attorneys’ fees then due and payable, and any out-of-pocket expenses
due to the Paying Agent in accordance with the Transaction Documents; provided that
the aggregate amount distributed under clauses (x), (y) and (z) for out-of-pocket
expenses on each Payment Date shall not exceed (a) $10,000 for each of the twelve
(12) Payment Dates immediately following the Closing Date, (b) $8,000 for each of
the twelve (12) Payment Dates beginning immediately after the period referenced in
clause (a), and (c) $6,000 for each Payment Date after the period referenced in
clause (b);




     (v) to the counterpart(y)(ies) of any Hedging Agreement, the aggregate amount
due under any such Hedging Agreement as of such date (including any breakage fees),
excluding any termination payment resulting from the default of such
counterpart(y)(ies);




     (vi) on a pari passu basis as follows:




(1) to the Support Institution, an amount equal to the Liquidity Fee
then due and payable to the Support Institution; and




(2) to the Facility Agent, an amount equal to the Facility Agent Fee
then due and payable to the Facility Agent; and



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(3) to the Facility Agent, an amount equal to the Program Fee then
due and payable to the Facility Agent; and




(4) for application pursuant to Section 2.07 hereof, an amount equal
to the aggregate amount of all interest then due and payable on the
Advances for the immediately preceding Accrual Period and, to the
extent not previously paid, for all prior Accrual Periods (including
interest on such unpaid amounts at the applicable interest rate for
the Advances during the Accrual Period(s) such amounts were overdue
(assuming the oldest are paid first));




     (vii) on a pari passu basis, to the Custodian, the Back-up Servicer, and the
Paying Agent, all out-of-pocket expenses not paid pursuant to the foregoing clause
(iv);




     (viii) to the Facility Agent, for application pursuant to Section 2.07 hereof,
a principal payment on the Advances in an amount equal to the excess of (i) the
aggregate principal amount of all outstanding Advances as of the end of the related
Accrual Period over (ii) the Borrowing Base as of the end of the related Accrual
Period;




     (ix) to the Partnership, so long as no Event of Default has occurred and is
continuing, the amount then required to be paid by the Partnership (pursuant to its
partnership agreement) to the Equity Investors;




     (x) to the Cash Reserve Account, the amount necessary for the value of all
Reserve Account Property on deposit therein to be equal to the Required Cash
Reserve;




     (xi) to the Servicer, the Paying Agent, the Custodian, the Back-up Servicer and
the Lenders, all other amounts due and payable thereto by Borrower under the
Transaction Documents, including, without limitation, all Lender Expenses;




     (xii) to the entities then entitled thereto, all documented Transaction
Expenses, to the extent not previously paid by the Servicer or the Partnership;




     (xiii) to the counterpart(y)(ies) of any Hedging Agreement, the aggregate
amount of any termination payment resulting from the default of such
counterpart(y)(ies) under any such Hedging Agreement as of such date (including any
breakage fees);




     (xiv) if the aggregate principal amount of all outstanding Advances is then
less than 10% of the Advances on the first Purchase Date, then any balance to the
Facility Agent for application pursuant to Section 2.07 hereof, until the aggregate
principal amount of all outstanding Advances is zero; and



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     (xv) any balance to the Borrower or its designee; provided, however,
that any amounts representing payaheads (rather than prepayments) on scheduled
payments owed on Purchased Contracts shall remain on deposit in the Collection
Account for application on the next Payment Date.



          (b) Notwithstanding anything herein to the contrary:





     (i) if an Event of Default shall have occurred, all amounts in the Collection
Account and the Cash Reserve Account remaining after the distributions set forth in
clauses (a)(i) – (vi) above shall be distributed to the Facility Agent, for
application pursuant to Section 2.07 hereof, as additional principal to be applied
to the Advances (and Breakage Costs thereon) until fully
repaid; provided, that such application shall be made on the date that
the Facility Agent determines in the exercise of its reasonable judgment shall
minimize Breakage Costs; and




     (ii) all amounts deposited into the Collection Account in accordance with
either Section 2.03(b) of the Purchase and Contribution Agreement or 2.05(b)(i) of
the Purchase and Contribution Agreement, as applicable, shall be immediately
distributed to the Facility Agent, for application pursuant to Section 2.07 hereof,
and applied to reduce the aggregate principal amount of all outstanding Advances
then outstanding (and Breakage Costs thereon) without any further application with
respect to the Priority of Payments; provided, that such application shall
be made on the date that the Facility Agent determines in the exercise of its
reasonable judgment shall minimize Breakage Costs.



     SECTION 2.16. Release of Purchased Contracts. 



          (a) Subject to Section 2.07 hereof with respect to prepayment of Advances, upon any optional
or mandatory prepayment, in whole or in part, of the outstanding Advances, the Borrower shall be
permitted, subject to compliance with this Section 2.16, to obtain the release of any one or more
Purchased Contracts from the security interest of the Collateral Agent therein after depositing
into the Collection Account an amount not less than the Release Price therefor on the date of such
repayment (which date shall, unless the Required Lenders otherwise consent, be a Payment Date);
provided, that the foregoing release shall only be available if, after giving effect thereto and
the application of the proceeds thereof in accordance with the terms hereof, there shall not be an
Event of Default.




          (b) The Borrower shall notify the Collateral Agent of any Release Price to be paid pursuant to
this Section 2.16 on the Business Day immediately preceding the date on which such Release
Price shall be paid, specifying the Purchased Contracts to be released and the Release Price.




          (c) Promptly after the date on which (i) the aggregate outstanding principal amount of all
Advances has been repaid in full and all interest and fees and all other Obligations have been paid
in full and (ii) the Lenders shall have no further obligation to make any additional Advances, the
Collateral Agent shall release (and the Custodian is hereby authorized to deliver to the Borrower
all documents in the related Contract File and the Paying Agent is hereby




- 16 -









 







authorized to deliver to
the Borrower all remaining funds in the Collection Account and Cash Reserve Account) its security
interest in all Purchased Contracts and all other Collateral, for no additional consideration but
at the sole expense of the Borrower, free and clear of any Adverse Claim resulting solely from an
act by the Collateral Agent but without any other representation or warranty, express or implied,
by or recourse against the Collateral Agent.




     SECTION 2.17. Cash Reserve Account



          (a) The Borrower, for the benefit of the Collateral Agent and the Lenders, hereby establishes
and agrees to maintain in the name of the Borrower an account until the date upon which Borrower’s
Obligations are extinguished entitled “Key Equipment Finance Inc., as Collateral Agent, Cash
Reserve Account of LEAF III B SPE, LLC” (the “Cash Reserve Account”), bearing a designation clearly indicating that the funds deposited therein
are subject to the Lien of the Collateral Agent for the benefit of the Lenders. The Cash Reserve
Account shall initially be established with and maintained at the Paying Agent.



          (b) The funds on deposit in the Cash Reserve Account may be invested in Eligible Investments
at the direction of the Borrower, or, during the continuation of an Event of Default, solely at the
direction of the Collateral Agent. Other than as agreed upon between the Collateral Agent and the
Borrower, funds on deposit in the Cash Reserve Account shall be invested in Eligible Investments
that will mature so that such funds will be available at the close of business on the Business Day
immediately preceding the following Payment Date. All Eligible Investments purchased with funds
from the Cash Reserve Account will be held to maturity.



          (c) The Borrower shall possess all right, title and interest in all property on deposit from
time to time in the Cash Reserve Account and in all proceeds thereof and all such funds,
investments, proceeds, income and other property (collectively, the “Reserve Account
Property”) shall be part of the Collateral. Except as otherwise provided herein, the Cash
Reserve Account shall be under the control of the Paying Agent for the benefit of the Collateral
Agent and Lenders. In the event that the Cash Reserve Account is not to be maintained with the
Paying Agent, the Borrower shall notify the Collateral Agent in writing prior to such transfer and
request the Collateral Agent’s consent to such transfer and, upon receipt of such consent, shall
cause the depository to execute such control agreements and other instruments of similar import as
the Collateral Agent shall have reasonably requested.



          (d) The Collateral Agent shall not enter into any subordination or intercreditor agreement
with respect to the Reserve Account Property other than, to the extent applicable, this Agreement
or as contemplated by the Transaction Documents.



     SECTION 2.18. Deposits into and Withdrawals from the Cash Reserve Account.



          (a) On each Payment Date (and, in each case, prior to the making of any required payments on
such Payment Date pursuant to Section 7 of the Paying Agent Agreement and the monthly
Servicer Report), the Paying Agent shall withdraw the Cash Reserve Account Available Amount, if
any, from the Cash Reserve Account and deposit it in the Collection Account in accordance with this
Loan Agreement.



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          (b) No party hereto shall withdraw or otherwise remove, or permit the removal by any Person
other than the Paying Agent, any funds in the Cash Reserve Account, other than in accordance with
this Agreement and the other Transaction Documents then in effect. No Person shall instruct the
Paying Agent to withdraw or otherwise remove any funds in the Cash Reserve Account except as
provided in the Transaction Documents. Notwithstanding anything in this clause (b) to the
contrary, the Servicer shall instruct the Paying Agent to pay to the Borrower amounts paid into the
Collection Account that are neither Contract Receivables nor other amounts required to be deposited
into the Collection Account pursuant to this Agreement or any of the other Transaction Documents
(including, without limitation, any reasonable out-of-pocket expenses incurred by the Servicer in
enforcing a Purchased Contract that is a Defaulted Contract, to the extent not previously retained)
if the Borrower or Servicer shall have notified the Lenders (with a copy to the Collateral Agent,
in the case of any amount to be withdrawn from the Collection Account) in writing of the amount to
be remitted to the Borrower.



          (c) On the Closing Date, the Borrower shall, from the proceeds of the first Advance under the
Loan Agreement, deposit into the Cash Reserve Account, an amount equal to two percent (2%) of the
aggregate principal amount of all Advances advanced on such date.



          (d) In the event that the monthly Servicer Report with respect to any Determination Date shall
state that the available funds in the Collection Account that constitute Collections on such
Determination Date are less than the sum of the amounts payable on the related Payment Date
pursuant to clauses (i) through (ix) of the Priority of Payments (such deficiency being a
“Deficiency Claim Amount”), then on such Determination Date, the Servicer shall deliver to
the Paying Agent, Collateral Agent, the Borrower and the Lenders, by hand delivery, telex or
facsimile transmission, a written notice (a “Deficiency Notice”) specifying the Deficiency
Claim Amount and the Cash Reserve Account Available Amount for the related Payment Date. Such
Deficiency Notice shall direct the Paying Agent to remit from the Cash Reserve Account the Cash
Reserve Account Available Amount for deposit in the Collection Account on such Payment Date. Upon
receipt of written notice from the Collateral Agent of the occurrence of the Commitment Termination
Date or during the existence of an Event of Default, the Paying Agent shall withdraw all amounts on
deposit in the Cash Reserve Account and deposit them into the Collection Account for distribution
on the immediately following Payment Date pursuant to the Priority of Payments. Any Deficiency
Notice shall be delivered by 12:00 p.m., New York City time, on the related Determination Date.



          (e) To the extent that, on any Payment Date after giving effect to the payments required to be
made on such Payment Date pursuant to clauses (i) through (ix) of the Priority of Payments, the
Cash Reserve Account Available Amount exceeds the Required Cash Reserve as of such Payment Date,
then on such Payment Date the Borrower shall instruct the Paying Agent in writing (with a copy to
the Collateral Agent) to withdraw from the Cash Reserve Account an amount equal to such excess and
pay such amount to the Borrower or its designee.



     SECTION 2.19. Securities Account. The Borrower agrees that the Cash Reserve Account
held by it hereunder shall each be maintained as a “securities account” as defined in the UCC as in
effect in New York, and the Paying Agent hereby agrees that it is and will act as a “securities
intermediary” (in such capacity, the “Securities Intermediary”) for the benefit of the Collateral
Agent as the sole “entitlement holder” (as defined in Section 8-102(a)(7) of the UCC)



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with respect
to such account. The parties hereto agree that the Cash Reserve Account shall be governed by the
laws of the State of New York, and regardless of any provision in any other agreement, the
“securities intermediary’s jurisdiction” (within the meaning of Section 8-110 of the UCC) shall be
the State of New York. The Securities Intermediary acknowledges and agrees that (a) each item of
property (whether investment property, financial asset, security, instrument or cash) credited to
the Cash Reserve Account shall be treated as a “financial asset” within the meaning of Section
8-102(a)(9) of the UCC and (b) notwithstanding anything to the contrary, if at any time the
Securities Intermediary shall receive any order from the Collateral Agent directing transfer or
redemption of any financial asset relating to the Cash Reserve Account, the Securities Intermediary
shall comply with such entitlement order without further consent by Servicer, Seller, Borrower, the
Lenders or any other person. In the event of any conflict of any provision of this Section 2.19
with any other provision of this Agreement or any other agreement or document, the provisions of
this Section 2.19 shall prevail.



     SECTION 2.20. Hedging Agreements.



          (a) The Borrower shall enter into one or more Hedging Agreements with one or more hedge
providers with respect to each Advance having a notional amount equal to ninety-six (96%) of the
initial principal balance of such Advance. If on any Payment Date, the aggregate notional amounts
of all Hedging Agreements then in effect with respect to any Advance shall be less than an amount
equal to ninety-five percent (95%) of the outstanding principal balance of such Advance, the
Borrower shall enter one or more Hedging Agreements so as to cause such condition no longer to
apply.



          (b) All payments made by a hedge provider shall be deposited directly into the Collection
Account.



          (c) All Hedging Agreements must be entered into for bona fide hedging activities and not for
speculative purposes.



     SECTION 2.21. Duties of Paying Agent The Paying Agent shall not have any duties or
obligations except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Paying Agent shall not be subject to any fiduciary or other implied duties and
(b) the Paying Agent shall not have any duty to take any discretionary action or exercise any
discretionary powers. The Paying Agent may rely, and shall be protected in acting or refraining to
act, in each case, in accordance with the terms of this Agreement, upon and need not verify the
accuracy of, (i) any written instructions or directions from any persons the Paying Agent
reasonably believes to be authorized to give such instructions or directions, and (ii) any written
instruction, notice, order, request, direction, certificate, opinion or other instrument or
document reasonably believed by the Paying Agent to be genuine and to have been signed and
presented by the proper party or parties, whether such presentation is by personal delivery,
express delivery or facsimile. Except to confirm the form thereof complies with the requirements
therefor set forth in the applicable Transaction Document, the Paying Agent shall not be
responsible for or have any duty to ascertain or inquire into the contents of any instruction,
direction, certificate, report or other document delivered hereunder or in connection herewith.



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ARTICLE III




CONDITIONS PRECEDENT




     SECTION 3.01. Closing Date. This Agreement shall become effective on the Closing Date so long as each of the following
conditions precedent have been satisfied to the satisfaction of the Facility Agent and the Lenders
in their sole discretion and, as to any agreement, document or instrument specified below, each in
form and substance satisfactory to the Facility Agent:



          (a) Each of the conditions set forth in Section 3.01 of the Purchase and Contribution
Agreement shall have been satisfied, or, with the prior written consent of the Required Lenders,
waived.




          (b) Borrower shall deliver to the Facility Agent the following, each, unless otherwise noted,
dated as of the Closing Date:





     (i) copies of the organizational documents of Borrower, certified by the
Secretary of State of the State of Delaware, or, if such document is of a type that
may not be so certified, certified by an officer of Borrower, together with a good
standing certificate from the Secretary of State of the State of Delaware and each
other jurisdiction in the United States in which Borrower is qualified to do
business and, to the extent generally available, a certificate or other evidence of
good standing as to payment of any applicable franchise or similar taxes from the
appropriate taxing authority of its jurisdiction of organization, each dated a
recent date prior to the Closing Date;




     (ii) signature and incumbency certificates of the officers of Borrower
executing the Transaction Documents to which it is a party;




     (iii) executed originals of the Transaction Documents to which Borrower is a
party; and




     (iv) such other documents relating to any of the foregoing as the Facility
Agent may reasonably request.



          (c) The Partnership shall deliver to the Facility Agent the following, each, unless otherwise
noted, dated as of the Closing Date:





     (i) copies of the organizational documents of Borrower, certified by the
Secretary of State of the State of Delaware, or, if such document is of a type that
may not be so certified, certified by an officer of the Partnership, together with a
good standing certificate from the Secretary of State of the State of Delaware and
each other jurisdiction in the United States in which the Partnership is qualified
to do business and, to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable franchise or similar taxes
from the appropriate taxing authority of its jurisdiction of organization, each
dated a recent date prior to the Closing Date;



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     (ii) signature and incumbency certificates of the officers of the Partnership
executing the Transaction Documents to which it is a party;




     (iii) executed originals of the Transaction Documents to which the Partnership
is a party; and




     (iv) such other documents relating to any of the foregoing as the Facility
Agent may reasonably request.



          (d) The Servicer shall deliver to the Facility Agent the following, each, unless otherwise
noted, dated as of Closing Date:





     (i) copies of the organizational documents of the Servicer, certified by the
Secretary of State of the State of Delaware, or, if such document is of a type that
may not be so certified, certified by an officer of the Servicer, together with a
good standing certificate from the Secretary of State of the State of Delaware and
each other jurisdiction in the United States in which the Servicer is qualified to
do business and, to the extent generally available, a certificate or other evidence
of good standing as to payment of any applicable franchise or similar taxes from the
appropriate taxing authority of its jurisdiction of organization, each dated a
recent date prior to the Closing Date;




     (ii) signature and incumbency certificates of the officers of the Servicer
executing the Transaction Documents to which it is a party;




     (iii) executed originals of the Transaction Documents to which the Servicer is
a party; and




     (iv) such other documents relating to any of the foregoing as the Facility
Agent may reasonably request.



          (e) The Facility Agent shall have received an Authorized Officer’s Certificate dated as of the
Closing Date to the effect that:





     (i) Borrower’s representations and warranties contained in Section 4.01 are
true and correct on and as of such day as though made on and as of such date;




     (ii) no event has occurred and is continuing, or would result from the
transactions contemplated hereby, that constitutes or which with the passage of time
or the giving of notice or both would constitute, a Servicer Default or an Event of
Default; and




     (iii) Borrower shall have complied with all of its covenants hereunder and
shall have fulfilled in all respects all of its obligations hereunder.



          (f) Borrower shall have obtained all Governmental Authorizations and all consents of other
Persons that are necessary in connection with the transactions provided for in




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the Transaction
Documents. Each such Governmental Authorization and consent shall be in full force and effect.




          (g) Each of the other Transaction Documents shall be in full force and effect.




          (h) All proceedings taken or to be taken in connection with the transactions contemplated
hereby and all documents incidental thereto shall be satisfactory in form and substance to the
Facility Agent, and the Facility Agent shall have received all such counterpart originals or
certified copies of such documents as the Facility Agent or any Lender may reasonably request,
including, without limitation a copy of that certain subordinated debt note payable to RAI.




          (i) The Lenders shall have received one or more favorable Opinions of Counsel, of counsel to
LEAF III and the Borrower, with respect to such matters as any Lender may reasonably request,
including opinions with respect to (i) the creation, perfection and first priority of the security
interest of the Borrower and the Collateral Agent in the property described in such Opinion of
Counsel, (ii) the true conveyance of the Purchased Contracts under the Purchase and Contribution
Agreement, (iii) issues of substantive consolidation, and (iv) the due authorization, execution and
delivery of, and enforceability of the Transaction Documents.



          (j) There shall have been delivered to the Lenders and the Collateral Agent (i) file-stamped
copies of the financing statements relating to the conveyance of the Purchased Contracts, naming
Seller as debtor, Borrower as intermediate secured party and the Collateral Agent as secured party,
or other similar instruments or documents, as may be necessary or, in the opinion of the Lender or
the Collateral Agent, desirable under the Uniform Commercial Code of any appropriate jurisdiction
or other applicable law to perfect Borrower’s ownership of the Purchased Contracts and a first
priority security interest therein and (ii) file-stamped copies of the financing statements
relating to the grant of a first priority security interest in the Collateral, naming Borrower as
debtor and Collateral Agent as secured party, or other similar instruments or documents, as may be
necessary or, in the opinion of the Lender or the Collateral Agent, desirable under the Uniform
Commercial Code of any appropriate jurisdiction or other applicable law to grant the Collateral
Agent a first priority perfected security interest therein. Each of the aforementioned financing
statements, instruments or documents shall have been duly filed on or prior to the Closing Date
with the Secretary of State of the State of Delaware and such other filing offices as may be
necessary or appropriate



     SECTION 3.02. Purchase Date. The obligation of each Lender to make any Advance on a Purchase Date (including the Closing
Date, if applicable) is subject to satisfaction of the following conditions precedent:



          (a) The Facility Agent shall have received the applicable Purchase Date Notice, not later than
12:00 noon (New York City time) on the date which is no later that two (2) Business Days prior to
the date of a proposed making of Advances and the applicable Lender shall have received such
Purchase Date Notice by 2:00 p.m. (New York City Time) on such day.




          (b) The Custodian shall have delivered the Trust Receipt, without any Exceptions, for
Purchased Contracts with an aggregate Contract Value exceeding 75% of the amount of the Advance
requested in the related Purchase Date Notice.




- 22 -









 








          (c) Each of the conditions set forth in Section 3.02 of the Purchase and Contribution
Agreement shall have been satisfied, or, with the prior written consent of the Required Lenders,
waived.




          (d) The ability of the CP Rate Lender to fund Advances under this Agreement shall at all time
be subject to the following conditions: (i) a liquidity facility relating to this transaction to
which such CP Rate Lender is a party remains in full force and effect; (ii) after giving effect to
the Advance to occur on such Purchase Date, the CP Rate Lender will have sufficient unused
liquidity support pursuant to such liquidity facility (which unused liquidity support includes, for
the avoidance of doubt, undrawn available cash required to be posted by the
relevant Support Institution in connection with such liquidity facility); and (iii) such CP
Rate Lender has received funds: (A) from the commercial paper market; (B) pursuant to such
liquidity facility (including receipt of undrawn available cash required to be posted by a
liquidity provider thereunder); or (C) from other sources available to it related to this Agreement
(in all cases referred to in this clause (iii) in an amount sufficient to fund such Advance and to
the extent such funds were raised to fund such Advance).




          (e) On such Purchase Date, the following statements shall be true:





     (i) Borrower’s representations and warranties contained in Section 4.01 are
correct on and as of such day as though made on and as of such date; and




     (ii) no event has occurred and is continuing, or would result from such
purchase, that constitutes a Servicer Default or an Event of Default;




     (iii) Borrower shall have complied with all of its covenants hereunder and
shall have fulfilled in all material respects all of its obligations hereunder;




     (iv) Borrower shall not be insolvent or subject to any Insolvency Event; and




     (v) immediately prior to and after giving effect to the Advances to be made on
such Purchase Date, the aggregate principal amount of all outstanding Advances as of
such date does not exceed the Credit Limit as of such date.



     SECTION 3.03. Representation and Warranty. The acceptance by Borrower of the proceeds of any Advance shall be deemed to be a
representation and warranty by Borrower as to the matters set forth in this Article III.



ARTICLE IV




REPRESENTATIONS AND WARRANTIES




     SECTION 4.01. Representations and Warranties. Borrower represents and warrants to the Facility Agent and to the Lenders as of each
Purchase Date (or such other date as expressly provided below) that:



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          (a) Organization. Borrower is duly organized and validly existing as a limited liability company in good
standing under the laws of the State of Delaware. Borrower has full power, authority and legal
right to own its properties and conduct its business as presently owned and conducted, and as is
proposed to be conducted under this Agreement and each of the other Transaction Documents to which
it is a party, and to execute, deliver and perform its obligations under this Agreement and each of
the other Transaction Documents to which it is a party.




          (b) Due Authorization; Due Qualification. Borrower’s execution, delivery and performance of this Agreement, each of the other
Transaction Documents to which it is a party and the other agreements and instruments executed or
to be executed by Borrower contemplated by this Agreement and the consummation of the transactions
contemplated by this Agreement have been duly and validly authorized by all necessary action on the
part of Borrower. The Borrower is duly qualified to do business in good standing, and has obtained
all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of its
property, the performance of its obligations under this Agreement, each of the other Transaction
Documents to which it is a party and the other agreements and instruments executed or to be
executed by Borrower contemplated by this Agreement or the conduct of its business requires such
qualification, licenses and/or approvals.




          (c) Binding Obligation. This Agreement and each of the other Transaction Documents to which it is a party
constitutes a valid and legally binding obligation of Borrower, enforceable against it in
accordance with its terms, except as such enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other similar laws affecting creditors’ rights generally,
now and hereafter in effect, and except as such enforceability may be limited by general principles
of equity (whether considered in a suit at law or in equity).




          (d) No Conflict. Borrower’s execution and delivery of this Agreement and each of the other Transaction
Documents to which it is a party and its performance of the transactions contemplated hereby and
thereby and its fulfillment of the terms hereof and thereof applicable to the Borrower (i) do not
contravene Borrower’s organizational documents, (ii) do not conflict with or violate any
Requirements of Law applicable to Borrower, and (iii) do not conflict with, result in a breach of
any of the provisions of, or constitute (with or without notice or lapse of time or both) a default
under, any indenture, Purchased Contract, agreement, mortgage, deed of trust or other instrument to
which Borrower is a party or by which it or its properties are bound. The execution and delivery
of this Agreement will not result in the creation of an Adverse Claim against Borrower or any
assets of Borrower, except those created under the Loan Agreement.




          (e) Security Interest. This Agreement creates a valid security interest in favor of the Collateral Agent, for the
benefit of the Secured Parties, in the Collateral as security for the Obligations.




          (f) No Proceedings. There are no proceedings, injunctions, writs, restraining orders or investigations pending
or, to the best knowledge of Borrower, threatened against Borrower before any Governmental
Authority (i) asserting the illegality, invalidity or unenforceability, or seeking any
determination or ruling that would affect the legality, validity or enforceability of, this
Agreement or any of the other Transaction Documents, (ii) seeking to




- 24 -









 







prevent the consummation of
any of the transactions contemplated by this Agreement or any of the other Transaction Documents,
or (iii) seeking any determination or ruling that is reasonably likely to affect adversely the
financial condition or operations of Borrower or the validity or enforceability of, or
the performance by Borrower of its obligations under, this Agreement or any of the other
Transaction Documents.




          (g) No Consents. No authorization, consent, license, order or approval of, filing, registration or
declaration with, or notice to, any Person, including, without limitation, any Governmental
Authority, is required for Borrower in connection with the execution and delivery of this Agreement
or any of the other Transaction Documents by Borrower or the performance of its obligations under
this Agreement or any of the other Transaction Documents, except for the filing of documents
required to have been filed on or prior to the Closing Date or a Purchase Date pursuant to Sections
3.01 and 3.02, all of which were so filed and are in full force and effect.




          (h) Ownership; Liens.





     (i) On each Purchase Date, Borrower is the sole and exclusive owner of each
Purchased Contract purchased by Borrower on such date, each such Purchased Contract
is free and clear of any Lien and no effective financing statement or other
instrument similar in effect covering such Purchased Contract is on file in any
recording office.




     (ii) As of each Purchase Date, each Purchased Contract shall be acquired by
Borrower from LEAF III free and clear of any Lien except Permitted Liens.



          (i) Location. The principal place of business and major executive office of Borrower is 110 S. Poplar
Street, Suite 101, Wilmington, Delaware 19801.  




          (j) Valid Lien. This Agreement creates, to secure the Obligations, a valid security interest (as defined in
the UCC) in the Collateral and, upon the filing of the financing statements on Form UCC-1 described
in Section 3.01(j); the Collateral Agent, for the benefit of the Secured Parties, will have a valid
first priority perfected security interest in the Collateral (subject to Section 9-315 of the UCC).




          (k) Solvency. Borrower is solvent and will not become insolvent after giving effect to the transactions
contemplated by this Agreement. Borrower is currently repaying all of its indebtedness as such
indebtedness becomes due; and, after giving effect to the transactions contemplated by this
Agreement, Borrower will have adequate capital to conduct its business as presently conducted and
as contemplated by this Agreement.




          (l) Compliance. Borrower has complied, and will comply on each Purchase Date, in all respects with all
Requirements of Law with respect to it, its business and properties and all Purchased Contracts
acquired by it pursuant to the Purchase and Contribution Agreement. Borrower has maintained and
will maintain all applicable permits, certifications and licenses necessary in any respect with
respect to its business and properties and all Purchased Contracts,




- 25 -









 







Borrower has filed or caused to
be filed, and will file, on a timely basis all tax returns required by any Governmental Authority.




          (m) No Rescission. No Purchased Contract has been satisfied, subordinated or rescinded or, except as disclosed
in writing to the Facility Agent, amended in any manner.




          (n) No Insolvency Event. No Insolvency Event has occurred with respect to Borrower nor, in Borrower’s good faith
judgment, is any Insolvency Event anticipated to occur with respect to Borrower in the foreseeable
future.




          (o) Fraudulent Conveyance. Borrower is not entering into the transactions contemplated hereby with any intent of
hindering, delaying or defrauding creditors.




          (p) Eligible Contracts. As of the relevant Purchase Date:





     (i) each Purchased Contract sold on such date is an Eligible Contract and the
transfer, sale and conveyance of such Purchased Contract from LEAF III to Borrower
under the Purchase and Contribution Agreement does not conflict with, result in a
breach of any of the provisions of, or constitute (with or without notice or lapse
of time or both) a default under, such Purchased Contract or violate any Requirement
of Law or subject the Borrower, the Collateral Agent, Facility Agent or any of the
Lenders to any fine, penalty or liability;




     (ii) the information set forth in the Purchase Date Notice with respect to each
Purchased Contract to be purchased on such date, together with the applicable
electronic data file provided in connection therewith, is and shall be true and
correct;




     (iii) the weighted average (by Contract Value) remaining term of each Purchased
Contract sold on such date is not longer than forty (40) calendar months.



          (q) No Proceedings. There are no proceedings, injunctions, writs, restraining orders or investigations pending
or, to the best knowledge of an Authorized Officer of Borrower, threatened with respect to any
Purchased Contract before any Governmental Authority asserting the illegality, invalidity or
unenforceability, or seeking any determination or ruling that would affect the legality, validity
or enforceability of any such Purchased Contract.




          (r) Legal Name. The legal name of Borrower is LEAF III B SPE, LLC.




          (s) ERISA. No Plan (as defined in Section 3(3) of ERISA) maintained by Borrower or any of its ERISA
Affiliates (as defined in Section 414(b), (c), (m) or (o) of the Code) has any accumulated funding
deficiency (within the meaning of Section 302 of ERISA or Section 412 of the Code), whether or not
waived, Borrower and each ERISA Affiliate of Borrower have, in a timely manner, made all
contributions required to be made by it to any Plan and Multiemployer Plan (as defined in Section
4001(a)(3) of ERISA) to which contributions are or have been required to be made by Borrower or
such ERISA Affiliate, and no event requiring notice to the Pension Benefit Guaranty Corporation
under Section 302(f) of ERISA has occurred





- 26 -












 




and is continuing or could reasonably
be expected to occur with respect to any such Plan, in any case, that could reasonably be expected
to result, directly or indirectly, in any Lien being imposed on the property of Borrower or the
payment of any material amount to avoid such Lien. No Reportable Event (as defined in Section 4043
of ERISA) with respect to Borrower or any of its ERISA Affiliates has occurred or could reasonably
be expected to occur that could reasonably be expected to result, directly or indirectly, in any
Lien being imposed on the property of Borrower or the payment of any material amount to avoid such
Lien.




          (t) PATRIOT Act. To the extent applicable, Borrower is in compliance, in all material
respects, with the (i) Trading with the Enemy Act, as amended, and each of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as
amended) and any other enabling legislation or executive order relating thereto, and (ii) the
PATRIOT Act. No part of the proceeds of any Advance will be used, directly or indirectly, for any
payments to any governmental official or employee, political party, official of a political party,
candidate for political office, or anyone else acting in an official capacity, in order to obtain,
retain or direct business or obtain any improper advantage, in violation of the United States
Foreign Corrupt Practices Act of 1977, as amended.




ARTICLE V




COVENANTS




     SECTION 5.01. Covenants of Borrower. Borrower hereby covenants that, until the
termination of this Agreement:



          (a) Compliance with Law. Borrower will comply in all material respects with all
Requirements of Law with respect to it, its business and properties and the Collateral. Borrower
will maintain all applicable permits, certifications and licenses necessary in any material respect
with respect to its business and properties and the Collateral. Borrower will file on a timely
basis all tax returns required by any Governmental Authority.




          (b) Preservation of Existence. (i) Borrower will preserve and maintain its corporate
existence, rights, franchises and privileges, and become and remain licensed in each jurisdiction
where the failure to maintain such license would materially and adversely affect (A) the interests
of Borrower, the Collateral Agent, any of the Secured Parties hereunder or the Collateral, (B) the
collectibility of any Contract Receivable or (C) the ability of Borrower to perform its obligations
hereunder in any material respect and (ii) Borrower shall not consolidate with or merge into any
other Person or convey or transfer its properties and assets substantially as an entirety to any
Person.




          (c) Inspections. At any time and from time to time during Borrower’s regular business
hours and at Borrower’s expense, on reasonable prior notice and for a purpose reasonably related to
this Agreement, Borrower shall, in response to any reasonable request of the Required Lenders,
permit the Collateral Agent, or its agents or representatives, (i) to examine and make copies of
and abstracts from all books, records and documents (including, without limitation, computer tapes,
microfiche and disks) in the possession or under the control of Borrower relating to the Collateral
and (ii) to visit the offices and properties of Borrower for the purpose of examining such
materials and to discuss matters relating to the Collateral, Borrower’s




- 27 -









 







performance hereunder, the
business operations, properties and financial or other condition of Borrower with any of its
officers or directors or (after consultation with a Authorized Officer) employees of Borrower
having knowledge thereof.




          (d) Keeping of Records and Books of Account. Borrower will maintain and implement
administrative and operating procedures (including, without limitation, the ability to recreate
records evidencing the Collateral in the event of the destruction of the originals thereof), and
keep and maintain all documents, books, records and other information reasonably necessary or
advisable for the collection of the Contract Receivables.




          (e) Collections. Borrower will cause any Collections received by it to be held in
trust for the Collateral Agent and the Lenders and promptly deposited to the Collection Account in
accordance with the terms of the Servicing Agreement.




          (f) Reporting Requirements.





     (i) Borrower shall (A) within one (1) Business Day after an Authorized Officer
of Borrower obtains knowledge of the occurrence of any Event of Default, notify
(either orally or in writing) the Facility Agent of such occurrence and (B) as soon
as possible and in any event within three (3) Business Days after an Authorized
Officer of Borrower obtains knowledge of the occurrence of any Event of Default,
deliver to the Facility Agent a statement of an Authorized Officer of Borrower
setting forth details of such Event of Default or such event and the action that
Borrower has taken and proposes to take with respect thereto.




     (ii) As soon as possible and in any event within ten (10) Business Days after
an Authorized Officer of Borrower obtains knowledge thereof, Borrower shall notify
the Facility Agent of any litigation, investigation or proceeding that could
reasonably be expected to impair in any respect the ability of Borrower to perform
its obligations under this Agreement.




     (iii) Borrower shall promptly deliver to the Facility Agent such other
information, documents, records or reports regarding the Collateral as the Facility
Agent or any of the Lenders may from time to time reasonably request in order to
protect the Secured Parties’ interests under or as contemplated by this Agreement.




     (iv) Borrower shall deliver to the Facility Agent, at least thirty (30) days
prior to any change in the name or jurisdiction of organization of Borrower, or
LEAF III, a notice setting forth the new name or jurisdiction of organization, as
applicable, and the effective date thereof.



          (g) Extension or Amendment of Contract Receivables. Except as otherwise permitted
under the Servicing Agreement, Borrower will not (i) extend, amend or otherwise modify the terms of
any Purchased Contract or (ii) rescind or cancel any Purchased Contract.




- 28 -









 








          (h) No Actions Against Obligors. Except in accordance with the Servicing Agreement,
Borrower will not commence or settle any legal action to enforce any rights under any Purchased
Contract.




          (i) Relationship of LEAF III and Borrower.





     (i) Borrower shall maintain at all times a telephone number different from any
telephone numbers of LEAF III. Borrower shall use stationery separate from that of
LEAF III.




     (ii) Borrower shall take all reasonable steps to ensure that its creditors and
the creditors of LEAF III are aware that Borrower is a legal entity separate and
distinct from any other Person and maintains its assets, and conducts its
operations, separate from those of any other Person. Borrower shall not fail to
correct any known misunderstanding regarding its separate identity. Borrower shall
pay from its own funds, to the extent funds are available, its operating expenses
and liabilities, including legal fees and expenses, or shall reimburse LEAF III for
any such expenses or liabilities paid by LEAF III on Borrower’s behalf. Borrower
shall not hold out the assets or creditworthiness of LEAF III as being available for
the payment of Borrower’s liabilities or obligations, and Borrower shall not hold
out its assets or creditworthiness as being available for the payment of the
liabilities or obligations of LEAF III or any of its affiliates other than Borrower.
Borrower shall not permit LEAF III to hold its assets or creditworthiness, as being
available for the payment of the liabilities or obligations of LEAF III or any of
its affiliates (other than Borrower). Borrower shall not use or permit the separate
existence of Borrower to be used by LEAF III to abuse creditors or to perpetrate a
fraud, injury, or injustice on creditors.




     (iii) Borrower shall conduct its business separate and apart from the business
conducted by any other Person. Borrower shall maintain its books and records
distinct and separately identifiable from the corporate records of LEAF III and any
other Person. Borrower shall prepare financial records distinct and separately
identifiable from the financial records of LEAF III or any of its affiliates (other
than Borrower). Borrower shall prepare and maintain such statements and reports in
accordance with generally accepted accounting principles. To the extent that
Borrower is required to file tax returns under applicable law, Borrower shall file
such tax returns separate from those of any other Person. Borrower shall keep its
funds and bank accounts separate and apart from the funds of LEAF III and any of its
affiliates (other than Borrower), and shall maintain its other assets separately
identifiable and distinguishable from the assets of LEAF III and any of its
affiliates (other than Borrower). Borrower shall not commingle its funds or other
assets with those of any other Person.




     (iv) Borrower shall act solely in its own name and solely through its duly
Authorized Officers or agents. Borrower shall comply with the provisions of its
limited liability company agreement, and shall comply in all material respects with
the laws of the State of Delaware, insofar as they pertain to its separateness.



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Borrower shall maintain appropriate records of its member’s written consents and
shall observe all requisite corporate formalities insofar as they pertain to
Borrower’s separate existence.




     (v) All transactions between LEAF III and Borrower are and shall be duly
authorized and documented, and recorded accurately in their respective books and
records. All such transactions shall be fair to each party, constitute exchanges for
fair consideration and for reasonably equivalent value, and shall be made in good
faith and without any intent to hinder, delay, or defraud creditors. Borrower shall
not take any action, and shall not engage in transactions with LEAF III or any of
its Affiliates (other than Borrower) except as directed by LEAF III.



          (j) The Borrower will keep the office where it maintains its records concerning the Purchased
Contracts at (i) the address of the Borrower set forth as specified in Section 9.12 or (ii) upon
thirty (30) days’ prior written notice to the Facility Agent, at any other locations in
jurisdictions where all actions reasonably requested by the Facility Agent to protect and perfect
the interest in the Collateral have been taken and completed. The Borrower will not locate either
its principal place of business or its chief executive office within the State of California.




          (k) Stockholder Indemnity Rights. Borrower, at the expense of the Collateral Agent,
shall take all commercially reasonable actions to enforce the Stockholder Indemnity Rights for the
benefit of, and as requested in writing by, the Collateral Agent, to the extent that the
Collateral Agent shall not be permitted to enforce such Stockholder Indemnity Rights in their own
name.




ARTICLE VI




EVENTS OF DEFAULT




     SECTION 6.01. Events of Default. Upon the occurrence of (x) any Event of Default
described in clause (c) of the definition thereof, automatically, and (y) any other Event of
Default, at the written demand of the Required Lenders, upon notice to Borrower by the Collateral
Agent:



          (a) the Commitments shall immediately terminate;




          (b) the aggregate principal of all Advances, all accrued and unpaid interest thereon, all fees
and all other Obligations under this Agreement and the other Transaction Documents shall become due
and payable immediately, without presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived by Borrower; and




          (c) the Collateral Agent shall exercise any and all of its other rights and remedies under
applicable law (including the UCC) or at equity, hereunder and under the other Transaction
Documents.




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     SECTION 6.02. Remedies. If any Event of Default shall have occurred and be
continuing:



          (a) The Collateral Agent may exercise in respect of the Collateral all of the rights and
remedies of a secured party upon default under the UCC (whether or not the UCC applies to the
affected Collateral), and also may (i) require Borrower to, and Borrower hereby agrees that it will
at its expense and upon request of the Collateral Agent forthwith, assemble all or part of the
Collateral as directed by the Collateral Agent and make it available to the Collateral Agent at a
place or places to be designated by the Collateral Agent which is reasonably convenient to both
parties and (ii) without notice except as specified below, sell the Collateral or any part thereof
in one or more parcels at public or private sale, at any of the Collateral Agent’ offices or
elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such
other terms as the Collateral Agent may deem commercially reasonable. Borrower agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days’ notice to Borrower of the
time and place of any public sale or the time after which any private sale is to be made shall
constitute reasonable notification. The Collateral Agent shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn any
public or private sale from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to which it was so adjourned.
Borrower hereby waives any claims against the Collateral Agent arising by reason of the fact that
the price at which the Collateral may have been sold at a private sale was less than the price
which might have been obtained at a public sale or was less than the aggregate amount of the
Obligations, even if the Collateral Agent accepts the first offer received and does not offer the
Collateral to more than one offeree and waives all rights which Borrower may have to require that
all or any part of the Collateral be marshalled upon any sale (public or private) thereof.




          (b) Any cash held by the Collateral Agent as Collateral and all cash proceeds received by the
Collateral Agent in respect of any sale of or collection from, or other realization upon, all or
any part of the Collateral may, in the discretion of the Collateral Agent, be held by the
Collateral Agent as collateral for, and/or then or at any time thereafter applied in whole or in
part by the Collateral Agent against, all or any part of the Obligations.




          (c) In the event that the proceeds of any such sale, collection or realization are
insufficient to pay all amounts to which the Collateral Agent, on behalf of the Secured Parties, is
legally entitled, Borrower shall be liable for the deficiency, together with interest thereon at
the highest rate specified in any applicable Transaction Document for interest on overdue principal
thereof or such other rate as shall be fixed by applicable law, together with the costs of
collection and the reasonable fees, costs and expenses of any attorneys employed by the Collateral
Agent to collect such deficiency.




          (d) The Collateral Agent shall have, in addition to any rights and remedies under this
Agreement, all other rights and remedies with respect to the Collateral available to it under
applicable law or at equity, which rights and remedies shall be cumulative.




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ARTICLE VII




SECURITY AGREEMENT




     SECTION 7.01. Grant of Security Interest. As collateral security for all of the
Obligations, Borrower hereby pledges and assigns to the Collateral Agent, for the benefit of the
Secured Parties, and grants to the Collateral Agent, for the benefit of the Secured Parties, a
continuing security interest in all of the following property of Borrower, whether now or hereafter
existing and whether now owned or hereafter acquired, tangible or intangible, consisting of all of
Borrower’s right, title and interest in and to the following, in each case howsoever Borrower’s
interest therein may arise or appear (whether by ownership, security interest, claim or otherwise)
(collectively, the “Collateral”):



          (a) the Purchased Contracts;




          (b) the Contract Receivables;




          (c) the Accounts and all property therein from time to time;




          (d) each of the Transaction Documents to which it is a party or under which it has any right,
remedy, privilege or interest;




          (e) all cash and non-cash proceeds of any and all of the foregoing and, to the extent not
otherwise included, all payments under insurance (whether or not the Collateral Agent is the loss
payee thereof) and any indemnity, warranty or guaranty payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral; and




          (f) all of Borrower’s rights, remedies, interest, powers and privileges under the Asset
Purchase Agreement with respect to the items in the foregoing clause (a) including, without
limitation, the Stockholder Indemnity Rights.




     SECTION 7.02. Security for Obligations. The security interest created hereby in the
Collateral constitutes continuing collateral security for all of the Obligations, whether now
existing or hereafter incurred.



     SECTION 7.03. Further Assurances.



          (a) Borrower hereby covenants that, until the termination of this Agreement, Borrower shall,
from time to time, at the expense of Borrower, promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary, or that the Collateral Agent may
reasonably request, in order to create and/or maintain the validity, perfection or priority of and
protect any security interest granted hereby or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Borrower shall:





     (i) file such financing or continuation statements, or amendments thereto, and
execute and deliver such other agreements, instruments, endorsements, powers of
attorney or notices, as may be necessary, or as the



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Collateral Agent may reasonably
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby;




     (ii) at any reasonable time, following the occurrence and during the
continuance of any Event of Default, upon request by the Collateral Agent, assemble
the Collateral and allow inspection of the Collateral by the Collateral Agent, or
persons designated by the Collateral Agent; and




     (iii) at the Collateral Agent’s reasonable request, appear in and defend any
action or proceeding that may affect Borrower’s title to or the Collateral Agent’s
security interest in all or any part of the Collateral in any material respect.



          (b) Borrower hereby authorizes the Collateral Agent to file a Record or Records, including,
without limitation, financing or continuation statements, and amendments thereto, in any
jurisdictions and with any filing offices as the Collateral Agent may determine, in its sole
discretion, are necessary or advisable to perfect the security interest granted to the Collateral
Agent herein. Such financing statements may describe the Collateral in the same manner as
described herein or may contain an indication or description of collateral that describes such
property in any other manner as the Collateral Agent may determine, in its sole discretion, is
necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral
granted to the Collateral Agent herein. Borrower shall furnish to the Collateral Agent from time
to time statements and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Collateral Agent may reasonably request, all in
reasonable detail.




     SECTION 7.04. Power of Attorney. If an Event of Default has occurred and is
continuing, Borrower hereby irrevocably appoints the Collateral Agent (such appointment being
coupled with an interest) as Borrower’s attorney-in-fact, with full authority in the place and
stead of Borrower and in the name of Borrower, the Collateral Agent or otherwise, from time to time
in the Collateral Agent’s discretion to take any action and to execute any instrument that the
Collateral Agent may deem reasonably necessary to accomplish the purposes of this Agreement,
including, without limitation, the following:



          (a) upon the occurrence and during the continuance of any Event of Default, to obtain and
adjust insurance required to be maintained by Borrower or paid to the Collateral Agent pursuant to
this Agreement;




          (b) upon the occurrence and during the continuance of any Event of Default, to ask for,
demand, collect, sue for, recover, compound, receive and give acquittance and receipts for moneys
due and to become due under or in respect of any of the Collateral;




          (c) upon the occurrence and during the continuance of any Event of Default, to file any claims
or take any action or institute any proceedings that the Collateral Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce the rights of the
Collateral Agent with respect to any of the Collateral;




          (d) to prepare and file any UCC financing statements against Borrower as debtor;




- 33 -









 








          (e) to take or cause to be taken all actions necessary to perform or comply or cause
performance or compliance with the terms of this Agreement, including, without limitation, access
to pay or discharge taxes or Liens (other than Permitted Liens) levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts necessary to discharge the
same to be determined by the Collateral Agent in its sole discretion, any such payments made by the
Collateral Agent to become obligations of Borrower to the Collateral Agent, due and payable
immediately without demand; and




          (f) if otherwise permitted in accordance with the terms of this Agreement, generally to sell,
transfer, pledge, make any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the Collateral Agent were the absolute owner thereof for all
purposes, and to do, at the Collateral Agent’s option and Borrower’s expense, at any time or from
time to time, all acts and things that the Collateral Agent deems reasonably necessary to protect,
preserve or realize upon the Collateral and the Collateral Agent’s security interest therein in
order to effect the intent of this Agreement, all as fully and effectively as Borrower might do.




     SECTION 7.05. No Duty on the Part of the Collateral Agent or Secured Parties. The powers
conferred on the Collateral Agent hereunder are solely to protect the interests of the Secured
Parties in the Collateral and shall not impose any duty upon the Collateral Agent or any Secured
Party to exercise any such powers. The Collateral Agent and the Secured Parties shall be
accountable only for amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees or agents shall be responsible to
Borrower for any act or failure to act hereunder, except for their own gross negligence or willful
misconduct.



ARTICLE VIII




COLLATERAL AGENT




     SECTION 8.01. Appointment. KEF is hereby appointed the Collateral Agent hereunder and
under the other Transaction Documents and each Lender hereby authorizes the Collateral Agent to act
as its agent in accordance with the terms hereof and the other Transaction Documents. The
Collateral Agent hereby agrees to act upon the express conditions contained herein and the other
Transaction Documents, as applicable. The provisions of this Article VIII are solely for the
benefit of the Collateral Agent and the Lenders and Borrower nor any Affiliate thereof (except, in
each case, with respect to Section 8.03 hereof) shall have any rights as a third party beneficiary
of any of the provisions thereof. In performing its functions and duties hereunder, the Collateral
Agent shall act solely as an agent of the Lenders and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or for Borrower or any
Affiliate thereof.



     SECTION 8.02. Powers and Duties. Each Lender irrevocably authorizes the Collateral Agent
to take such action on such Lender’s behalf and to exercise such powers, rights and remedies
hereunder and under the other Transaction Documents as are specifically delegated or granted to the
Collateral Agent by the terms hereof and thereof, together with such powers, rights and remedies as
are reasonably incidental thereto. The Collateral Agent shall have only those



- 34 -









 







duties and
responsibilities that are expressly specified herein and in the other Transaction Documents. The
Collateral Agent may exercise such powers, rights and remedies and perform such duties by or
through its agents or employees. The Collateral Agent shall not have, by reason hereof or any of
the other Transaction Documents, a fiduciary relationship in respect of any Lender; and nothing
herein or any of the other Transaction Documents, expressed or implied, is intended to or shall be
so construed as to impose upon the Collateral Agent any obligations in respect hereof or any of the
other Transaction Documents except as expressly set forth herein or therein. Notwithstanding the
foregoing, the Collateral Agent shall not have the power or authority to sign any document in the
name of any Lender.



     SECTION 8.03. General Immunity.



          (a) No Responsibility for Certain Matters. The Collateral Agent shall not be
responsible to any Lender for the execution, effectiveness, genuineness, validity, enforceability,
collectability or sufficiency hereof or of any other Transaction Document or for any
representations, warranties, recitals or statements made herein or therein or made in any written
or oral statements or in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by Collateral Agent to the Lenders or by or on behalf of
Borrower to the Collateral Agent or any Lender in connection with the Transaction Documents and the
transactions contemplated thereby or for the financial condition or business affairs of Borrower or
any other Person liable for the payment of any Obligations, nor shall the Collateral Agent be
required to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Transaction Documents or as
to the use of the proceeds of the Advances or as to the existence or possible existence of any
Event of Default. Anything contained herein to the contrary notwithstanding, the Collateral Agent
shall not have any liability arising from confirmations of the amount of outstanding Advances or
the component amounts thereof.




          (b) Exculpatory Provisions. Neither the Collateral Agent nor any of its officers,
partners, directors, employees or agents shall be liable to the Lenders for any action taken or
omitted by the Collateral Agent under or in connection with any of the Transaction Documents except
to the extent caused by the Collateral Agent’s gross negligence or willful misconduct. The
Collateral Agent shall be entitled to refrain from any act or the taking of any action (including
the failure to take an action) in connection herewith or any of the other Transaction Documents or
from the exercise of any power, discretion or authority vested in it hereunder or thereunder unless
and until the Collateral Agent shall have received instructions in respect thereof from the
Required Lenders and, upon receipt of such instructions from the Required Lenders, the Collateral
Agent shall be entitled to act or (where so instructed) refrain from acting, or to exercise such
power, discretion or authority, in accordance with such instructions. Without prejudice to the
generality of the foregoing, (i) the Collateral Agent shall be entitled to rely, and shall be fully
protected in relying, upon any communication, instrument or document believed by it to be genuine
and correct and to have been signed or sent by the proper Person or Persons, and shall be entitled
to rely and shall be protected in relying on opinions and judgments of attorneys (who may be
attorneys for Borrower or its Affiliates), accountants, experts and other professional advisors
selected by it; and (ii) no Lender shall have any right of action whatsoever against the Collateral
Agent as a result of the Collateral Agent




- 35 -









 







acting or (where so instructed) refraining from acting
hereunder or any of the other Transaction Documents in accordance with the instructions of the
Required Lenders.




          (c) Delegation of Duties. The Collateral Agent may perform any and all of its duties
and exercise its rights and powers under this Agreement or under any other Transaction Document by
or through any one or more sub-agents appointed by the Collateral Agent. The Collateral Agent and
any such sub-agent may perform any and all of its duties and exercise its rights and powers by or
through their respective Affiliates. The exculpatory, indemnification and other provisions of this
Section 8.03 and of Section 8.06 shall apply to any Affiliates of the Collateral Agent and shall
apply to their respective activities in connection with the syndication of the credit facilities
provided for herein as well as activities as the Collateral Agent. All of the rights, benefits,
and privileges (including the exculpatory and indemnification provisions) of this Section 8.03 and
of Section 8.06 shall apply to any such sub-agent and to the Affiliates of any such sub-agent, and
shall apply to their respective activities as sub-agent as if such sub-agent and Affiliates were
named herein. Notwithstanding anything herein to the contrary, with respect to each sub-agent
appointed by the Collateral Agent, (i) such sub-agent shall be a third party beneficiary under this
Agreement with respect to all such rights, benefits and privileges (including exculpatory rights
and rights to indemnification) and shall have all of the rights and benefits of a third party
beneficiary, including an independent right of action to enforce such rights, benefits and
privileges (including exculpatory rights and rights to indemnification) directly, without the
consent or joinder of any other Person, against Borrower and the Lenders, (ii) such rights,
benefits and privileges (including exculpatory rights and rights to indemnification) shall not be
modified or amended without the consent of such sub-agent, and (iii) such sub-agent shall only have
obligations to the Collateral Agent and not to Borrower, Lender or any other Person and none of
Borrower, any Lender or any other Person shall have any rights, directly or indirectly, as a third
party beneficiary or otherwise, against such sub-agent.




     SECTION 8.04. Collateral Agent Entitled to Act as Lender. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, the Collateral Agent in its individual capacity as a Lender hereunder. With
respect to its participation in the Advances, the Collateral Agent shall have the same rights
and powers hereunder as any other Lender and may exercise the same as if it were not performing the
duties and functions delegated to it hereunder, and the term “Lender” shall, unless the context
clearly otherwise indicates, include the Collateral Agent in its individual capacity. Any
Collateral Agent and its Affiliates may accept deposits from, lend money to, own securities of and
generally engage in any kind of banking, trust, financial advisory or other business with Borrower
or any of its Affiliates as if it were not performing the duties specified herein, and may accept
fees and other consideration from Borrower for services in connection herewith and otherwise
without having to account for the same to the Lenders.



     SECTION 8.05. Lenders’ Representations and Warranties. Each Lender represents and
warrants that it has made its own independent investigation of the financial condition and affairs
of Borrower in connection with the Advances hereunder and that it has made and shall continue to
make its own appraisal of the creditworthiness of Borrower and the Collateral. The Collateral
Agent shall have no duty or responsibility, either initially or on a continuing basis, to make any
such investigation or any such appraisal on behalf of the Lenders or to provide any Lender with any
credit or other information with respect thereto, whether coming into its possession before



- 36 -









 







the
making of the Advances or at any time or times thereafter, and the Collateral Agent shall have no
responsibility with respect to the accuracy of or the completeness of any information provided to
the Lenders.



     SECTION 8.06. Right to Indemnity. Each Lender (other than the CP Rate Lender), in
proportion to its Pro Rata Share, severally agrees to indemnify the Collateral Agent, to the extent
that the Collateral Agent shall not have been reimbursed by Borrower, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements, whether incurred in a third party action or in an action
to enforce this agreement or any other Transaction Document) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Collateral Agent in
exercising its powers, rights and remedies or performing its duties hereunder or under the other
Transaction Documents or otherwise in its capacity as the Collateral Agent in any way relating to
or arising out hereof or the other Transaction Documents; provided, no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Collateral Agent’s gross negligence or
willful misconduct. If any indemnity furnished to the Collateral Agent for any purpose shall, in
the opinion of the Collateral Agent, be insufficient or become impaired, the Collateral Agent may
call for additional indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished; provided, in no event shall this sentence require any
Lender to indemnify the Collateral Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such Lender’s Pro Rata Share
thereof; and provided further, this sentence shall not be deemed to require any Lender to indemnify
the Collateral Agent against any liability, obligation, loss, damage, penalty, action, judgment,
suit, cost, expense or disbursement described in the proviso in the immediately preceding sentence.



     SECTION 8.07. Successor Collateral Agent. The Collateral Agent may resign at any time
by giving thirty (30) days’ prior written notice thereof to the Lenders and Borrower. Upon any
such notice of resignation, the Required Lenders shall have the right, upon five Business Days’
notice to Borrower, to appoint a successor Collateral Agent (and, failing such
appointment, the retiring collateral agent may appoint a successor collateral agent among the
Lenders or any other financial institution on behalf of the Lenders). Upon the acceptance of any
appointment as the Collateral Agent hereunder by a successor Collateral Agent, that successor
Collateral Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Collateral Agent and the retiring Collateral Agent shall
promptly (a) transfer to such successor Collateral Agent all sums, Securities and other items of
Collateral held under the Transaction Documents, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the successor
Collateral Agent under the Transaction Documents, and (b) execute and deliver to such successor
Collateral Agent such amendments to financing statements, and take such other actions, as may be
necessary or appropriate in connection with the assignment to such successor Collateral Agent of
the security interests created under the Transaction Documents, whereupon such retiring Collateral
Agent shall be discharged from its duties and obligations hereunder. After any retiring Collateral
Agent’s resignation hereunder as the Collateral Agent, the provisions of this Article VIII shall
inure to its benefit as to any actions taken or omitted to be taken by it while it was Collateral
Agent hereunder.



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     SECTION 8.08. Collateral.



          (a) Collateral Agent under Collateral Documents. Each Secured Party hereby further
authorizes the Collateral Agent, on behalf of and for the benefit of Secured Parties, to be the
agent for and representative of the Secured Parties with respect to the Collateral and the
Transaction Documents. Subject to Section 9.10, without further written consent or authorization
from any Secured Party, the Collateral Agent may execute any documents or instruments necessary in
connection with a sale or disposition of assets permitted by this Agreement, release any Lien
encumbering any item of Collateral that is the subject of such sale or other disposition of assets
or to which Required Lenders have otherwise consented.




          (b) Right to Realize on Collateral. Anything contained in any of the Transaction
Documents to the contrary notwithstanding, Borrower, the Collateral Agent and each Secured Party
hereby agree that (i) no Secured Party shall have any right individually to realize upon any of the
Collateral, it being understood and agreed that all powers, rights and remedies hereunder may be
exercised solely by the Collateral Agent, on behalf of the Secured Parties in accordance with the
terms hereof, and (ii) in the event of a foreclosure by the Collateral Agent on any of the
Collateral pursuant to a public or private sale or other disposition, the Collateral Agent or any
Lender may be the purchaser or licensor of any or all of such Collateral at any such sale or other
disposition and the Collateral Agent, as agent for and representative of Secured Parties (but not
any Lender or Lenders in its or their respective individual capacities unless Required Lenders
shall otherwise agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the Collateral sold at any
such public sale, to use and apply any of the Obligations as a credit on account of the purchase
price for any collateral payable by the Collateral Agent at such sale or other disposition.




ARTICLE VIII A




FACILITY AGENT




     SECTION 8A.01. Appointment. KEF is hereby appointed the Facility Agent hereunder and
under the other Transaction Documents and each Lender hereby authorizes the Facility Agent to act
as its agent in accordance with the terms hereof and the other Transaction Documents. The
Facility Agent hereby agrees to act upon the express conditions contained herein and the other
Transaction Documents, as applicable. The provisions of this Article VIIIA are solely for the
benefit of the Facility Agent and the Lenders and Borrower nor any Affiliate thereof (except, in
each case, with respect to Section 8A.03 hereof) shall have any rights as a third party beneficiary
of any of the provisions thereof. In performing its functions and duties hereunder, the Facility
Agent shall act solely as an agent of the Lenders and does not assume and shall not be deemed to
have assumed any obligation towards or relationship of agency or trust with or for Borrower or any
Affiliate thereof.



     SECTION 8A.02. Powers and Duties. Each Lender irrevocably authorizes the Facility Agent to
take such action on such Lender’s behalf and to exercise such powers, rights and remedies hereunder
and under the other Transaction Documents as are specifically delegated or granted to the Facility
Agent by the terms hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. The Facility Agent shall have only those



- 38 -









 







duties and
responsibilities that are expressly specified herein and in the other Transaction Documents. The
Facility Agent may exercise such powers, rights and remedies and perform such duties by or through
its agents or employees. The Facility Agent shall not have, by reason hereof or any of the other
Transaction Documents, a fiduciary relationship in respect of any Lender; and nothing herein or any
of the other Transaction Documents, expressed or implied, is intended to or shall be so construed
as to impose upon the Facility Agent any obligations in respect hereof or any of the other
Transaction Documents except as expressly set forth herein or therein. Notwithstanding the
foregoing, the Facility Agent shall not have the power or authority to sign any document in the
name of any Lender.



     SECTION 8A.03. General Immunity.



          (a) No Responsibility for Certain Matters. The Facility Agent shall not be
responsible to any Lender for the execution, effectiveness, genuineness, validity, enforceability,
collectability or sufficiency hereof or of any other Transaction Document or for any
representations, warranties, recitals or statements made herein or therein or made in any written
or oral statements or in any financial or other statements, instruments, reports or certificates or
any other documents furnished or made by the Facility Agent to the Lenders or by or on behalf of
Borrower to the Facility Agent or any Lender in connection with the Transaction Documents and the
transactions contemplated thereby or for the financial condition or business affairs of Borrower or
any other Person liable for the payment of any Obligations, nor shall the Facility Agent be
required to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Transaction Documents or as
to the use of the proceeds of the Advances or as to the existence or possible existence of any
Event of Default. Anything contained herein to the contrary notwithstanding, the Facility Agent
shall not have any liability arising from confirmations of the amount of outstanding Advances or
the component amounts thereof.




          (b) Exculpatory Provisions. Neither the Facility Agent nor any of its officers,
partners, directors, employees or agents shall be liable to the Lenders for any action taken or
omitted by the Facility Agent under or in connection with any of the Transaction Documents except
to the extent caused by the Facility Agent’s gross negligence or willful misconduct. The Facility
Agent shall be entitled to refrain from any act or the taking of any action (including the failure
to take an action) in connection herewith or any of the other Transaction Documents or from the
exercise of any power, discretion or authority vested in it hereunder or thereunder unless and
until the Facility Agent shall have received instructions in respect thereof from the Required
Lenders and, upon receipt of such instructions from the Required Lenders, the Facility Agent shall
be entitled to act or (where so instructed) refrain from acting, or to exercise such power,
discretion or authority, in accordance with such instructions. Without prejudice to the generality
of the foregoing, (i) the Facility Agent shall be entitled to rely, and shall be fully protected in
relying, upon any communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, and shall be entitled to rely and
shall be protected in relying on opinions and judgments of attorneys (who may be attorneys for
Borrower or its Affiliates), accountants, experts and other professional advisors selected by it;
and (ii) no Lender shall have any right of action whatsoever against the Facility Agent as a result
of the Facility Agent acting or (where so instructed) refraining from




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acting hereunder or any of
the other Transaction Documents in accordance with the instructions of the Required Lenders.




          (c) Delegation of Duties. The Facility Agent may perform any and all of its duties and
exercise its rights and powers under this Agreement or under any other Transaction Document by or
through any one or more sub-agents appointed by the Facility Agent. The Facility Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and powers by or through
their respective Affiliates. The exculpatory, indemnification and other provisions of this Section
8A.03 and of Section 8A.06 shall apply to any Affiliates of the Facility Agent and shall apply to
their respective activities in connection with the syndication of the credit facilities provided
for herein as well as activities as the Facility Agent. All of the rights, benefits, and
privileges (including the exculpatory and indemnification provisions) of this Section 8A.03 and of
Section 8A.06 shall apply to any such sub-agent and to the Affiliates of any such sub-agent, and
shall apply to their respective activities as sub-agent as if such sub-agent and Affiliates were
named herein. Notwithstanding anything herein to the contrary, with respect to each sub-agent
appointed by the Facility Agent, (i) such sub-agent shall be a third party beneficiary under this
Agreement with respect to all such rights, benefits and privileges (including exculpatory rights
and rights to indemnification) and shall have all of the rights and benefits of a third party
beneficiary, including an independent right of action to enforce such rights, benefits and
privileges (including exculpatory rights and rights to indemnification) directly, without the
consent or joinder of any other Person, against Borrower and the Lenders, (ii) such rights,
benefits and privileges (including exculpatory rights and rights to indemnification) shall not be
modified or amended without the consent of such sub-agent, and (iii) such sub-agent shall only have
obligations to the Facility Agent and not to Borrower, Lender or any other Person and none of
Borrower, any Lender or any other Person shall have any rights, directly or indirectly, as a third
party beneficiary or otherwise, against such sub-agent.




     SECTION 8A.04. Facility Agent Entitled to Act as Lender. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, the Facility Agent in its individual capacity as a Lender hereunder. With
respect to its participation in the Advances, the Facility Agent shall have the same rights
and powers hereunder as any other Lender and may exercise the same as if it were not performing the
duties and functions delegated to it hereunder, and the term “Lender” shall, unless the context
clearly otherwise indicates, include the Facility Agent in its individual capacity. Any Facility
Agent and its Affiliates may accept deposits from, lend money to, own securities of and generally
engage in any kind of banking, trust, financial advisory or other business with Borrower or any of
its Affiliates as if it were not performing the duties specified herein, and may accept fees and
other consideration from Borrower for services in connection herewith and otherwise without having
to account for the same to the Lenders.



     SECTION 8A.05. Lenders’ Representations and Warranties. Each Lender represents and
warrants that it has made its own independent investigation of the financial condition and affairs
of Borrower in connection with the Advances hereunder and that it has made and shall continue to
make its own appraisal of the creditworthiness of Borrower and the Collateral. The Facility Agent
shall have no duty or responsibility, either initially or on a continuing basis, to make any such
investigation or any such appraisal on behalf of the Lenders or to provide any Lender with any
credit or other information with respect thereto, whether coming into its possession before



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the
making of the Advances or at any time or times thereafter, and the Facility Agent shall have no
responsibility with respect to the accuracy of or the completeness of any information provided to
the Lenders.



     SECTION 8A.06. Right to Indemnity. Each Lender (other than the CP Rate Lender), in
proportion to its Pro Rata Share, severally agrees to indemnify the Facility Agent, to the extent
that the Facility Agent shall not have been reimbursed by Borrower, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements, whether incurred in a third party action or in an action
to enforce this agreement or any other Transaction Document) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Facility Agent in
exercising its powers, rights and remedies or performing its duties hereunder or under the other
Transaction Documents or otherwise in its capacity as the Facility Agent in any way relating to or
arising out hereof or the other Transaction Documents; provided, no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Facility Agent’s gross negligence or willful
misconduct. If any indemnity furnished to the Facility Agent for any purpose shall, in the opinion
of the Facility Agent, be insufficient or become impaired, the Facility Agent may call for
additional indemnity and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished; provided, in no event shall this sentence require any Lender to
indemnify the Facility Agent against any liability, obligation, loss, damage, penalty, action,
judgment, suit, cost, expense or disbursement in excess of such Lender’s Pro Rata Share thereof;
and provided further, this sentence shall not be deemed to require any Lender to indemnify the
Facility Agent against any liability, obligation, loss, damage, penalty, action, judgment, suit,
cost, expense or disbursement described in the proviso in the immediately preceding sentence.



     SECTION 8A.07. Successor Facility Agent. The Facility Agent may resign at any time by
giving thirty (30) days’ prior written notice thereof to the Lenders, Borrower and the Paying
Agent. Upon any such notice of resignation, the Required Lenders shall have the right, upon five
Business Days’ notice to Borrower, to appoint a successor Facility Agent (and, failing such
appointment, the retiring facility agent may appoint a successor facility agent among the
Lenders or any other financial institution on behalf of the Lenders). Upon the acceptance of any
appointment as the Facility Agent hereunder by a successor Facility Agent, that successor Facility
Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Facility Agent and the retiring Facility Agent shall promptly (a) transfer
to such successor Facility Agent all sums, Securities and other items of Collateral held under the
Transaction Documents, together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Facility Agent under the Transaction
Documents, and (b) execute and deliver to such successor Facility Agent such amendments to
financing statements, and take such other actions, as may be necessary or appropriate in connection
with the assignment to such successor Facility Agent of the security interests created under the
Transaction Documents, whereupon such retiring Facility Agent shall be discharged from its duties
and obligations hereunder. After any retiring Facility Agent’s resignation hereunder as the
Facility Agent, the provisions of this Article VIIIA shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Facility Agent hereunder.




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ARTICLE IX




MISCELLANEOUS




     SECTION 9.01. Costs, Expenses and Taxes. Borrower agrees to pay on demand all costs and expenses of the Facility Agent, the
Collateral Agent, the Paying Agent, the Custodian, the Back-up Servicer, the Lenders and their
respective Affiliates in connection with the negotiation, preparation, execution, delivery,
administration and amendment of all documents to be delivered subsequent to the Closing Date
pursuant to this Agreement, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for such Persons with respect thereto and with respect to advising such Persons
as to their respective rights and remedies under this Agreement, and Borrower agrees to pay all
costs and expenses of the Facility Agent, the Collateral Agent, the Paying Agent, the Custodian,
the Back-up Servicer, the Lenders and their respective Affiliates, if any (including reasonable
counsel fees and expenses), in connection with the enforcement of this Agreement and the other
documents to be delivered hereunder. In addition, Borrower agrees to pay any and
all stamp and other taxes (other than any income or franchise or similar taxes, or any
interest or penalties with respect thereto payable by any Person other than Borrower or an
Affiliate thereof) and fees payable or determined to be payable in connection with the execution,
delivery, filing and recording of this Agreement, any Support Agreements and any documents to be
delivered hereunder, and Borrower agrees to indemnify the Lenders against any liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes and fees.



     SECTION 9.02. Assignments; Participations.



          (a) Generally. This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties hereto and the
successors and assigns of the Lenders and permitted assigns of Borrower, the Collateral Agent and
the Facility Agent. None of Borrower’s rights or obligations hereunder nor any interest therein
may be assigned or delegated by Borrower without the prior written consent of all of the Lenders.
nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns permitted hereby and, to
the extent expressly contemplated hereby, Affiliates of the Facility Agent, Collateral Agent and
the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement;
provided, LEAF Funding and LEAF III shall be third party beneficiaries of all provisions of this
Agreement with respect to the Borrower and are entitled to enforce the provisions hereof against
the Facility Agent, the Collateral Agent, and the Lenders as if each were a party hereto.




          (b) Register. Borrower, the Facility Agent, the Collateral Agent and the Lenders
shall deem and treat the Persons listed as the Lenders in the Register as the holders and owners of
the corresponding Commitments and Advances listed therein for all purposes hereof, and no
assignment or transfer of any such Commitment or Advance shall be effective, in each case, unless
and until recorded in the Register following receipt of an Assignment Agreement effecting the
assignment or transfer thereof, in each case, as provided in Section 9.02(d). Each







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assignment shall
be recorded in the Register on the Business Day the Assignment Agreement is received by the
Facility Agent, if received by 12:00 noon New York City time, and on the following Business Day if
received after such time, prompt notice thereof shall be provided to Borrower and a copy of such
Assignment Agreement shall be maintained. The date of such recordation of a transfer shall be
referred to herein as the “Assignment Effective Date”. Any request, authority or consent
of any Person who, at the time of making such request or giving such authority or consent, is
listed in the Register as a Lender shall be conclusive and binding on any subsequent holder,
assignee or transferee of the corresponding Commitments or Advances.




          (c) Right to Assign. Each Lender shall have the right at any time to sell, assign or
transfer all or a portion of its rights and obligations under this Agreement, including, without
limitation, all or a portion of its Commitment or Advances owing to it or other Obligations
(provided, pro rata assignments shall not be required, but each such assignment shall be of
a uniform, and not varying, percentage of all rights and obligations under and in respect of any
Advance and any related Commitment):





     (i) to any Person meeting the criteria of clause (i) of the definition of the
term of “Eligible Assignee” (and the Lender shall give prompt notice thereafter to
Borrower and the Facility Agent); and




     (ii) to any Person meeting the criteria of clause (ii) of the definition of the
term of “Eligible Assignee” and consented to by each of Borrower and the Facility
Agent (such consent not to be (x) unreasonably withheld or delayed or, (y) in the
case of Borrower, required at any time an Event of Default shall have occurred and
then be continuing); provided, further each such assignment pursuant to this
Section 9.02(c)(ii) shall be in an aggregate amount of not less than $1,000,000 (or
such lesser amount as may be agreed to by Borrower and the Facility Agent or as
shall constitute the aggregate amount of the Commitments and Advances of the
assigning Lender) with respect to the assignment of the Commitments and Advances.



          (d) Mechanics. Assignments and assumptions of Advances and Commitments pursuant to
clause (c)(ii) above shall only be effected by execution and delivery to the Facility Agent of an
Assignment Agreement. Assignments made pursuant to the foregoing provision shall be effective as
of the Assignment Effective Date. In connection with all assignments there shall be delivered to
the Facility Agent such forms, certificates or other evidence, if any, with respect to United
States federal income tax withholding matters as the assignee under such Assignment Agreement may
be required to deliver pursuant to Section 2.11(c)




          (e) Representations and Warranties of Assignee. Each Lender, upon execution and
delivery hereof or upon succeeding to an interest in the Commitments and Advances, as the case may
be, represents and warrants as of the Closing Date or as of the Assignment Effective Date that (i)
it is an Eligible Assignee; (ii) it has experience and expertise in the making of or investing in
commitments or loans such as the applicable Commitments or Advances, as the case may be; and (iii)
it will make or invest in, as the case may be, its Commitments or Advances for its own account in
the ordinary course of its business and without







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a view to distribution of such Commitments or
Advances within the meaning of the Securities Act or the Exchange Act or other federal securities
laws (it being understood that, subject to the provisions of this Section 9.02, the disposition of
such Commitments or Advances or any interests therein shall at all times remain within its
exclusive control).




          (f) Effect of Assignment. Subject to the terms and conditions of this Section 9.02,
as of the Assignment Effective Date (i) the assignee thereunder shall have the rights and
obligations of a “Lender” hereunder to the extent of its interest in the Advances and Commitments
as reflected in the Register and shall thereafter be a party hereto and a “Lender” for all purposes
hereof; (ii) the assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned to the assignee, relinquish its rights and be released from its
obligations hereunder (and, in the case of an assignment covering all or the remaining portion of
an assigning Lender’s rights and obligations hereunder, such Lender shall cease to be a party
hereto on the Assignment Effective Date); provided, anything contained in any of the
Transaction Documents to the contrary notwithstanding, such assigning Lender shall continue to be
entitled to the benefit of all indemnities hereunder as specified herein with respect to matters
arising out of the prior involvement of such assigning Lender as a Lender hereunder; (iii) the
Commitments shall be modified to reflect the Commitment of such assignee and any Commitment of such
assigning Lender, if any; and (iv) if any such assignment occurs after the issuance of any Note
hereunder, the assigning Lender shall, upon the effectiveness of such assignment or as promptly
thereafter as practicable, surrender its applicable Notes to the Facility Agent for cancellation,
and thereupon Borrower shall issue and deliver new Notes, if so requested by the assignee and/or
assigning Lender, to such assignee and/or to such assigning Lender, with appropriate insertions, to
reflect the new Commitments and/or outstanding Advances of the assignee and/or the assigning
Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that
does not comply with clauses (b) through (f) of this Section 9.02 shall be treated for purposes of
this Agreement as a sale by such Lender of a participation in such rights and obligations in
accordance with clause (g).




          (g) Participations. Each Lender shall have the right at any time to sell one or more
participations to any Person (other than Borrower or any of its Affiliates) in all or any part of
its Commitments, Advances or in any other Obligation; provided, such participant agrees to
be subject to Section 2.08 as though it were a Lender.




          (h) Certain Other Assignments and Participations. In addition to any other assignment
or participation permitted pursuant to this Section 9.02, any Lender may assign and/or pledge all
or any portion of its Advances, the other Obligations owed by or to such Lender, and its Notes, if
any, to secure obligations of such Lender, including, without limitation, to any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of Governors and any operating
circular issued by such Federal Reserve Bank; provided, no Lender, as between Borrower and
such Lender, shall be relieved of any of its obligations hereunder as a result of any such
assignment and pledge, and provided further, in no event shall the applicable
Federal Reserve Bank, pledgee or trustee be considered to be a “Lender” or be entitled to require
the assigning Lender to take or omit to take any action hereunder.




          (i) Electronic Signatures, Etc. The words “execution,” “signed,” “signature,” and
words of like import in any Assignment Agreement shall be deemed to include electronic








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signatures
or the keeping of records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.




     SECTION 9.03. Independence of Covenants. All covenants hereunder shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be permitted by an
exception to, or would otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default if such action is taken or condition exists.



     SECTION
9.04. Survival of Representations, Warranties and Agreements.
All representations, warranties and agreements made herein shall survive the execution and
delivery hereof and the making of any Advance. Notwithstanding anything herein or implied by law
to the contrary, the agreements of Borrower set forth in Sections 2.09(c), 2.10, 2.11, 9.01, 9.16,
9.18 and 9.19, and the agreements of the Lenders set forth in Sections 2.04, 8.03(b), 8.06, 9.18
and 9.l9 shall survive the payment of the Advances and the termination hereof.



     SECTION 9.05 Marshalling; Payments Set Aside. Neither the Collateral Agent nor any Lender shall be under any obligation to marshal any
assets in favor of Borrower or any other Person or against or in payment of any or all of the
Obligations. To the extent that Borrower makes a payment or payments to the Facility Agent or the
Lenders (or to the Facility Agent, on behalf of the Lenders), or the Collateral Agent or the
Lenders enforce any security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state or federal law,
common law or any equitable cause, then, to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied, and all Liens, rights and remedies therefor or related
thereto, shall be revived and continued in full force and effect as if such payment or payments had
not been made or such enforcement or setoff had not occurred.



     SECTION 9.06. Obligations Several; Independent Nature of the Lenders’ Rights. The obligations of the Lenders hereunder are several and no Lender shall be responsible for
the obligations or Commitment of any other Lender hereunder. Nothing contained herein or in any
other Transaction Document, and no action taken by the Lenders pursuant hereto or thereto, shall be
deemed to constitute the Lenders as a partnership, an association, a joint venture or any other
kind of entity. The amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its rights arising out
hereof and it shall not be necessary for any other Lender to be joined as an additional party in
any proceeding for such purpose.



     SECTION 9.07. Headings. Section headings herein are included herein for convenience of reference only and shall not
constitute a part hereof for any other purpose or be given any substantive effect.



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     SECTION 9.08. Governing Law, Jurisdiction, Consent to Service of Process, Waiver of Jury
Trial.



          (a) Governing Law. THIS AGREEMENT, INCLUDING THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, EXCEPT FOR SECTIONS 5-1401
AND 5-
1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND TO THE EXTENT THAT THE PERFECTION OF THE
INTERESTS OF THE COLLATERAL AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, IN THE COLLATERAL IS
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.




          (b) Jurisdiction. Each of the parties hereto hereby irrevocably and unconditionally submits to the
nonexclusive jurisdiction of any New York State court or federal court of the United States sitting
in New York City, and any appellate court from any thereof, in any action or proceeding arising out
of or relating to this Agreement, and each of the parties hereto hereby irrevocably and
unconditionally (i) agrees that all claims in respect of any such action or proceeding may be heard
and determined in such New York State or, to the extent permitted by law, such federal court and
(ii) waives the defense of an inconvenient forum. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.




          (c) Consent to Service of Process. Each party to this Agreement irrevocably consents to service of process by personal
delivery, certified mail, postage prepaid or overnight courier. Nothing in this Agreement will
affect the right of any party to this Agreement to serve process in any other manner permitted by
law.




          (d) WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO THIS AGREEMENT, ANY OTHER
TRANSACTION DOCUMENT OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN
THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), ACTIONS OF ANY OF THE PARTIES HERETO OR
ANY OTHER RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER TRANSACTION
DOCUMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.




     SECTION 9.09. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Collateral Agent or
any Lender, any right, remedy, interest, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, interest, power or
privilege hereunder preclude any other or further exercise thereof or the exercise of any other
right, remedy, interest, power or privilege. Except as expressly otherwise provided herein, the
rights, remedies, interests, powers and



- 46 - 









 




privileges herein provided are cumulative and not
exhaustive of any rights, remedies, interests, powers and privileges provided by law.




     SECTION 9.10. Amendments, Waivers and Consents.



          (a) Required Lenders’ Consent. Subject to the additional requirements of Section 9.10(b), no amendment, modification,
termination or waiver of any provision of the Transaction Documents, or consent to any departure by
Borrower therefrom, shall in any event be effective without the written concurrence of the Required
Lenders; provided, (i) no such amendment shall be effective without the prior written
consent of LEAF Funding and LEAF III if the effect of such amendment has or would reasonably be
expected to have a material adverse effect on the third party beneficiary rights of LEAF Funding or
LEAF III hereunder and (ii) no such amendment shall be effective without the prior written consent
of U.S. Bank National Association and/or the Back-up Servicer, as applicable, if the effect of such
amendment has or would reasonably be expected to have a material adverse effect on their respective
rights hereunder.




          (b) Facility Agent Consent. No amendment, modification, termination or waiver of any provision of the Transaction
Documents, or consent to any departure by Borrower therefrom, shall amend, modify, terminate or
waive any provision of Article IX as the same applies to the Facility Agent, or any other provision
hereof as the same applies to the rights or obligations of the Facility Agent, in each case without
the consent of the Facility Agent.




          (c) Execution of Amendments, etc. Any waiver or consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on Borrower in any case shall entitle
Borrower to any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance with this
Section 9.10 shall be binding upon each Lender at the time outstanding, each future Lender and, if
signed by Borrower, on Borrower.




     SECTION 9.11. Severability. If any provision hereof is deemed void or unenforceable in any jurisdiction, such voiding
or unenforceability shall not affect the validity or enforceability of such provision in any other
jurisdiction or any other provision hereof in such or any other jurisdiction.



     SECTION 9.12. Notices: Electronic Communications.



          (a) Notices. Except where telephonic instructions or notices are specifically authorized, all notices,
demands, instructions and other communications required or permitted under this Agreement
shall be in writing and shall be personally delivered or sent by first class or express mail,
in each case, with postage prepaid, national overnight courier service, hand delivery or by
facsimile transmission or other electronic communication device capable of transmitting or creating
a written record and shall be deemed to be given for purposes of this Agreement on the day that the
writing is delivered or sent to its intended recipient. Unless otherwise specified in a notice
sent or delivered in accordance with the provisions of this Section 9.12, notices, demands,
instructions and other communications in writing shall be given to or made upon a party at its
Notice Office, and, in the case of telephonic instructions or notices, by calling the telephone
number indicated for the party at its Notice Office.




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     (b) Electronic Communications.




     (i) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by Collateral Agent and the Facility
Agent, provided, the foregoing shall not apply to notices to any Lender
pursuant to Article II if such Lender has notified the Collateral Agent and the
Facility Agent that it is incapable of receiving notices under such Section by
electronic communication.




     (ii) The Collateral Agent, the Facility Agent or Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it, provided
that approval of such procedures may be limited to particular notices or
communications.




     (iii) Unless the Collateral Agent or the Facility Agent otherwise prescribes,
(A) notices and other communications sent to an e-mail address shall be deemed
received upon the sender’s receipt of an acknowledgement from the intended recipient
(such as by the “return receipt requested” function, as available, return e-mail or
other written acknowledgement), provided, if such notice or other
communication is not sent during the normal business hours of the recipient, such
notice or communication shall be deemed to have been sent at the opening of business
on the next Business Day for the recipient, and (B) notices or communications posted
to an Internet or intranet website shall be deemed received upon the deemed receipt
by the intended recipient at its e-mail address as described in the foregoing
clause (A) of notification that such notice or communication is available and
identifying the website address therefor.




     (iv) Borrower understands that the distribution of material through an
electronic medium is not necessarily secure and that there are confidentiality and
other risks associated with such distribution and agrees and assumes the risks
associated with such electronic distribution, except to the extent caused by the
willful misconduct or gross negligence of the Collateral Agent or the Facility
Agent.




     (v) Any Approved Electronic Communications are provided “as is” and “as
available”. Neither the Collateral Agent, the Facility Agent nor any of their
respective officers, directors, employees, agents, advisors or representatives (the
“Agent Affiliates”) warrant the accuracy, adequacy, or completeness of the
Approved Electronic Communications and each expressly disclaims liability for errors
or omissions in the Approved Electronic Communications. No warranty of any kind,
express, implied or statutory, including any warranty of merchantability, fitness
for a particular purpose, non-infringement of third party rights or freedom from
viruses or other code defects is made by the Agent Affiliates in connection with the
Approved Electronic Communications.



- 48 - 









 






     (vi) Borrower, the Lenders, the Facility Agent and the Collateral Agent agree
that the Collateral Agent and the Facility Agent may, but shall not be obligated to,
store any Approved Electronic Communications in accordance with their respective
customary document retention procedures and policies.



     SECTION 9.13. Counterparts. This Agreement may be executed in any number of counterparts and by the different parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original,
and all of which taken together shall constitute one and the same agreement.



     SECTION 9.14. Termination. This Agreement shall create and constitute the continuing obligations of the parties hereto
in accordance with its terms, and shall remain in full force and effect until the later of the
repayment in full of Borrower’s Obligations and the termination of all Commitments hereunder.



     SECTION 9.15. Servicing. Borrower, the Collateral Agent and the Lenders each consent to the appointment of the
Servicer to service the Collateral pursuant to the Servicing Agreement and each of them agrees to
take such actions as the Servicer reasonably requests and to execute and deliver such instruments
as may reasonably be requested by the Servicer in order to effectuate the purposes and carry out
the terms of the Servicing Agreement.



     SECTION 9.16. Indemnification; Certain Waivers.



          (a) Without limiting any other rights that any of the Indemnified Parties may have hereunder
or under any applicable law, Borrower hereby agrees to indemnify the Indemnified Parties from and
against any and all Indemnified Amounts, whether direct, indirect or consequential, as a result of
or arising from or relating to or in connection with any of the following:





     (i) the reliance by any of the Indemnified Parties on any representation or
warranty made by Borrower under this Agreement that was incorrect in any respect
when made or deemed made;




     (ii) any breach by Borrower of any of its obligations under this Agreement or
any other Transaction Document;




     (iii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnified Party is a party thereto;




     (iv) any commingling by Borrower of Collections with other funds of Borrower or
any of its Affiliates; or




     (v) any breach by Borrower of any obligation under, or any violation by
Borrower of any Requirement of Law with respect to, any Purchased Contract;


provided, however, that Borrower shall not have any obligation to any Indemnified
Party pursuant to this Section 9.16 for any of the foregoing (x) caused by the gross negligence or
willful misconduct of such Indemnified Party as determined by a final judgment of a court of











- 49 - 









 







competent jurisdiction or (y) that arise out of facts and circumstances related to the Purchased
Contracts occurring prior to the Effective Date. To the extent that the undertaking to indemnify,
pay and hold harmless set forth in this Section 9.16 may be unenforceable because it is violative
of any law or public policy, Borrower shall contribute the maximum portion which it is permitted to
pay and satisfy under applicable law, to the payment and satisfaction of all Indemnified Amounts
incurred by the Indemnified Parties.




          (b) Each Indemnified Party shall use reasonable efforts to notify Borrower in advance of
making any claim under this Section 9.16. Any Indemnified Amounts due under this Section 9.16 shall
be payable when incurred and, in any event, within ten (10) Business Days of submission of a claim
by the Indemnified Party. This Section 9.16 shall survive the payment of all amounts otherwise due
under this Agreement.




          (c) To the extent permitted by applicable law, Borrower shall not assert, and Borrower hereby
waives, any claim against each Lender, the Facility Agent, the Collateral Agent, the Paying Agent,
the Custodian, the Back-up Servicer and their respective Affiliates, directors, employees,
attorneys, agents or sub-agents, on any theory of liability, for special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) (whether or not the claim therefor is
based on contract, tort or duty imposed by any applicable legal requirement) arising out of, in
connection with, arising out of, as a result of, or in any way related to, this Agreement or any
Transaction Document or any agreement or instrument contemplated hereby or thereby or referred to
herein or therein, the transactions contemplated hereby or thereby, any Advance or the use of the
proceeds thereof or any act or omission or event occurring in connection therewith, and Borrower
hereby waives, releases and agrees not to sue upon any such claim or any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.




     SECTION 9.17. Usury Savings Clause. Notwithstanding any other provision herein, the aggregate interest rate charged with
respect to any of the Obligations, including all charges or fees in connection therewith deemed in
the nature of interest under applicable law, shall not exceed the Highest Lawful Rate. If the rate
of interest (determined without regard to the preceding sentence) under this Agreement at any time
exceeds the Highest Lawful Rate, the outstanding amount of the Advances made hereunder shall bear
interest at the Highest Lawful Rate until the total amount of interest due hereunder equals the
amount of interest which would have been due hereunder if the stated rates of interest set forth in
this Agreement had at all times been in effect. In addition, if when the Advances made hereunder
are repaid in full the total interest due hereunder (taking into account the increase provided for
above) is less than the total amount of interest which would have been due hereunder if the stated
rates of interest set forth in this Agreement had at all times been in effect, then to the extent
permitted by law, Borrower shall pay to the Collateral Agent an amount equal to the difference
between the amount of interest paid and the amount of interest which would have been paid if the
Highest Lawful Rate had at all times been in effect. Notwithstanding the foregoing, it is the
intention of the Lenders and Borrower to conform strictly to any applicable usury laws.
Accordingly, if any Lender contracts for, charges, or receives any consideration which constitutes
interest in excess of the Highest Lawful Rate, then any such excess shall be cancelled
automatically and, if previously paid, shall at such Lender’s option be applied to the outstanding
amount of the Advances made hereunder or be refunded to Borrower.



- 50 - 









 





     SECTION 9.18. No Proceedings.




          (a) The Facility Agent, the Collateral Agent and each Lender covenants and agrees that it
shall not institute against, or join any other Person in instituting against, or knowingly or
intentionally encourage or cooperate with any other Person in instituting against, Borrower any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar
proceeding under the laws of the United States or any state of the United States for one year and a
day after the latest maturing Note has been paid.




          (b) Each of Borrower, the Facility Agent, the Collateral Agent and each Lender hereby agrees
that it shall not institute or join any other Person in instituting against, or knowingly or
intentionally encourage or cooperate with any other Person in instituting against, any CP Rate
Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or other
proceeding under any federal or state bankruptcy or similar law, for one year and a day after the
latest maturing commercial paper note, medium term note or other debt security issued by such CP
Rate Lender is paid.




          (c) The provisions of this Section shall survive termination of this Agreement.




     SECTION 9.19. No Recourse.



          (a) The obligations of each CP Rate Lender under this Agreement, or any other agreement,
instrument, document or certificate executed or delivered or issued by such CP Rate Lender or any
officer thereof are solely the corporate, limited liability company or
partnership obligations of such CP Rate Lender. No recourse shall be had for the payment of
any fee or other obligations, instrument, document or certificate executed and delivered or issued
by any CP Rate Lender or any officer thereof in connection therewith, against any stockholder,
limited partner, employee, officer, director or incorporator of any CP Rate Lender.




          (b) Each of Borrower, the Facility Agent, the Collateral Agent and each Lender hereby
irrevocably waives all right of setoff that it may have under contract (including this Agreement),
applicable law or otherwise with respect to any funds or monies of any CP Rate Lender at any time
held by or in the possession of such Person.




          (c) Notwithstanding anything to the contrary contained in this Agreement, the obligations of
the CP Rate Lender under this Agreement shall be payable by the CP Rate Lender and shall constitute
a claim (as defined in Section 101 of Title 11 of the United States Bankruptcy Code) against the CP
Rate Lender solely to the extent of funds received by the CP Rate Lender in respect of this
Agreement. In addition, no recourse shall be had against CP Rate Lender for the payment of any
amounts constituting fees, a reimbursement for expenses or indemnities hereunder (collectively,
“Expense Claims”), and such Expense Claims shall not constitute a claim against the CP Rate
Lender (as defined in Section 101 of Title 11 of the United States Bankruptcy Code), unless or
until CP Rate Lender has received amounts sufficient to pay such Expense Claims pursuant to this
Agreement and such amounts are not required to pay the commercial paper and any other outstanding
indebtedness of such CP Rate Lender; provided, however, that nothing in this Section shall affect
the rights of any Secured Party as a secured party with respect to the Collateral.





- 51 - 









 








          (d) The provisions of this Section and the parties’ respective obligations under this Section
shall survive termination of this Agreement.




     SECTION 9.20. Intent of the Parties.



     The Borrower has structured the Transaction Documents with the intention that the Advances
with respect to the Notes and the obligations of the Borrower hereunder will be treated under
United States federal, and applicable state, local and foreign tax law as debt (the “Intended
Tax Treatment”). The Borrower, LEAF III, the Facility Agent and the Lenders agree to file no
tax return, or take any action, inconsistent with the Intended Tax Treatment. Each assignee and
each participant acquiring an interest in Advances hereunder, by its acceptance of such assignment
or participation, agrees to comply with the immediately preceding sentence.



- 52 - 









 





[remainder of page intentionally left blank]







 









 








     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their
respective officers thereunto duly authorized as of the day and year first above written.



	 	 	 	 	 	 	 
	 	 	LEAF III B SPE, LLC, as Borrower	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Miles Herman	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Miles Herman
	 	 
	 

	 	Title:	 	President, COO	 	 
	 
	 	 	 	 	 	 
	 	 	KEY EQUIPMENT FINANCE INC., as the Facility Agent
and Collateral Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Andrew G. Mesches	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Andrew G. Mesches	 	 
	 

	 	Title:	 	Senior Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	U.S. BANK NATIONAL ASSOCIATION, as the Paying Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Diane L. Reynolds	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Diane L. Reynolds	 	 
	 

	 	Title:	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	RELATIONSHIP FUNDING
COMPANY, LLC, 
as a CP Rate
Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ R. Scott Chisholm	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	R. Scott Chisholm	 	 
	 

	 	Title:	 	Authorized Signer	 	 




Loan and
Security Agreement



 









 






APPENDIX A

TO LOAN AND SECURITY AGREEMENT




Commitments




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Pro
	Lender	 	Commitment	 	Rata Share
	RFC
	 	$	131,425,392.23	 	 	 	100	%
	Total
	 	$	131,425,392.23	 	 	 	100	%






Total Commitments as of the Closing Date: $131,425,392.23.




 









 








EXHIBIT A




NOTE




			
	$131,425,392.23
	 	May 30, 2008

New York, New York





FOR VALUE RECEIVED, LEAF III B SPE, LLC, a Delaware limited liability company (“Borrower”),
promises to pay Relationship Funding Company, LLC (“Payee”) or its assigns, on each day set
forth for a payment hereunder under the Priority of Payments (as defined in the Loan Agreement
referred to below), the lesser of (a) One Hundred Thirty One Million Four Hundred Twenty Five
Thousand Three Hundred Ninety Two Dollars and Twenty Three Cents ($131,425,392.23) and (b) the
unpaid principal amount of all Advances made by Payee to Borrower under the Loan Agreement referred
to below.



Borrower also promises to pay interest on the unpaid principal amount hereof, from the date hereof
until paid in full, at the rates and at the times which shall be determined in accordance with the
provisions of that certain Loan and Security Agreement, dated as of the date hereof (as it may be
amended, supplemented or otherwise modified, the “Loan Agreement”; the terms defined
therein and not otherwise defined herein being used herein as therein defined), by and among
Borrower, Payee, the other Lenders party thereto, U.S. Bank National Association, as Paying Agent,
and Key Equipment Finance Inc., a Michigan corporation, as Facility Agent and Collateral Agent.



This Note is a “Note” and is issued pursuant to and entitled to the benefits of the Loan Agreement,
to which reference is hereby made for a more complete statement of the terms and conditions under
which the Advances evidenced hereby were made and are to be repaid.



All payments of principal and interest in respect of this Note shall be made in lawful money of the
United States in same day funds in accordance with the terms of the Loan Agreement. Payee hereby
agrees, by its acceptance hereof, that before disposing of this Note or any part hereof it will
make a notation hereon of all principal payments previously made hereunder and of the date to which
interest hereon has been paid; provided, the failure to make a notation of any payment made on this
Note shall not limit or otherwise affect the obligations of Borrower hereunder with respect to
payments of principal of or interest on this Note.



This Note is subject to mandatory prepayment and to prepayment at the option of Borrower, each as
provided in the Loan Agreement.



THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE BORROWER AND PAYEE HEREUNDER SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
EXCEPT FOR CONFLICT OF LAWS PROVISIONS WHICH WOULD APPLY THE LAWS OF ANY OTHER JURISDICTION.



Upon the occurrence of an Event of Default, the unpaid balance of the principal amount of this
Note, together with all accrued and unpaid interest thereon, may become, or may be declared to





 









 







be, due and payable in the manner, upon the conditions and with the effect provided in the Loan
Agreement.



The terms of this Note are subject to amendment only in the manner provided in the Loan Agreement.



No reference herein to the Loan Agreement and no provision of this Note or the Loan Agreement shall
alter or impair the obligations of Borrower, which are absolute and unconditional, to pay the
principal of and interest on this Note at the place, at the respective times, and in the currency
herein prescribed.



Borrower promises to pay all costs and expenses, including reasonable attorneys’ fees, all as
provided in the Loan Agreement, incurred in the collection and enforcement of this Note. Borrower
and any endorsers of this Note hereby consent to renewals and extensions of time at or after the
maturity hereof, without notice, and hereby waive diligence, presentment, protest, demand notice of
every kind and, to the full extent permitted by law, the right to plead any statute of limitations
as a defense to any demand hereunder.




[remainder of page intentionally left blank]






 









 







IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed and delivered by its officer
thereunto duly authorized as of the date and at the place first written above.




	 	 	 	 	 	 	 
	 	 	LEAF III B SPE, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Miles Herman	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	Miles Herman
	 	 
	 

	 	Title:	 	President, COO	 	 






 









 






TRANSACTIONS

ON

NOTE




	 	 	 	 	 	 	 	 	 
	 	 	Amount of	 	 	 	 	 	 
	 	 	Advance	 	Amount of	 	Outstanding	 	 
	 	 	Made This	 	Principal Paid	 	Principal Balance	 	Notation
	Date	 	Date	 	This Date	 	This Date	 	Made By
	 

	 	 	 	 	 	 	 	 





 









 






EXHIBIT B




FORM OF


ASSIGNMENT AND ASSUMPTION AGREEMENT




     This Assignment and Assumption Agreement (the “Assignment”) is dated as of the Effective Date
set forth below and is entered into by and between the Person named as the Assignor herein (the
“Assignor”) and the Person named as the Assignee herein (the “Assignee”). Capitalized terms used
but not defined herein shall have the meanings given to them in the Loan Agreement identified below
(as it may be amended, supplemented or otherwise modified from time to time, the “Loan Agreement”),
receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and
Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment as if set forth herein in full.



     For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the attached Standard Terms and Conditions and the Loan Agreement, as of the
Effective Date inserted by the Facility Agent as contemplated below, the interest in and to all of
the Assignor’s rights and obligations under the Loan Agreement and any other documents or
instruments delivered pursuant thereto that represents the amount and percentage interest
identified below of all of the Assignor’s outstanding rights and obligations under the respective
facilities identified below (the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment and the Loan
Agreement, without representation or warranty by the Assignor.



	 	 	 
	1. Assignor:
	 	 
	 

	 	              
                          
	 
	 	 
	2. Assignee:
	 	 
	 

	 	                      
       
            [and is an
Affiliate/Related Fund1]
	 
	 	 
	3. Borrower:

	 	LEAF III B SPE, LLC, a
Delaware limited liability company
	 
	 	 
	4. Facility Agent and Collateral
Agent:

	 	KEY EQUIPMENT FINANCE INC., as the
facility agent and collateral agent
under the Loan Agreement
	 
	 	 
	5. Loan Agreement:

	 	The Loan and Security Agreement,
dated as of May 30, 2008, by and
among LEAF III B SPE, LLC, a Delaware
limited liability company, the
Lenders party thereto from time to
time, U.S. Bank National Association,
as Paying Agent, and Key Equipment
Finance Inc., as Facility Agent and
Collateral Agent.








 




			
	1	 	Select as applicable




 









 










6. Assigned Interest:




	 	 	 	 	 	 	 
	 	 	Aggregate Amount of	 	Amount of	 	 
	 	 	Commitment/Advances	 	Commitment/Advances	 	Percentage Assigned of
	Facility Assigned	 	for all Lenders	 	Assigned	 	Commitment/Advances2
	                                        3
	 	$                                        
	 	$                                        
	 	                                        %
	                                        
	 	$                                        
	 	$                                        
	 	                                        %
	                                        
	 	$                                        
	 	$                                        
	 	                                        %





Effective
Date:                                         , 20___[ TO BE INSERTED BY FACILITY AGENT AND WHICH SHALL BE THE
EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]




7. Notice and Wire Instructions:




	 	 	 
	[NAME OF ASSIGNOR]

	 	[NAME OF ASSIGNEE]
	 
	 	 
	Notices:

	 	Notices:






	 	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 

	 	Attention:
	 	 	 	Attention:	 	 
	 

	 	Telecopier:
	 	 	 	Telecopier:	 	 
	 
	 	 	 	 	 	 	 	 
	with a copy to:	 	                        with a copy to:
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	Attention:
	 	 	 	Attention:	 	 
	 

	 	Telecopier:
	 	 	 	Telecopier:	 	 
	 
	 	 	 	 	 	 	 	 
	Wire Instructions:	 	                        Wire Instructions:	 	 








 




			
	2	 	Set forth, to at least 9 decimals, as a percentage of
the Commitment/Advances of all Lenders thereunder.
	 
	3	 	Fill in the appropriate terminology for the types of
facilities under the Loan Agreement that are being assigned under this
Assignment (e.g. “CP Rate Commitment” or “LIBO Rate
Commitment”.)





2









 










The terms set forth in this Assignment are hereby agreed to:




	 	 	 	 	 
	 	 	ASSIGNOR
	 	 	[NAME OF ASSIGNOR]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 
	 
	 	 	 	 
	 	 	ASSIGNEE
	 	 	[NAME OF ASSIGNEE]
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	Title:	 	 






[Consented to and]4 Accepted:




	 	 	 	 	 
	KEY EQUIPMENT FINANCE INC., as
Facility Agent	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	Name:

	 	 

	 	 
	Title:
	 	 	 	 
	 
	 	 	 	 
	[Consented to:]5	 	 
	 
	 	 	 	 
	LEAF III B SPE, LLC	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	 

	 	 	 	 
	Name:
	 	 	 	 
	Title:
	 	 	 	 








 




			
	4	 	To be added only if the consent of the Facility Agent is
required by the terms of the Loan Agreement.
	 
	5	 	To be added only if the consent of the Borrower is
required by the terms of the Loan Agreement.




3









 










ANNEX 1




STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT

AND ASSUMPTION AGREEMENT





	1.	 	Representations and Warranties.






	 	1.1	 	Assignor. The Assignor (a) represents and warrants
that (i) it is the legal and beneficial owner of the Assigned Interest,
(ii) the Assigned Interest is free and clear of any lien, encumbrance or other
adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with
respect to (i) any statements, warranties or representations made in or in
connection with any Credit Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Agreement or any
other instrument or document delivered pursuant thereto, other than this
Assignment (herein collectively the “Credit Documents”), or any collateral
thereunder, (iii) the financial condition of Borrower, any of its Subsidiaries
or Affiliates or any other Person obligated in respect of any Credit Document
or (iv) the performance or observance by Borrower, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Credit Document.
	 
	 	1.2	 	Assignee. The Assignee (a) represents and warrants
that (i) it has full power and authority, and has taken all action necessary,
to execute and deliver this Assignment and to consummate the transactions
contemplated hereby and to become a Lender under the Loan Agreement, (ii) it is
an Eligible Assignee under the Loan Agreement, (iii) from and after the
Effective Date, it shall be bound by the provisions of the Loan Agreement and,
to the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Loan Agreement and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision,
and (v) if it is a Non-US Lender, attached to the Assignment is any
documentation required to be delivered by it pursuant to the terms of the Loan
Agreement, duly completed and executed by the Assignee; and (b) agrees that
(i) it will, independently and without reliance on the Facility Agent, the
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at that time, continue to make its own credit decisions
in taking or not taking action under the Credit Documents, and (ii) it will
perform in accordance with their terms all of the obligations which by the
terms of the Credit Documents are required to be performed by it as a Lender.






	2.	 	Payments. All payments with respect to the Assigned Interests shall be made on the
Effective Date as follows:




4









 












	 	2.1	 	Unless notice to the contrary is delivered to the Lender from
the Facility Agent, payment to the Assignor by the Assignee in respect of the
Assigned Interest shall include such compensation to the Assignor as may be
agreed upon by the Assignor and the Assignee with respect to all unpaid
interest which has accrued on the Assigned Interest to but excluding the
Effective Date. On and after the applicable Effective Date, the Assignee shall
be entitled to receive all interest paid or payable with respect to the
Assigned Interest, whether such interest accrued before or after the Effective
Date.






	3.	 	General Provisions. This Assignment shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns. This Assignment may be
executed in any number of counterparts, which together shall constitute one instrument.
Delivery of an executed counterpart of a signature page of this Assignment by telecopy shall
be effective as delivery of a manually executed counterpart of this Assignment. This
Assignment shall be governed by, and construed in accordance with, the internal laws of the
State of New York without regard to conflict of laws principles thereof.
	 
	4.	 	No Proceedings






	 	4.1	 	The Assignee covenants and agrees that it shall not institute
against, or join any other Person in instituting against, or knowingly or
intentionally encourage or cooperate with any other Person in instituting
against, Borrower any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings or other similar proceeding under the laws of the
United States or any state of the United States for one year and a day after
the latest maturing Note has been paid.
	 
	 	4.2	 	The Assignee hereby agrees that it shall not institute or join
any other Person in instituting against, or knowingly or intentionally
encourage or cooperate with any other Person in instituting against, [Assignor
or] any CP Rate Lender any bankruptcy, reorganization, arrangement, insolvency
or liquidation proceeding, or other proceeding under any federal or state
bankruptcy or similar law, for one year and a day after the latest maturing
commercial paper note, medium term note or other debt security issued by such
entity is paid.






	5.	 	No Recourse






	 	5.1	 	The Assignee hereby covenants and agrees that the obligations
of each CP Rate Lender under this Agreement, or any other agreement,
instrument, document or certificate executed or delivered or issued by such CP
Rate Lender or any officer thereof are solely the corporate, limited liability
company or partnership obligations of such CP Rate Lender and that no recourse
shall be had for the payment of any fee or other obligations, instrument,
document or certificate executed and delivered or issued by any CP Rate Lender
or any officer thereof in connection therewith, against any




5









 






	 	 	 	stockholder, limited partner, employee, officer, director or incorporator of
any CP Rate Lender.






	 	5.2	 	Assignee hereby irrevocably waives all right of setoff that it
may have under contract (including this Agreement), applicable law or otherwise
with respect to any funds or monies of any CP Rate Lender at any time held by
or in the possession of such Person.
	 
	 	5.3	 	The Assignee hereby covenants and agrees that notwithstanding
anything to the contrary contained in this Agreement, the obligations of any CP
Rate Lender under the Loan Agreement shall be payable by the CP Rate Lender and
shall constitute a claim (as defined in Section 101 of Title 11 of the United
States Bankruptcy Code) against the CP Rate Lender solely to the extent of
funds received by the CP Rate Lender in respect of the Loan Agreement, and that
no recourse shall be had against any such CP Rate Lender for the payment of any
amounts constituting fees, a reimbursement for expenses or indemnities
hereunder (collectively, “Expense Claims”), and such Expense Claims shall not
constitute a claim against the CP Rate Lender (as defined in Section 101 of
Title 11 of the United States Bankruptcy Code), unless or until CP Rate Lender
has received amounts sufficient to pay such Expense Claims pursuant to this
Agreement and such amounts are not required to pay the commercial paper and any
other outstanding indebtedness of such CP Rate Lender; provided, however, that
nothing in this Section shall affect the rights of any Secured Party as a
secured party with respect to the Collateral.






	6.	 	The provisions of Section 4 and Section 5 of this Assignment shall survive termination of the
Loan Agreement and this Assignment.





[Remainder of page intentionally left blank]





6