28, 2009 (the “Forbearance Period”), the Forbearing Parties will forbear from exercisingtheir rights and remedies resulting solely from the Covenant Failures. The forbearanceprovided herein shall not extend to any Event of Default, Program Termination Event orServicer Default other than the Covenant Failures and all of the Forbearing Parties’ rightsand remedies with respect thereto are hereby reserved. Further, the forbearance providedherein shall not derogate from the Forbearing Parties’ rights to collect, reserve and/orapply proceeds of Pledged Assets to payment of outstanding liabilities as may bespecifically provided for in the RLSA and the other Transaction Documents. If the foregoingforbearance is not extended by the Forbearing Parties by the end of the Forbearance Period,the Borrower and the Servicer hereby acknowledge that the Covenant Failures shall exist andthat each Forbearing Party shall be fully entitled to declare a Program Termination Date andto exercise all other rights and remedies with respect thereto under the RLSA and the otherTransaction Documents.     (b) The Borrower hereby notifies the Qualifying Swap Counterparty that one or more ofthe Covenant Failures constitutes the “Event of Default” (as defined in the Swap Agreement)set forth in clause (1) of Section 5(a)(vi) of the Swap Agreement andentitles the Qualifying Swap Counterparty to exercise remedies pursuant thereto absent theforbearance provided for hereunder. The Qualifying Swap Counterparty hereby agrees toforbear from exercising its rights and remedies resulting solely from such “Event ofDefault” or the Breach and each of the Qualifying Swap Counterparty and the Borrower herebyagrees that the “Early Termination Date” under (and as defined in) the Swap Agreement shallnot be declared as a result of such “Event of Default” during the Forbearance Period. Ifthe foregoing forbearance is not extended by the Qualifying Swap Counterparty by the end ofthe Forbearance Period, the Borrower hereby acknowledges that such “Event of Default” shallexist under the Swap Agreement and that the Qualifying Swap Counterparty shall be fullyentitled to exercise all rights and remedies with respect thereto under the Swap Agreement.     SECTION 2. Termination of Funding. The Borrower and the Lender hereby agree that,notwithstanding this Forbearance or anything to the contrary set forth in the RLSA or any otherTransaction Document, under no circumstances shall the Lender be obligated to make, nor shall theBorrower request, any additional Loan under the RLSA. For the avoidance of doubt, such terminationof funding shall continue in effect notwithstanding any subsequent extension of the forbearancegranted in Section 1(a).     SECTION 3. Representations and Warranties. Each of the Borrower and Servicerrepresents and warrants that:     (a) except as expressly described in Section 1 above, no event or condition hasoccurred and is continuing which would constitute an Event of Default, a Program TerminationEvent, a Servicer Default, a Pool A Termination Event, a Pool B Termination Event, a“Termination Event” under the Swap Agreement, an “Event of Default” under the SwapAgreement, or any event that, if it continued uncured, with the lapse of time or notice, orboth, would constitute any of the foregoing events; and     (b) except as expressly described in Section 1 above, its representations andwarranties set forth in the RLSA, the Swap Agreement and the other Transaction
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Documents aretrue and correct as of the date hereof, as though made on and as of suchdate (except to the extent such representations and warranties relate solely to anearlier date and then as of such earlier date), and such representations and warrantiesshall continue to be true and correct (to such extent) after giving effect to thetransactions contemplated hereby.     SECTION 4. Effect of Forbearance; Ratification. Except as expressly set forth herein,the RLSA, the Swap Agreement and each of the other Transaction Documents remain in full force andeffect and are hereby ratified. This Forbearance shall not be deemed to expressly or impliedlywaive, amend, or supplement any provision of the RLSA or the Swap Agreement other than asspecifically set forth herein.     SECTION 5. Expenses. The Borrower agrees to pay on demand all reasonable costs andexpenses of the Forbearing Parties and the Qualifying Swap Counterparty (including costs andexpenses of counsel for the Forbearing Parties and the Qualifying Swap Counterparty) incurred inconnection with the preparation, execution and delivery of this Forbearance.     SECTION 6. Counterparts. This Forbearance may be executed in any number ofcounterparts and by different parties on separate counterparts, and each counterpart shall bedeemed to be an original, and all such counterparts shall together constitute but one and the sameinstrument.     SECTION 7. Governing Law. This Forbearance shall be governed by, and construed inaccordance with, the internal laws of the State of New York without regard to the conflicts of lawprinciples thereof (other than Section 5-1401 of the New York General Obligations Law).     SECTION 8. Section Headings. The various headings of this Forbearance are insertedfor convenience only and shall not affect the meaning or interpretation of this Forbearance or anyprovision hereof.     SECTION 9. Entire Agreement. This Forbearance is intended by the parties hereto to bethe final expression of their agreement with respect to the subject matter hereof, and is thecomplete and exclusive statement of the terms thereof, notwithstanding any representations,statements or agreements to the contrary heretofore made.[SIGNATURE PAGES FOLLOW]
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     IN WITNESS WHEREOF, the parties have executed this Forbearance as of the date first writtenabove.       **RESOURCE CAPITAL FUNDING II, LLC**, asBorrower       By:         Name:    Title:         **LEAF FINANCIAL CORPORATION**, asServicer       By:         Name:    Title:  *Forbearance and Reservation of Rights*