National City Credit Agreement Amended


    FIRST
      AMENDMENT TO CREDIT AGREEMENT

    


    This
      FIRST AMENDMENT TO CREDIT AGREEMENT (the “First Amendment”) dated August 14,
      2006, is by and among LEAF FINANCIAL CORPORATION, a Delaware corporation (“LEAF
      Financial”), and LEAF FUNDING, INC., a Delaware corporation (“LEAF Funding” and
      together with LEAF Financial, each individually a “Borrower” and individually
      and collectively, jointly and severally, the “Borrowers”), the various financial
      institutions and other Persons parties hereto (the “Lenders”), and National City
      Bank, as administrative agent and collateral agent for the Lenders (in such
      capacity, the “Agent”).

    


    BACKGROUND

    


    A.  Pursuant
      to that certain Credit Agreement dated
      July
      31,
      2006,
      by and
      among the Borrowers, the Lenders, and the Agent (as the same may be modified
      and
      amended from time to time, including by this First Amendment, the “Credit
      Agreement”), the Lenders agreed, inter
      alia,
      to
      extend to the Borrowers a revolving credit facility in the maximum aggregate
      principal amount of $150,000,000.

    


    B.  The
      Borrowers have requested an amendment to the available interest rates, to which
      the Lenders are willing to agree, on the terms and subject to the conditions
      set
      forth herein.

    


    NOW,
      THEREFORE, in consideration of the foregoing premises and for other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, and intending to be legally bound hereby, the parties hereto
      agree
      as follows:

    


    1.  Definitions.
      

    


    (a)  General
      Rule.
      Except
      as expressly set forth herein, all capitalized terms used and not defined herein
      shall have the respective meanings ascribed thereto in the Credit Agreement.
      

    


    (b)  Additional
      Definitions.
      The
      following additional definitions shall be added to Article 1 of the Credit
      Agreement to read in their entirety as follows:

    


    “First
      Amendment”
means
      the First Amendment to this Agreement dated August 14, 2006.

    


    “LIBOR
      Flex Rate”
means
      the quotient of (a) a fluctuating rate per annum which is designated or
      published from time to time by the Agent as being its “One Month LIBOR Rate”
(which, unless Agent otherwise notifies the Borrowers, shall be equal to the
      rate of interest (rounded upwards, if necessary, to the nearest
      1/100th
      of 1%),
      at or about 11:00 a.m. London, England time, two (2) Business Days prior to
      the
      applicable Change Date (as defined below), as listed on the British Bankers
      Association Interest LIBOR 01 or 02 as provided by Reuters (or another similar
      service if Reuters is unavailable), as the rate at which Dollar deposits with
      a
      maturity of one month are offered to Agent in the London interbank market)
      (it
      being acknowledged that the LIBOR Flex Rate is not necessarily (i) the lowest
      rate of interest or the only “LIBOR” denominated interest rate then available
      from the Agent on fluctuating rate loans or (ii) calculated in the same manner
      as any other “LIBOR” denominated interest rate offered by the Agent)
divided
      by
      (b) a
      number equal to 1.00 minus
      the
      LIBOR Reserve Percentage.
      It is
      further acknowledged that the LIBOR Flex Rate is not necessarily calculated
      in
      the same manner as any other “LIBOR” denominated interest rate offered by any
      other bank or published by any publication. The Agent will inform the Borrowers
      of the current LIBOR Flex Rate upon their request. The interest rate change
      will
      not occur more often than once each month and shall be based on the LIBOR Flex
      Rate effective as of the last business day of each month (the “Change
      Date”)
      and
      apply thereafter until the next Change Date. If the LIBOR Flex Rate becomes
      unavailable during the term of any Loan, the Agent may designate a substitute
      index after notice to the Borrowers. The Borrowers understand that Agent may
      make loans based on other indexes or rates as well.

    


    “LIBOR
      Flex Rate Loan”
means
      a
      Loan bearing interest at a fluctuating rate determined by reference to the
      LIBOR
      Flex Rate.

    


    (c)  Amended
      Definitions.
      

    


    (i) The
      following definitions in Article 1 of the Credit Agreement shall be amended
      and
      restated to read in their entirety as follows:

    


    “Applicable
      Margin”
means,
      (a) as to any Base Rate Loan, 0.0%, and (b) as to any LIBOR Loan or LIBOR Flex
      Rate Loan, 1.50%. 

    


    “Type”
means,
      relative to any Loan, the portion thereof, if any, being maintained as a Base
      Rate Loan, a LIBOR Loan or a LIBOR Flex Rate Loan.

    


    (ii) The
      definition of “Interest Period” in Article 1 of the Credit Agreement shall be
      amended to replace the reference to “six (6)” with “ten (10)” in phrase (e) of
      such definition.

    


    2.  Amendment
      to Section 2.3.
      Section
      2.3 of the Credit Agreement is hereby amended to add, after “Base Rate Loan” and
“Base Rate Loans”, respectively, “or LIBOR Flex Rate Loan” and “or LIBOR Flex
      Rate Loans”.

    


    3.  Amendment
      to Section 3.1.
      Phrase
“(i)” of subsection 3.1(b) of the Credit Agreement is hereby amended and
      restated in its entirety to read as follows: “(i) any such prepayment shall be
      applied, first, to any outstanding Swingline Loans, second, to any other Base
      Rate Loans, third, to any LIBOR Flex Rate Loans, and, fourth, pro rata among
      LIBOR Loans having the same Interest Period, in the direct order of maturity
      of
      such Interest Periods;”. 

    


    4.  Amendments
      to Section 3.2.
      Subsection 3.2(a) of the Credit Agreement is hereby amended by added a phrase
      “(iii)” at the end of such subsection, to read in its entirety as follows:
“(iii) on that portion maintained from time to time as a LIBOR Flex Rate Loan,
      equal to the sum of the LIBOR Flex Rate from time to time in effect plus the
      Applicable Margin”, and Subsection 3.2(c) of the Credit Agreement is hereby
      amended to add, after “Base Rate Loan” and “Base Rate Loans”, respectively, “or
      LIBOR Flex Rate Loan” and “or LIBOR Flex Rate Loans”.

    


    5.  Amendments
      to Exhibits.
      Exhibit
      B (Form of Borrowing Request) and Exhibit D (Form of Continuation/Conversion
      Notice) to the Credit Agreement are hereby amended and restated in their
      entirety with Exhibit B and Exhibit D attached hereto.

    


    6.  Representations
      and Warranties.
      Each
      Borrower hereby represents and warrants to the Agent and each Lender that,
      as to
      such Borrower:

    


    (a)  Representations.
      each of
      the representations and warranties of such Borrower contained in the Credit
      Agreement and/or the other Credit Documents are true, accurate and correct
      in
      all material respects on and as of the date hereof as if made on and as of
      the
      date hereof, except to the extent such representation or warranty was made
      as of
      a specific date;

    


    (b)  Power
      and Authority.
      (i)
      such Borrower has the power and authority under the laws of its jurisdiction
      of
      organization and under its organizational documents to enter into and perform
      this First Amendment and any other documents which the Lenders require such
      Borrower to deliver hereunder (this First Amendment and any such additional
      documents delivered in connection with the First Amendment are herein referred
      to as the “Amendment Documents”); and (ii) all actions, corporate or otherwise,
      necessary or appropriate for the due execution and full performance by the
      Borrower of the First Amendment have been adopted and taken and, upon their
      execution, the Credit Agreement, as amended by this First Amendment will
      constitute the valid and binding obligations of the Borrower enforceable in
      accordance with their respective terms (except as may be limited by applicable
      insolvency, bankruptcy, moratorium, reorganization, or other similar laws
      affecting enforceability of creditors’ rights generally and the availability of
      equitable remedies);

    


    (c)  No
      Violations of Law or Agreements.
      the
      making and performance of the First Amendment will not violate any provisions
      of
      any law or regulation, federal, state, local, or foreign, or the organizational
      documents of such Borrower, or result in any breach or violation of, or
      constitute a default or require the obtaining of any consent under, any
      agreement or instrument by which such Borrower or its property may be
      bound;

    


    (d)  No
      Default.
      no
      Default or Event of Default has occurred and is continuing; and

    


    (e)  No
      Material Adverse Effect.
      No
      Material Adverse Effect has occurred since July 31, 2006.

    


    7.  Conditions
      to Effectiveness of Amendment.
      This
      First Amendment shall be effective upon the Agent’s receipt of the following,
      each in form and substance reasonably satisfactory to the Lenders:

    


    (a)  First
      Amendment.
      this
      First Amendment, duly executed by the Borrowers and the Lenders; 

    


    (b)  Consent
      and Waivers.
      copies
      of any consents or waivers necessary in order for the Borrowers to comply with
      or perform any of its covenants, agreements or obligations contained in any
      agreement, which are required as a result of the Borrowers’ execution of this
      First Amendment, if any; and

    


    (c)  Other
      Documents and Actions.
      such
      additional agreements, instruments, documents, writings and actions as the
      Lenders may reasonably request.

    


    8.  No
      Waiver; Ratification.
      The
      execution, delivery and performance of this First Amendment shall not operate
      as
      a waiver of any right, power or remedy of the Agent or the Lenders under the
      Credit Agreement or any Credit Document, or constitute a waiver of any provision
      thereof. Except as expressly modified hereby, all terms, conditions and
      provisions of the Credit Agreement and the other Credit Documents shall remain
      in full force and effect and are hereby ratified and confirmed by any Borrower.
      Nothing contained herein constitutes an agreement or obligation by the Agent
      or
      any Lender to grant any further amendments to any of the Credit
      Documents.

    


    9.  Acknowledgments.
      To
      induce the Lenders to enter into this First Amendment, each Borrower
      acknowledges, agrees, warrants, and represents that:

    


    (a)  Acknowledgment
      of Obligations; Collateral; Waiver of Claims.
      (i) the
      Credit Documents are valid and enforceable against, and all of the terms and
      conditions of the Credit Documents are binding on, the Borrowers; (ii) the
      liens
      and security interests granted to the Agent by the Borrowers pursuant to the
      Credit Documents are valid, legal and binding, properly recorded or filed and
      first priority perfected liens and security interests; and (iii) the Borrowers
      hereby waive any and all defenses, set-offs and counterclaims which they,
      whether jointly or severally, may have or claim to have against the Agent or
      any
      Lender as of the date hereof.

    


    (b)  No
      Waiver of Existing Defaults.
      No
      Default or Event of Default exists immediately before or immediately after
      giving effect to this First Amendment. Nothing in this First Amendment nor
      any
      communication between the Agent, any Lender, any Borrower or any of their
      respective officers, agents, employees or representatives shall be deemed to
      constitute a waiver of (i) any Default or Event of Default arising as a result
      of the foregoing representation proving to be false or incorrect in any material
      respect; or (ii) any rights or remedies which the Agent or any Lender has
      against any Borrower under the Credit Agreement or any other Credit Document
      and/or applicable law, with respect to any such Default or Event of Default
      arising as a result of the foregoing representation proving to be false or
      incorrect in any material respect.

    


    10.  Binding
      Effect.
      This
      First Amendment shall be binding upon and inure to the benefit of the parties
      hereto and their respective successors and assigns.

    


    11.  Governing
      Law.
      This
      First Amendment and all rights and obligations of the parties hereunder shall
      be
      governed by and be construed and enforced in accordance with the laws of the
      internal laws of the Commonwealth of Pennsylvania.

    


    12.  Headings.
      The
      headings of the sections of this First Amendment are inserted for convenience
      only and shall not be deemed to constitute a part of this First
      Amendment.

    


    13.  Counterparts.
      This
      First Amendment may be executed in any number of counterparts with the same
      affect as if all of the signatures on such counterparts appeared on one document
      and each counterpart shall be deemed an original.

    


     

    


     

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    IN
      WITNESS WHEREOF, the parties hereto have caused this First Amendment to Credit
      Agreement to be executed under seal by their duly authorized officers, all
      as of
      the day and year first written above.

     

    


     

                                        LEAF
      FINANCIAL
      CORPORATION

    


                                        By:
      ___/s/
      Miles Herman ____________
      

                                        Name:
      Miles
      Herman

                                        Title:
      President,
      COO

    


    


                                        LEAF
      FUNDING,
      INC.

    


                                        By:
      ___/s/
      Miles Herman ____________

                                        Name:
      Miles
      Herman

                                        Title:
      Senior Vice
      President

    


    



    
      
        
          Borrowers
            Signature Page

          First
            Amendment to Credit Agreement

          


        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    


                                        NATIONAL
      CITY BANK,


                                        as
      Agent, Swingline
      Lender and as a Lender

    


                                        By:
      ___/s/
      Christos Kytzidis __________
      

                                        Name:
      Christos
      Kytzidis

                                        Title:
      Senior Vice
      President

    


    



    
      
        
          Lender
            Signature Page

          First
            Amendment to Credit Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    


    


                                        HSH
      NORDBANK AG, NEW
      YORK BRANCH

    


    


                                        By:
      ___/s/
      Edward I. Sproull__________
      

                                        Name:
      Edward I.
      Sproull

                                        Title:
      Senior Vice
      President

    


    


                                        By:
      ___/s/
      Ann E. Hardy _____________
      

                                        Name:
      Ann E.
      Hardy

                                        Title:
      Vice
      President

    



    
      
        
          Lender
            Signature Page

          First
            Amendment to Credit Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    


    


                                        SOVEREIGN
      BANK

    


    


                                        By:
      ___/s/
      Michael J. Hassett__________
      

                                        Name:
      Michael J.
      Hassett

                                        Title:
      Vice
      President

    


    


    



    
      
        
          Lender
            Signature Page

          First
            Amendment to Credit Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    


    


                                        LASALLE
      BANK NATIONAL
      ASSOCIATION

    


    


                                       By:
      ___/s/
      Bonita J. Althoff ___________
      

                                        Name:
      Bonita J.
      Althoff

                                        Title:
      Senior Vice
      President

    



    
      
        
          Lender
            Signature Page

          First
            Amendment to Credit Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    


    


                                        COMMERCE
      BANK,
      N.A.

    


    


                                        By:
      ___/s/
      Gerald L. Grady___________
      

                                        Name:
      Gerald L.
      Grady

                                        Title:
      Senior Vice
      President

    



    
      
        
          Lender
            Signature Page

          First
            Amendment to Credit Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    



    


    


                                        WACHOVIA
      BANK,
      NATIONAL ASSOCIATION

    


    


                                        By:
      ___/s/
      John M. Fessick___________
      

                                        Name:
      John M.
      Fessick

                                        Title:
      Senior Vice
      President