Document:

Pure Capital Stock Plan 2007

    PURE
      CAPITAL INCORPORATED 

    

    2007
      STOCK INCENTIVE PLAN

    

    

    The
      purpose of the Pure Capital Incorporated 2007 Stock Plan (the “Plan”) is to
      provide (i) designated employees of Pure Capital Incorporated (the “Company”)
      and its subsidiaries, (ii) certain consultants and advisors who perform services
      for the Company or its subsidiaries and (iii) members of the Board of Directors
      of the Company (the “Board”) with the opportunity to receive grants of incentive
      stock options, nonqualified stock options and restricted stock. The Company
      believes that the Plan will encourage the participants to contribute materially
      to the growth of the Company, thereby benefiting the Company’s stockholders, and
      will align the economic interests of the participants with those of the
      stockholders.

    

    1. Administration

    

    (a) Board
      Authority.
      The
      Board shall have the sole authority to (i) determine the individuals to whom
      grants shall be made under the Plan, (ii) determine the type, size and terms
      of
      the grants to be made to each such individual, (iii) determine the time when
      the
      grants will be made and the duration of any applicable exercise or restriction
      period, including the criteria for exercisability and the acceleration of
      exercisability, (iv) amend the terms of any previously issued grant and (v)
      deal
      with any other matters arising under the Plan.

    

    (b) Delegation.
      The
      Board may delegate certain of its duties to one or more of its members or to
      one
      or more agents as it may deem advisable. The Board may employ attorneys, agents,
      consultants, accountants or other persons, and shall be entitled to rely upon
      the advice, opinions or valuations of such persons.

    

    (c) Board
      Determinations.
      The
      Board shall have full power and authority to administer and interpret the Plan,
      to make factual determinations and to adopt or amend such rules, regulations,
      agreements and instruments for implementing the Plan and for the conduct of
      its
      business as it deems necessary or advisable, in its sole discretion. The Board’s
      interpretations of the Plan and all determinations made by the Board pursuant
      to
      the powers vested in it hereunder shall be conclusive and binding on all persons
      having any interest in the Plan or in any awards granted hereunder. All powers
      of the Board shall be executed in its sole discretion, in the best interest
      of
      the Company, not as a fiduciary, and in keeping with the objectives of the
      Plan
      and need not be uniform as to similarly situated individuals.

    

    2. Grants

    

    Awards
      under the Plan may consist of grants of incentive stock options as described
      in
      Section 5 (“Incentive Stock Options”), nonqualified stock options as described
      in Section 5 (“Nonqualified Stock Options”) (Incentive Stock Options and
      Nonqualified Stock Options are collectively referred to as “Options”) and
      restricted stock as described in Section 6 (“Restricted Stock”) (hereinafter
      collectively referred to as “Grants”). All Grants shall be subject to the terms
      and conditions set forth herein and to such other terms and conditions
      consistent with this Plan as the Board deems appropriate and as are specified
      in
      writing by the Board to the individual in a grant instrument or an amendment
      to
      the grant instrument (the “Grant Instrument”). The Board shall approve the form
      and provisions of each Grant Instrument. Grants under a particular Section
      of
      the Plan need not be uniform as among the grantees.

    

    3. Shares
      Subject to the Plan

    

    (a) Shares
      Authorized.
      Subject
      to adjustment as described below, the aggregate number of shares of common
      stock, no par value per share, of the Company (“Company Stock”) that may be
      issued or transferred under the Plan or upon which awards under the Plan may
      be
      granted is 10 million (10,000,000) shares, all of which may be issued pursuant
      to Incentive Stock Options. The shares may be authorized but unissued shares
      of
      Company Stock or reacquired shares of Company Stock, including shares purchased
      by the Company on the open market for purposes of the Plan. If and to the extent
      Options granted under the Plan terminate, expire, or are canceled, forfeited,
      exchanged or surrendered without having been exercised or if any Restricted
      Stock are forfeited, the shares subject to such Grants shall again be available
      for purposes of the Plan, unless otherwise provided by the Board.

    

    (b) Adjustments.
      If
      there is any change in the number or kind of shares of Company Stock outstanding
      by reason of (i) a stock dividend, spinoff, recapitalization, stock split or
      combination or exchange of shares, (ii) a merger, reorganization or
      consolidation, (iii) a reclassification or change in par value or (iv) any
      other
      extraordinary or unusual event affecting the outstanding Company Stock as a
      class without the Company’s receipt of consideration, or if the value of
      outstanding shares of Company Stock is substantially reduced as a result of
      a
      spinoff or the Company’s payment of an extraordinary dividend or distribution,
      the maximum number of shares of Company Stock available for Grants, the maximum
      number of shares of Company Stock that any individual participating in the
      Plan
      may be granted in any year, the number of shares covered by outstanding Grants,
      the kind of shares issued under the Plan, and the price per share or the
      applicable market value of such Grants may be appropriately adjusted by the
      Board to reflect any increase or decrease in the number of, or change in the
      kind or value of, issued shares of Company Stock to preclude, to the extent
      practicable, the enlargement or dilution of rights and benefits under such
      Grants; provided, however, that any fractional shares resulting from such
      adjustment shall be eliminated. Any adjustments determined by the Board shall
      be
      final, binding and conclusive.

    

    4. Eligibility
      for Participation

    

    (a) Eligible
      Persons.
      All key
      employees (including officers) and directors (“Employees”) of the Company and
      any of its subsidiaries are eligible to participate in the Plan. Consultants
      and
      advisors who perform services for the Company or any of its subsidiaries (“Key
      Advisors”) shall be eligible to participate in the Plan if the Key Advisors
      render bona fide services to the Company or its subsidiaries, the services
      are
      not in connection with the offer and sale of securities in a capital-raising
      transaction and the Key Advisors do not directly or indirectly promote or
      maintain a market for the Company’s securities. Collectively Employees and Key
      Advisors are referred to herein as “Participants”.

    

    (b) Selection
      of Grantees.
      The
      Board shall select the Participants to receive Grants and shall determine the
      number of shares of Company Stock subject to a particular Grant in such manner
      as the Board determines. Participants who receive Grants under this Plan shall
      hereinafter be referred to as “Grantees.”

    

    5. Granting
      of Options

    

    (a) Type
      of Option and Price.

    

    (i) The
      Board
      may grant Incentive Stock Options that are intended to qualify as “incentive
      stock options” within the meaning of Section 422 of the Code or Nonqualified
      Stock Options that are not intended so to qualify or any combination of
      Incentive Stock Options and Nonqualified Stock Options, all in accordance with
      the terms and conditions set forth herein. Incentive Stock Options may be
      granted only to Employees of the Company or a parent or subsidiary (within
      the
      meaning of Section 424(f) of the Code). Nonqualified Stock Options may be
      granted to Participants. Unless otherwise provided in the Grant Instrument,
      any
      Option granted under this Plan to an Employee is intended to be an Incentive
      Stock Option.

    

    (ii) The
      purchase price (the “Exercise Price”) of Company Stock subject to an Option
      shall be determined by the Board and must not be less than the Fair Market
      Value
      (as defined below) of a share of Company Stock on the date the Option is
      granted; provided, however, that an Incentive Stock Option may not be granted
      to
      an Employee who, at the time of grant, owns stock possessing more than ten
      percent of the total combined voting power of all classes of stock of the
      Company or any parent or subsidiary of the Company, unless the Exercise Price
      per share is not less than 110% of the Fair Market Value of Company Stock on
      the
      date of grant.

    

    (iii) The
      Fair
      Market Value per share of the Company Stock shall be determined as follows:
      (x)
      if the principal trading market for the Company Stock is a national securities
      exchange or the Nasdaq National Market, the closing price thereof on the
      relevant date or (if there were no trades on that date) the latest preceding
      date upon which a sale was reported, or (y) if the Company Stock is not
      principally traded on such exchange or market, the mean between the last
      reported “bid” and “asked” prices of Company Stock on the relevant date, as
      reported on Nasdaq or, if not so reported, as reported by the National Daily
      Quotation Bureau, Inc. or as reported in a customary financial reporting
      service, as applicable and as the Board determines. If the Company Stock is
      not
      publicly traded or, if publicly traded, is not subject to reported transactions
      or “bid” or “asked” quotations as set forth above, the Fair Market Value per
      share shall be as determined by the Board.

    

    (b) Option
      Term.
      The
      Board shall determine the term of each Option. The term of any Option shall
      not
      exceed ten years from the date of grant, which date of grant is determined
      by
      the Board. However, an Incentive Stock Option that is granted to an Employee
      who, at the time of grant, owns stock possessing more than ten percent of the
      total combined voting power of all classes of stock of the Company, or any
      parent or subsidiary of the Company, may not have a term that exceeds five
      years
      from the date of grant.

    

    (c) Exercisability
      of Options.
      Options
      shall become exercisable in accordance with such terms and conditions,
      consistent with the Plan, as may be determined by the Board and specified in
      the
      Grant Instrument. Unless a different vesting schedule is specified by the Board
      in a Grant Instrument, Options granted under this Plan shall vest in one-quarter
      increments over 4 years beginning with the first annual anniversary of the
      date
      of grant. The Board may accelerate, and may provide in the Grant Instrument
      for
      the acceleration of, the exercisability of any or all outstanding Options at
      any
      time for any reason.

    

    (d) Reload
      Options.
      In the
      event that shares of Company Stock are used to exercise an Option, the terms
      of
      such Option may provide for a Grant of additional Options, or the Board may
      grant additional Options, to purchase a number of shares of Company Stock equal
      to the number of whole shares used to exercise the Option and the number of
      whole shares, if any, withheld in payment of any taxes. Such Options shall
      be
      granted with an Exercise Price equal to the Fair Market Value of the Company
      Stock on the date of grant of such additional Options, or at such other Exercise
      Price as the Board may establish, for a term not longer than the unexpired
      term
      of the exercised Option and on such other terms as the Board shall
      determine.

    

    (e) Dividend
      Equivalents.
      The
      Board may not grant dividend equivalents in connection with Options granted
      under the Plan.

    

    (f) Reserved.

    

    (g) Termination
      of Employment, Disability or Death.

    

    (i) Except
      as
      provided below, an Option may only be exercised while the Grantee is employed
      by, or providing service to, the Company as an Employee or Key Advisor. In
      the
      event that a Grantee ceases to be employed by, or provide service to, the
      Company for any reason other than (A) termination by the Company without Cause
      (as defined below), (B) termination of employment or service by the Grantee
      after at least 90 days advance written notice by the Grantee of the effective
      date of such termination, (C) Disability (as defined below) or (D) death, any
      Option held by the Grantee shall terminate immediately (unless the Board
      specifies otherwise). In addition, notwithstanding any other provision of this
      Section 5, if the Board determines that the Grantee has engaged in conduct
      that
      constitutes Cause at any time while the Grantee is employed by, or providing
      service to, the Company or after the Grantee’s termination of employment or
      service, any Option held by the Grantee shall immediately terminate and the
      Grantee shall automatically forfeit all shares underlying any exercised portion
      of an Option for which the Company has not yet delivered the share certificates,
      upon refund by the Company of the Exercise Price paid by the Grantee for such
      shares. Upon any exercise of an Option, the Company may withhold delivery of
      share certificates pending resolution of an inquiry that could lead to a finding
      resulting in a forfeiture.

    

    (ii) In
      the
      event that a Grantee ceases to be employed by, or provide service to, the
      Company as a result of a termination without Cause by the Company, or if the
      Grantee provides the Company with at least 90 days advance written notice of
      the
      effective date of such termination of employment or service with the Company,
      any Option which is otherwise exercisable by the Grantee shall terminate unless
      exercised within 90 days after the date on which the Grantee ceases to be
      employed by, or provide service to, the Company (or within such other period
      of
      time as may be specified by the Board), but in any event no later than the
      date
      of expiration of the Option term. Except as otherwise provided by the Board,
      any
      of the Grantee’s Options that are not otherwise exercisable as of the date on
      which the Grantee ceases to be employed by, or provide service to, the Company
      shall terminate as of such date.

    

    (iii) In
      the
      event the Grantee ceases to be employed by, or provide service to, the Company
      because the Grantee is Disabled, any Option which is otherwise exercisable
      by
      the Grantee shall terminate unless exercised within one year after the date
      on
      which the Grantee ceases to be employed by, or provide service to, the Company
      (or within such other period of time as may be specified by the Board), but
      in
      any event no later than the date of expiration of the Option term. Except as
      otherwise provided by the Board, any of the Grantee’s Options which are not
      otherwise exercisable as of the date on which the Grantee ceases to be employed
      by, or provide service to, the Company shall terminate as of such
      date.

    

    (iv) If
      the
      Grantee dies while employed by, or providing service to, the Company or within
      90 days after the date on which the Grantee ceases to be employed or provide
      service on account of a termination specified in Section 5(g)(ii) above (or
      within such other period of time as may be specified by the Board), any Option
      that is otherwise exercisable by the Grantee shall terminate unless exercised
      within one year after the date on which the Grantee ceases to be employed by,
      or
      provide service to, the Company (or within such other period of time as may
      be
      specified by the Board), but in any event no later than the date of expiration
      of the Option term. Except as otherwise provided by the Board, any of the
      Grantee’s Options that are not otherwise exercisable as of the date on which the
      Grantee ceases to be employed by, or provide service to, the Company shall
      terminate as of such date.

    

    (v) For
      purposes of this Section 5(g) and Section 6:

    

    (A) The
      term
“Company” shall mean the Company and its parent and subsidiary corporations or
      other entities, as determined by the Board.

    

    (B) “Employed
      by, or provide service to, the Company” shall mean employment or service as an
      Employee, Key Advisor or member of the Board (so that, for purposes of
      exercising Options and satisfying conditions with respect to Restricted Stock,
      a
      Grantee shall not be considered to have terminated employment or service until
      the Grantee ceases to be an Employee, Key Advisor and member of the Board),
      unless the Board determines otherwise.

    

    (C) “Disability”
      shall mean a Grantee’s becoming disabled under the Company’s long-term
      disability plan, or, if the Grantee is not covered under such plan or no such
      plan is maintained, and in the case of an Incentive Stock Option, “Disability”
shall mean a Grantee’s becoming disabled within the meaning of Section 22(e)(3)
      of the Code.

    

    (D) “Cause”
      shall mean, except to the extent specified otherwise by the Board, a finding
      by
      the Board that the Grantee (i) has breached his or her employment or service
      contract with the Company, (ii) has engaged in disloyalty to the Company,
      including, without limitation, fraud, embezzlement, theft, commission of a
      felony or proven dishonesty in the course of his or her employment or service,
      (iii) has disclosed trade secrets or confidential information of the Company
      to
      persons not entitled to receive such information, (iv) has breached any written
      confidentiality, non-competition or non-solicitation agreement between the
      Grantee and the Company or (v) has engaged in such other behavior detrimental
      to
      the interests of the Company as the Board determines. 

    

    (vi) Notwithstanding
      anything set forth above, the Board may provide that an Option granted to a
      Key
      Advisor shall not terminate or otherwise be affected by any termination of
      service by the Key Advisor.

    

    (h) Exercise
      of Options.
      A
      Grantee may exercise an Option that has become exercisable, in whole or in
      part,
      by delivering a notice of exercise to the Company. Along with the notice of
      exercise, the Grantee shall pay the Exercise Price in respect of the exercise
      of
      an Option as specified by the Board (i) in cash, (ii) with the approval of
      the
      Board, by delivering shares of Company Stock owned by the Grantee (including
      Company Stock acquired in connection with the exercise of an Option, subject
      to
      such restrictions as the Board deems appropriate) valued at Fair Market Value
      on
      the date of exercise, (iii) with the approval of the Board, by surrender of
      outstanding awards under the Plan or (iv) by such other method as the Board
      may
      approve. Shares of Company Stock used to exercise an Option shall have been
      held
      by the Grantee for the requisite period of time to avoid adverse accounting
      consequences to the Company with respect to the Option. The Grantee shall pay
      the amount of any withholding tax due (pursuant to Section 7) at the time of
      exercise. 

    

    6. Restricted
      Stock

    

    The
      Board
      may grant Restricted Stock to an Employee, Director or Key Advisor, upon such
      terms as the Board deems appropriate. The following provisions are applicable
      to
      Restricted Stock:

    

    (a) General
      Requirements.
      Shares
      of Company Stock issued or transferred pursuant to a Grant of Restricted Stock
      may be issued or transferred for consideration or for no consideration, and
      subject to restrictions or no restrictions, as determined by the Board. The
      Board may, but shall not be required to, establish conditions under which
      restrictions on Restricted Stock shall lapse over a period of time or according
      to such other criteria as the Board deems appropriate, including, without
      limitation, restrictions based upon the achievement of specific performance
      goals. The period of time during which the Restricted Stock will remain subject
      to restrictions will be designated in the Grant Instrument as the “Restriction
      Period.”

    

    (b) Requirement
      of Employment or Service.
      If the
      Grantee ceases to be employed by, or provide service to, the Company (as defined
      in Section 5(g)) during a period designated in the Grant Instrument as the
      Restriction Period, or if other specified conditions are not met, the Restricted
      Stock shall terminate as to all shares covered by the Grant as to which the
      restrictions have not lapsed, and those shares of Company Stock must be
      immediately returned to the Company. The Board may, however, provide for
      complete or partial exceptions to this requirement as it deems
      appropriate.

    

    (c) Restrictions
      on Transfer and Legend on Stock Certificate.
      During
      the Restriction Period, a Grantee may not sell, assign, transfer, pledge or
      otherwise dispose of the shares of Restricted Stock except to a Successor
      Grantee under Section 8(a). A stock certificate representing the shares of
      Restricted Stock shall be registered in the Grantee’s name but shall be held in
      the custody of the Company for the Grantee’s account.

    

    (d) Right
      to Vote and to Receive Dividends.
      Unless
      the Board determines otherwise, during the Restriction Period, the Grantee
      shall
      have the right to vote shares of Restricted Stock and to receive any dividends
      or other distributions paid on such shares.

    

    (e) Lapse
      of Restrictions.
      All
      restrictions imposed on Restricted Stock shall lapse upon the expiration of
      the
      applicable Restriction Period and the satisfaction of all conditions imposed
      by
      the Board. The Board may determine, as to any or all Restricted Stock, that
      the
      restrictions shall lapse without regard to any Restriction Period.

    

    7. Withholding
      of Taxes;
      Required
      Withholding.
      All
      Grants under the Plan shall be subject to applicable Canadian and United States
      tax withholding requirements. The Company shall have the right to deduct from
      all Grants paid in cash, or from other amounts paid to the Grantee, any taxes
      required by law to be withheld with respect to such Grants. The Company may
      require that the Grantee or other person receiving or exercising Grants pay
      to
      the Company the amount of any taxes that the Company is required to withhold
      with respect to such Grants, or the Company may deduct from other wages paid
      by
      the Company the amount of any withholding taxes due with respect to such
      Grants.

    

    8. Transferability
      of Grants

    

    (a) Nontransferability
      of Grants.
      Except
      as provided below, only the Grantee may exercise rights under a Grant during
      the
      Grantee’s lifetime. A Grantee may not transfer those rights except (i) by will
      or by the laws of descent and distribution or (ii) with respect to Grants other
      than Incentive Stock Options, if permitted in any specific case by the Board,
      pursuant to a domestic relations order or otherwise as permitted by the Board.
      When a Grantee dies, the personal representative or other person entitled to
      succeed to the rights of the Grantee (“Successor Grantee”) may exercise such
      rights. A Successor Grantee must furnish proof satisfactory to the Company
      of
      his or her right to receive the Grant under the Grantee’s will or under the
      applicable laws of descent and distribution.

    

    (b) Transfer
      of Nonqualified Stock Options.
      Notwithstanding the foregoing, the Board may provide, in a Grant Instrument,
      that a Grantee may transfer Nonqualified Stock Options to family members, or
      one
      or more trusts or other entities for the benefit of or owned by family members,
      consistent with the applicable securities laws, according to such terms as
      the
      Board may determine; provided that the Grantee receives no consideration for
      the
      transfer of an Option and the transferred Option shall continue to be subject
      to
      the same terms and conditions as were applicable to the Option immediately
      before the transfer.

    

    9. Requirements
      for Issuance or Transfer of Shares

    

    (a) Stockholder’s
      Agreement.
      The
      Board may require that a Grantee execute a stockholder’s agreement, with such
      terms as the Board deems appropriate, with respect to any Company Stock issued
      or distributed before a Public Offering pursuant to this Plan.

    

    (b) Limitations
      on Issuance or Transfer of Shares.
      No
      Company Stock shall be issued or transferred in connection with any Grant
      hereunder unless and until all legal requirements applicable to the issuance
      or
      transfer of such Company Stock have been complied with to the satisfaction
      of
      the Board. The Board shall have the right to condition any Grant made to any
      Grantee hereunder on such Grantee’s undertaking in writing to comply with such
      restrictions on his or her subsequent disposition of such shares of Company
      Stock as the Board shall deem necessary or advisable, and certificates
      representing such shares may be legended to reflect any such restrictions.
      Certificates representing shares of Company Stock issued or transferred under
      the Plan will be subject to such stop-transfer orders and other restrictions
      as
      may be required by applicable laws, regulations and interpretations, including
      any requirement that a legend be placed thereon.

    

    12. Cancellation
      and Rescission of Options and Restricted Stock

     

    (a)  Unless
      the Grant Instrument specifies otherwise, the Board may cancel, rescind,
      suspend, withhold or otherwise limit or restrict any unexpired or unpaid Options
      or Restricted Stock (for purposes of this Section 12, an “Award”) at any time if
      the Grantee is not in compliance with all applicable provisions of the Grant
      Instrument and the Plan, or if the Grantee engages in any “Detrimental
      Activity.” For purposes of this Section 12, “Detrimental Activity” shall
      include: (i) the rendering of services for any organization or engaging directly
      or indirectly in any business which is or becomes competitive with the Company,
      or which organization or business, or the rendering of services to such
      organization or business, is or becomes otherwise prejudicial to or in conflict
      with the interests of the Company; (ii) the disclosure to anyone outside the
      Company, or the use in other than the Company’s business, without prior written
      authorization from the Company, of any confidential information or material,
      in
      violation of the Company’s applicable agreement with the Grantee or of the
      Company’s applicable policy regarding confidential information and intellectual
      property; (iii) the failure or refusal to disclose promptly and to assign to
      the
      Company, pursuant to the Company’s applicable
      agreement with the Grantee or to the Company’s applicable policy regarding
      confidential information and intellectual property, all right, title and
      interest in any invention or idea, patentable or not, made or conceived by
      the
      Grantee during employment by the Company, relating in any manner to the actual
      or anticipated business, research or development work of the Company, or the
      failure or refusal to do anything reasonably necessary to enable the Company
      to
      secure a patent in the United States and where appropriate in other countries;
      (iv) activity that results in termination of the Grantee’s employment for cause;
      (v) a violation of any rules, policies, procedures or guidelines of the Company,
      including (but not limited to) the Company’s business conduct guidelines; (vi)
      any attempt (directly or indirectly) to induce any employee of the Company
      to be
      employed or perform services elsewhere or any attempt (directly or indirectly)
      to solicit the trade or business of any current or prospective customer,
      supplier or partner of the Company; (vii) the Grantee’s being convicted of, or
      entering a guilty plea with respect to, a crime, whether or not connected with
      the Company; or (viii) any other conduct or act determined to be injurious,
      detrimental or prejudicial to any interest of the Company.

     

    (b) Upon
      exercise, payment or delivery pursuant to an Award, the Grantee shall certify
      in
      a manner acceptable to the Company that he or she is in compliance with the
      terms and conditions of the Plan. In the event a Grantee fails to comply with
      the provisions of paragraphs (a)(i)-(viii) of this Section 12 prior to, or
      during the six months after, any exercise, payment or delivery pursuant to
      an
      Award, such exercise, payment or delivery may be rescinded within two years
      thereafter. In the event of any such rescission, the Grantee shall pay to the
      Company the amount of any gain realized or payment received as a result of
      the
      rescinded exercise, payment or delivery, in such manner and on such terms and
      conditions as may be required, and the Company shall be entitled to set-off
      against the amount of any such gain any amount owed to the Grantee by the
      Company.

    

    (c) The
      Board, in its sole discretion, may grant to a Grantee, in exchange for the
      surrender and cancellation of an award previously granted to the Grantee, a
      new
      award in the same or different form and containing such terms, including without
      limitation a price that is higher or lower than any price provided in the award
      so surrendered or cancelled.

    

    13. Amendment
      and Termination of the Plan

    

    (a) Amendment.
      The
      Board may amend the Plan at any time; provided, however, that the Board shall
      not amend the Plan without stockholder approval if such approval is required
      in
      order to comply with the Code or applicable laws, or to comply with applicable
      stock exchange requirements.

    

    (b) Termination
      of Plan.
      No
      Incentive Stock Option may be granted more than ten years from the Plan’s
      effective date. The Plan may be terminated by the Board at any
      time.

    

    (c) Termination
      and Amendment of Outstanding Grants.
      A
      termination or amendment of the Plan that occurs after a Grant is made shall
      not
      materially impair the rights of a Grantee unless the Grantee consents or unless
      the Board acts pursuant to Section 19(b). The termination of the Plan shall
      not
      impair the power and authority of the Board with respect to an outstanding
      Grant. Whether or not the Plan has terminated, an outstanding Grant may be
      terminated or amended by agreement of the Company and the Grantee consistent
      with the Plan.

    

    (d) Governing
      Document.
      The
      Plan shall be the controlling document. No other statements, representations,
      explanatory materials or examples, oral or written, may amend the Plan in any
      manner. The Plan shall be binding upon and enforceable against the Company
      and
      its successors and assigns.

    

    14. Funding
      of the Plan

    

    This
      Plan
      shall be unfunded. The Company shall not be required to establish any special
      or
      separate fund or to make any other segregation of assets to assure the payment
      of any Grants under this Plan. In no event shall interest be paid or accrued
      on
      any Grant, including unpaid installments of Grants.

    

    15. Rights
      of Participants

    

    Nothing
      in this Plan shall entitle any Employee, Key Advisor, Director or other person
      to any claim or right to be granted a Grant under this Plan. Neither this Plan
      nor any action taken hereunder shall be construed as giving any individual
      any
      rights to be retained by or in the employ of the Company or any other employment
      rights.

    

    16. No
      Fractional Shares

    

    No
      fractional shares of Company Stock shall be issued or delivered pursuant to
      the
      Plan or any Grant. The Board shall determine whether cash, other awards or
      other
      property shall be issued or paid in lieu of such fractional shares or whether
      such fractional shares or any rights thereto shall be forfeited or otherwise
      eliminated.

    

    17. Headings

    

    Section
      headings are for reference only. In the event of a conflict between a title
      and
      the content of a Section, the content of the Section shall control.

    

    18. Effective
      Date of the Plan

    

    The
      Plan
      shall be effective on February 1, 2007.

    

    19. Miscellaneous

    

    (a) Grants
      in Connection with Corporate Transactions and Otherwise.
      Nothing
      contained in this Plan shall be construed to (i) limit the right of the Board
      to
      make Grants under this Plan in connection with the acquisition, by purchase,
      lease, merger, consolidation or otherwise, of the business or assets of any
      corporation, firm or association, including Grants to employees thereof who
      become Employees of the Company, or for other proper corporate purposes, or
      (ii)
      limit the right of the Company to grant stock options or make other awards
      outside of this Plan. Without limiting the foregoing, the Board may make a
      Grant
      to an employee of another corporation who becomes an Employee by reason of
      a
      corporate merger, consolidation, acquisition of stock or property,
      reorganization or liquidation involving the Company or any of its subsidiaries
      in substitution for a stock option or stock awards grant made by such
      corporation. The terms and conditions of the substitute grants may vary from
      the
      terms and conditions required by the Plan and from those of the substituted
      stock incentives. The Board shall prescribe the provisions of the substitute
      grants.

    

    (b) Compliance
      with Law.
      The
      Plan, the exercise of Options and the obligations of the Company to issue or
      transfer shares of Company Stock under Grants shall be subject to all applicable
      laws and to approvals by any governmental or regulatory agency as may be
      required. With respect to persons subject to Section 16 of the Exchange Act,
      it
      is the intent of the Company that all transactions under the Plan comply with
      all applicable provisions of Rule 16b-3 or its successors under the Exchange
      Act. In addition, it is the intent of the Company that the Plan and applicable
      Grants under the Plan comply with the applicable provisions of Section 162(m)
      of
      the Code and Section 422 of the Code. To the extent that any legal requirement
      of Section 16 of the Exchange Act or Section 162(m) or 422 of the Code which
      shall have been incorporated in the Plan ceases to be required under Section
      16
      of the Exchange Act or Section 162(m) or 422 of the Code, that Plan provision
      shall cease to apply. The Board may revoke any Grant if it is contrary to law
      or
      modify a Grant to bring it into compliance with any valid and mandatory
      government regulation. The Board may also adopt rules regarding the withholding
      of taxes on payments to Grantees. The Board may, in its sole discretion, agree
      to limit its authority under this Section.

    

    (c) Governing
      Law.
      The
      validity, construction, interpretation and effect of the Plan and Grant
      Instruments issued under the Plan shall be governed and construed by and
      determined in accordance with the laws of Canada.

    

    (d) Other
      Restrictions.
      Notwithstanding any other provision of this Plan, Company Stock issued or
      distributed pursuant to this Plan may be subject to other restrictions described
      in the Company’s by-laws.Exhibit 10.1 Rec Loan and Security Agreement $250MM w RCF, Leaf and Morgan
      Stanley dated 122106

    EXECUTION
      COPY

     

    [incorporates
      First Amendment,

    dated
      as
      of December 21, 2006]

     

      

    

     

    U.S.
      $250,000,000

     

    RECEIVABLES
      LOAN AND SECURITY AGREEMENT

     

    Dated
      as
      of October 31, 2006

     

    Among

     

    RESOURCE
      CAPITAL FUNDING II, LLC,

     

    as
      the
      Borrower

     

    and

     

    LEAF
      FINANCIAL CORPORATION,

     

    as
      the
      Servicer

     

    and

     

    MORGAN
      STANLEY BANK,

     

    as
      a
      Lender and Collateral Agent

     

    and

     

    U.S.
      BANK
      NATIONAL ASSOCIATION,

     

    as
      the
      Custodian and the Lender’s Bank

     

    and

     

    LYON
      FINANCIAL SERVICES, INC. (D/B/A U.S. BANK PORTFOLIO SERVICES),

     

    as
      the
      Backup Servicer

     

    
      
        
           

        

         

      

      
         

        
          

        

      

      
         

        
        

      

    

    This
      RECEIVABLES LOAN AND SECURITY AGREEMENT is made as of October 31, 2006,
      among:

     

    (1) RESOURCE
      CAPITAL FUNDING II, LLC, a Delaware limited liability company (the “Borrower”);

     

    (2) LEAF
      FINANCIAL CORPORATION, a Delaware corporation (“LEAF
      Financial”
or
      the
“initial Servicer”), as the Servicer (as defined herein);

     

    (3) MORGAN
      STANLEY BANK (“Morgan
      Stanley”),
      as a
      Lender and Collateral Agent (as defined herein);

     

    (4) U.S.
      BANK
      NATIONAL ASSOCIATION, as the Custodian and the Lender’s Bank (as each such term
      is defined herein); and

     

    (5) LYON
      FINANCIAL SERVICES, INC. (d/b/a U.S. Bank Portfolio Services), a Minnesota
      corporation, as the Backup Servicer (as defined herein).

     

    IT
      IS
      AGREED as follows:

     

    ARTICLE
      I.

     

    DEFINITIONS

     

    SECTION
      1.01 Certain
      Defined Terms.
      i)
      Certain
      capitalized terms used throughout this Agreement are defined above or in this
      Section 1.01.

     

    (b) As
      used
      in this Agreement and the exhibits and schedules thereto (each of which is
      hereby incorporated herein and made a part hereof), the following terms shall
      have the following meanings (such meanings to be equally applicable to both
      the
      singular and plural forms of the terms defined):

     

    “Accountants’
      Report”
has
      the
      meaning assigned to that term in Section 6.11(b).

     

    “Active
      Backup Servicer’s Fee”
means,
      for any Fee Period or portion thereof after the occurrence of a Servicer Default
      and the appointment of the Backup Servicer as Servicer hereunder, an amount,
      payable out of Collections on the Pledged Receivables and amounts applied to
      the
      payment of, or treated as payments on, the Pledged Receivables, equal to the
      greater of (i) the Active Backup Servicing Fee Rate, multiplied by the Net
      Eligible Receivables Balance as of the first day of such Fee Period, multiplied
      by a fraction, the numerator of which shall be the actual number of days in
      such
      Fee Period and the denominator of which shall be 360, and (ii) $5,000. The
      Active Backup Servicer’s Fees shall also include reasonable out-of-pocket
      expenses incurred by the Backup Servicer in performing its duties as
      Servicer.

     

    “Active
      Backup Servicing Fee Rate”
means
      1.00%.

     

    “Active
      Backup Servicer’s Indemnified Amounts”
has
      the
      meaning assigned to that term in Section 6.09.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    “Adjusted
      Eurodollar Rate”
means,
      with respect to any Interest Period for any Loan allocated to such Interest
      Period, an interest rate per annum equal to the sum of (i) the Adjusted
      Eurodollar Rate Margin and (ii) an interest rate per annum equal to the
      average of the interest rates per annum (rounded upwards, if necessary, to
      the
      nearest 1/16 of 1%) reported during such Interest Period on Telerate Access
      Service Page 3750 (British Bankers Association Settlement Rate) as the London
      Interbank Offered Rate for United States dollar deposits having a term of thirty
      (30) days and in a principal amount of $1,000,000 or more (or, if such page
      shall cease to be publicly available or, if the information contained on such
      page, in the Lender’s sole judgment, shall cease to accurately reflect such
      London Interbank Offered Rate, such rate as reported by any publicly available
      recognized source of similar market data selected by the Lender that, in the
      Lender’s reasonable judgment, accurately reflects such London Interbank Offered
      Rate).

     

    “Adjusted
      Eurodollar Rate Margin”
has
      the
      meaning ascribed thereto in the Fee Letter.

     

    “Adverse
      Claim”
means
      a
      lien, security interest, charge, encumbrance or other right or claim of any
      Person other than, with (i) respect to the Pledged Assets, any lien,
      security interest, charge, encumbrance or other right or claim in favor of
      the
      Collateral Agent or (ii) any Permitted Lien.

     

    “Affected
      Party”
has
      the
      meaning assigned to that term in Section 2.09.

     

    “Affiliate”
when
      used with respect to a Person, means any other Person controlling, controlled
      by
      or under common control with such Person. For the purposes of this definition,
      “control,” when used with respect to any specified Person, means the power to
      direct the management and policies of such Person, directly or indirectly,
      whether through the ownership of voting securities, by contract or otherwise;
      and the terms “controlling” and “controlled” have meanings correlative to the
      foregoing.

     

    “Agreement”
means
      this Receivables Loan and Security Agreement, as the same may be amended,
      restated, supplemented and/or otherwise modified from time to time hereafter
      in
      accordance with its terms.

     

    “Allonge”
means
      an allonge in the form attached hereto as Exhibit G.

     

    “Amortized
      Equipment Cost”
means,
      as of any date of determination, (i) for any Pool A Receivable, the
      net investment with respect to such Pool A Receivables, where “net
      investment” means (a) the present value of the remaining Scheduled Payments
      under the related Contract, discounted at the rate at which the present value
      of
      all Scheduled Payments under the related Contract, including any Balloon Payment
      or Put Payment, equals the original equipment cost related to such Receivable,
      plus (b) the associated amortized indirect costs related to the applicable
      equipment, amortized using the interest method over the life of the related
      Contract and (ii) for any Pool B Receivable, the net investment with
      respect to such Pool B Receivable, where “net investment” means
      (a) the sum of the present values of the remaining Underlying Scheduled
      Payments under each related Eligible Underlying Contract, discounted at the
      rate
      at which the present value of all scheduled payments under such Eligible
      Underlying Contract, including any Balloon Payment or Put Payment, equals the
      original equipment cost related to

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    such
      Eligible Underlying Contract, plus (b) the associated amortized indirect
      costs related to the applicable equipment, amortized using the interest method
      over the life of the related Underlying Contract.

     

    “Annualized
      Default Rate”
means,
      as of any date of determination after the end of the first Collection Period
      following the date hereof, an amount (expressed as a percentage) equal to
      (i) the product of (A) the aggregate Discounted Balances of all
      Pledged Receivables which were Eligible Receivables at the time of their Pledge
      hereunder and which became Defaulted Receivables during the six (or such lesser
      number of Collection Periods since the date hereof) immediately preceding
      Collection Periods and (B) 2 (if six or more Collection Periods have
      occurred since the date hereof), 2.4 (if five Collection Periods have occurred
      since the date hereof), 3 (if four Collection Periods have occurred since
      the date hereof), 4 (if three Collection Periods have occurred since the
      date hereof), 6 (if two Collection Periods have occurred since the date
      hereof) or 12 (if one Collection Period has occurred since the date hereof)
      divided by (ii) the average Eligible Receivables Balance as of the first
      Business Day of each of the six (or such lesser number of Collection Periods
      since the date hereof) immediately preceding Collection Periods.

     

    “Annualized
      Net Loss Rate”
means,
      as of any date of determination after the end of the first Collection Period
      following the date hereof, an amount (expressed as a percentage) equal to
      (i) the product of (A) (x) the aggregate Discounted Balances of
      all Pledged Receivables which were Eligible Receivables at the time of their
      Pledge hereunder and which became Defaulted Receivables during the six (or
      such
      lesser number of Collection Periods since the date hereof) immediately preceding
      Collection Periods minus
      (y) Recoveries received during the six (or such lesser number of Collection
      Periods since the date hereof) immediately preceding Collection Periods and
      (B) 2 (if six or more Collection Periods have occurred since the date
      hereof), 2.4 (if five Collection Periods have occurred since the date
      hereof), 3 (if four Collection Periods have occurred since the date
      hereof), 4 (if three Collection Periods have occurred since the date
      hereof), 6 (if two Collection Periods have occurred since the date hereof)
      or 12 (if one Collection Period has occurred since the date hereof) divided
      by (ii) the Eligible Receivables Balance as of the first Business Day of
      the six (or such lesser number of Collection Periods since the date hereof)
      immediately preceding Collection Periods.

     

    “Applicable
      Date”
has
      the
      meaning set forth in definition of Pool B Annualized Net Loss Rate.

     

    “Assigned
      Documents”
has
      the
      meaning assigned to that term in Section 2.10.

     

    “Assignment”
has
      the
      meaning set forth in the Purchase and Sale Agreement.

     

    “Assignment
      and Acceptance”
has
      the
      meaning assigned to that term in Section 9.04.

     

    “Available
      Funds”
has
      the
      meaning assigned to that term in Section 2.04(c).

     

    “Backup
      Servicer”
means
      Lyon Financial Services, Inc. (d/b/a U.S. Bank Portfolio Services) or any
      successor Backup Servicer appointed by the Lender pursuant to Section 6.13.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    “Backup
      Servicer Delivery Date”
has
      the
      meaning assigned to that term in Section 6.10(d).

     

    “Balloon
      Payment”
means
      a
      payment due, or which may be required, at the end of the term of a Contract
      or
      Underlying Contract (which constitutes a loan) equal to the principal amount
      under such Contract or Underlying Contract which remains outstanding after
      the
      payment of all regular scheduled payments of principal during the term of such
      Contract or Underlying Contract.

     

    “Bankruptcy
      Code”
means
      Title 11, United States Code, 11 U.S.C. §§ 101 et seq.,
      as
      amended.

     

    “Bankruptcy
      Event”
shall
      be deemed to have occurred with respect to a Person if either:

     

    (c) a
      case or
      other proceeding shall be commenced, without the application or consent of
      such
      Person, in any court, seeking the liquidation, reorganization, debt arrangement,
      dissolution, winding up, or composition or readjustment of debts of such Person,
      the appointment of a trustee, receiver, custodian, liquidator, assignee,
      sequestrator or the like for such Person or all or substantially all of its
      assets, or any similar action with respect to such Person under any law relating
      to bankruptcy, insolvency, reorganization, winding up or composition or
      adjustment of debts, and such case or proceeding shall continue undismissed,
      or
      unstayed and in effect, for a period of 60 consecutive days; or an order for
      relief in respect of such Person shall be entered in an involuntary case under
      the federal bankruptcy laws or other similar laws now or hereafter in effect;
      or

     

    (d) such
      Person shall commence a voluntary case or other proceeding under any applicable
      bankruptcy, insolvency, reorganization, debt arrangement, dissolution or other
      similar law now or hereafter in effect, or shall consent to the appointment
      of
      or taking possession by a receiver, liquidator, assignee, trustee, custodian,
      sequestrator (or other similar official) for such Person or for any substantial
      part of its property, or shall make any general assignment for the benefit
      of
      creditors, or shall fail to, or admit in writing its inability to, pay its
      debts
      generally as they become due, or, if a corporation or similar entity, its board
      of directors or members shall vote to implement any of the
      foregoing.

     

    “Base
      Rate”
means,
      on any date, a fluctuating rate of interest per annum equal to the arithmetic
      average of the rates of interest publicly announced by JPMorgan Chase Bank
      and
      Citibank, N.A. (or their respective successors) as their respective prime
      commercial lending rates (or, as to any such bank that does not announce such
      a
      rate, such bank’s “base” or other rate determined by the Lender to be the
      equivalent rate announced by such bank), except that, if any such bank shall,
      for any period, cease to announce publicly its prime commercial lending (or
      equivalent) rate, the Lender shall, during such period, determine the Base
      Rate
      based upon the prime commercial lending (or equivalent) rates announced publicly
      by the other such bank or, if each such bank ceases to announce publicly its
      prime commercial lending (or equivalent) rate, based upon the prime commercial
      lending (or equivalent) rate or rates announced publicly by one or more other
      banks selected by the Lender. The prime commercial lending (or equivalent)
      rates
      used in computing the Base Rate are not intended to be the lowest rates of
      interest charged by

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    such
      banks in connection with extensions of credit to debtors. The Base Rate shall
      change as and when such banks’ prime commercial lending (or equivalent) rates
      change.

     

    “Borrower”
has
      the
      meaning assigned to that term in the preamble hereto.

     

    “Borrower
      Pension Plan”
means
      a
“pension plan” as such term is defined in section 3(2) of ERISA, which is
      subject to title IV of ERISA and to which the Borrower or any ERISA Affiliate
      of
      Borrower may have any liability, including any liability by reason of having
      been a substantial employer within the meaning of section 4063 of ERISA at
      any
      time during the preceding five years, or by reason of being deemed to be a
      contributing sponsor under section 4069 of ERISA.

     

    “Borrowing”
means
      a
      borrowing of Loans under this Agreement.

     

    “Borrowing
      Base”
means,
      at any time, the sum of the Pool A Borrowing Base plus the Pool B
      Borrowing Base at such time.

     

    “Borrowing
      Base Certificate”
means
      a
      report, in substantially the form of Exhibit A,
      prepared by the Borrower (or the initial Servicer on its behalf) for the benefit
      of Lender pursuant to Section 6.10(c).

     

    “Borrowing
      Base Deficiency”
means,
      at any time, that the Borrowing Base is less than the Facility Amount, an amount
      equal to the amount of such deficiency.

     

    “Borrowing
      Base Surplus”
means,
      at any time, that the Borrowing Base exceeds the Facility Amount, an amount
      equal to the amount of such excess.

     

    “Borrowing
      Date”
means,
      with respect to any Borrowing, the date on which such Borrowing is funded,
      which
      date, other than in the case of the initial Borrowing, shall be a Subsequent
      Borrowing Date.

     

    “Borrowing
      Limit”
means
      initially (i) prior to and including the first anniversary of the Closing Date,
      $100,000,000 and (ii) after the first anniversary of the Closing Date until
      the
      Facility Maturity Date, $250,000,000, as such amounts may be increased pursuant
      to Section 2.16;
      provided,
      however,
      that at
      all times, on or after the Program Termination Date, the Borrowing Limit shall
      mean the aggregate outstanding principal balance of the Loans.

     

    “Breakage
      Fee”
means,
      for Loans allocated to any Interest Period during which such Loans are repaid
      (in whole or in part) prior to the end of such Interest Period, the breakage
      costs, if any, related to such repayment plus the amount, if any, by which
      (i) interest (calculated without taking into account any Breakage Fee),
      which would have accrued on the amount of the payment of such Loans during
      such
      Interest Period (as so computed) if such payment had not been made, as the
      case
      may be, exceeds (ii) the sum of (A) interest actually received by the
      Lender in respect of such Loans for such Interest Period and, if applicable,
      (B) the income, if any, received by the Lender from the Lender’s investing
      the proceeds of such payments on such Loans.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    “Business
      Day”
means
      a
      day of the year other than a Saturday or a Sunday or any other day on which
      banks are authorized or required to close in New York City, St. Paul, Minnesota
      or Salt Lake City, Utah; provided,
      that,
      if any determination of a Business Day shall relate to a Loan bearing interest
      at the Adjusted Eurodollar Rate, the term “Business Day” shall also exclude any
      day on which banks are not open for dealings in dollar deposits in the London
      interbank market.

     

    “Calculated
      Swap Amortizing Balance”
means,
      with respect to a Qualifying Interest Rate Swap and as of any date of
      determination, the projected scheduled amortizing balance of the Pledged
      Receivables which were Pledged during the period ending on the Remittance Date
      on which such Qualifying Interest Rate Swap became effective and beginning
      on
      the day following the immediately preceding Remittance Date, determined by
      the
      Servicer and accepted by the Lender based upon the Discounted Balance of such
      Pledged Receivables as of such date of determination, adjusted for prepayments
      using an absolute prepayment speed which, in the judgment of the Lender, is
      consistent with the speed with which the Pledged Receivables have prepaid in
      the
      past.

     

    “Capital
      Stock”
of
      any
      Person means any and all shares, interests, rights to purchase, warrants,
      options, contingent share issuances, participations or other equivalents of
      or
      interest in equity (however designated) of such Person.

     

    “Cash
      Reserve”
means
      any amount paid to the Originator, the Servicer or the Borrower by an Obligor
      that is an Underlying Originator as a cash reserve which may be drawn upon
      if
      amounts due under the related Underlying Originator Loan Contract are not paid
      when due (or by the end of any cure period related thereto), which has not
      previously been refunded to such Obligor or applied toward such Obligor’s
      obligations under such Underlying Originator Loan Contract.

     

    “Cash
      Reserve Account”
has
      the
      meaning assigned to that term in Section 2.06.

     

    “Cash
      Reserve Account Agreement”
means
      any Securities Account Agreement with respect to any Cash Reserve Account
      established by an Originator, among the Borrower, the Servicer, the Lender’s
      Bank and the Lender, in form and substance satisfactory to the parties thereto,
      as such agreement may from time to time be amended, supplemented or otherwise
      modified in accordance with the terms thereof.

     

    “Certificate
      of Title”
means
      with respect to a Vehicle, an original certificate of title issued by the
      Registrar of Titles of the applicable State.

     

    “Change
      of Control”
means
      that at any time (i) Owner shall own directly or indirectly less than 100%
      of
      all membership interests of the Borrower, (ii) Resource America shall own
      directly or indirectly less than 50.1% of all Capital Stock or voting power
      of
      the initial Servicer, (iii) the initial Servicer shall own directly or
      indirectly less than 80% of all Capital Stock or voting power of Originator
      and
      Owner, (iv) Resource America, Owner or the Borrower merges or consolidates
      with any other Person without the prior written consent of the Lender,
      (v) the initial Servicer or the Originator merges or consolidates with any
      other Person and the initial Servicer or the Originator, as applicable, is
      not
      the surviving entity or (vi) either of Crit DeMent

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    or
      Miles
      Herman is not employed in a senior management position at the initial Servicer,
      is not involved in the day-to-day operations of the initial Servicer or is
      not
      able to perform substantially all of his duties as an employee of the initial
      Servicer during any three month period and, in each case, has not been replaced
      by a person approved by the Lender in writing within 90 days of any such
      event.

     

    “Closing
      Date”
means
      October 31, 2006.

     

    “Code”
means
      the Internal Revenue Code of 1986, as amended.

     

    “Collateral
      Agent”
means
      the Lender in its capacity as collateral agent on behalf of the Secured
      Parties.

     

    “Collateral
      Receipt”
has
      the
      meaning assigned to that term in the Custodial Agreement.

     

    “Collection
      Account”
means
      a
      special trust account (account number 106682000 at the Lender’s Bank) in the
      name of the Borrower and under the control of the Lender; provided,
      that
      the funds deposited therein (including any interest and earnings thereon) from
      time to time shall constitute the property and assets of the Borrower and the
      Borrower shall be solely liable for any taxes payable with respect to the
      Collection Account.

     

    “Collection
      Account Agreement”
means
      that certain Collection Account Agreement, dated the date of this Agreement,
      among the Borrower, the Servicer, the Lender’s Bank and the Lender, as such
      agreement may from time to time be amended, supplemented or otherwise modified
      in accordance with the terms thereof.

     

    “Collection
      Date”
means
      the date on which the aggregate outstanding principal amount of the Loans have
      been repaid in full and all interest and Fees and all other Obligations have
      been paid in full, and the Lender shall have no further obligation to make
      any
      additional Loans.

     

    “Collection
      Period”
means,
      (i) with respect to any Remittance Date (including the initial Remittance Date),
      the period beginning on, and including, the first day of the most recently
      ended
      calendar month and ending on, and including, the last day of the most recently
      ended calendar month; provided,
      that
      the final Collection Period shall begin on, and include, the first day of the
      then current calendar month and shall end on the Collection Date and (ii) in
      any
      context other than with respect to any Remittance Date, a calendar
      month.

     

    “Collections”
means,
      without duplication, with respect to any Pledged Receivable, all Scheduled
      Payments (and, in the case of a Pledged Pool B Receivable after a Pool B
      Termination Event has occurred with respect to the related Underlying
      Originator, all Underlying Scheduled Payments) related to such Receivable,
      all
      prepayments and related penalty payments with respect to the Contract (and
      any
      related Underlying Contract related to a Pledged Pool B Receivable after a
      Pool
      B Termination Event has occurred with respect to the related Underlying
      Originator) related to such Receivable, all overdue payments and related
      interest and penalty payments with respect to the Contract (and any related
      Underlying Contract related to a Pledged Pool B Receivable after a Pool B
      Termination Event has occurred with respect to the related Underlying
      Originator) related to such Receivable, all Guaranty Amounts, all Insurance
      Proceeds, all Servicing Charges, all proceeds under “buyout letters” or other
      prepayment/termination

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    agreements
      and all Recoveries related to such Receivable, all amounts paid to the Borrower
      related to such Receivable pursuant to the terms of the Purchase and Sale
      Agreement, all amounts paid by the Servicer related to such Receivable in
      connection with its obligations under Section 6.20
      hereof,
      and all other payments received with respect to the Contract (and, if
      applicable, Underlying Contract) related to such Receivable, all cash receipts
      and proceeds in respect of the Other Conveyed Property or Related Security
      (including, without limitation, the Obligor Collateral) related to such
      Receivable, any Servicer Advances related to such Receivable, and any amounts
      paid to the Borrower under or in connection with any Qualifying Interest Rate
      Swap or the hedging arrangements contemplated thereunder.

     

    “Commitment
      Percentage”
has
      the
      meaning assigned to that term in Section 9.04(b).

     

    “Computer
      Tape or Listing”
means
      the computer tape or listing (whether in electronic form or otherwise) generated
      by the Servicer on behalf of the Borrower, which provides information relating
      to the Receivables included in the Net Eligible Receivables
      Balance.

     

    “Contract”
means
      a
      Pool A Contract or a Pool B Contract.

     

    “Credit
      and Collection Policy”
means
      (i) collectively, the “Operations Policies & Procedures” memorandum, the
“Limited Recourse Term Debt Facility” memorandum of the Servicer, and certain
      other items, as annexed hereto as Schedule IV
      as such
      policy may hereafter be amended, modified or supplemented from time to time
      in
      compliance with this Agreement and (ii) with respect to any Servicer other
      than
      LEAF Financial, that Servicer’s collection policies for similar assets in effect
      from time to time.

     

    “Critical
      Defaults”
has
      the
      meaning assigned to that term in Section 5.01(u)
      hereof.

     

    “Custodial
      Agreement”
means
      that certain Custodial Agreement dated as of the date hereof among the Servicer,
      the Borrower, the Lender and the Custodian, together with all instruments,
      documents and agreements executed in connection therewith, as such Custodial
      Agreement may from time to time be amended, restated, supplemented and/or
      otherwise modified in accordance with the terms thereof.

     

    “Custodian”
means
      U.S. Bank National Association (or a sub-custodian on its behalf) or any
      substitute Custodian appointed by the Lender pursuant to the Custodial
      Agreement.

     

    “Custodian’s
      Fee”
means,
      for any Fee Period, an amount, payable out of Collections on the Pledged
      Receivables and amounts applied to the payment of, or treated as payments on,
      the Pledged Receivables, equal to the aggregate fees listed in that certain
      “Schedule of Fees” letter dated October 19, 2006 between U.S. Bank National
      Association and Leaf Financial Corporation which relate to such Fee
      Period.

     

    “Debt”
of
      any
      Person means (i) indebtedness of such Person for borrowed money,
      (ii) obligations of such Person evidenced by bonds, debentures, notes or
      other similar instruments related to transactions that are classified as
      financings under GAAP, (iii) obligations of such Person to pay the deferred
      purchase price of property or services, (iv) obligations of such Person as
      lessee under leases which shall have been or should be, in accordance with
      GAAP,
      recorded as capital leases, (v) obligations secured by an Adverse Claim
      upon property or assets

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    owned
      (under GAAP) by such Person, even though such Person has not assumed or become
      liable for the payment of such obligations and (vi) obligations of such
      Person under direct or indirect guaranties in respect of, and obligations
      (contingent or otherwise) to purchase or otherwise acquire, or otherwise to
      assure a creditor, against loss in respect of, indebtedness or obligations
      of
      others of the kinds referred to in clauses (i) through (v)
      above.

     

    “Default
      Funding Rate”
means
      an interest rate per annum equal to 1.50% plus the Base Rate.

     

    “Defaulted
      Receivable”
means,
      as of any date of determination, any Pledged Receivable:

     

    (i) with
      respect to which any part of any Scheduled Payment, or any tax-related payment,
      owed by the applicable Obligor under the terms of the related Contract remains
      unpaid for more than 120 days after the due date therefor set forth in such
      Contract;

     

    (ii) with
      respect to which the first or second Scheduled Payment is not paid in full
      when
      due under the related Contract;

     

    (iii) with
      respect to which any payment or other material terms of the related Contract
      have been modified due to credit related reasons after such Contract was
      acquired by the Borrower pursuant to the Purchase and Sale
      Agreement;

     

    (iv) which
      has
      been or should be charged off as a result of the occurrence of a Bankruptcy
      Event with respect to the related Obligor or Underlying Obligor, if any, or
      which has been or should otherwise be deemed uncollectible by the Servicer,
      in
      each case, in accordance with the Credit and Collection Policy; or

     

    (v) with
      respect to which the Servicer has repossessed the related
      Equipment.

     

    “Delinquency
      Rate”
means,
      as of any date of determination, an amount (expressed as a percentage) equal
      to
      (i) the aggregate Discounted Balances of all Delinquent Receivables as of
      the last day of the immediately preceding Collection Period divided by
      (ii) the Net Eligible Receivables Balance as of such day.

     

    “Delinquent
      Receivable”
means,
      as of any date of determination, any Pledged Receivable (other than a Defaulted
      Receivable) with respect to which any part of any Scheduled Payment (or other
      amount payable under the terms of the related Contract) remains unpaid for
      more
      than 60 days but not more than 120 days after the due date therefor set
      forth in such Contract.

     

    “Depository
      Institution”
means
      a
      depository institution or trust company, incorporated under the laws of the
      United States or any State thereof, that is subject to supervision and
      examination by federal and/or State banking authorities.

     

    “Discount
      Rate”
means,
      as of any date of determination, a percentage equal to the sum of (i) the
      Weighted Average Swapped Rate as of such date of determination, (ii) the
      Adjusted Eurodollar Rate Margin, (iii) at any time prior to the occurrence
      of a
      Servicer Default and the appointment of the Backup Servicer as Servicer
      hereunder, the Servicing Fee Rate and the

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    Standby
      Backup Servicing Fee Rate, (iv) at any time after the occurrence of a
      Servicer Default and the appointment of the Backup Servicer as Servicer
      hereunder, the Active Backup Servicing Fee Rate and (vi) a rate per annum
      equal to 0.05%.

     

    “Discounted
      Balance”
means,
      with respect to any Contract or Underlying Contract, as of any date of
      determination, the present value of the aggregate amount of Scheduled Payments
      or, in the case of an Underlying Contract, Underlying Scheduled Payments
      (including any Balloon Payment or Put Payment but, in any event, calculated
      without giving effect to any booked residual value with respect to any related
      Equipment) due or to become due under the terms of the related Contract or
      Underlying Contract after the Cut-Off Date applicable to the Receivable related
      thereto, which remain unpaid as of such date of determination, calculated by
      discounting such aggregate amount of such Scheduled Payments or, in the case
      of
      an Underlying Contract, such Underlying Scheduled Payments to such date of
      determination at an annual rate equal to the Discount Rate.

     

    “Dollar
      Purchase Option Contract”
means
      a
      Contract or an Underlying Contract, as applicable, (i) in connection with
      which an agreement was executed which grants the related Obligor or Underlying
      Obligor, as applicable, a right to purchase the Equipment or Underlying
      Equipment leased under such Contract or Underlying Contract for $1.00 or other
      nominal consideration at the end of the initial term of such Contract or
      Underlying Contract or (ii) grants the related Obligor or Underlying
      Obligor, as applicable, a right to purchase the Equipment or Underlying
      Equipment leased under such Contract for $1.00 or other nominal consideration
      at
      the end of the initial term of such Contract.

     

    “Eligible
      Depository Institution”
means
      a
      Depository Institution the short term unsecured senior indebtedness of which
      is
      rated at least Prime-1 by Moody’s, A-1 by S&P, and F1 by Fitch, if rated by
      Fitch.

     

    “Eligible
      Pool A Receivable”
means,
      at any time, a Pledged Pool A Receivable with respect to which each of the
      representations and warranties regarding the Contract related to such Pledged
      Pool A Receivable contained in Schedule III-A
      hereto
      is true and correct at such time.

     

    “Eligible
      Pool A Receivables Balance”
means,
      at any time, the aggregate Discounted Balances of all Eligible Pool A
      Receivables which are Pledged hereunder to secure Loans at such
      time.

     

    “Eligible
      Pool B Receivable”
means,
      at any time, a Pledged Pool B Receivable with respect to which each of the
      representations and warranties regarding the Contract related to such Pledged
      Pool B Receivable contained in Schedule III-B
      hereto
      is true and correct at such time.

     

    “Eligible
      Pool B Receivables Balance”
means,
      at any time, the aggregate Discounted Balances of all Eligible Pool B
      Receivables which are Pledged hereunder to secure Loans at such
      time.

     

    “Eligible
      Pool B Underlying Lease Contract”
means,
      at any time, an Underlying Lease Contract with respect to which each of the
      representations and warranties contained in Schedule III-C
      hereto
      is true and correct at such time.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    “Eligible
      Pool B Underlying Loan Contract”
means,
      at any time, an Underlying Loan Contract with respect to which each of the
      representations and warranties contained in Schedule III-C
      hereto
      is true and correct at such time.

     

    “Eligible
      Receivable”
means,
      at any time, a Pledged Receivable which is an Eligible Pool A Receivable or
      an Eligible Pool B Receivable at such time.

     

    “Eligible
      Receivables Balance”
means,
      at any time, the aggregate Discounted Balances of all Eligible Receivables
      which
      are Pledged hereunder to secure Loans at such time.

     

    “Eligible
      Underlying Contract”
means
      an Eligible Pool B Underlying Lease Contract or Eligible Pool B
      Underlying Loan Contract.

     

    “Eligible
      Underlying Originator”
means
      an Underlying Originator that has been approved by the initial Servicer in
      accordance with the Credit and Collection Policy.

     

    “Equipment”
means
      the equipment or Vehicle (i) leased to an Obligor, or serving as collateral
      for
      a loan to an Obligor, under a Contract together with any replacement parts,
      additions and repairs thereof, and any accessories incorporated therein and/or
      affixed thereto or (ii) leased to an Underlying Obligor, or serving as
      collateral for a loan to an Underlying Obligor, under a Underlying Contract
      together with any replacement parts, additions and repairs thereof, and any
      accessories incorporated therein and/or affixed thereto.

     

    “Equipment
      Category”
means
      any of the Equipment Categories set forth on Schedule V hereto, as such schedule
      may be updated from time to time by the Borrower with the consent of the Lender
      (which such consent shall not be unreasonably withheld).

     

    “ERISA”
means
      the United States Employee Retirement Income Security Act of 1974, as amended
      from time to time.

     

    “ERISA
      Affiliate”
means
      a
      corporation, trade or business that is, along with any Person, a member of
      a
      controlled group of corporations or a controlled group of trades or businesses,
      as described in section 414 of the Internal Revenue Code of 1986, as amended,
      or
      section 4001 of ERISA.

     

    “Eurodollar
      Disruption Event”
means
      any of the following: (i) a determination by the Lender that it would be
      contrary to law or to the directive of any central bank or other governmental
      authority (whether or not having the force of law) to obtain United States
      dollars in the London interbank market to make, fund or maintain any Loan,
      (ii) a determination by the Lender that the rate at which deposits of
      United States dollars are being offered in the London interbank market does
      not
      accurately reflect the cost to the Lender of making, funding or maintaining
      any
      Loan or (iii) the inability of the Lender to obtain United States dollars
      in the London interbank market to make, fund or maintain any Loan.

     

    “Eurodollar
      Index”
means
      an index based upon an interest rate reported on Telerate Access Service
      Page 3750 (British Bankers Association Settlement Rate) as the London
      Interbank Offered Rate for United States dollar deposits.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    “Event
      of Default”
has
      the
      meaning assigned to that term in Section 7.01.

     

    “Exception
      Sublimit Receivable”
means
      a
      Pool A Receivable arising under a Lease Contract related to Equipment having
      an
      original cost of less than $100,000 as to which the original, executed Lease
      Contract has not been forwarded to the Custodian for inclusion in the related
      Receivable File.

     

    “Facility
      Amount”
means,
      at any time, the sum of the aggregate Loans Outstanding hereunder bearing
      interest at the Interest Rate, plus
      accrued
      interest and Fees with respect to such amounts.

     

    “Facility
      Maturity Date”
means
      the third anniversary of the date of this Agreement.

     

    “Fee
      Letter”
has
      the
      meaning assigned to that term in Section 2.08(a).

     

    “Fee
      Period”
means
      a
      period commencing on (and including) a Remittance Date and ending on (and
      including) the day prior to the next Remittance Date; provided,
      that,
      the initial Fee Period hereunder shall commence on (and include) the date hereof
      and end on (and include) December 22, 2006.

     

    “Fees”
has
      the
      meaning assigned to that term in Section 2.08(a).

     

    “Fitch”
means
      Fitch, Inc. (or its successors in interest).

     

    “FMV
      Contract”
means
      a
      Contract or an Underlying Contract, as applicable, which (i) in connection
      with which any agreement was executed which grants the related Obligor or
      Underlying Obligor, as applicable, a right to purchase the Equipment or
      Underlying Equipment leased under such Contract or Underlying Contract for
      the
      fair market value thereof at the end of the initial term of such Contract or
      Underlying Contract or (ii) grants the related Obligor or Underlying
      Obligor, as applicable, a right to purchase the Equipment or Underlying
      Equipment leased under such Contract for the fair market value thereof at the
      end of the initial term of such Contract.

     

    “GAAP”
means
      generally accepted accounting principles as in effect from time to time in
      the
      United States.

     

    “Global
      Overconcentration Amount”
means,
      at any time (x) after the first anniversary of the Closing Date or (y) the
      aggregate outstanding principal balance of the Loans is greater than
      $35,000,000, without duplication, the sum of:

     

    (vi) the
      amount by which the sum of the Discounted Balances of all Eligible Pool A
      Receivables related to any one Obligor (or any Affiliate thereof) at such time
      exceeds $3,000,000;

     

    (vii) the
      amount by which the sum of the Discounted Balances at such time of all Eligible
      Pool A Receivables related to the three Obligors which, together with any
      Affiliates thereof, owe the greatest amounts under their respective Contracts,
      in the aggregate, exceeds $9,500,000;

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    (viii) the
      amount by which the sum of the Discounted Balances of all Eligible Receivables
      with respect to which the related Contract is a Non-Level Payment Contract
      exceeds 20% of the sum of the Discounted Balances of all Eligible Receivables
      at
      such time;

     

    (ix) the
      amount by which the sum of the Discounted Balances of all Eligible Receivables
      with respect to which the related Contract provides for Scheduled Payments
      to be
      paid for any period other than monthly exceeds 10% of the sum of the Discounted
      Balances of all Eligible Receivables at such time;

     

    (x) the
      amount by which the sum of the Discounted Balances of all Eligible Receivables
      related to Obligor Collateral located in the State of California at such time
      exceeds 30% of the sum of the Discounted Balances of all Eligible Receivables
      at
      such time;

     

    (xi) the
      amount by which the sum of the Discounted Balances of all Eligible Receivables
      related to Obligor Collateral located in any State other than the State of
      California exceeds 20% of the sum of the Discounted Balances of all Eligible
      Receivables at such time;

     

    (xii) the
      amount by which the sum of the Discounted Balances of all Eligible Receivables
      related to Equipment within any one Equipment Category exceeds the sum of the
      Discounted Balances of all Eligible Receivables at such time multiplied by
      35%;

     

    (xiii) the
      amount by which the sum of the Discounted Balances of all Eligible Receivables
      (including, without limitation, Vehicle Sublimit Pledged Receivable), with
      respect to which the related Obligor Collateral is a Vehicle or other type
      of
      equipment which requires a security interest therein to be noted on the
      certificate of title with respect thereto in order to be perfected, exceeds
      20%
      of the sum of the Discounted Balances of all Eligible Receivables at such
      time;

     

    (xiv) the
      amount by which the sum of the Discounted Balances of all Eligible Receivables
      which are Vehicle Sublimit Pledged Receivables, exceeds 5% of the sum of the
      Discounted Balances of all Eligible Receivables at such time;

     

    (xv) the
      amount by which the sum of the Discounted Balances of all Eligible Receivables,
      with respect to which the related Obligor is a Government Entity, exceeds 10%
      of
      the sum of the Discounted Balances of all Eligible Receivables at such
      time;

     

    (xvi) the
      amount by which the sum of the Discounted Balances of all Eligible Receivables,
      which are Exception Sublimit Receivables, exceeds 10% of the sum of the
      Discounted Balances of all Eligible Receivables at such time (it being
      understood and agreed that, notwithstanding anything herein to the contrary
      (including clauses
      (x)
      and
(y)
      above),
      this component of the Global Overconcentration Amount shall apply at all times
      on and after the Closing Date); and

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (xvii) the
      amount by which the sum of the Discounted Balances of all Eligible Receivables
      with respect to which the related Obligor Collateral is a work vehicle exceeds
      20% of the sum of the Discounted Balances of all Eligible Receivables at such
      time.

     

    “Government
      Entity”
means
      the United States, any State, any political subdivision of a State and any
      agency or instrumentality of the United States or any State or political
      subdivision thereof and any entity exercising executive, legislative, judicial,
      regulatory or administrative functions of or pertaining to
      government.

     

    “Guaranty
      Amounts”
means
      any and all amounts paid by any guarantor with respect to the applicable
      Contract.

     

    “Holdback
      Amount”
means,
      with respect to any Pool B Receivable, the amount of any loan principal or
      purchase price which would otherwise be advanced by the Originator to the
      applicable Obligor pursuant to the terms of such Contract, but which was held
      back by the Originator as a liquidity reserve or similar reserve.

     

    “Included
      Repurchased Receivable”
means
      any Receivable repurchased by the Originator pursuant to Section 6.1(b) of
      the
      Purchase and Sale Agreement with respect to which, as of the date of repurchase,
      any part of any Scheduled Payment (or other amount payable under the terms
      of
      the related Contract) remained unpaid after the due date therefor set forth
      in
      such Contract.

     

    “Indemnified
      Amounts”
has
      the
      meaning assigned to that term in Section 8.01.

     

    “Independent
      Accountants”
has
      the
      meaning assigned to that term in Section 6.11(b).

     

    “Initial
      Qualified Swap Counterparty”
means
      Morgan Stanley Capital Services Inc., a Delaware corporation and its successors
      and permitted assigns.

     

    “Insurance
      Certificate”
means
      the insurance certificate related to the Insurance Policy with respect to such
      Receivable (which insurance certificate shall list the Originator as a loss
      payee).

     

    “Insurance
      Policy”
means,
      with respect to any Obligor Collateral, the insurance policy maintained by
      or on
      behalf of the Obligor pursuant to the related Contract that covers physical
      damage to the related Equipment (in an amount sufficient to insure completely
      the value of such Equipment) and general liability (including policies procured
      by the Borrower or the Servicer, or any agent thereof, on behalf of the
      Obligor).

     

    “Insurance
      Proceeds”
means,
      with respect to an item of Obligor Collateral and a related Contract, any amount
      paid under an Insurance Policy or an Underlying Insurance Policy issued with
      respect to such Obligor Collateral and/or the related Contract.

     

    “Interest
      Period”
means,
      for any outstanding Loans, a period determined pursuant to Section 2.03(a).

     

    “Interest
      Rate”
has
      the
      meaning assigned to such term in Section
      2.03(b).

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    “LEAF
      Financial”
has
      the
      meaning assigned to that term in the preamble hereto.

     

    “Lease
      Contract”
means
      (i) a “Master Lease Schedule” in the form attached hereto as Exhibit D-1(b),
      Exhibit D-1(c),
      Exhibit D-1(d),
      together with a “Master Lease Agreement” in the form attached hereto as
Exhibit D-1(a)
      which is
      related to, and incorporated by reference into, a “Master Lease Schedule” (as
      such exhibits may be updated from time to time by the Borrower with the consent
      of the Lender), (ii) a “Lease Agreement” in the form attached hereto as
Exhibit D-1(e)
      or (iii)
      a lease agreement otherwise approved by the Servicer in compliance with the
      Credit and Collection Policy, pursuant to which Equipment is leased to an
      Obligor by Originator, together with all schedules, supplements and amendments
      thereto and each other document and instrument related to such
      lease.

     

    “Lender”
means,
      collectively, Morgan Stanley and/or any other Person that is an Affiliate of
      Morgan Stanley and/or, with the consent of the Borrower (which such consent
      shall not be unreasonably withheld) at any time prior to the occurrence of
      a
      Program Termination Event (and without the consent of the Borrower at any time
      after the occurrence of a Program Termination Event), any other Person that
      is
      not an Affiliate of Morgan Stanley, in each case, that agrees, pursuant to
      the
      pertinent Assignment and Acceptance, to make Loans secured by Pledged Assets
      pursuant to Article II of this Agreement.

     

    “Lender’s
      Bank”
means
      U.S. Bank National Association and its successors and assigns that are Eligible
      Depository Institutions.

     

    “Lender’s
      Bank Fee”
means
      an annual fee paid in advance, payable out of Collections on the Pledged
      Receivables and amounts applied to the payment of, or treated as payments on,
      the Pledged Receivables, equal to $7,000. The “Lender’s Bank Fee” shall also
      include (i) a one-time acceptance fee of $4,500 payable on the Closing Date
      and
      (ii) reasonable out-of-pocket expenses incurred by the Lender’s Bank in the
      performance of its duties.

     

    “Liquidation
      Proceeds”
means,
      with respect to a Receivable with respect to which the related Obligor
      Collateral has been repossessed or foreclosed upon by the Servicer, all amounts
      realized with respect to such Receivable net of (i) reasonable expenses of
      the Servicer incurred in connection with the collection, repossession,
      foreclosure and/or disposition of the related Obligor Collateral and
      (ii) amounts that are required to be refunded to the Obligor on such
      Receivable; provided,
      however,
      that
      the Liquidation Proceeds with respect to any Receivable shall in no event be
      less than zero.

     

    “Loan”
means
      each loan advanced by the Lender to the Borrower on a Borrowing Date pursuant
      to
Article II.

     

    “Loan
      Contract”
means,
      collectively, (i) a “Term Note (Level Payments)” together with the “Master Loan
      and Security Agreement” related thereto and incorporated by reference therein,
      each in the form attached hereto as Exhibit D-2(a)
      (as such
      exhibit may be updated from time to time by the Borrower with the consent of
      the
      Lender), (ii) a “Term Note (Level Payments)” or “Term Note (Step Payments)”
together with the “Master Loan and Security Agreement” related thereto and
      incorporated by reference therein, each in the form attached hereto as
Exhibit D-2(b)
      (as such
      exhibit may be updated from time to time by the Borrower with the consent of
      the

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

     

    Lender)
      or (iii) a loan agreement and promissory note otherwise approved by the Servicer
      in compliance with the Credit and Collection Policy, in each case, pursuant
      to
      which the Originator makes a loan to an Obligor secured by Equipment purchased
      by such Obligor, together with all schedules, supplements and amendments thereto
      and each other document and instrument related thereto.

     

    “Loans
      Outstanding”
means
      the sum of the principal amounts of Loans loaned to the Borrower for the initial
      and any subsequent borrowings pursuant to Sections 2.01
      and
2.02,
      reduced
      from time to time by Collections with respect to any Pledged Receivable received
      and distributed as repayment of principal amounts of Loans outstanding pursuant
      to Section 2.04
      and any
      other amounts received by the Lender to repay the principal amounts of Loans
      outstanding pursuant to Section 2.15
      or
      otherwise; provided,
      however,
      that
      the principal amounts of Loans outstanding shall not be reduced by any
      Collections with respect to any Pledged Receivable or other amounts if at any
      time such Collections or other amounts are rescinded or must be returned for
      any
      reason.

     

    “Lockbox”
means
      a
      post office box to which Collections with respect to any Pledged Receivable
      are
      remitted for retrieval by the Lockbox Bank and for deposit by the Lockbox Bank
      into the Lockbox Account.

     

    “Lockbox
      Account”
means
      the deposit account (account number 153910088597 at
      the
      Lockbox Bank) in the name of “U.S. Bank NA as Securities Intermediary for LEAF
      Financial and various lenders”.

     

    “Lockbox
      Bank”
means
      U.S. Bank National Association and its successors in interest.

     

    “Lockbox
      Intercreditor Agreement”
means
      the Amended and Restated Lockbox Intercreditor Agreement, dated as of April
      18,
      2005, among the Lockbox Bank, the Servicer, the Borrower, and certain other
      parties.

     

    “Material
      Adverse Effect”
means
      a
      material adverse effect on (i) the ability of the Borrower, the Originator
      and/or the Servicer to conduct its business, (ii) the ability of the
      Borrower, the Originator and/or the Servicer to perform its respective
      obligations under this Agreement and/or any other Transaction Document to which
      it is a party, (iii) the validity or enforceability of this Agreement
      and/or any other Transaction Document to which the Borrower, the Originator
      and/or the Servicer is a party, (iv) the rights and remedies of the Lender
      under this Agreement and/or any of the Transaction Documents and/or (v) the
      validity, enforceability or collectibility of all or any portion of the Pledged
      Receivables.

     

    “Minimum
      Tangible Net Worth
      means,
      with respect to Resource America, a Tangible Net Worth (measured as of each
      fiscal quarter end) of not less than $125,000,000.

     

    “Monthly
      Remittance Report”
means
      a
      report, in substantially the form of Exhibit C,
      furnished by the Servicer to the Lender pursuant to Section 6.10(b).

     

    “Moody’s”
means
      Moody’s Investors Service, Inc. (or its successors in interest).

     

    “Morgan
      Stanley”
has
      the
      meaning assigned to that term in the preamble hereto.

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    “Net
      Eligible Receivables Balance”
means,
      at any time, (i) the Eligible Receivables Balance at such time, minus
      (ii) the Overconcentration Amount at such time.

     

    “Non-Level
      Payment Contract”
means
      a
      Contract that does not provide for level Scheduled Payments during the term
      of
      such Contract.

     

    “Notice
      of Borrowing”
has
      the
      meaning assigned to that term in Section 2.02(b)
      hereof.

     

    “Notice
      of Pledge”
has
      the
      meaning assigned to that term in the Custodial Agreement.

     

    “Obligations”
means
      all present and future indebtedness and other liabilities and obligations
      (howsoever created, arising or evidenced, whether direct or indirect, absolute
      or contingent, or due or to become due) of the Borrower to the Secured Parties
      arising under this Agreement and/or any other Transaction Document and shall
      include, without limitation, all liability for principal of and interest on
      the
      Loans, indemnifications and other amounts due or to become due by the Borrower
      to the Secured Parties under this Agreement and/or any other Transaction
      Document, including, without limitation, interest, fees and other obligations
      that accrue after the commencement of an insolvency proceeding (in each case
      whether or not allowed as a claim in such insolvency proceeding).

     

    “Obligor”
means,
      collectively, each Person obligated to make payments under a
      Contract.

     

    “Obligor
      Collateral”
means
      (i) the Equipment leased to an Obligor under a Lease Contract,
      (ii) the Equipment and other property pledged by an Obligor to secure its
      obligations under a Loan Contract, (iii) the Equipment and other property
      pledged by an Obligor to secure its obligations under a Practice Acquisition
      Loan Contract and (iv) the Underlying Originator Loan Collateral and other
      property pledged by an Obligor to secure its obligations under an Underlying
      Originator Loan Contract.

     

    “Obligor
      Financing Statement”
means
      a
      UCC financing statement filed by Originator against an Obligor under a Contract
      which evidences a security interest in the related Obligor
      Collateral.

     

    “Officer’s
      Certificate”
means
      a
      certificate signed by the president, the secretary, the chief financial officer
      or any vice president of any Person.

     

    “Opinion
      of Counsel”
means
      a
      written opinion of independent counsel acceptable to the Lender, which opinion,
      if such opinion or a copy thereof is required by the provisions of this
      Agreement or any other Transaction Document to be delivered to the Borrower
      or
      the Lender, is acceptable in form and substance to the Lender.

     

    “Originator”
means
      LEAF Funding, Inc., a Delaware corporation.

     

    “Originator
      Insurance Agreement”
means
      that certain letter agreement regarding the Originator’s obligations as named
      loss payee under Insurance Policies and Underlying Insurance Policies, dated
      as
      of the date hereof, among the Originator, the Servicer, the Borrower and the
      Lender, as such agreement may from time to time be amended, restated,
      supplemented and/or otherwise modified in accordance with the terms
      thereof.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    “Other
      Commercial Contract”
means
      any agreement approved by the Servicer in compliance with the Credit and
      Collection Policy, in each case, pursuant to which the commercial Obligor
      thereunder agrees to make periodic payments in connection with any loan,
      services, rental or sale, together with all schedules, supplements and
      amendments thereto and each other document and instrument related
      thereto.

     

    “Other
      Conveyed Property”
means,
      with respect to any Receivable, all of the Borrower’s right, title and interest
      in, to and under (i) all Collections and other monies at any time received
      or receivable with respect to such Receivable after the applicable Cut-Off
      Date
      (as defined in the Purchase and Sale Agreement), (ii) the Equipment or
      Underlying Equipment related to such Receivable (to the extent of the Borrower’s
      ownership rights, if any, therein), (iii) in the case of a Receivable
      related to any Contract, any and all agreements, documents, certificates and
      instruments evidencing the Borrower’s security interest or other interest in and
      to the related Obligor Collateral or any intercreditor agreement with respect
      thereto, including, without limitation, any Certificate of Title, (iv) the
      Obligor Collateral related to such Receivable including, without limitation,
      the
      security interest in such Obligor Collateral granted by the related Obligor
      to
      Originator under the related Contract and assigned by Originator to the Borrower
      under the Purchase and Sale Agreement, (v) the Obligor Financing Statement,
      if any, related to such Receivable, (vi) the Insurance Policy and any
      proceeds from the Insurance Policy relating to such Receivable, including
      rebates of premiums not otherwise due to an Obligor, (vii) the related
      Contract and all other items required to be contained in the related Receivable
      File, any and all other documents or electronic records that the Borrower keeps
      on file in accordance with its customary procedures relating to such Receivable,
      the related Obligor Collateral or the related Obligor, (viii) any Security
      Deposits or Cash Reserve related to such Receivable, (ix) all property
      (including the right to receive future Liquidation Proceeds) that secures such
      Receivable and that has been acquired by or on behalf of the Borrower pursuant
      to the liquidation of such Receivable, and (x) all present and future
      rights, claims, demands, causes and chooses in action in respect of any or
      all
      of the foregoing and all payments on or under and all proceeds and investments
      of any kind and nature in respect of any of the foregoing.

     

    “Overconcentration
      Amount”
means,
      at any time, the sum of the Pool A Overconcentration Amount at such time and
      the
      Pool B Overconcentration Amount at such time.

     

    “Overdue
      Payment”
means,
      with respect to a Collection Period, all payments due in a prior Collection
      Period that the Servicer receives from or on behalf of an Obligor during such
      Collection Period, including any Servicing Charges.

     

    “Owner”
means
      (i) the Originator or (ii) subject to the prior written consent of the Lender
      (such consent not to be unreasonably withheld), any other subsidiary of the
      initial Servicer which acquires all or part of the membership interests of
      the
      Borrower.

     

    “Parallel
      Defaults”
has
      the
      meaning assigned to that term in Section 5.01(u)
      hereof.

     

    “Permitted
      Investments”
means
      any one or more of the following:

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

          
      (i)      
direct
      obligations of, or obligations fully guaranteed as to principal and interest
      by,
      the United States or any agency

          
or instrumentality
      thereof, provided such obligations are backed by the full faith and credit
      of
      the United States;

     

    (ii)     repurchase
      obligations (the collateral for which is held by a third party or the Trustee),
      with respect to any security described in clause (i) above, provided that
      the long-term unsecured obligations of the party agreeing to repurchase such
      obligations are at the time rated by Moody’s and S&P in one of their two
      highest long-term rating categories and if rated by Fitch, in one of its two
      highest long-term rating categories;

     

    (iii)     certificates
      of deposit, time deposits, demand deposits and bankers’ acceptances of any bank
      or trust company incorporated under the laws of the United States or any State
      thereof or the District of Columbia, provided that the short-term commercial
      paper of such bank or trust company (or, in the case of the principal depository
      institution in a depository institution holding company, the long-term unsecured
      debt obligations of the depository institution holding company) at the date
      of
      acquisition thereof has been rated by Moody’s and S&P in their highest
      short-term rating category, and if rated by Fitch, in its highest short-term
      rating category;

     

    (iv)     commercial
      paper (having original maturities of not more than 270 days) of any
      corporation incorporated under the laws of the United States or any State
      thereof or the District of Columbia, having a rating, on the date of acquisition
      thereof, of no less than A-1 by Moody’s, P-1 by S&P and F-1 if rated by
      Fitch;

     

    (v)     money
      market
      mutual funds, including funds managed by the Lender’s Bank or its Affiliates,
      registered under the Investment Company Act of 1940, as amended, having a
      rating, at the time of such investment, of no less than Aaa by Moody’s, AAA by
      S&P and AAA if rated by Fitch; and

     

    (vi)     any
      other
      investments approved in writing by the Lender.

     

    provided,
      that no
      such instrument shall be a Permitted Investment if such instrument evidences
      the
      right to receive either (a) interest only payments with respect to the
      obligations underlying such instrument or (b) both principal and interest
      payments derived from obligations underlying such instrument, where the
      principal and interest payments with respect to such instrument provide a yield
      to maturity exceeding 120% of the yield to maturity at par of such underlying
      obligation. Each Permitted Investment may be purchased by the Lender’s Bank or
      through an Affiliate of the Lender’s Bank.

     

    “Permitted
      Liens”
      means:

     

    (i)     with
      respect to Obligor Collateral, (A) liens and security interests in favor of
      the Collateral Agent, granted pursuant to the Transaction Documents,
      (B) the interests of an Obligor arising under the Contract to which it is a
      party in the Obligor Collateral related to such Contract, (C) liens for
      taxes, assessments, levies, fees and other governmental and similar charges
      either not yet due or being contested

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

          
      in good faith and by appropriate proceedings, provided, that appropriate
      reserves shall have been established with respect to any such taxes either
      not
      yet due or being contested in good faith and by appropriate proceedings,
      (D) any liens with respect to any mechanics, suppliers, materialmen,
      laborers, employees, repairmen and other like liens arising in the ordinary
      course of a servicer’s, lessor’s/lender’s or lessee’s/borrower’s business
      securing obligations which are not due and payable, and (E) salvage rights
      of insurers with respect to the equipment subject to a Contract under insurance
      policies maintained pursuant to the Transaction Documents or a Contract;
      and

     

    (ii)    with
      respect to Underlying Collateral, in addition to the Permitted Liens described
      in clause (i) above, (x) liens in favor of Originator or the Borrower,
      granted by the applicable Underlying Obligor, in each case, solely to the extent
      assigned to the Collateral Agent and (y) the interests of an Underlying
      Obligor arising under the Underlying Contract to which it is a party in the
      Underlying Originator Loan Collateral related to such Underlying
      Contract.

     

    “Person”
means
      an individual, partnership, corporation (including a business trust), limited
      liability company, joint stock company, trust, unincorporated association,
      joint
      venture, government (or any agency or political subdivision thereof) or other
      entity.

     

    “Pledge”
means
      the pledge of any Receivable pursuant to Article II.

     

    “Pledged
      Assets”
has
      the
      meaning assigned to that term in Section 2.11.

     

    “Pledged
      Receivables”
means
      Pledged Pool A Receivables and Pledged Pool B
      Receivables.

     

    “Pledged
      Pool A Receivables”
has
      the
      meaning assigned to that term in Section 2.11(a).

     

    “Pledged
      Pool B Receivables”
has
      the
      meaning assigned to that term in Section 2.11(a).

     

    “Pledged
      Receivables Balance”
means,
      at any time, the aggregate Discounted Balances of all Receivables which are
      Pledged hereunder to secure Loans at such time.

     

    “Pool A
      Annualized Net Loss Rate”
means,
      as of any date of determination after the end of the third Collection Period
      following the date hereof, an amount (expressed as a percentage) equal to
      (i) the product of (A) (x) the aggregate Discounted Balances of
      all Pledged Pool A Receivables which were Eligible Pool A Receivables
      at the time of their Pledge hereunder and which became Defaulted Receivables
      during the six (or such lesser number of Collection Periods since the date
      hereof) immediately preceding Collection Periods minus
      (y) Recoveries related to Pool A Receivable received during the six
      (or such lesser number of Collection Periods since the date hereof) immediately
      preceding Collection Periods and (B) 2 (if six or more Collection Periods
      have occurred since the date hereof), 2.4 (if five Collection Periods have
      occurred since the date hereof), 3 (if four Collection Periods have
      occurred since the date hereof), 4 (if three Collection Periods have
      occurred since the date hereof), 6 (if two Collection Periods have occurred
      since the date hereof) or 12 (if one Collection Period has occurred since
      the date hereof) divided by (ii) the Eligible Pool A Receivables
      Balance as of the first Business Day of the six (or

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

     

    such
      lesser number of Collection Periods since the date hereof) immediately preceding
      Collection Periods.

     

    “Pool
      A
      Borrowing Base”
means,
      at any time, the lowest of:

     

    (i)     98%
      of
      the Amortized Equipment Cost with respect to all Eligible Pool A
      Receivables; and

     

    (ii)     an
      amount
      equal to the Pool A Net Eligible Receivables Balance multiplied by a
      percentage equal to 92%.

     

    “Pool
      A
      Contract”
means
      a
      Lease Contract, a Loan Contract, a Practice Acquisition Loan Contract, a Real
      Estate Contract or an Other Commercial Contract.

     

    “Pool
      A
      Lease File”
has
      the
      meaning assigned to that term in clause
      (a)
      of the
      definition of “Receivable File”.

     

    “Pool A
      Loan”
has
      the
      meaning assigned to that term in Section 2.01.

     

    “Pool
      A
      Loan File”
has
      the
      meaning assigned to that term in clause
      (b)
      of the
      definition of “Receivable File”.

     

    “Pool A
      Net Eligible Receivables Balance”
means,
      at any time, (i) the Eligible Pool A Receivables Balance at such time
minus
      (ii) the Pool A Overconcentration Amount at such time.

     

    “Pool A
      Overconcentration Amount”
means,
      at any time, (x) after the first anniversary of the Closing Date or (y) the
      aggregate outstanding principal balance of the Loans is greater than
      $35,000,000, without duplication, the sum of:

     

    (i) 
an
      amount
      equal to the Global Overconcentration Amount at such time multiplied by a
      fraction the numerator of which is the aggregate Discounted Balances of all
      Eligible Pool A Receivables at such time and the denominator of which is
      the aggregate Discounted Balances of all Eligible Receivables at such
      time;

     

    (ii) 
the
      amount by which the sum of the Discounted Balances of all Eligible Pool A
      Receivables with respect to which the related Contract has a remaining term
      greater than 85 months and equal to or less than 120 months exceeds 50% of
      the
      sum of the Discounted Balances of all Eligible Pool A Receivables at such
      time;

     

    (iii) 
the
      amount by which the sum of the Discounted Balances of all Eligible Pool A
      Receivables with respect to which the related Contract has a remaining term
      greater than 120 months exceeds 15% of the sum of the Discounted Balances of
      all
      Eligible Pool A Receivables at such time;

     

    (iv) 
the
      amount by which the sum of the Discounted Balances of all Eligible Pool A
      Receivables with respect to which the related Contract has a Discounted Balance
      greater than $1,000,000 exceeds 50% of the sum of the Discounted Balances of
      all
      Eligible Pool A Receivables at such time;

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    (v)     the
      amount by which the sum of the Discounted Balances of all Eligible Pool A
      Receivables related to any one vendor of Equipment (or Affiliate thereof) at
      such time exceeds 35% of the sum of the Discounted Balances of all Eligible
      Pool A Receivables at such time;

     

    (vi)     the
      amount by which the sum of the Discounted Balances of all Eligible Pool A
      Receivables arising under a Contract which provides for a Balloon Payment or
      Put
      Payment, the amount of which is in excess of 34% of the original amount of
      the
      Scheduled Payments to be made under such Contract, exceeds 20% of the sum of
      the
      Discounted Balances of all Eligible Pool A Receivables at such
      time;

     

    (vii)     the
      amount by which the sum of the Discounted Balances of all Eligible Pool A
      Receivables arising from Practice Acquisition Loan Contracts at such time
      exceeds 50% of the sum of the Discounted Balances of all Eligible Pool A
      Receivables at such time; and

     

    (viii)     the
      amount by which the sum of the Discounted Balances of all Eligible Pool A
      Receivables that are Stand Alone Working Capital Loans at such time exceeds
      15%
      of the sum of the Discounted Balances of all Eligible Pool A Receivables at
      such time.

     

    “Pool A
      Receivable”
means
      the rights to all payments from an Obligor under a Pool A Contract,
      including, without limitation, any right to the payment with respect to
      (i) Scheduled Payments, (ii) any prepayments or overdue payments made
      with respect to such Scheduled Payments, (iii) any Guaranty Amounts,
      (iv) any Insurance Proceeds, (v) any Servicing Charges and
      (vi) any Recoveries.

     

    “Pool A
      Termination Event”
means
      the occurrence of any of the following events:

     

    (i)     the
      rolling weighted average of the Delinquency Rates in respect of any three
      consecutive Collection Periods, calculated by the Lender solely with respect
      to
      Pool A Receivables, exceeds 3.5%;

     

    (ii)     the
      Annualized Default Rate, calculated by (or in a manner satisfactory to) the
      Lender solely with respect to Pool A Receivables, exceeds 4.0%;
      or

     

    (iii)     the
      Pool
      A Annualized Net Loss Rate exceeds 3.5%.

     

    “Pool
      B
      Annualized Net Loss Rate”
means
      with respect to any Underlying Originator, as of any date of determination
      at
      least three Collection Periods after the date that the Pool B Receivable

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    related
      to such Underlying Originator is Pledged hereunder (the “Applicable
      Date”),
      an
      amount (expressed as a percentage) equal to (i) the product of
      (A) (x) the aggregate Discounted Balances of all Underlying Contracts
      related to such Underlying Originator which were Eligible Underlying Contracts
      at the time of the Pledge of the related Pool B Receivable hereunder and as
      to which an Underlying Contract Event of Default has occurred during the six
      (or
      such lesser number of Collection Periods since the Applicable Date) immediately
      preceding Collection Periods minus
      (y) recoveries received by the Underlying Originator during the six (or
      such lesser number of Collection Periods since the Applicable Date) immediately
      precedingCollection Periods and (B) 2 (if six or more Collection
      Periods have occurred since the Applicable Date), 2.4 (if five Collection
      Periods have occurred since the Applicable Date), 3 (if four Collection
      Periods have occurred since the Applicable Date), 4 (if three Collection
      Periods have occurred since the Applicable Date), 6 (if two Collection
      Periods have occurred since the Applicable Date) or 12 (if one Collection
      Period has occurred since the Applicable Date) divided by (ii) the
      aggregate Discounted Balances of all Underlying Contracts related to such
      Underlying Originator which are Eligible Underlying Contracts as of the first
      Business Day of the six (or such lesser number of Collection Periods since
      the
      Applicable Date) immediately preceding Collection Periods.

     

    “Pool
      B
      Borrowing Base”
means,
      at any time, (x) the sum of the amounts calculated with respect to each Eligible
      Pool B Receivable, equal to the least of:

     

    (i)     the
      sum
      of (A) 92% of the aggregate Discounted Balance of all related Underlying
      Contracts and (B) the amount of funds on deposit in the Cash Reserve Account
      related to such Eligible Pool B Receivable;

     

    (ii)     100%
      of
      the Amortized Equipment Cost with respect to such Eligible Pool B Receivable
      at
      such time (calculated without giving effect to any associated amortized indirect
      costs related to the applicable Equipment) minus the Holdback Amount for such
      Eligible Pool B Receivable; or

     

    (iii)     the
      Discounted Balance of such Eligible Pool B Receivable

     

    minus
      (y) the
      Pool B Overconcentration Amount.

     

    “Pool B
      Contract”
means
      an Underlying Originator Loan Contract.

     

    “Pool B
      Loan”
has
      the
      meaning assigned to that term in Section 2.01.

     

    “Pool
      B
      Master Receivable File”
has
      the
      meaning assigned to that term in clause
      (c)
      of the
      definition of “Receivable File”.

     

    “Pool
      B
      Micro Ticket Receivables”
means
      a
      Pool B Receivable related to equipment with an original cost of less than $3000
      and with respect to which the related Obligor is Northern Leasing Systems,
      Inc.
      or any other Obligor as approved in writing by the Lender in its sole
      discretion.

     

    “Pool B
      Net Eligible Receivables Balance”
means,
      at any time, (i) the Eligible Pool B Receivables Balance at such time
minus
      (ii) the Pool B Overconcentration Amount at such time.

     

    “Pool B
      Overconcentration Amount”
means,
      at any time, (x) after the first anniversary of the Closing Date or (y) the
      aggregate outstanding principal balance of the Loans is greater than
      $35,000,000, without duplication, the sum of:

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    (i)     an
      amount
      equal to the Global Overconcentration Amount at such time multiplied by a
      fraction the numerator of which is the aggregate Discounted Balances of all
      Eligible
      Pool B Receivables at such time and the denominator of which is the
      aggregate Discounted Balances of all Eligible Receivables at such
      time;

     

    (ii)     the
      amount by which the sum of the Discounted Balances of all Eligible Pool B
      Receivables related to any one Underlying Originator (or Affiliate thereof)
      at
      such time exceeds $25,000,000;

     

    (iii)     the
      amount by which the sum of the Discounted Balances of all Eligible Pool B
      Receivables related to any one Underlying Obligor (or Affiliate thereof) at
      such
      time exceeds $1,000,000;

     

    (iv)     the
      amount by which the sum of the Discounted Balances of all Eligible Pool B
      Receivables with respect which the related Contract has a remaining term greater
      than 84 months exceeds 20% of the sum of the Discounted Balances of all
      Eligible Pool B Receivables at such time; and

     

    (v)     the
      amount by which the sum of the Discounted Balances of all Eligible Pool B
      Receivables that are Pool B Micro Ticket Receivables at such time exceeds
      $15,000,000.

     

    “Pool B
      Receivable”
means
      the rights to all payments from an Obligor under a Pool B Contract,
      including, without limitation, any right to the payment with respect to
      (i) Scheduled Payments and Underlying Scheduled Payments, (ii) any
      prepayments or overdue payments made with respect to such Scheduled Payments
      and
      Underlying Scheduled Payments, (iii) any Guaranty Amounts, (iv) any
      Insurance Proceeds, (v) any Servicing Charges and (vi) any
      Recoveries.

     

    “Pool B
      Termination Event”
means,
      with respect to an Underlying Originator, the occurrence of any of the following
      events:

     

    (i)     other
      than with respect to Pool B Micro Ticket Receivables, the rolling weighted
      average of the Underlying Delinquency Rates with respect to such Underlying
      Originator in respect of any three consecutive Collection Periods exceeds
      8%;

     

    (ii)     other
      than with respect to Pool B Micro Ticket Receivables, the Pool B Annualized
      Net
      Loss Rate with respect to such Underlying Originator in respect of any
      Collection Period exceeds 6%;

     

    (iii)     other
      than with respect to Pool B Micro Ticket Receivables, the current amount of
      recourse, if any, against such Underlying Originator with respect to its
      obligations under the related Underlying Originator Loan Contract is less than
      5% of the maximum amount of such recourse;

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    
       

      (iv)     with
        respect to Pool B Micro Ticket Receivables only, the rolling weighted average
        of
        the Underlying Delinquency Rates with respect to such Underlying Originator
        in
        respect of any three consecutive Collection Periods exceeds
        10%;

    

     

    (v)     with
      respect to Pool B Micro Ticket Receivables only, the Pool B Annualized Net
      Loss
      Rate with respect to such Underlying Originator in respect of any Collection
      Period exceeds 25%;

     

    (vi)     with
      respect to Pool B Micro Ticket Receivables only, the current amount of recourse,
      if any, against such Underlying Originator with respect to its obligations
      under
      the related Underlying Originator Loan Contract is less than 5% of the maximum
      amount of such recourse; or

     

    (vii)     the
      occurrence of any Bankruptcy Event in respect of such Underlying
      Originator.

     

    “Pool
      B
      Underlying Lease File”
has
      the
      meaning assigned to that term in clause
      (d)
      of the
      definition of “Receivable File”.

     

    “Pool
      B
      Underlying Loan File”
has
      the
      meaning assigned to that term in clause
      (e)
      of the
      definition of “Receivable File”.

     

    “Practice
      Acquisition Loan Contract”
means,
      collectively, a “Term Note (Level Payments)” together with the “Master Loan and
      Security Agreement” related thereto and incorporated by reference therein, each
      in the form attached hereto as Exhibit D-3
      (as such
      exhibit may be updated from time to time by the Borrower with the consent of
      the
      Lender) or a loan agreement and promissory note otherwise approved by the
      Servicer in compliance with the Credit and Collection Policy, pursuant to which
      Originator makes a loan to an Obligor to enable such Obligor to acquire a
      dental, medical, osteopathic medical, optometric or veterinary practice, secured
      by Equipment related to the practice of dentistry, medicine or veterinary
      medicine and certain non-equipment assets, together with all schedules,
      supplements and amendments thereto and each other document and instrument
      related thereto.

     

    “Prepayment
      Amount”
means
      the principal amount of Loans repaid by the Borrower in connection with an
      optional prepayment of Loans made by the Borrower pursuant to Section 2.15
      hereof.

     

    “Prepayment
      Date”
means
      any date on which an optional prepayment of Loans is made by the Borrower
      pursuant to Section 2.15 hereof.

     

    “Prepayment
      Premium”
has
      the
      meaning ascribed thereto in the Fee Letter.

     

    “Program
      Termination Cure Event”
means
      the occurrence of any of the following events:

     

    (i)     following
      the occurrence of a Program Termination Event described in clause (iv),
      (v), (vi), (vii), (viii) or (ix) of the definition thereof, such Program
      Termination Event is cured within the following two Collection Periods and
      two
      further Collection Periods pass without the occurrence of such a Program
      Termination Event; or

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    
       

      (ii)     following
        the occurrence of a Program Termination Event described in clause (xi) of
        the definition thereof, such Program Termination Event is cured; provided
        that, in
        any event, no other Program Termination Event shall have occurred and be
        continuing.

    

     

    “Program
      Termination Date”
means
      the earliest of (i) the date of occurrence of any event described in
Section 7.01(a)
      hereof,
      (ii) the date of the declaration of the Program Termination Date pursuant
      to any other subsection of Section 7.01
      or
      (iii) the date of the declaration of the Program Termination Date by, and
      at the option of, the Lender upon the occurrence of a Program Termination
      Event.

     

    “Program
      Termination Event”
means
      the occurrence of any of the following events:

     

    (i)     a
      regulatory, tax or accounting body has ordered that the activities of the Lender
      or any Affiliate thereof contemplated hereby be terminated or, as a result
      of
      any other event or circumstance, the activities of the Lender or any Affiliate
      contemplated hereby may reasonably be expected to cause the Lender or the
      Person, if any, then acting as the administrator or the manager for the Lender
      or any of its Affiliates to suffer materially adverse regulatory, accounting
      or
      tax consequences;

     

    (ii)     an
      Event
      of Default has occurred and is continuing;

     

    (iii)     the
      Facility Maturity Date shall have occurred;

     

    (iv)     other
      than with respect to Pool B Micro Ticket Receivables, the
      Annualized Default Rate exceeds 4.5%;

     

    (v)     other
      than with respect to Pool B Micro Ticket Receivables, the rolling weighted
      average of the Delinquency Rates in respect of any three consecutive Collection
      Periods exceeds 4.0%;

     

    (vi)     other
      than with respect to Pool B Micro Ticket Receivables, the Annualized Net Loss
      Rate exceeds 4.0%;

     

    (vii)     with
      respect to Pool B Micro Ticket Receivables only, the Annualized Default Rate
      exceeds 25.0%;

     

    (viii)     with
      respect to Pool B Micro Ticket Receivables only, the rolling weighted average
      of
      the Delinquency Rates in respect of any three consecutive Collection Periods
      exceeds 10.0%;

     

    (ix)     with
      respect to Pool B Micro Ticket Receivables only, the Annualized Net Loss Rate
      exceeds 25.0%;

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    (x)     a
      Servicer Default has occurred and is continuing; or

     

    (xi)     (1) any
      Qualifying Swap Counterparty ceases to maintain the long-term debt ratings
      required of a Qualifying Swap Counterparty and (A) does not post cash
      collateral in a manner acceptable to the Lender within 45 days and (B) is
      not replaced
      within 45 days by a replacement acceptable to the Lender or (2) the
      Borrower fails to comply with any term, covenant or agreement hereunder related
      to the maintenance of any Qualifying Interest Rate Swaps; or

     

    (xii)     the
      occurrence of three or more Pool A Termination Events and/or Pool B
      Termination Events.

     

    “Purchase
      and Sale Agreement”
means
      that certain Purchase and Sale Agreement, dated as of the date hereof, between
      the Originator, as seller, and the Borrower, as purchaser, together with all
      instruments, documents and agreements executed in connection therewith, as
      such
      Purchase and Sale Agreement may from time to time be amended, supplemented
      or
      otherwise modified in accordance with the terms hereof.

     

    “Purchase
      Date”
has
      the
      meaning set forth in the Purchase and Sale Agreement.

     

    “Put
      Payment”
means
      with respect to any Contract or Underlying Contract constituting a lease, the
      payment, if any, required to be made by the Obligor under the terms of such
      lease in connection with the required purchase by such Obligor or Underlying
      Obligor of the related Equipment or Underlying Equipment at the end of the
      term
      of such lease.

     

    “QSC
      Subordinated Termination Payment”
means
      a
      termination payment required to be made by the Borrower to a Qualifying Swap
      Counterparty upon the termination of the related Qualifying Interest Rate Swap
      pursuant to an event of default or termination event (other than Illegality
      or
      Tax Event) (each as defined in the related Qualifying Interest Rate Swap) as
      to
      which the Qualifying Swap Counterparty was the defaulting party or the sole
      affected party under the Qualifying Interest Rate Swap.

     

    “Qualifying
      Interest Rate Swap”
means
      (X) an interest rate swap agreement (i) between the Borrower and a
      Qualifying Swap Counterparty, (ii) under which the Borrower shall receive a
      floating rate of interest based on a Eurodollar Index acceptable to the Lender
      in exchange for the payment by the Borrower of a fixed rate of interest equal
      to
      the applicable Swapped Rate, (iii) the effective date of which is a
      Borrowing Date, (iv) having a varying notional balance which is, as of the
      effective date thereof, in an amount equal to the aggregate principal amount
      of
      the Loans advanced on such effective date and (v) which shall otherwise be
      on such terms and conditions and pursuant to such documentation as shall be
      acceptable to the Lender or (Y) an alternative interest rate hedging
      agreement agreed to in writing by the Borrower and the Lender.

     

    
      “Qualifying
        Swap Counterparty”
means
        Morgan Stanley Capital Services Inc. (or any successors or permitted assigns)
        or
        any other financial institution that is in the business of entering into
        interest rate swap transactions, is acceptable to the Lender and has a long-term
        senior unsecured debt rating of “A” or higher (or the equivalent) by each Rating
        Agency then rating such long-term senior unsecured debt) or posts cash
        collateral in a manner and amount satisfactory to the Lender.

    

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

     

    
      “Rating
        Agencies”
means
        Moody’s, S&P and Fitch, or any other nationally recognized statistical
        rating organizations as may be designated by the Lender.

    “Real
      Estate Contract”
means
      a
      loan agreement and promissory note approved
      by the Servicer in compliance with the Credit and Collection Policy, in each
      case, pursuant to which the Originator makes a loan to an Obligor secured by
      rentals or other receivables arising from the use of real property, together
      with all schedules, supplements and amendments thereto and each other document
      and instrument related thereto.

     

    “Receivable”
means
      a
      Pool A Receivable or a Pool B Receivable.

     

    “Receivable
      File”
means
      with respect to each Receivable:

     

    (a) if
      such
      Receivable is related to a Lease Contract the following items (collectively,
      a
“Pool
      A
      Lease File”):

     

    (i)     (1) the
      related original, executed Lease Contract (or, in the case of a Lease Contract
      under a master lease, a machine or facsimile copy of the related master lease
      certified by an authorized officer of the Borrower and stamped “I hereby certify
      that this is a true and exact copy of the original” and an original, executed
      schedule thereto describing the related Equipment) unless such Lease Contract
      is
      related to an Exception Sublimit Receivable, in which event the executed Lease
      Contract (or, in the case of Lease Contracts under a master lease, the related
      schedule) may be a machine or facsimile copy certified in the manner described
      above, (2) a true, executed copy of the related delivery/installation
      certificate or acknowledgment and acceptance of delivery certificate if such
      Receivable is related to Equipment with an original cost in excess of $50,000,
      (3) a true copy of the  Insurance Certificate if such Receivable is
      related to Equipment with an original cost in excess of $100,000, (4) other
      than with respect to a Lease Contract related to Equipment which has an original
      cost of less than $25,000 if such Lease Contract is a Dollar Purchase Option
      Contract or $50,000 if such Lease Contract is a FMV Contract, a “transmittal
      order” from the Servicer to a filing service company and an “in process report”
from such filing service company to the Servicer (or other evidence of the
      submission of the related UCC financing statement for filing in the appropriate
      filing office) and, within 45 days of the related Contract being executed,
      a file-stamped copy of the related UCC financing statement and (5) vendor
      order(s) or invoice(s); and

     

    (ii)     copies
      of
      any additional documents, other than servicing related documents, that the
      Borrower keeps on file with respect to such Receivable;

     

    (b) if
      such
      Receivable is related to a Loan Contract or a Practice Acquisition Loan Contract
      the following items (collectively, a “Pool
      A
      Loan File”):

     

    (i)     (1) the
      original, executed promissory note (with fully executed, original Allonge
      attached thereto), (2) a true, executed copy of the related “Master Loan
      and Security Agreement”, (3) a true copy of the related Insurance
      Certificate if such Receivable is related to Equipment with an original cost
      in
      excess of 

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

           $100,000
      and (4) other than with respect to a Receivable related to Equipment which
      has an original cost of less than $25,000, a “transmittal order” from the
      Servicer to afiling service company and an “in process report” from such filing
      service company to the Servicer (or other evidence of the submission of the
      related UCC financing statement for filing in the appropriate filing office)
      and, within 45 days of the related Contract being executed, a file-stamped
      copy of the related UCC financing statement; and

     

    (ii)     copies
      of
      any additional documents, other than servicing related documents, that the
      Borrower keeps on file with respect to such Receivable;

     

    (c) if
      such
      Receivable is related to an Underlying Originator Loan Contract the following
      items (collectively, a “Pool
      B
      Master Receivable File”):

     

    (i)     (1) the
      original, executed promissory note (with fully executed, original Allonge
      attached thereto) unless such Underlying Originator Loan Contract is in the
      form
      of a “Master Purchase and Sale Agreement,” (2) a true, executed copy of the
      related security agreement and (3) a “transmittal order” from the Servicer to a
      filing service company and an “in process report” from such filing service
      company to the Servicer (or other evidence of the submission of the related
      UCC
      financing statement for filing in the appropriate filing office) and, within
      45
      days of the related Contract being executed, a file-stamped copy of the related
      UCC financing statement; and

     

    (ii)     copies
      of
      any additional documents, other than servicing related documents, that the
      Borrower keeps on file with respect to such Receivable;

     

    (d) if
      such
      Receivable is related to a Underlying Originator Loan Contract which finances
      an
      Underlying Lease Contract the following items (collectively, a “Pool
      B
      Underlying Lease File”):

     

    (i)     (1) the
      related original, executed Underlying Lease Contract (or, in the case of an
      Underlying Lease Contract under a master lease, a machine or facsimile copy
      of
      the related master lease certified by an authorized officer of the Borrower
      and
      stamped “I hereby certify that this is a true and exact copy of the original”
and an original, executed schedule thereto describing the related Equipment),
      (2) a true, executed copy of the related delivery/installation certificate
      or
      acknowledgment and acceptance of delivery certificate, (3) a true, executed
      copy of the related purchase agreement, (4) a true copy of the related
      Underlying Insurance Certificate if such Underlying Lease Contract is related
      to
      Equipment with an original cost in excess of $100,000, (5) other than with
      respect to an Underlying Lease Contract related to Equipment which has an
      original cost of less than $25,000 if such Underlying Lease Contract is a Dollar
      Purchase Option Contract or $50,000 if such Underlying Lease Contract is a
      FMV
      Contract, a “transmittal order” from the Underlying Originator to a filing
      service company and an “in process report” from such filing service company to
      the Underlying Originator (or other evidence of the submission of the related
      UCC 

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

          
      financing statement for filing in the appropriate filing office) and, within
      45 days of the related Underlying Lease Contract being executed, a
      file-stamped copy of the related UCC financing statement and (6) vendor
      order or invoice; and

     

    (ii)     copies
      of
      any additional documents, other than servicing related documents, that the
      Borrower keeps on file with respect to such Receivable;

     

    (e) if
      such
      Receivable is related to an Underlying Originator Loan Contract which finances
      an Underlying Loan Contract the following items (collectively, a “Pool
      B
      Underlying Loan File”):

     

    (i)     (1) the
      original, executed promissory note (with fully executed, original Allonge
      attached thereto), (2) a true, executed copy of the related security
      agreement, (3) a true copy of the related Underlying Insurance Certificate
      if such Underlying Loan Contract is related to Equipment with an original cost
      in excess of $100,000 and (4) other than with respect to an Underlying Loan
      Contract related to Equipment which has an original cost of less than $25,000
      a
“transmittal order” from the Underlying Originator to a filing service company
      and an “in process report” from such filing service company to the Underlying
      Originator (or other evidence of the submission of the related UCC financing
      statement for filing in the appropriate filing office) and, within 45 days
      of the related Contract being executed, a file-stamped copy of the related
      UCC
      financing statement; and

     

    (ii)     copies
      of
      any additional documents, other than servicing related documents, that the
      Borrower keeps on file with respect to such Receivable.

     

    In
      addition, if the Obligor Collateral related to such Receivable (other than
      a
      Vehicle Sublimit Pledged Receivable) is a Vehicle, the related Receivable File
      shall include the original copy of the Certificate of Title with respect to
      such
      Vehicle which such Certificate of Title notes the owner of such Vehicle as
      being
      the Borrower and indicates “Morgan Stanley Bank” as the sole lienholder with
      respect to such Vehicle or (prior to the 90th day after such Receivable was
      first included in the calculation of the Eligible Receivables Balance, if such
      Certificate of Title has not yet been received by the Servicer or the Borrower)
      a copy of the application for such Certificate of Title.

     

    “Receivables
      Schedule”
has
      the
      meaning assigned to that term in the Custodial Agreement.

     

    “Records”
means
      all documents, books, records and other information (including, without
      limitation, tapes, disks, punch cards and related property and rights)
      maintained with respect to Receivables and the related Obligors which the
      Borrower has itself generated, in which the Borrower has acquired an interest
      pursuant to the Purchase and Sale Agreement or in which the Borrower has
      otherwise obtained an interest.

     

    “Recoveries”
means,
      for any Collection Period during which, or any Collection Period after the
      date
      on which, any Receivable becomes a Defaulted Receivable and with respect to
      such
      Defaulted Receivable, all payments that the Servicer received from or on behalf
      of 

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

     

    the
      related Obligor during such Collection Period in respect of such Defaulted
      Receivable or from the repossession, liquidation or re-leasing of the related
      Obligor Collateral, including but not limited to Scheduled Payments, Overdue
      Payments, Guaranty Amounts and Insurance Proceeds.

     

    “Registrar
      of Titles”
means
      with respect to any State, the governmental agency or body responsible for
      the
      registration of, and the issuance of certificates of title relating to, motor
      vehicles and liens thereon.

     

    “Related
      Security”
means
      with respect to any Receivable:

     

    (i)     any
      and
      all security interests or liens and property subject thereto from time to time
      securing or purporting to secure payment of such Receivable;

     

    (ii)     all
      guarantees, indemnities, warranties, letters of credit, insurance policies
      and
      proceeds and premium refunds thereof and other agreements or arrangements of
      whatever character from time to time supporting or securing payment of such
      Receivable; and

     

    (iii)     all
      proceeds of the foregoing.

     

    “Release
      Price”
      means,
      with respect to a Pledged Receivable to be released hereunder, an amount equal
      to the Discounted Balance of such Pledged Receivable at the time of such release
      plus
      interest
      accrued thereon at the Discount Rate from and including the Remittance Date
      immediately preceding the date such Pledged Receivable is to be released through
      (but not including) the next succeeding Remittance Date.

     

    “Remittance
      Date”
means
      the twenty-third (23rd)
      day of
      each month beginning December, 2006, or, if such date is not a Business Day,
      the
      next succeeding Business Day; provided, that the final Remittance Date shall
      occur on the Collection Date.

     

    “Resource
      America”
means
      Resource America, Inc., a Delaware corporation.

     

    “Rollover
      Interest Period”
means
      any Interest Period other than any Interest Period (i) applicable to the
      Loan arising as a result of the Borrowing on the initial Borrowing Date or
      (ii) applicable to any new Loan arising as a result of a Borrowing on a
      Subsequent Borrowing Date.

     

    “S&P”
means
      Standard & Poor’s Ratings Group, a division of The McGraw-Hill Companies,
      Inc. (or its successors in interest).

     

    “Scheduled
      Payments”
means,
      with respect to any Receivable, the periodic payments payable under the terms
      of
      the related Contract (but not including any such periodic payment to the extent
      paid in advance by the related Obligor).

     

    “Secured
      Parties”
means
      the Lender, the Servicer, the Backup Servicer, the Custodian, the Lender’s Bank,
      each Qualified Swap Counterparty and their respective successors and
      assigns.

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    “Security
      Deposit”
means
      any amount paid to the Servicer or the Borrower by an Obligor as a security
      deposit or as a payment in advance of any amounts to become due under a
      Contract, which has not previously been refunded to such Obligor or applied
      toward such Obligor’s obligations under such Contract (for purposes of
      clarification, a Cash Reserve shall not be deemed to constitute a Security
      Deposit).

     

    “Security
      Deposit Account”
has
      the
      meaning assigned to that term in Section 2.05.

     

    “Security
      Deposit Account Agreement”
means
      that certain Securities Account Agreement, dated the date of this Agreement,
      among the Borrower, the Servicer, the Lender’s Bank and the Lender, as such
      agreement may from time to time be amended, supplemented or otherwise modified
      in accordance with the terms thereof.

     

    “Servicer”
means,
      at any time, LEAF Financial or any other Person then authorized, pursuant to
      Section 6.01,
      to
      service, administer and collect Pledged Receivables.

     

    “Servicer
      Advance”
has
      the
      meaning assigned to such term in Section 6.19.

     

    “Servicer
      Default”
means
      the occurrence of any of the following events:

     

    (i)     the
      failure of the Servicer to deliver any payments, collections or proceeds which
      it is obligated to deliver under the terms hereof or of any other Transaction
      Document at the times it is obligated to make such deliveries under the terms
      hereof or of any other Transaction Document, and such failure remains unremedied
      for two Business Days;

     

    (ii)     the
      failure of the Servicer to satisfy any of its reporting, certification,
      notification or documentation requirements under the terms hereof or of any
      other Transaction Document or the failure of the Servicer to observe or perform
      any material term, covenant or agreement hereunder or under any other
      Transaction Document (other than those described in clause (i) above) and
      such failure shall remain unremedied for 10 days after the Servicer first
      has knowledge, whether constructive or actual, of such failure;

     

    (iii)     any
      representation, warranty or statement of the Servicer made herein or in any
      other Transaction Document shall prove to be incorrect in any material respect,
      and, solely if such incorrect representation, warranty or statement can be
      remedied, such representation, warranty or statement is not made true within
      15 days;

     

    (iv)     the
      occurrence of an Event of Default;

     

    (v)     the
      occurrence of a Program Termination Event described in clauses (iv), (v),
      (vi), (vii), (viii), (ix) or (xii) of the definition of Program Termination
      Events; or

     

    (vi)     the
      occurrence of any Bankruptcy Event in respect of the Servicer.

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

     

            
      “Servicer
      Pension Plan”
means
      a
“pension plan” as such term is defined in section 3(2) of ERISA, which is
      subject to title IV of ERISA and to which the Servicer or any ERISA Affiliate
      of
      Servicer may have any liability, including any liability by reason of having
      been a substantial employer within the meaning of section 4063 of ERISA at
      any
      time during the preceding five years, or by reason of being deemed to be a
      contributing sponsor under section 4069 of ERISA.

     

    “Servicing
      Charges”
means
      the sum of (a) all late payment charges paid by Obligors under Contracts
      after payment in full of any Scheduled Payments due in a prior Collection Period
      and Scheduled Payments for the related Collection Period and (b) any other
      incidental charges or fees received from an Obligor, including, but not limited
      to, late fees, collection fees, taxes and charges for insufficient
      funds.

     

    “Servicing
      Fee”
means,
      for any Fee Period, an amount, payable out of Collections on the Pledged
      Receivables and amounts applied to the payment of, or treated as payments on,
      the Pledged Receivables, equal to (i) the Servicing Fee Rate multiplied by
      (ii) the Net Eligible Receivables Balance as of the first day of such Fee
      Period multiplied by (iii) a fraction, the numerator of which shall be the
      actual number of days in such Fee Period and the denominator of which shall
      be
      360. Upon assuming the duties of the Servicer hereunder, the Backup Servicer
      shall also be entitled to receive a one-time acceptance fee of $60,000, which
      shall be considered part of the “Servicing Fee” hereunder but shall be in
      addition to the amount set forth in the sentence above.

     

    “Servicing
      Fee Rate”
means
      1.00%.

     

    “Stand
      Alone Working Capital Loan”
means
      a
      loan to a dental, medical, osteopathic medical, optometric or veterinary
      practice that may be secured by all assets of such dental, medical, osteopathic
      medical, optometric or veterinary practice or that might be
      unsecured.

     

    “Standby
      Backup Servicer’s Fee”
means,
      for any Fee Period or portion thereof prior to the occurrence of a Servicer
      Default and the appointment of the Backup Servicer as Servicer hereunder, an
      amount, payable out of Collections on the Pledged Receivables and amounts
      applied to the payment of, or treated as payments on, the Pledged Receivables,
      equal to the greater of (i) the Standby Backup Servicing Fee Rate, multiplied
      by
      the Net Eligible Receivables Balance as of the first day of such Fee Period,
      multiplied by a fraction, the numerator of which shall be the actual number
      of
      days in such Fee Period and the denominator of which shall be 360, or (ii)
      $1,500. The “Standby Backup Servicer’s Fee” shall also include (i) a one-time
      acceptance fee of $4,000 payable on the Closing Date and (ii) reasonable
      out-of-pocket expenses incurred by the Standby Backup Servicer in the
      performance of its duties.

     

    “Standby
      Backup Servicing Fee Rate”
means
      .0215%.

     

    “State”
means
      one of the fifty states of the United States or the District of
      Columbia.

     

    “Subsequent
      Borrowing”
means
      a
      Borrowing which occurs on a Subsequent Borrowing Date.

     

    “Subsequent
      Borrowing Date”
means
      each Business Day occurring after the initial Borrowing Date on an additional
      Borrowing is funded from the Lender to the Borrower.

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    “Swapped
      Rate”
means,
      with respect to any Qualifying Interest Rate Swap, the annual rate of interest
      (expressed as a percentage) which the Borrower, as the fixed-rate payor, is
      required to pay under such Qualifying Interest Rate Swap in order to receive
      the
      floating rate of interest provided for under such Qualifying Interest Rate
      Swap.

     

    “Tangible
      Net Worth”
means,
      with respect to any Person, the amount calculated in accordance with GAAP as
      (i) the consolidated net worth of such Person and its consolidated
      subsidiaries, plus
      (ii) to the extent not otherwise included in such consolidated net worth,
      unsecured subordinated Debt of such Person and its consolidated subsidiaries,
      the terms and conditions of which are reasonably satisfactory to the Lender,
      minus
      (iii) the consolidated intangibles of such Person and its consolidated
      subsidiaries, including, without limitation, goodwill, trademarks, tradenames,
      copyrights, patents, patent allocations, licenses and rights in any of the
      foregoing and other items treated as intangibles in accordance with
      GAAP.

     

    “Transaction
      Documents”
means
      this Agreement, the Purchase and Sale Agreement, the Lockbox Intercreditor
      Agreement, the
      Collection Account Agreement, the Security Deposit Account Agreement, each
      Cash
      Reserve Account Agreement, the Fee Letter, the Custodial Agreement, the
      Originator Insurance Agreement, any lease bailment agreement with a
      sub-custodian and each Qualifying Interest Rate Swap and each document and
      instrument related to any of the foregoing.

     

    “Transition
      Costs”
means
      any documented expenses and allocated cost of personnel reasonably incurred
      by
      the Backup Servicer in connection with a transfer of servicing from the Servicer
      to the Backup Servicer as the successor Servicer; provided, that such expenses
      and allocated costs do not exceed $60,000.

     

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

     

    “Underlying
      Collateral”
means
      the Underlying Equipment leased or sold to an Underlying Obligor, or serving
      otherwise as collateral for a loan to an Underlying Obligor under an Underlying
      Contract.

     

    “Underlying
      Contract”
means
      an Underlying Lease Contract or an Underlying Loan Contract.

     

    “Underlying
      Contract Event of Default”
means,
      as of any time of determination, the occurrence and continuation of any of
      the
      following events with respect to any Underlying Contract:

     

    (i)     any
      Underlying Scheduled Payment (or other amount payable under the terms of the
      related Underlying Contract) remains unpaid for more than 120 days after
      the due date therefor set forth in such Underlying Contract;

     

    (ii)     the
      first
      or second Underlying Scheduled Payment is not paid in full when due under the
      related Underlying Contract;

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

    (iii)     any
      payment or other material terms of the related Underlying Contract have been
      modified due to credit related reasons after such Underlying Contract was
      acquired by Originator;

     

    (iv)     such
      Underlying Contract has been or should be charged off as a result of the
      occurrence of a Bankruptcy Event with respect to the related Underlying Obligor,
      if any, or has been or should otherwise be deemed uncollectible by the
      Underlying Originator in accordance with its credit and collection policy;
      or

     

    (v)     the
      related Underlying Equipment has been repossessed.

     

    “Underlying
      Delinquency Rate”
means
      with respect to any Underlying Originator, as of any date of determination,
      an
      amount (expressed as a percentage) equal to (i) the aggregate Discounted
      Balances of all Underlying Contracts related to such Underlying Originator
      as to
      which any part of any Underlying Scheduled Payment (or other amount payable
      under the terms of the related Underlying Contract) remains unpaid for more
      than
      30 days but not more than 120 days after the due date therefor set
      forth in such Underlying Contract as of the last day of the immediately
      preceding Collection Period divided by (ii) the aggregate Discounted
      Balances with respect to all Eligible Pool B Underlying Lease Contracts and
      Eligible Pool B Underlying Loan Contracts related to such Underlying
      Originator as of such day.

     

    “Underlying
      Equipment”
means
      the equipment or Vehicle leased or sold to an Underlying Obligor by an
      Underlying Originator, or serving as collateral for a loan to an Underlying
      Obligor by an Underlying Originator, under an Underlying Contract together
      with
      any replacement parts, additions and repairs thereof, and any accessories
      incorporated therein and/or affixed thereto.

     

    “Underlying
      Insurance Certificate”
means
      with respect to any Pool B Receivable, the insurance certificate related to
      the Underlying Insurance Policy with respect to the Underlying Contract relating
      to such Receivable (which insurance certificate shall list the
      Originator or
      the
      Underlying Originator as the loss payee).

     

    “Underlying
      Insurance Policy”
means,
      with respect to any Underlying Collateral, the insurance policy maintained
      by or
      on behalf of the Obligor pursuant to the related Contract that covers physical
      damage to the related Equipment (in an amount sufficient to insure completely
      the value of such Equipment) and general liability (including policies procured
      by the Borrower or the Servicer, or any agent thereof, on behalf of the
      Obligor).

     

    “Underlying
      Lease Contract”
means
      a
      lease contract pursuant to which Underlying Equipment is leased to an Underlying
      Obligor by an Underlying Originator, together with all schedules, supplements
      and amendments thereto and each other document and instrument related to such
      lease contract.

     

    “Underlying
      Lease Documents”
means,
      with respect to any Pool B Receivable, the Underlying Lease Contract and
      all agreements, documents or instruments evidencing, securing, guaranteeing
      or
      otherwise relating to the obligations of the Underlying Obligor
      thereunder.

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

     

    “Underlying
      Loan Contract”
means,
      collectively, a promissory note, a loan agreement and a security agreement
      pursuant to which an Underlying Originator makes a loan to an Underlying Obligor
      secured by Underlying Equipment owned by such Underlying Obligor, together
      with
      all schedules, supplements and amendments thereto and each other document and
      instrument related thereto.

     

    “Underlying
      Loan Documents”
means,
      with respect to any Pool B Receivable, the Underlying Loan Contract and all
      agreements, documents or instruments evidencing, securing, guaranteeing or
      otherwise relating to the obligations of the Underlying Obligor thereunder,
      including, without limitation, the note or notes evidencing such
      indebtedness.

     

    “Underlying
      Obligor”
means,
      collectively, each Person obligated to make payments under an Underlying
      Contract.

     

    “Underlying
      Originator”
means
      an Obligor engaged, in the ordinary course of business in providing financing
      to
      Underlying Obligors for the purposes of acquiring Underlying
      Equipment.

     

    “Underlying
      Originator Credit and Collection Policy”
means
      the credit and collection policy of an Underlying Originator, as such policy
      may
      hereafter be amended, modified or supplemented from time to time in compliance
      with this Agreement.

     

    “Underlying
      Originator Loan Collateral”
means
      Underlying Loan Contracts and Underlying Lease Contracts and all other assets
      of
      the Underlying Originators which secure the obligations of Underlying
      Originators under an Underlying Originator Loan Contract, or which are sold
      to
      the Originator by Underlying Originators under an Underlying Originator Loan
      Contract, in each case whether now owned or hereafter acquired, and including
      without limitation the Underlying Loan Documents, the Underlying Lease
      Documents, Underlying Security Deposit (if any) and the Underlying Equipment
      related thereto, together with all proceeds of every kind and nature, including
      proceeds of proceeds, of any and all of the foregoing.

     

    “Underlying
      Originator Loan Contract”
means,
      collectively, a “Master Purchase and Sale Agreement,” a “Master Loan and
      Security Agreement,” or a “Loan and Security Agreement,” each of which complies
      with all of the criteria set forth in Exhibit D-4
      hereto
      (as such exhibit may be updated from time to time by the Borrower with the
      consent of the Lender), pursuant to which Originator makes a purchase of
      Underlying Originator Loan Collateral from an Underlying Originator or makes
      a
      loan to an Underlying Originator secured by Underlying Originator Loan
      Collateral, together with all schedules, supplements and amendments thereto
      and
      each other document and instrument related thereto.

     

    “Underlying
      Scheduled Payments”
means,
      with respect to any Underlying Contract, the periodic payments payable under
      the
      terms of such Underlying Contract (but not including any such periodic payment
      to the extent paid in advance by the related Underlying Obligor).

     

    “Underlying
      Security Deposit”
means
      any amount paid to an Underlying Originator by an Underlying Obligor as a
      security deposit or as a payment in advance of any amounts to become due under
      an Underlying Contract, which has not previously been refunded to such
      Underlying Obligor or applied toward such Underlying Obligor’s obligations under
      such Underlying Contract.

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

     

    “United
      States”
means
      the United States of America.

     

    “Unmatured
      Event of Default”
means
      any event that, if it continues uncured, will, with lapse of time or notice
      or
      lapse of time and notice, constitute an Event of Default.

     

    “Vehicle”
means
      a
      new or a used automobile, minivan, sports utility vehicle, light duty truck
      or
      heavy duty truck.

     

    “Vehicle
      Sublimit Pledged Receivable”
means
      a
      Pledged Receivable, with respect to which the related Obligor Collateral or
      Underlying Collateral is a Vehicle or other type of equipment which requires
      a
      security interest therein to be noted on the certificate of title with respect
      thereto in order to be perfected, but the Borrower has not forwarded to the
      Custodian for inclusion in the appropriate Receivable File an original
      Certificate of Title which indicates the owner of the related Vehicle as being
      the Borrower and indicates “Morgan Stanley Bank” as the sole lienholder with
      respect to such Vehicle.

     

    “Weighted
      Average Swapped Rate”
means,
      as of any date of determination, the weighted average (weighted solely based
      on
      the Calculated Swap Amortizing Balances of such Qualifying Interest Rate Swaps
      as of such date of determination) of the Swapped Rates of the Qualifying
      Interest Rate Swaps in effect on such date of determination.

     

    SECTION
      1.02 Other
      Terms.
      All
      accounting terms not specifically defined herein shall be construed in
      accordance with GAAP. All terms used in Article 9 of the UCC in the State of
      New
      York, and not specifically defined herein, are used herein as defined in such
      Article 9.

     

    SECTION
      1.03 Computation
      of Time Periods.
      Unless
      otherwise stated in this Agreement, in the computation of a period of time
      from
      a specified date to a later specified date, the word “from” means “from and
      including” and the words “to” and “until” each mean “to but
      excluding.”

     

    ARTICLE
      II.

     

    THE
      RECEIVABLES FACILITY

     

    SECTION
      2.01 Borrowings.
      On the
      terms and conditions hereinafter set forth, the Lender shall make loans
      (“Loans”)
      to the
      Borrower secured by Pledged Assets from time to time during the period from
      the
      date hereof until the earlier of the Program Termination Date or the Facility
      Maturity Date. Separate Loans will be made to finance the Borrower’s acquisition
      of (x) Pool A Receivables (“Pool A
      Loans”)
      and
      (y) Pool B Receivables (“Pool B
      Loans”),
      and
      no Loan shall finance both Pool A Receivables and Pool B Receivables.
      Under no circumstances shall the Lender make, or the Borrower request, any
      Loan
      if (a) the principal amount of such Loan is less than (i) with respect to
      the initial Borrowing only, $10,000,000 and (ii) with respect to any Subsequent
      Borrowing, $500,000, or (b) after giving effect to the Borrowing of such
      Loan, either (i) a Program Termination Event or an event that but for
      notice or lapse of time or both would constitute a Program Termination Event
      has
      occurred and is continuing or (ii) the aggregate 

     

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

     

    Facility
      Amount hereunder would exceed the lesser of (A) the Borrowing Limit and
      (B) the Borrowing Base. Under no circumstances shall the Lender make, or
      the Borrower request, any Loan secured by Pool A Receivables if after
      giving effect to the Borrowing of such Loan, either (1) the aggregate
      Facility Amount hereunder, calculated solely with respect to Loans secured
      by
      Pool A Receivables, would exceed the Pool A Borrowing Base or
      (2) a Pool A Termination Event shall exist. Under no circumstances
      shall the Lender make, or the Borrower request, any Loan secured by any
      Pool B Receivable if after giving effect to the Borrowing of such Loan,
      either (1) the aggregate Facility Amount hereunder, calculated solely with
      respect to Loans secured by Pool B Receivables, would exceed the Pool B
      Borrowing Base or (2) a Pool B Termination Event shall exist with
      respect to the Underlying Originator related to such Pool B
      Receivable.

     

    SECTION
      2.02 The
      Initial Borrowing and Subsequent Borrowings.

     

    (a) Until
      the
      occurrence of the earlier of the Program Termination Date and the Facility
      Maturity Date, the Lender will make Loans on any Business Day at the request
      of
      the Borrower, subject to and in accordance with the terms and conditions of
      Sections 2.01
      and
2.02
      and
      subject to the provisions of Article III
      hereof.

     

    (b) (1) The
      initial Borrowing shall be made on at least five (5) Business Days’ irrevocable
      written notice from the Borrower to the Lender and each Subsequent Borrowing
      shall be made on at least three (3) Business Days’ irrevocable written notice
      from the Borrower to the Lender (any such written notice, a “Notice
      of Borrowing”),
      provided that such Notice of Borrowing is received by the Lender no later than
      12:00 noon (New York City time) on the Business Day of receipt. Any Notice
      of
      Borrowing received after 12:00 noon (New York City time) shall be deemed
      received prior to 12:00 noon (New York City time) on the following Business
      Day.
      Each such Notice of Borrowing shall specify (A) the aggregate amount of
      such Borrowing, (B) the date of such Borrowing, (C) the allocation of
      the Loans as Pool A Loans and Pool B Loans, and (D) the Eligible
      Pool A Receivables and the Eligible Pool B Receivables to be Pledged
      in connection with such Borrowing (and upon such Borrowing, such Receivables
      shall be Pledged Receivables hereunder). On the date of each Borrowing, the
      Lender shall, upon satisfaction of the applicable conditions set forth in
Article III,
      make
      available to the Borrower on the applicable Borrowing Date, no later than 2:00
      P.M. (New York City time), in same day funds, the amount of such Borrowing
      (net
      of amounts payable to or for the benefit of the Lender), by payment into the
      account which the Borrower has designated in writing.

     

    (ii)     Each
      Notice of Borrowing delivered to the Lender pursuant to this Section 2.02(b)
      shall be
      in an electronic file format acceptable to the Lender (A) accompanied by a
      copy
      of the Notice of Pledge (and the Receivables Schedule attached thereto), which
      was sent to the Custodian pursuant to the terms of the Custodial Agreement
      in
      connection with the pledge of Eligible Receivables to be made in connection
      therewith and (B) specifying for each Receivables pledged therein the
      information set forth on Exhibit B hereto.

     

    (iii)     The
      Loans
      shall bear interest at the Interest Rate.

     

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    (iv)     Subject
      to Section 2.15
      and the
      other terms, conditions, provisions and limitations set forth herein, the
      Borrower may borrow, repay or prepay and reborrow Loans, on and after the date
      hereof and prior to the earlier to occur of the Facility Maturity Date and
      the
      Program Termination Date.

     

    (v)     Determinations
      by the Lender of the existence of any Eurodollar Disruption Event (any such
      determination to be communicated to the Borrower by written notice from the
      Lender promptly after the Lender learns of such event), or of the effect of
      any
      Eurodollar Disruption Event on its making or maintaining Loans at the Adjusted
      Eurodollar Rate, shall be conclusive absent manifest error.

     

    SECTION
      2.03 Determination
      of Interest Periods and Interest Rates.

     

    (a) The
      initial Interest Period applicable to any new Loan arising as a result of a
      Borrowing shall commence on, and include, the date of such Borrowing and shall
      terminate on, and include, the day immediately prior to the next occurring
      Remittance Date or such earlier date as the Lender may determine (an
“Early
      Interest Period Termination Date”).
      All
      outstanding Pool A Loans allocated to one or more initial Interest Periods
      or
      Rollover Interest Periods maturing on the same date shall be combined and
      allocated to a single Rollover Interest Period at the end of such initial
      Interest Periods or Rollover Interest Periods. All outstanding Pool B Loans
      allocated to one or more initial Interest Periods or Rollover Interest Periods
      maturing on the same date shall be combined and allocated to a single Rollover
      Interest Period at the end of such initial Interest Periods or Rollover Interest
      Periods. Each Rollover Interest Period shall commence on, and include, the
      Remittance Date following the last day of the immediately preceding Interest
      Period (or, if applicable, on an Early Interest Period Termination Date) and
      shall terminate on, and include, the day immediately prior to the next occurring
      Remittance Date.

     

    (b) The
      interest rate per annum (the “Interest
      Rate”)
      applicable to any Loan for any Interest Period shall be equal to the Adjusted
      Eurodollar Rate; provided,
      however,
      that if
      the Lender shall have notified the Borrower that a Eurodollar Disruption Event
      has occurred, the Interest Rate for such Loan shall be equal to the Base Rate
      until such Eurodollar Disruption Event has ceased, at which time the Interest
      Rate shall again be equal to the Adjusted Eurodollar Rate. Notwithstanding
      the
      foregoing:

     

    (c) upon
      the
      occurrence and during the continuance of any Program Termination Event, the
      applicable Interest Rate for all Interest Periods in effect at the time of
      such
      occurrence shall convert to, and for all Interest Periods that come into effect
      during the continuance of any Event of Default shall be, the Default Funding
      Rate;

     

    (d) upon
      the
      occurrence and during the continuance of any Pool A Termination Event, the
      applicable Interest Rate for all Interest Periods with respect to all Pool
      A
      Loans in effect at the time of such occurrence shall convert to, and for all
      Interest Periods with respect to all Pool A Loans that come into effect during
      the continuance of any Pool A Termination Event shall be, the Default Funding
      Rate; and

     

    (e) upon
      the
      occurrence and during the continuance of any Pool B Termination Event, the
      applicable Interest Rate for all Interest Periods with respect to all Pool
      B
      Loans in effect at the time of such occurrence shall convert to, and for all
      Interest Periods with respect to all Pool B Loans that come into effect during
      the continuance of any Pool B Termination Event shall be, the Default Funding
      Rate.

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

     

    SECTION
      2.04 Remittance
      Procedures.
      The
      Servicer, as agent for the Lender, shall instruct the Lender’s Bank and, if the
      Servicer fails to do so, the Collateral Agent shall instruct the Lender’s Bank,
      to apply funds on deposit in the Collection Account as described in this
Section 2.04.

     

    (a) Interest
      and Breakage Fees.
      On each
      Business Day (including any Remittance Date), the Servicer shall, and, if the
      Servicer fails to do so, the Lender may direct the Lender’s Bank to, retain in
      the Collection Account for transfer at the further direction of the Lender
      or
      any duly authorized agent of the Lender (whether on such day or on a subsequent
      day) collected funds in an amount equal to accrued and unpaid interest through
      such day on the Loans not so previously retained and the amount of any accrued
      and unpaid Breakage Fees owed to the Lender on such day. On or before the last
      day of each Interest Period, the Lender shall notify the Servicer of the accrued
      and unpaid interest for such Interest Period and the Servicer shall, on the
      last
      day of each Interest Period, direct the Lender’s Bank to pay collected funds set
      aside in respect of accrued and unpaid interest pursuant to this Section 2.04(a)
      to the
      Lender (or the designee of the Lender) in respect of payment of such accrued
      and
      unpaid interest for such Interest Period. On any Business Day on which an amount
      is set aside in respect of Breakage Fees pursuant to this Section 2.04(a),
      the
      Servicer shall direct the Lender’s Bank to pay such funds to the Lender in
      payment of such Breakage Fees.

     

    (b) Interest
      Period Loan Principal Repayment.
      The
      Servicer shall, and if the Servicer fails to do so the Lender may, by 10:00
      a.m.
      (St. Paul, Minnesota time) on the last day of each Interest Period that is
      not a
      Remittance Date, direct the Lender’s Bank to transfer collected funds held by
      the Lender’s Bank in the Collection Account on such date, to pay the Lender in
      payment (or partial payment) of the outstanding principal amount of all Loans
      allocated to such Interest Period, in an amount equal to the least of
      (i) the amount of such collected funds held in the Collection Account other
      than funds set aside pursuant to Section 2.04(a),
      (ii) the aggregate outstanding principal amount of Loans allocated to such
      Interest Period, (iii) if no Program Termination Event shall have occurred
      and be continuing, an amount equal to the sum of (A) the excess, if any, of
      the Facility Amount immediately prior to such distribution, calculated solely
      with respect to Loans secured by Pool A Receivables over the Pool A
      Borrowing Base and (B) the excess, if any, of the Facility Amount
      immediately prior to such distribution, calculated solely with respect to Loans
      secured by Pool B Receivables over the Pool B Borrowing Base (with respect
      to Pool A Loans and Pool B Loans collectively, after giving effect to
      any Borrowing made on such date and any distributions of amounts on deposit
      in
      the Collection Account made on such date) or (iv) if no Program Termination
      Event shall have occurred and be continuing, an amount equal to the excess,
      if
      any, of the Facility Amount immediately prior to such distribution over the
      lesser of (A) the Borrowing Base and (B) the Borrowing Limit (after
      giving effect to any Borrowing made on such date and any distributions of
      amounts on deposit in the Collection Account made on such date).

     
      
    (c) Remittance
    Date Transfers From Collection Account.
    The
    Servicer shall, and if the Servicer fails to do so the Collateral Agent shall,
    by 10:00 a.m. (St. Paul, Minnesota time) on 

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

     

    each
      Remittance Date, direct the Lender’s Bank to transfer collected funds held by
      the Lender’s Bank in the Collection Account which were remitted to the
      Collection Account during the Collection Period with respect to such Remittance
      Date (“Available
      Funds”),
      in
      the following amounts and priority:

     

    (i)     to
      the
      Borrower, in an amount equal to such funds which were paid by Obligors with
      respect to their obligation under the related Contracts to pay any taxes (it
      being agreed by the Borrower that such amount shall be promptly paid to the
      taxing authorities entitled thereto);

     

    (ii)     to
      the
      related Qualifying Swap Counterparty under each Qualifying Interest Rate Swap,
      in an amount equal to (and for the payment of) all amounts which are due and
      payable by the Borrower to such Qualifying Swap Counterparty on such Remittance
      Date, pursuant to the terms of the applicable Qualifying Interest Rate Swap
      or
      this Agreement, other than any QSC Subordinated Termination Amounts which are
      due and payable by the Borrower pursuant to the applicable Qualifying Interest
      Rate Swap;

     

    (iii)     on
      a pro
      rata basis, to (x) the Backup Servicer in an amount equal to the Standby
      Backup Servicer’s Fee (to the extent accrued and unpaid as of the last day of
      the immediately preceding Fee Period) at any time prior to the occurrence of
      a
      Servicer Default and the appointment of the Backup Servicer as the Servicer
      hereunder and (y) the Custodian, the Custodian’s Fee and (z) the
      Lender’s Bank, the Lender’s Bank Fee;

     

    (iv)     at
      any
      time after the occurrence of a Servicer Default and the appointment of the
      Backup Servicer as the Servicer hereunder, to the Backup Servicer in an amount
      equal to (1) the Active Backup Servicer’s Fees which are accrued and unpaid as
      of the last day of the immediately preceding Fee Period plus (2) any Transition
      Costs not previously reimbursed to the Backup Servicer plus (3) the Active
      Backup Servicer’s Indemnified Amounts;

     

    (v)     to
      the
      Lender in an amount equal to (and for the pro rata payment of) (A) the Fees
      which are due and payable on such Remittance Date pursuant to the terms of
      the
      Fee Letter and (B) any interest on any Loan which is accrued and unpaid as
      of the last day of the immediately preceding Fee Period;

     

    (vi)     at
      any
      time prior to the occurrence of a Servicer Default and the appointment of the
      Backup Servicer as the Servicer hereunder, to the Servicer in an amount equal
      to
      the Servicing Fee which is accrued and unpaid as the last day of the immediately
      preceding Fee Period;

     

    (vii)     to
      the
      Lender (for application to the repayment of Loans Outstanding) in an amount
      equal to the sum (in the following order, if the available amount should be
      insufficient to pay in full such sum), without duplication, of:

     

                    (x)     any
      Borrowing Base Deficiency;

     

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

    (y)     the
      excess of the aggregate Facility Amount hereunder, calculated solely with
      respect to Loans secured by Pool A Receivables, over the Pool A
      Borrowing Base; and

     

    (z)     the
      excess of
      the aggregate Facility Amount hereunder, calculated solely with respect to
      Loans
      secured by Pool B Receivables, over the Pool B Borrowing
      Base;

     

    (viii)     on
      a pro
      rata basis, (A) to the Servicer in an amount equal to any Servicer Advances
      (and amounts to be reimbursed as Servicer Advances pursuant to Section 6.03)
      not
      previously reimbursed to the Servicer and (B) to the Lender in an amount
      equal to the aggregate amount of all other Obligations then due from the
      Borrower to the Lender or any Affected Party hereunder for the account of such
      parties as applicable (other than those specified in clauses (ix) through (xii)
      below);

     

    (ix)     on
      or after
      the occurrence of the Program Termination Date (but prior to any Program
      Termination Cure Event with respect to the Program Termination Event related
      to
      such Program Termination Date), to the Lender for the repayment of Loans
      Outstanding in an amount equal to the lesser of (A) all remaining Available
      Funds in the Collection Account and (B) an amount necessary to repay the
      outstanding principal amount of all Loans in full;

     

    (x)     on
      or
      after the occurrence of a Pool A Termination Event, to the Lender for the
      repayment of Pool A Loans in an amount equal to the lesser of (A) all
      remaining Available Funds in the Collection Account and (B) an amount
      necessary to repay the outstanding principal amount of all Pool A Loans in
      full;

     

    (xi)     on
      or after
      the occurrence of a Pool B Termination Event with respect to any Underlying
      Originator, to the Lender for the repayment of Pool B Loans related to such
      Underlying Originator in an amount equal to the lesser of (A) all remaining
      Available Funds in the Collection Account and (B) an amount necessary to
      repay the outstanding principal amount of all Pool B Loans related to such
      Underlying Originator in full;

     

    (xii)     to
      the
      related Qualifying Swap Counterparty under each Qualifying Interest Rate Swap
      in
      an amount equal to (and for the payment of) any QSC Subordinated Termination
      Payments which are due and payable by the Borrower to such Qualifying Swap
      Counterparty on such Remittance Date pursuant to the applicable Qualifying
      Interest Rate Swap; and

     

    (xiii)     to
      the
      order of the Borrower, any remaining amounts.

     

    (d) Borrower
      Deficiency Payments.
      Notwithstanding anything to the contrary contained in this Section 2.04
      or in
      any other provision in this Agreement, if, on any day prior to the Collection
      Date, the Facility Amount shall exceed the Borrowing Limit, then the Borrower
      shall remit to the Lender, prior to any Borrowing and in any event no later
      than
      the close of business of the Lender on such day (or if such day is not a
      Business Day, no later than the close of 

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

     

    business
      of the Lender on the next succeeding Business Day), a payment (to be applied
      by
      the Lender to repay Loans selected by the Lender, in its sole discretion),
      in
      such amount as may be necessary to reduce the Facility Amount to an amount
      less
      than or equal to the Borrowing Limit. Notwithstanding anything to the contrary
      contained in this Section 2.04
      or in
      any other provision in this Agreement, if, on any day prior to the Collection
      Date, the Facility Amount shall exceed the Borrowing Base, then the Borrower
      shall (X) remit to the Lender, prior to any Borrowing and in any event no
      later than the close of business of the Lender on such day (or if such day
      is
      not a Business Day, no later than the close of business of the Lender on the
      next succeeding Business Day), a payment (to be applied by the Lender to repay
      Loans selected by the Lender, in its sole discretion), in such amount as may
      be
      necessary to reduce the Facility Amount to an amount less than or equal to
      the
      Borrowing Base or (Y) Pledge additional Eligible Receivables hereunder,
      prior to any Borrowing and in any event no later than the close of business
      of
      the Lender on such day (or if such day is not a Business Day, no later than
      the
      close of business of the Lender on the next succeeding Business Day) in such
      amount as may be necessary to increase the Borrowing Base to an amount equal
      to
      or greater than the Facility Amount.

     

    (e) Pool A
      Deficiency Payments.
      Notwithstanding anything to the contrary contained in this Section 2.04
      or in
      any other provision in this Agreement, if, on any day prior to the Collection
      Date, the aggregate Facility Amount hereunder, calculated solely with respect
      to
      Loans secured by Pool A Receivables, would exceed the Pool A Borrowing
      Base, then the Borrower shall remit to the Lender, prior to any Borrowing and
      in
      any event no later than the close of business of the Lender on such day (or
      if
      such day is not a Business Day, no later than the close of business of the
      Lender on the next succeeding Business Day), a payment (to be applied by the
      Lender to repay Loans with respect to Pool A Receivables selected by the
      Lender, in its sole discretion), in such amount as may be necessary to reduce
      such excess to zero.

     

    (f) Pool B
      Deficiency Payments.
      Notwithstanding anything to the contrary contained in this Section 2.04
      or in
      any other provision in this Agreement, if, on any day prior to the Collection
      Date, the aggregate Facility Amount hereunder, calculated solely with respect
      to
      Loans secured by Pool B Receivables, would exceed the Pool B Borrowing
      Base, then the Borrower shall remit to the Lender, prior to any Borrowing and
      in
      any event no later than the close of business of the Lender on such day (or
      if
      such day is not a Business Day, no later than the close of business of the
      Lender on the next succeeding Business Day), a payment (to be applied by the
      Lender to repay Loans with respect to Pool B Receivables selected by the
      Lender, in its sole discretion), in such amount as may be necessary to reduce
      such excess to zero.

     

    (g) Instructions
      to the Lender’s Bank.
      All
      instructions and directions given to the Lender’s Bank by the Servicer, the
      Borrower or the Lender pursuant to this Section 2.04
      shall be
      in writing (including instructions and directions transmitted to the Lender’s
      Bank in electronic format), and such written instructions and directions shall
      be delivered with a written certification that such instructions and directions
      are in compliance with the provisions of this Section 2.04.
      The
      Servicer and the Borrower shall immediately transmit to the Lender by telecopy
      a
      copy of all instructions and directions given to the Lender’s Bank by such party
      pursuant to this Section 2.04.
      The
      Lender shall immediately transmit to the Servicer and the Borrower
      by telecopy a copy of all instructions and directions given to the Lender’s Bank
      by the Lender, pursuant to this Section 2.04.

     

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

     

    SECTION
      2.05 Security
      Deposit Account.

     

    (a) On
      or
      before the date hereof, the Borrower shall enter into a Security Deposit Account
      Agreement and open and maintain a segregated trust account (the “Security
      Deposit Account”)
      at the
      Lender’s Bank, for the receipt of amounts representing any Security Deposits
      with respect to any Pool A Contract by the related Obligor. The Servicer shall
      promptly deposit into the Security Deposit Account, all Security Deposits
      related to Pledged Pool A Receivables which are in the possession of, or come
      into the possession of, the Servicer or the Originator. Monies received in
      the
      Security Deposit Account shall be invested in Permitted Investments at the
      written direction of the Servicer or the Lender (as determined in accordance
      with the Security Deposit Account Agreement) during the term of this Agreement,
      and any income or other gain realized from such investment shall be held in
      the
      Security Deposit Account, subject to disbursement and withdrawal as herein
      provided. No such Permitted Investment shall mature later than the Business
      Day
      preceding the next following Remittance Date and shall not be sold or disposed
      of prior to its maturity. Monies shall be subject to withdrawal in accordance
      with Section 2.05(d)
      hereof.

     

    (b) The
      Servicer shall provide to the Borrower monthly written confirmation of
      investments of funds held in the Security Deposit Account, describing the
      Permitted Investments in which such amounts have been invested. Any funds not
      so
      invested shall be insured by the Federal Deposit Insurance
      Corporation.

     

    (c) If
      any
      amounts invested as provided in Section 2.05(a)
      hereof
      shall be subject to disbursement from the Security Deposit Account as set forth
      in Section 2.05(d)
      hereof,
      the Servicer shall cause such investments of such Security Deposit Account
      to be
      sold or otherwise converted to cash to the credit of such Security Deposit
      Account. The Servicer shall not be liable for any investment loss resulting
      from
      investment of money in the Security Deposit Account in any Permitted Investment
      in accordance with the terms hereof (other than in its capacity as obligor
      under
      any Permitted Investment and other than to the extent such loss results from
      the
      gross negligence or wilful misconduct of the Servicer).

     

    (d) Disbursements
      from the Security Deposit Account shall be made, to the extent funds therefore
      are available, only as follows:

     

    (i)     for
      deposit in the Collection Account in accordance with the direction of the
      Servicer prior to 2:00 p.m. New York time on the Business Day prior to any
      Remittance Date to the extent that the Servicer, in accordance with the terms
      of
      a Pool A Contract, has determined that amounts in respect of a Security Deposit
      shall be applied as full or partial Recoveries or, in its discretion, as a
      full
      or partial Scheduled Payment under such Pool A Contract;

     

    (ii)     the
      Security Deposit with respect to a Pledged Pool A Receivable shall be paid
      to or
      upon the order of the Servicer at any time that the Pool A Contract with respect
      to which such Security Deposit has been made is no longer a Pledged Pool AReceivable,
      whether through maturity of such Pool A Contract or repurchase by the Servicer,
      for further disposition by the Servicer in accordance with the terms of the
      related Pool A Contract or applicable law; and
       

    

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

    (iii)     any
      amounts
      remaining in the Security Deposit Account upon the Collection Date shall be
      distributed to or at the direction of the Servicer for further disposition
      in
      accordance with the terms of the related Contract or applicable
      law.

     

    SECTION
      2.06 Cash
      Reserve Account.

     

    (a) From
      time
      to time after the date hereof, the Borrower may enter into one or more Cash
      Reserve Account Agreements and open and maintain a segregated trust account
      (any
      such account, a “Cash
      Reserve Account”)
      at the
      Lender’s Bank, for the receipt of amounts representing any Cash Reserves funded
      with respect to any Pool B Contract. The Servicer shall promptly deposit into
      the Cash Reserve Account, all Cash Reserves related to Pledged Pool B
      Receivables which are in the possession of, or come into the possession of,
      the
      Servicer or the Originator. Monies received in any Cash Reserve Account shall
      be
      invested in Permitted Investments at the written direction of the Servicer
      or
      the Lender (as determined in accordance with the Cash Reserve Account Agreement)
      during the term of this Agreement, and any income or other gain realized from
      such investment shall be held in such Cash Reserve Account, subject to
      disbursement and withdrawal as herein provided. No such Permitted Investment
      shall mature later than the Business Day preceding the next following Remittance
      Date and shall not be sold or disposed of prior to its maturity. Monies shall
      be
      subject to withdrawal in accordance with Section 2.06(d)
      hereof.

     

    (b) The
      Servicer shall provide to the Borrower monthly written confirmation of
      investments of funds held in each Cash Reserve Account, describing the Permitted
      Investments in which such amounts have been invested. Any funds not so invested
      shall be insured by the Federal Deposit Insurance Corporation.

     

    (c) If
      any
      amounts invested as provided in Section 2.06(a)
      hereof
      shall be subject to disbursement from a Cash Reserve Account as set forth in
      Section 2.06(d)
      hereof,
      the Servicer shall cause such investments of such Cash Reserve Account to be
      sold or otherwise converted to cash to the credit of such Cash Reserve Account.
      The Servicer shall not be liable for any investment loss resulting from
      investment of money in the Cash Reserve Account in any Permitted Investment
      in
      accordance with the terms hereof (other than in its capacity as obligor under
      any Permitted Investment and other than to the extent such loss results from
      the
      gross negligence or willful misconduct of the Servicer).

     

    (d) Disbursements
      from any Cash Reserve Account shall be made, to the extent funds therefore
      are
      available, only as follows:

     

    (i)     for
      deposit in the Collection Account in accordance with the direction of the
      Servicer prior to 2:00 p.m. New York time on the Business Day prior to any
      Remittance Date to the extent that the Servicer, in accordance with the terms
      of
      a Pool B Contract, has determined that amounts in respect of a Cash Reserve
      shall be
      applied as full or partial Recoveries or, in its discretion, as a full or
      partial Scheduled Payment under such Pool B Contract;

     

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

     

    (ii)     the
      Cash
      Reserve with respect to a Pool B Contract shall be paid to or upon the
      order of the Servicer at any time that the related Pool B Loan has been
      repaid in full and the Pool B Contract with respect to which such Cash
      Reserve has been made is no longer a Pledged Receivable, whether through
      maturity of such Contract or repurchase by the Servicer, for further disposition
      by the Servicer in accordance with the terms of the related Pool B Contract
      or
      applicable law; and

     

    (iii)     any
      amounts remaining in the Cash Reserve Account upon the Collection Date shall
      be
      distributed to or at the direction of the Servicer for further disposition
      in
      accordance with the terms of the related Pool B Contract or applicable
      law.

     

    SECTION
      2.07 Payments
      and Computations, Etc.
      ii)
      All
      amounts to be deposited or paid by the Borrower or the Servicer to the Lender
      hereunder shall be paid or deposited in accordance with the terms hereof no
      later than 12:00 noon (New York City time) on the day when due in lawful
      money of the United States in immediately available funds to the Collection
      Account or such other account as is designated by the Lender. The Borrower
      shall, to the extent permitted by law, pay to the Lender interest on all amounts
      not paid or deposited when due hereunder (whether owing by the Borrower or
      the
      Servicer) at the Base Rate, plus 2%, payable on demand; provided,
      however,
      that
      such interest rate shall not at any time exceed the maximum rate permitted
      by
      applicable law. Such interest shall be for the account of the Lender. Any
      Obligation hereunder shall not be reduced by any distribution of any portion
      of
      Collections with respect to any Pledged Receivable if at any time such
      distribution is rescinded or returned by the Lender to the Borrower or any
      other
      Person for any reason. All computations of interest and all computations of
      Breakage Fee and other fees hereunder (including, without limitation, the Fees,
      the Active Backup Servicer’s Fee, the Standby Backup Servicer’s Fee, the
      Custodian’s Fee and the Servicing Fee) shall be made on the basis of a year of
      360 days (or 365 or 366 days for interest calculated at the Base Rate) for
      the actual number of days (including the first but excluding the last day)
      elapsed.

     

    (b) Whenever
      any payment hereunder shall be stated to be due on a day other than a Business
      Day, such payment shall be made on the next succeeding Business Day, and such
      extension of time shall in such case be included in the computation of payment
      of interest or any fee payable hereunder, as the case may be; provided,
      however,
      that
      with respect to the calculation of interest, such extension of time shall not
      be
      included in more than one Interest Period.

     

    (c) If
      any
      Borrowing requested by the Borrower and approved by the Lender pursuant to
      Section 2.02
      is not
      for any reason whatsoever, except as a result of the gross negligence or wilful
      misconduct of the Lender or an Affiliate thereof, made or effectuated, as the
      case may be, on the date specified therefor, the Borrower shall indemnify the
      Lender against any loss, cost or expense incurred by the Lender related thereto
      (other than any such loss, cost or expense solely due to the gross negligence
      or
      willful misconduct of the Lender or an Affiliate thereof), including, without
      limitation, any loss (including cost of funds and reasonable out-of-pocket
      expenses), cost or expense incurred by reason of the liquidation or reemployment
      of deposits or other funds acquired by the Lender to fund Loans or maintain
      Loans during such Interest Period.

     

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

     

     The
      Lender shall provide to the Borrower documentation setting forth the amounts
      of
      any loss, cost or expense referred to in the previous sentence, such
      documentation to be conclusive absent manifest error.

     

    SECTION
      2.08 Fees.
      iii)
      The
      Borrower shall pay the Lender certain fees (the “Fees”)
      in the
      amounts and on the dates set forth in a fee letter (the “Fee
      Letter”),
      dated
      the date hereof, among the Borrower and the Lender.

     

    (b) All
      of
      the Fees payable pursuant to this Section 2.08
      (other
      than Fees payable on the date hereof) shall be payable solely from amounts
      available for application pursuant to, and subject to the priority of, payment
      set forth in, Section 2.04.

     

    SECTION
      2.09 Increased
      Costs; Capital Adequacy.
      iv)
      If, due
      to either (i) the introduction of or any change (including, without
      limitation, any change by way of imposition or increase of reserve requirements)
      in or in the interpretation of any law or regulation (including, without
      limitation, any law or regulation resulting in any interest payments paid to
      a
      Lender under this Agreement being subject to United States withholding tax)
      or
      (ii) the compliance with any guideline or request from any central bank or
      other governmental authority (whether or not having the force of law), there
      shall be any increase in the cost to the Lender or any Affiliate, successor
      or
      assign or participant thereof (each of which shall be an “Affected
      Party”)
      of
      agreeing to make or making, funding or maintaining any Loan (or any reduction
      of
      the amount of any payment (whether of principal, interest, fee, compensation
      or
      otherwise) to any Affected Party hereunder), as the case may be, the Borrower
      shall, from time to time, within ten days after written demand complying with
      Section 2.09(c)
      by the
      Lender, on behalf of such Affected Party, pay to the Lender, on behalf of such
      Affected Party, additional amounts sufficient to compensate such Affected Party
      for such increased costs or reduced payments.

     

    (b) If
      either
      (i) the introduction of or any change in or in the interpretation of any
      law, guideline, rule or regulation, directive, request or accounting principle
      or (ii) the compliance by any Affected Party with any law, guideline, rule,
      regulation, directive, request or accounting principle from any central bank,
      other governmental authority, agency or accounting authority (whether or not
      having the force of law), including, without limitation, compliance by an
      Affected Party with any request or directive regarding capital adequacy, has
      or
      would have the effect of reducing the rate of return on the capital of any
      Affected Party, as a consequence of its obligations hereunder or any related
      document or arising in connection herewith or therewith to a level below that
      which any such Affected Party could have achieved but for such introduction,
      change or compliance (taking into consideration the policies of such Affected
      Party with respect to capital adequacy), by an amount deemed by such Affected
      Party to be material, then, from time to time, after demand by such Affected
      Party (which demand shall be accompanied by a statement setting forth the basis
      of such demand), the Lender shall be paid, on behalf of such Affected Party
      (from Collections with respect to Pledged Receivables pursuant to, and subject
      to the priority of payment set forth in, Section 2.04),
      such
      additional amounts as will compensate such Affected Party for such
      reduction.

     

    (c) In
      determining any amount provided for in this Section 2.09,
      the
      Affected Party may use any reasonable averaging and attribution methods. The
      Lender, on behalf of any Affected Party making a claim under this Section 2.09,
      shall
      submit to the Borrower a certificate setting 

     

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

     

    forth
      in
      reasonable detail the basis for and the computations of such additional or
      increased costs, which certificate shall be conclusive absent demonstrable
      error.

     

    (d) If,
      as a
      result of any event or circumstance similar to those described in Section 2.09(a)
      or
2.09(b),
      any
      Affected Party (that is a Lender) is required to compensate a bank or other
      financial institution (including, without limitation, any Affiliate of Morgan
      Stanley) providing liquidity support, credit enhancement or other similar
      support to such Affected Party in connection with this Agreement, then, upon
      demand by such Affected Party, the Borrower shall pay, in accordance with
Section 2.04,
      to such
      Affected Party such additional amount or amounts as may be necessary to
      reimburse such Affected Party for any amounts paid by it, and shall notify
      each
      Qualified Swap Counterparty of such payment. 

     

    SECTION
      2.10 Collateral
      Assignment of Agreements.
      The
      Borrower hereby collaterally assigns to the Collateral Agent (and its successors
      and assigns) for the benefit of the Secured Parties, all of the Borrower’s right
      and title to and interest in, to and under (but not any obligations under)
      the
      Purchase and Sale Agreement, each Qualifying Interest Rate Swap, the Contract
      related to each Pledged Receivable, all other agreements, documents and
      instruments evidencing, securing or guarantying any Pledged Receivable and
      all
      other agreements, documents and instruments related to any of the foregoing
      (the
“Assigned
      Documents”).
      Without limiting any obligation of the Servicer hereunder, the Borrower confirms
      and agrees that the Collateral Agent (or any designee thereof, including,
      without limitation, the Servicer), following an Event of Default or a Program
      Termination Event, shall have the right to enforce the Borrower’s rights and
      remedies under each Assigned Document, but without any obligation on the part
      of
      the Collateral Agent or any of its Affiliates to perform any of the obligations
      of the Borrower under any such Assigned Document. In addition, each of the
      Servicer and the Borrower confirms and agrees that the Servicer and the Borrower
      will, upon receipt of notice or discovery thereof, promptly send to the
      Collateral Agent a notice of (i) any breach of any representation,
      warranty, agreement or covenant under any such Assigned Document or
      (ii) any event or occurrence that, upon notice, or upon the passage of time
      or both, would constitute such a breach, in each case, immediately upon learning
      thereof. The parties hereto agree that such assignment to the Collateral Agent
      shall terminate upon the Collection Date.

     

    SECTION
      2.11 Grant
      of a Security Interest.
      To
      secure the prompt and complete payment when due of the Obligations and the
      performance by the Borrower of all of the covenants and obligations to be
      performed by it pursuant to this Agreement, the Borrower hereby
      (i) collaterally assigns and pledges to the Collateral Agent (and its
      successors and assigns), for the benefit of the Secured Parties, and
      (ii) grants a security interest to the Collateral Agent (and its successors
      and assigns), for the benefit of the Secured Parties, in all property of the
      Borrower, whether tangible or intangible and whether now owned or existing
      or
      hereafter arising or acquired and wheresoever located (collectively, the
“Pledged
      Assets”),
      including, without limitation, all of the Borrower’s right, title and interest
      in, to and under:

     

    (a) all
      Pool A Receivables and Pool B Receivables purchased by (or otherwise
      transferred or pledged pursuant to the terms of the Purchase and Sale Agreement)
      to the Borrower under the Purchase and Sale Agreement from time to time (such
      Pool A Receivables, the “Pledged
      Pool A Receivables”,
      and
      such Pool B Receivables, the “Pledged
      Pool B Receivables”),
      all
      Other Conveyed Property related to the Pledged Receivables purchased by (or
      

     

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

     

    otherwise
      transferred or pledged pursuant to the terms of the Purchase and Sale Agreement)
      to the Borrower under the Purchase and Sale Agreement, all Related Security
      related to the Pledged Receivables, all interest of the Borrower in all Obligor
      Collateral related to the Pledged Receivables (together with all security
      interests in and insurance proceeds related to such Obligor Collateral and
      all
      proceeds from the disposition of such Obligor Collateral, whether by sale to
      the
      related Obligors or otherwise), any Security Deposits or Cash Reserve related
      to
      such Pledged Receivables, all Collections and other monies due and to become
      due
      under the Contracts (and, if applicable, Underlying Contracts) related to the
      Pledged Receivables received on or after the date such Pledged Receivables
      were
      purchased by (or purportedly purchased by) the Borrower under the Purchase
      and
      Sale Agreement;

     

    (b) the
      Assigned Documents, including, in each case, without limitation, all monies
      due
      and to become due to the Borrower under or in connection therewith;

     

    (c) the
      Collection Account, the Lockbox, the Lockbox Account, the Security Deposit
      Account, each Cash Reserve Account and all other bank and similar accounts
      relating to Collections with respect to Pledged Receivables (whether now
      existing or hereafter established) and all funds held therein, and all
      investments in and all income from the investment of funds in the Collection
      Account, the Lockbox Account, the Security Deposit Account, each Cash Reserve
      Account and such other accounts;

     

    (d) the
      Records relating to any Pledged Receivables;

     

    (e) all
      UCC
      financing statements filed by the Borrower against the Originator under or
      in
      connection with the Purchase and Sale Agreement;

     

    (f) [Reserved];

     

    (g) each
      Qualifying Interest Rate Swap, any other interest rate protection agreement
      entered into with respect to the transactions contemplated under the RLSA and,
      in each case, all payments thereunder;

     

    (h) all
      Liquidation Proceeds relating to any Pledged Receivables; and

     

    (i) all
      proceeds of the foregoing property described in clauses (a) through (g)
      above, including interest, dividends, cash, instruments and other property
      from
      time to time received, receivable or otherwise distributed in respect of or
      in
      exchange for or on account of the sale or other disposition of any or all of
      the
      then existing Pledged Receivables.

     

    The
      Borrower hereby authorizes the Collateral Agent to file financing statements
      describing as the collateral covered thereby as "all of the debtor's personal
      property or assets" or words to that effect, notwithstanding that such wording
      may be broader in scope than the collateral described in this Agreement.

     

    SECTION
      2.12 Evidence
      of Debt.
      The
      Lender shall maintain an account or accounts evidencing the indebtedness of
      the
      Borrower to the Lender resulting from each Loan owing to the Lender from time
      to
      time, including the amounts of principal and interest payable and paid
      to

     

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

     

    the
      Lender from time to time hereunder. The entries made in such account(s) of
      the
      Lender shall be conclusive and binding for all purposes, absent manifest
      error.

     

    SECTION
      2.13 Release
      of Pledged Receivables.
      v)
      Subject
      to Section 2.15
      hereof,
      upon the repayment of any Loan, the Borrower may obtain the release of any
      Pledged Receivable and the related Other Conveyed Property or Related Security
      securing such Loan (including, without limitation, the release of any security
      interest of the Collateral Agent or the Borrower therein) by depositing into
      an
      account designated by the Lender the Release Price therefor on the date of
      such
      repayment; 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 a Borrowing Base Deficiency, Program Termination Event,
      Pool A Termination Event or a Pool B Termination Event (and such
      Pool B Termination Event is related to such Pledged Receivable), or an
      event that but for notice or lapse of time or both would constitute any of
      the
      foregoing events.

     

    (b) The
      Borrower shall notify the Collateral Agent of any Release Price to be paid
      pursuant to this Section 2.13
      on the
      Business Day on which such Release Price shall be paid specifying the Pledged
      Receivables to be released and the Release Price.

     

    (c) Promptly
      after the Collection Date has occurred, the Collateral Agent shall re-assign
      and
      transfer to the Borrower, for no consideration but at the sole expense of the
      Borrower, their respective remaining interests in the Pledged Assets, 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
      2.14 Treatment
      of Amounts Paid by the Borrower.
      Amounts
      paid by the Borrower pursuant to Section 2.13
      on
      account of Pledged Receivables shall be treated as payments on Pledged
      Receivables hereunder.

     

    SECTION
      2.15 Prepayment;
      Certain Indemnification Rights; Termination.
      vi)
      The
      Borrower may prepay, in whole or in part, the outstanding principal amount
      of
      any Loans advanced hereunder. Any amounts so prepaid shall be applied to repay
      the outstanding principal amount of Loans allocated to an Interest Period or
      Interest Periods selected by the Lender. Amounts prepaid pursuant to this
      Section 2.15(a) may be reborrowed in accordance with the terms of this
      Agreement. If the Borrower intends to make an optional prepayment pursuant
      to
      this Section 2.15(a), the Borrower shall give five (5) Business Days' prior
      written notice thereof to the Lender, specifying the intended Prepayment Date,
      the intended Prepayment Amount, whether the Loans being prepaid are Pool A
      Loans
      or Pool B Loans, a calculation of any applicable Breakage Fee and the Pledged
      Receivables that the Borrower shall request to have released pursuant to Section
      2.13 in connection with such prepayment (and the Discounted Balance thereof).
      Any such optional prepayment of the outstanding principal amount of any Loans
      advanced hereunder shall be accompanied by all interest accrued with respect
      thereto and the Prepayment Premium with respect to the applicable Prepayment
      Amount and Prepayment Date. If such notice is given, the principal amount
      specified in such notice (together with all interest accrued with respect
      thereto and the Prepayment Premium related thereto) shall be due and payable
      on
      the Prepayment Date specified therein. Notwithstanding the foregoing, any
      payment by the Borrower required pursuant to Section 2.04(c)(vii), Section
      2.04(d),(e) or (f) or,

     

    
      
         

      

      
        50

        
          

        

      

      
         

      

    

     

    in
      connection with the occurrence of an Event of Default, pursuant to Section
      7.01
      hereof shall not be considered an optional prepayment and no Prepayment Premium
      shall be required to be paid in respect thereof.

     

    (b) Without
      limiting any other provision hereof, the Borrower agrees to indemnify the
      Lender, the Qualifying Swap Counterparty and any Affiliate thereof and to hold
      each such Person harmless from any cost, loss or expense which it may sustain
      or
      incur as a consequence of (i) the Borrower making any optional prepayment
      pursuant to Section 2.15(a) hereof, (ii) any default by the Borrower in making
      any optional prepayment pursuant to Section 2.15(a) hereof after notice of
      such
      prepayment has been given, (iii) any failure by the Borrower to take a Loan
      hereunder after notice of such Loan has been given pursuant to this Agreement,
      (iv) any acceleration of the maturity of any Loans by the Lender in accordance
      with the terms of this Agreement, including, but not limited to, any Breakage
      Fees, any cost, loss or expense arising related to the termination (in whole
      or
      in part) or amendment of any Qualifying Interest Rate Swap and from interest
      or
      fees payable by the Lender to lenders of funds obtained by it in order to
      advance or maintain the Loans hereunder. Indemnification pursuant to this
      Section shall survive the termination of this Agreement and shall include
      reasonable fees and expenses of counsel and expenses of litigation.

     

    (c) Notwithstanding
      any other provision hereof, the Borrower shall not terminate or amend this
      Agreement or any other Transaction Document or reduce the Borrowing Limit prior
      to the Facility Maturity Date without the Lender’s prior written consent, which
      consent may be withheld in the Lender’s sole discretion.

     

    SECTION
      2.16 Increase
      of Borrowing Limit.
      The
      Borrower may, upon 30 days’ prior written notice to the Lender (with a
      simultaneous copy to the Initial Qualifying Swap Counterparty), request that
      the
      Borrowing Limit be increased, which request may be granted in the sole
      discretion, and with the written consent, of the Lender, it being agreed that
      the Borrower shall pay to the Lender the fee related to such increase that
      is
      required pursuant to the terms of the Fee Letter.

     

    ARTICLE
      III.

     

    CONDITIONS
      OF LOANS

     

    SECTION
      3.01 Conditions
      Precedent to Initial Borrowing.
      The
      initial Borrowing hereunder is subject to the conditions precedent
      that:

     

    (a) the
      Arrangement Fee (as such term is defined in the Fee Letter) shall have been
      paid
      in full and all other acts and conditions (including, without limitation, the
      obtaining of any necessary regulatory approvals and the making of any required
      filings, recordings or registrations) required to be done and performed and
      to
      have happened prior to the execution, delivery and performance of this Agreement
      and all related documents and to constitute the same legal, valid and binding
      obligations, enforceable in accordance with their respective terms, shall have
      been done and performed and shall have happened in due and strict compliance
      with all applicable laws; and

     

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

    (b) the
      Lender shall have received on or before the date of such Borrowing the items
      listed in Schedule I
      hereto,
      each in form and substance satisfactory to the Lender.

     

    SECTION
      3.02 Conditions
      Precedent to All Borrowings.
      Each
      Borrowing (including the initial Borrowing, except as explicitly set forth
      below) by the Borrower from the Lender shall be subject to the further
      conditions precedent that:

     

    (a) With
      respect to any such Borrowing (other than the initial Borrowing), on or prior
      to
      the date of such Borrowing, the Servicer shall have delivered to the Lender,
      in
      form and substance satisfactory to the Lender, the most recent Monthly
      Remittance Report required by the terms of Section 6.10(b);

     

    (b) After
      giving effect to such Borrowing requested by the Borrower the following
      statements shall be true (and the Borrower shall be deemed to have certified
      that):

     

    (i)     the
      Facility Amount will not exceed the lesser of the (x) Borrowing Limit and
      (y) the Borrowing Base;

     

    (ii)     the
      Facility Amount, calculated solely with respect to Loans secured by Pool A
      Receivables, will not exceed the Pool A Borrowing Base; and

     

    (iii)     the
      Facility Amount, calculated solely with respect to Loans secured by Pool B
      Receivables, will not exceed the Pool B Borrowing Base;

     

    (c) On
      the
      Borrowing Date of such Borrowing, the following statements shall be true and
      correct, and the Borrower by accepting any amount of such Borrowing shall be
      deemed to have represented that:

     

    (i)     the
      representations and warranties contained in Section 4.01
      are true
      and correct in all material respects, before and after giving effect to the
      Borrowing to take place on such Borrowing Date and to the application of
      proceeds therefrom, 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 such Borrowing, which
      constitutes a Program Termination Event hereunder or an event that but for
      notice or lapse of time or both would constitute a Program Termination
      Event;

     

    (iii)     with
      respect
      to any Borrowing of a Pool A Loan, no event has occurred and is continuing,
      or would result from such Borrowing, which constitutes a Pool A Termination
      Event hereunder or an event that but for notice or lapse of time or both would
      constitute a Pool A Termination Event;

     

    (iv)     with
      respect to any Borrowing of a Pool B Loan, no event has occurred and is
      continuing, or would result from such Borrowing, which constitutes a Pool B
      Termination Event with respect to the Underlying Originator related to the
      Pool B Receivable securing such Pool B Loan or an event that but for
      notice or lapse of time or both would constitute such a Pool B Termination
      Event;

     

    
      
         

      

      
        52

        
          

        

      

      
         

      

    

    (v)    (A)    the
      principal amount of such Loan being advanced on such Borrowing Date is not
      less
      than $500,000, (b) on and as of such Borrowing Date, after giving effect to
      such Borrowing, the Facility Amount does not exceed the lesser of (A) the
      Borrowing Limit and (B) the Borrowing Base, (c) on and as of such
      Borrowing Date, after giving effect to such Borrowing, the aggregate Facility
      Amount hereunder, calculated solely with respect to Loans secured by Pool A
      Receivables, does not exceed the Pool A Borrowing Base, and (d) on and
      as of such Borrowing Date, after giving effect to such Borrowing, the aggregate
      Facility Amount hereunder, calculated solely with respect to Loans secured
      by
      Pool B Receivables, does not exceed the Pool B Borrowing
      Base;

     

    (vi)    (A)    the
      Borrower has delivered to the Lender a copy of the Notice of Borrowing and
      the
      related Notice of Pledge (together with the attached Receivables Schedule)
      pursuant to Section 2.02,
      each
      appropriately completed and executed by the Borrower, (B) the Borrower has
      delivered or caused to have been delivered to the Custodian the Notice of Pledge
      and each item listed in the definition of Receivable File with respect to the
      Receivables being Pledged hereunder three (3) or, in the case of the initial
      Borrowing Date hereunder, four (4) Business Days prior to such Borrowing Date,
      (C) the Contract related to each Receivable being Pledged hereunder on such
      Borrowing Date has been duly assigned by the Originator to the Borrower and
      duly
      assigned by the Borrower to the Collateral Agent and (D) by 2:00 P.M.
      (New York City time) on the Business Day immediately preceding such Borrowing
      Date, a Collateral Receipt from the Custodian confirming that, inter alia,
      the
      Receivable Files received on or before such Business Day conform with the
      Receivables Schedule delivered to the Custodian and the Lender pursuant to
      Section 2.02;

     

    (vii)     all
      terms
      and conditions of the Purchase and Sale Agreement required to be satisfied
      in
      connection with the assignment of each Receivable being Pledged hereunder on
      such Borrowing Date (and the Other Conveyed Property and Related Security
      related thereto), including, without limitation, the perfection of the
      Borrower’s interests therein (other than with respect to Equipment which has a
      value of less than $25,000 and is leased under Dollar Purchase Option Contracts
      or $50,000 and is leased under FMV Contracts), shall have been satisfied in
      full, and all filings (including, without limitation, UCC filings) required
      to
      be made by any Person and all actions required to be taken or performed by
      any
      Person in any jurisdiction to give the Collateral Agent a first priority
      perfected security interest in such Receivables, Related Security and the Other
      Conveyed Property related thereto and the proceeds thereof shall have been
      made,
      taken or performed;

     

    (viii)    (A)    the
      initial Servicer shall have taken or caused to be taken all steps necessary
      under all applicable law (including the filing of an Obligor Financing
      Statement) in order to cause a valid, subsisting and enforceable perfected,
      first priority security interest to exist in Originator’s favor in the Obligor
      Collateral securing each Receivable being Pledged hereunder on such Borrowing
      Date (other than with respect to Equipment which has a value of less than
      $25,000 and is leased under Dollar Purchase Option Contracts or $50,000 and
      is
      leased under

     

    
      
         

      

      
        53

        
          

        

      

      
         

      

    

           
      FMV Contracts), (B) the Originator shall have assigned the perfected, first
      priority security interest in the Obligor Collateral to the Borrower pursuant
      to
      the Purchase and Sale Agreement and (C) the Borrower shall have assigned the
      perfected, first priority security interest in the Obligor Collateral (and
      the
      proceeds thereof) referred to in clause (A) above to the Collateral Agent,
      pursuant to Section 2.11
      hereof;

     

    (ix)     if
      the
      Obligor Collateral related to any Receivable (other than a Vehicle Sublimit
      Pledged Receivable) securing such Borrowing is a Vehicle, the Borrower shall
      have delivered to the applicable Registrar of Titles an application for a
      Certificate of Title for such Vehicle which such Certificate of Title shall
      indicate the Borrower as the owner of the related Vehicle and indicate “Morgan
      Stanley Bank” as the sole lienholder with respect to such Vehicle;
      and

     

    (x)     the
      Borrower shall have taken all steps necessary under all applicable law in order
      to cause to exist in favor of the Collateral Agent a valid, subsisting and
      enforceable first priority perfected security interest in the Borrower’s
      interest in the Obligor Collateral related to each Receivable being Pledged
      hereunder on such Borrowing Date (other than with respect to Underlying
      Equipment which has a value of less than $25,000 and is leased under Dollar
      Purchase Option Contracts or $50,000 and is leased under FMV
      Contracts);

     

    (d) No
      law or
      regulation shall prohibit, and no order, judgment or decree of any federal,
      state or local court or governmental body, agency or instrumentality shall
      prohibit or enjoin, the making of such Loans by the Lender in accordance with
      the provisions hereof; and

     

    (e) The
      Lender shall have received and found to be satisfactory with respect to Pledged
      Receivables being Pledged in connection with such Borrowing, which have been
      previously pledged to any lender by the Originator, the Borrower or any
      Affiliate thereof under any other financing facility, evidence of the release
      of
      any liens granted in connection with such financing with respect to any such
      Pledged Receivables.

     

    (f) Unless
      a
      credit agreement and/or security agreement, including but not limited to any
      such agreement with National City Bank, as agent, related to Receivables being
      Pledged by the Borrower in connection with such Borrowing, shall have provided
      for an automatic release of the Agent’s or Collateral Agent’s, as applicable,
      lien and security interest in such Receivables granted thereunder, the
      applicable agent or lender shall have executed and delivered to the Borrower
      and
      the Collateral Agent a partial release letter and the Borrower shall have duly
      filed with the appropriate filing office a UCC-3 partial release evidencing
      the
      release contained in such release letter, in each case in a form satisfactory
      to
      the Collateral Agent.

     

    SECTION
      3.03 Advances
      Do Not Constitute a Waiver.
      No
      advance of a Loan hereunder shall constitute a waiver of any condition to the
      Lender’s obligation to make such an advance unless such waiver is in writing and
      executed by the Lender.

     

    
      
         

      

      
        54

        
          

        

      

      
         

      

    

    ARTICLE
      IV.

     

    REPRESENTATIONS
      AND WARRANTIES

     

    SECTION
      4.01 Representations
      and Warranties of the Borrower.
      The
      Borrower hereby represents and warrants, as of the date hereof, on each
      Borrowing Date and on the first day of each Rollover Interest Period, as
      follows:

     

    (a) Each
      Receivable designated as an Eligible Receivable on any Borrowing Base
      Certificate or Monthly Remittance Report is an Eligible Receivable. Each
      Receivable included as an Eligible Receivable in any calculation of the
      Borrowing Base or the Eligible Receivables Balance is an Eligible
      Receivable.

     

    (b) The
      Borrower is a limited liability company duly organized, validly existing and
      in
      good standing under the laws of the jurisdiction of its formation and has the
      power and all licenses necessary to own its assets and to transact the business
      in which it is engaged and is duly qualified and in good standing under the
      laws
      of each jurisdiction where the transaction of such business or its ownership
      of
      the Pledged Receivables requires such qualification.

     

    (c) The
      Borrower has the power, authority and legal right to make, deliver and perform
      this Agreement and each of the Transaction Documents to which it is a party
      and
      all of the transactions contemplated hereby and thereby, and has taken all
      necessary action to authorize the execution, delivery and performance of this
      Agreement and each of the Transaction Documents to which it is a party, and
      to
      grant to the Collateral Agent a first priority perfected security interest
      in
      the Pledged Assets on the terms and conditions of this Agreement. This Agreement
      and each of the Transaction Documents to which the Borrower is a party
      constitutes the legal, valid and binding obligation of the Borrower, enforceable
      against it in accordance with their respective terms, except as the
      enforceability hereof and thereof may be limited by bankruptcy, insolvency,
      moratorium, reorganization and other similar laws of general application
      affecting creditors’ rights generally and by general principles of equity
      (whether such enforceability is considered in a proceeding in equity or at
      law).
      No consent of any other party and no consent, license, approval or authorization
      of, or registration or declaration with, any governmental authority, bureau
      or
      agency is required in connection with the execution, delivery or performance
      by
      the Borrower of this Agreement or any Transaction Document to which it is a
      party or the validity or enforceability of this Agreement or any such
      Transaction Document or the Pledged Receivables, other than such as have been
      met or obtained.

     

    (d) The
      execution, delivery and performance of this Agreement and all other agreements
      and instruments executed and delivered or to be executed and delivered pursuant
      hereto or thereto in connection with the Pledge of the Pledged Assets will
      not
      (i) create any Adverse Claim on the Pledged Assets or (ii) violate any
      provision of any existing law or regulation or any order or decree of any court,
      regulatory body or administrative agency or the certificate of formation or
      limited liability company agreement of the Borrower or any contract or other
      agreement to which or the Borrower is a party or by which the Borrower or any
      property or assets of the Borrower may be bound.

     

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

    (e) No
      litigation or administrative proceeding of or before any court, tribunal or
      governmental body is presently pending or, to the knowledge of the Borrower,
      threatened against the Borrower or any properties of Borrower or with respect
      to
      this Agreement, which, if adversely determined, could have a Material Adverse
      Effect.

     

    (f) In
      selecting the Receivables to be Pledged pursuant to this Agreement, no selection
      procedures were employed which are intended to be adverse to the interests
      of
      the Lender.

     

    (g) The
      grant
      of the security interest in the Pledged Assets by the Borrower to the Collateral
      Agent pursuant to this Agreement, is in the ordinary course of business for
      the
      Borrower and is not subject to the bulk transfer or any similar statutory
      provisions in effect in any applicable jurisdiction. No such Pledged Assets
      have
      been sold, transferred, assigned or pledged by the Borrower to any Person,
      other
      than the Pledge of such Assets to the Collateral Agent pursuant to the terms
      of
      this Agreement.

     

    (h) The
      Borrower has no Debt or other indebtedness which, in the aggregate, exceeds
      $10,000, other than Debt incurred under the terms of the Transaction
      Documents.

     

    (i) The
      Borrower has been formed solely for the purpose of engaging in the transactions
      contemplated by this Agreement and the other Transaction Documents.

     

    (j) No
      injunction, writ, restraining order or other order of any nature adversely
      affects the Borrower’s performance of its obligations under this Agreement or
      any Transaction Document to which the Borrower is a party.

     

    (k) The
      Borrower has filed (on a consolidated basis or otherwise) on a timely basis
      all
      tax returns (including, without limitation, all foreign, federal, state, local
      and other tax returns) required to be filed, is not liable for taxes payable
      by
      any other Person and has paid or made adequate provisions for the payment of
      all
      taxes, assessments and other governmental charges due from the Borrower except
      for those taxes being contested in good faith by appropriate proceedings and
      in
      respect of which no penalty may be assessed from such contest and it has
      established proper reserves on its books. No tax lien or similar adverse claim
      has been filed, and no claim is being asserted, with respect to any such tax,
      assessment or other governmental charge. Any taxes, fees and other governmental
      charges payable by the Borrower, as applicable, in connection with the execution
      and delivery of this Agreement and the other Transaction Documents and the
      transactions contemplated hereby or thereby have been paid or shall have been
      paid if and when due.

     

    (l) The
      chief
      executive office of the Borrower (and the location of the Borrower’s records
      regarding the Pledged Receivables (other than those delivered to the Custodian))
      is located at 1818 Market Street, 9th Floor, Philadelphia, PA
      19103.

     

    (m) The
      Borrower’s legal name is as set forth in this Agreement; other than as disclosed
      on Schedule II
      hereto
      (as such schedule may be updated from time to by the Lender upon receipt of
      a
      notice delivered to the Lender pursuant to Section 6.18),
      the
      Borrower has not changed its name since its formation; the Borrower does not
      have tradenames, fictitious names, assumed names or “doing business as” names
      other than as disclosed on Schedule II
      hereto
      (as such

     

    
      
         

      

      
        56

        
          

        

      

      
         

      

    

    schedule
      may be updated from time to by the Lender upon receipt of a notice delivered
      to
      the Lender pursuant to Section 6.18).

     

    (n) The
      Borrower is solvent and will not become insolvent after giving effect to the
      transactions contemplated hereby; the Borrower is paying its debts as they
      become due; and the Borrower, after giving effect to the transactions
      contemplated hereby, will have adequate capital to conduct its
      business.

     

    (o) The
      Borrower has no subsidiaries.

     

    (p) The
      Borrower has given fair consideration and reasonably equivalent value in
      exchange for the sale of the Pledged Receivables by the Originator under the
      Purchase and Sale Agreement.

     

    (q) No
      Monthly Remittance Report or Borrowing Base Certificate (each if prepared by
      the
      Borrower or to the extent that information contained therein is supplied by
      the
      Borrower), information, exhibit, financial statement, document, book, record
      or
      report furnished or to be furnished by the Borrower to the Lender in connection
      with this Agreement is or will be inaccurate in any material respect as of
      the
      date it is or shall be dated or (except as otherwise disclosed in writing to
      the
      Lender, as the case may be, at such time) as of the date so furnished, and
      no
      such document contains or will contain any material misstatement of fact or
      omits or shall omit to state a material fact or any fact necessary to make
      the
      statements contained therein not misleading.

     

    (r) No
      proceeds of any Loans will be used by the Borrower to acquire any security
      in
      any transaction, which is subject to Section 13 or 14 of the Securities
      Exchange Act of 1934, as amended.

     

    (s) There
      are
      no agreements in effect adversely affecting the rights of the Borrower to make,
      or cause to be made, the grant of the security interest in the Pledged Assets
      contemplated by Section 2.10.

     

    (t) The
      Borrower is not an “investment company” or an “affiliated person” of or
“promoter” or “principal underwriter” for an “investment company” as such terms
      are defined in the Investment Company Act of 1940, as amended, nor is the
      Borrower otherwise subject to regulation thereunder.

     

    (u) No
      Event
      of Default or Unmatured Event of Default has occurred and is
      continuing.

     

    (v) Each
      of
      the Pledged Receivables was underwritten and is being serviced in conformance
      with Originator’s standard underwriting, credit, collection, operating and
      reporting procedures and systems (including, without limitation, the Credit
      and
      Collection Policy).

     

    (w) The
      Borrower is in compliance with ERISA in all material respects. No steps have
      been taken to terminate any Borrower Pension Plan which could result in material
      liability, and no contribution failure has occurred with respect to any Borrower
      Pension Plan sufficient to give rise to a lien under section 302(f) of ERISA.
      No
      condition exists or event or transaction has

     

    
      
         

      

      
        57

        
          

        

      

      
         

      

    

     

    occurred
      with respect to any Borrower Pension Plan which could result in the Borrower
      or
      any ERISA Affiliate of Borrower incurring any material liability, fine or
      penalty.

     

    (x) There
      is
      not now, nor will there be at any time in the future, any agreement or
      understanding between the Servicer and the Borrower (other than as expressly
      set
      forth herein), providing for the allocation or sharing of obligations to make
      payments or otherwise in respect of any taxes, fees, assessments or other
      governmental charges.

     

    SECTION
      4.02 Representations
      and Warranties of the Servicer.
      The
      Servicer (so long as the Servicer is not the Backup Servicer as successor
      Servicer) hereby represents and warrants, as of the date hereof, on each
      Borrowing Date, on each Remittance Date and on the first day of each Rollover
      Interest Period, as follows:

     

    (a) Each
      Receivable designated as an Eligible Receivable on any Borrowing Base
      Certificate or Monthly Remittance Report is an Eligible Receivable. Each
      Receivable included as an Eligible Receivable in any calculation of the
      Borrowing Base or the Eligible Receivables Balance is an Eligible
      Receivable.

     

    (b) The
      Servicer is a corporation duly organized, validly existing and in good standing
      under the laws of the jurisdiction of its incorporation and has the power and
      all licenses necessary to own its assets and to transact the business in which
      it is engaged (which includes servicing Receivables on behalf of third parties
      and itself) and is duly qualified and in good standing under the laws of each
      jurisdiction where its servicing of the Pledged Receivables requires such
      qualification.

     

    (c) The
      Servicer has the power, authority and legal right to make, deliver and perform
      this Agreement and each of the Transaction Documents to which it is a party
      and
      all of the transactions contemplated hereby and thereby, and has taken all
      necessary action to authorize the execution, delivery and performance of this
      Agreement and each of the Transaction Documents to which it is a party. This
      Agreement and each of the Transaction Documents to which the Servicer is a
      party
      constitutes the legal, valid and binding obligation of the Servicer, enforceable
      against it in accordance with their respective terms, except as the
      enforceability hereof and thereof may be limited by bankruptcy, insolvency,
      moratorium, reorganization and other similar laws of general application
      affecting creditors’ rights generally and by general principles of equity
      (whether such enforceability is considered in a proceeding in equity or at
      law).
      No consent of any other party and no consent, license, approval or authorization
      of, or registration or declaration with, any governmental authority, bureau
      or
      agency is required in connection with the execution, delivery or performance
      by
      the Servicer of this Agreement or any Transaction Document to which it is a
      party or the validity or enforceability of this Agreement or any such
      Transaction Document, other than such as have been met or obtained.

     

    (d) The
      execution, delivery and performance of this Agreement by the Servicer and all
      other agreements and instruments executed and delivered or to be executed and
      delivered by the Servicer pursuant hereto or thereto in connection with the
      Pledge of the Pledged Assets will not (i) create any Adverse Claim on the
      Pledged Assets or (ii) violate any provision of any existing law or
      regulation or any order or decree of any court, regulatory body or
      administrative agency or the certificate of incorporation or bylaws of the
      Servicer or any material contract or other

     

    
      
         

      

      
        58

        
          

        

      

      
         

      

    

     

    agreement
      to which the Servicer is a party or by which the Servicer or any of its property
      or assets may be bound.

     

    (e) No
      litigation or administrative proceeding of or before any court, tribunal or
      governmental body is presently pending or, to the knowledge of the Servicer,
      threatened against the Servicer or any properties of the Servicer or with
      respect to this Agreement, which, if adversely determined, could have a Material
      Adverse Effect.

     

    (f) No
      injunction, writ, restraining order or other order of any nature adversely
      affects the Servicer’s performance of its obligations under this Agreement or
      any Transaction Document to which the Servicer is a party.

     

    (g) The
      Servicer has filed (on a consolidated basis or otherwise) on a timely basis
      all
      tax returns (including, without limitation, all foreign, federal, state, local
      and other tax returns) required to be filed, is not liable for taxes payable
      by
      any other Person and has paid or made adequate provisions for the payment of
      all
      taxes, assessments and other governmental charges due from the Servicer except
      for those taxes being contested in good faith by appropriate proceedings and
      in
      respect of which it has established proper reserves on its books. No tax lien
      or
      similar adverse claim has been filed, and no claim is being asserted, with
      respect to any such tax, assessment or other governmental charge. Any taxes,
      fees and other governmental charges payable by the Servicer in connection with
      the execution and delivery of this Agreement and the other Transaction Documents
      to which it is a party and the transactions contemplated hereby or thereby
      have
      been paid or shall have been paid if and when due.

     

    (h) The
      chief
      executive office of the Servicer (and the location of the Servicer’s records
      regarding the Pledged Receivables (other than those delivered to the Custodian))
      is located at 1818 Market Street, 9th Floor, Philadelphia, PA
      19103.

     

    (i) The
      Servicer’s legal name is as set forth in this Agreement; other than as disclosed
      on Schedule II
      hereto
      (as such schedule may be updated from time to by the Lender upon receipt of
      a
      notice delivered to the Lender pursuant to Section 6.18),
      the
      Servicer has not changed its name since its formation; the Servicer does not
      have tradenames, fictitious names, assumed names or “doing business as” names
      other than as disclosed on Schedule II
      hereto
      (as such schedule may be updated from time to by the Lender upon receipt of
      a
      notice delivered to the Lender pursuant to Section 6.18).

     

    (j) The
      Servicer is solvent and will not become insolvent after giving effect to the
      transactions contemplated hereby; the Servicer is paying its debts as they
      become due; and the Servicer, after giving effect to the transactions
      contemplated hereby, will have adequate capital to conduct its
      business.

     

    (k) As
      of the
      date hereof and as of the date of delivery of any Monthly Remittance Report
      or
      Borrowing Base Certificate, no Monthly Remittance Report or Borrowing Base
      Certificate (each if prepared by the Servicer or to the extent that information
      contained therein is supplied by the Servicer), information, exhibit, financial
      statement, document, book, record or report furnished or to be furnished by
      the
      Servicer to the Lender in connection with this Agreement is or will be
      inaccurate in any material respect, and no such document contains or will
      contain any

     

    
      
         

      

      
        59

        
          

        

      

      
         

      

    

     

    material
      misstatement of fact or omits or shall omit to state a material fact or any
      fact
      necessary to make the statements contained therein not misleading.

     

    (l) The
      Servicer is not an “investment company” or an “affiliated person” of or
“promoter” or “principal underwriter” for an “investment company” as such terms
      are defined in the Investment Company Act of 1940, as amended, nor is the
      Servicer otherwise subject to regulation thereunder.

     

    (m) No
      Event
      of Default or Unmatured Event of Default has occurred and is
      continuing.

     

    (n) Each
      of
      the Pledged Receivables was underwritten and is being serviced in conformance
      with Originator’s and the Servicer’s standard underwriting, credit, collection,
      operating and reporting procedures and systems (including, without limitation,
      the Credit and Collection Policy).

     

    (o) Any
      Computer Tape or Listing made available by the Servicer to the Lender was
      complete and accurate in all material respects as of the date on which such
      Computer Tape or Listing was made available.

     

    (p) The
      Servicer is in compliance with ERISA in all material respects. No steps have
      been taken to terminate any Servicer Pension Plan which could result in material
      liability, and no contribution failure has occurred with respect to any Servicer
      Pension Plan sufficient to give rise to a lien under section 302(f) of ERISA.
      No
      condition exists or event or transaction has occurred with respect to any
      Servicer Pension Plan which could result in the Servicer or any ERISA Affiliate
      of Servicer incurring any material liability, fine or penalty.

     

    (q) There
      is
      not now, nor will there be at any time in the future, any agreement or
      understanding between the Servicer and the Borrower (other than as expressly
      set
      forth herein), providing for the allocation or sharing of obligations to make
      payments or otherwise in respect of any taxes, fees, assessments or other
      governmental charges.

     

    SECTION
      4.03 Resale
      of Receivables Upon Breach of Covenant or Representation and Warranty by
      Borrower.
      The
      Borrower or the Servicer, as the case may be, shall inform the other parties
      to
      this Agreement and the Qualifying Swap Counterparty promptly, in writing, upon
      the discovery of any breach of the representations, warranties and/or covenants
      contained in Section 4.01,
      Section 4.02
      or
Section 5.01;
      provided,
      however,
      that
      the failure to provide any such notice shall not diminish, in any manner
      whatsoever, any obligation of the Borrower under this Section 4.03
      to sell
      any Pledged Receivable. Upon the discovery by or notice to the Borrower of
      any
      such breach that also constitutes a LEAF Purchase Event under and as defined
      in
      the Purchase and Sale Agreement, the Borrower shall have an obligation to,
      and
      the Borrower shall, resell to the Originator pursuant to the Purchase and Sale
      Agreement (and the Collateral Agent may enforce such obligation of the Borrower
      to sell) any Pledged Receivable adversely affected by any such breach. The
      Servicer shall notify the Collateral Agent promptly, in writing, of any failure
      by the Borrower to so resell any such Pledged Receivable. In connection with
      the
      resale of such Pledged Receivable, the Borrower shall remit funds in an amount
      equal to the Release Price for such Pledged Receivable to the Collection Account
      on the date of such resale. It is understood and agreed that the obligation
      of
      the Borrower to resell to the Originator, and the

     

    
      
         

      

      
        60

        
          

        

      

      
         

      

    

     

    obligation
      of the Originator to purchase, any Receivables which are adversely effected
      by a
      LEAF Purchase Event is not intended to, and shall not, constitute a guaranty
      of
      the collectibility or payment of any Receivable which is not collected, not
      paid
      or uncollectible on account of the insolvency, bankruptcy, or financial
      inability to pay of the related Obligor.

     

    SECTION
      4.04 Representations
      and Warranties of the Lender.
      The
      Lender hereby represents and warrants, as of the date hereof, on each Borrowing
      Date and on the first day of each Rollover Interest Period, that it is a
“qualified purchaser” within the meaning of Section 3(c)(7) of the Investment
      Company Act.

     

    ARTICLE
      V.

     

    GENERAL
      COVENANTS OF THE BORROWER AND THE SERVICER

     

    SECTION
      5.01 General
      Covenants.
      vii)
      The
      Borrower will observe all corporate procedures required by its certificate
      of
      formation, limited liability company agreement and the laws of its jurisdiction
      of formation. The Borrower will maintain its limited liability company existence
      in good standing under the laws of its jurisdiction of formation and will
      promptly obtain and thereafter maintain qualifications to do business as a
      foreign limited liability company in any other state in which it does business
      and in which it is required to so qualify under applicable law.

     

    (b) The
      Borrower will at all times ensure that (i) its members act independently
      and in its interests and in the interests of its creditors, (ii) it shall
      at all times maintain at least one independent manager who (A) is not
      currently and has not been during the five years preceding the date of this
      Agreement an officer, director or employee of the Borrower or an Affiliate
      thereof (other than acting as independent manager or in a similar capacity)
      and
      (B) is not a member of the Borrower or an Affiliate thereof (other than a
      special independent member of the Borrower or a limited purpose corporation,
      business trust, partnership or other entity organized for the purpose of
      acquiring, financing or otherwise investing, directly or indirectly, in assets
      or receivables originated, owned or serviced by Originator or an Affiliate
      of
      any of them), (iii) its assets are not commingled with those of Originator
      or any other Affiliate of the Borrower, (iv) its members duly authorize all
      of its limited liability company actions, (v) it maintains separate and
      accurate records and books of account and such books and records are kept
      separate from those of Originator and any other Affiliate of the Borrower and
      (vi) it maintains minutes of the meetings and other proceedings of the
      members. Where necessary, the Borrower will obtain proper authorization from
      its
      members for limited liability company action.

     

    (c) The
      Borrower will pay its operating expenses and liabilities from its own
      assets.

     

    (d) The
      Borrower will not have any of its indebtedness guaranteed by Originator or
      any
      Affiliate thereof. Furthermore, the Borrower will not hold itself out, or permit
      itself to be held out, as having agreed to pay or as being liable for the debts
      of Originator, and the Borrower will not engage in business transactions with
      Originator, except on an arm’s-length basis. The Borrower will not hold
      Originator out to third parties as other than an entity with assets and
      liabilities distinct from the Borrower. The Borrower will cause any of its
      financial statements consolidated with those of Originator to state that the
      Borrower is a separate corporate entity

     

    
      
         

      

      
        61

        
          

        

      

      
         

      

    

     

    with
      its
      own separate creditors who, in any liquidation of the Borrower, will be entitled
      to be satisfied out of the Borrower’s assets prior to any value in the Borrower
      becoming available to the Borrower’s equity holders. The Borrower will not act
      in any other matter that could foreseeably mislead others with respect to the
      Borrower’s separate identity.

     

    (e) In
      its
      capacity as Servicer, LEAF Financial will, to the extent necessary, maintain
      separate records on behalf of and for the benefit of the Lender, act in
      accordance with instructions and directions, delivered in accordance with the
      terms hereof, from the Borrower, and/or the Lender in connection with its
      servicing of the Pledged Receivables hereunder, and will ensure that, at all
      times when it is dealing with or in connection with the Pledged Receivables
      in
      its capacity as Servicer, it holds itself out as Servicer, and not in any other
      capacity.

     

    (f) The
      Servicer (if LEAF Financial or an Affiliate thereof) shall, to the extent
      required by applicable law, disclose all material transactions associated with
      this transaction in appropriate regulatory filings and public announcements.
      The
      annual financial statements of Resource America (including any consolidated
      financial statements) shall disclose the effects of the transactions
      contemplated by the Purchase and Sale Agreement as a sale of Receivables,
      Related Security and Other Conveyed Property to the Borrower, and the annual
      financial statements of the Borrower shall disclose the effects of the
      transactions contemplated by this Agreement as a loan to the extent required
      by
      and in accordance with GAAP, it being understood that the Loans to the Borrower
      under this Agreement will be treated as debt on the consolidated financial
      statements of Resource America.

     

    (g) The
      Borrower shall take all other actions necessary to maintain the accuracy of
      the
      factual assumptions set forth in the legal opinions of Thacher Proffitt &
Wood LLP, as special counsel to the Originator and the Borrower, issued in
      connection with the Purchase and Sale Agreement and relating to the issues
      of
      substantive consolidation and true conveyance of the Pledged
      Receivables.

     

    (h) Except
      as
      otherwise provided herein or in any other Transaction Document, neither the
      Borrower nor the Servicer shall sell, assign (by operation of law or otherwise)
      or otherwise dispose of, or create or (if the Servicer is LEAF Financial or
      an
      Affiliate thereof) suffer to exist any Adverse Claim upon or with respect to,
      any Pledged Receivable, any Collections related thereto or any other Pledged
      Assets related thereto, or upon or with respect to any account to which any
      Collections of any Receivable are sent, or assign any right to receive income
      in
      respect thereof. Except as otherwise provided herein or in any other Transaction
      Document, the Borrower shall not create or suffer to exist any Adverse Claim
      upon or with respect to any of the Borrower’s assets. Except as otherwise
      provided herein or in any other Transaction Document, the Servicer shall not
      create, or (if the Servicer is LEAF Financial or an Affiliate thereof) permit
      any action to be taken by any Person to create, any Adverse Claim upon or with
      respect to any of the Borrower’s assets.

     

    (i) The
      Borrower will not merge or consolidate with, or convey, transfer, lease or
      otherwise dispose of (whether in one transaction or in a series of
      transactions), all or substantially all of its assets (whether now owned or
      hereafter acquired) other than with respect to asset dispositions in connection
      with an optional prepayment pursuant to Section 2.15(a)

     

    
      
         

      

      
        62

        
          

        

      

      
         

      

    

     

    hereof,
      or acquire all or substantially all of the assets or capital stock or other
      ownership interest of any Person without the prior written consent of the
      Lender.

     

    (j) The
      Borrower will not account for or treat (whether in financial statements or
      otherwise) the transactions contemplated by the Purchase and Sale Agreement
      in
      any manner other than a sale and absolute assignment of Receivables, Related
      Security and Other Conveyed Property by Originator to the Borrower constituting
      a “true conveyance” for bankruptcy purposes.

     

    (k) The
      Borrower will not amend, modify, waive or terminate any terms or conditions
      of
      the Purchase and Sale Agreement without the written consent of the Lender,
      and
      shall perform its obligations thereunder.

     

    (l) The
      Borrower will not make any amendment, modification or other change to its
      certificate of formation or limited liability company agreement that would
      materially and adversely affect the Lender without the Lender’s prior written
      consent, and shall notify the Lender prior to making any amendment, modification
      or other change to its certificate of formation or limited liability company
      agreement prior to the effectiveness thereof.

     

    (m) Neither
      the Borrower nor (if the Servicer is LEAF Financial or an Affiliate thereof)
      the
      Servicer will make or allow to be made any material amendment to the Credit
      and
      Collection Policy without the prior written consent of the Lender (and the
      Lender hereby agrees to take commercially reasonable efforts to respond to
      any
      request for such consent in a timely manner). Neither the Borrower nor (if
      the
      Servicer is LEAF Financial or an Affiliate thereof) the Servicer will make
      or
      allow to be made any non-material amendment to the Credit and Collection Policy
      without the prior written consent of the Lender; provided, that if the Lender
      has not responded to a written request for such consent within ten (10) Business
      Days of receipt thereof, the Lender shall be deemed to have consented to such
      request.

     

    (n) If
      the
      Borrower or the Servicer receives any Collections with respect to any Pledged
      Receivable, the Borrower or the Servicer, as applicable, will remit such
      Collections to the Collection Account within one (1) Business Day of the
      Borrower’s or the Servicer’s identification thereof.

     

    (o) The
      Servicer shall cause:

     

    (i)     the
      Obligor under each Contract to remit all payments owed or otherwise payable
      (including, without limitation, amounts payable by the Obligor in its role
      as a
      servicer of Underlying Contracts sold to the Originator) by such Obligor under
      such Contract (or any servicer on its behalf) to the Lockbox or by wire transfer
      to the Lockbox Account;

     

    (ii)     the
      Lockbox Bank to deposit all Collections with respect to any Pledged Receivable
      in the Lockbox into the Lockbox Account on each Business Day; and

     

    (iii)     the
      Lockbox Bank to remit all Collections with respect to any Pledged Receivable
      on
      deposit in the Lockbox Account (or any sub-account thereof or any related
      account) to the Collection Account on each Business Day.

     

    
      
         

      

      
        63

        
          

        

      

      
         

      

    

     

          
      (p) The
      Borrower shall deliver or cause to be delivered to the Custodian four (4)
      Business Days prior to the initial Borrowing Date
      hereunder and three (3) Business Days prior to any other Borrowing Date
      hereunder a Notice of Pledge and each item listed  
in
      the definition of Receivable File with respect to the Receivables being Pledged
      hereunder on such Borrowing Date.

     

    (q) The
      Borrower shall deliver to the Lender on each Purchase Date a copy of the
      Assignment delivered to it on such Purchase Date.

     

    (r) Each
      of
      the Servicer (and, if the Servicer is not LEAF Financial or an Affiliate
      thereof, upon the Servicer gaining knowledge thereof) and the Borrower shall
      promptly notify the Lender of the occurrence of any Servicer Default, Event
      of
      Default, Program Termination Event, Pool A Termination Event or Pool B
      Termination Event (any event that, if it continues uncured, would, with lapse
      of
      time or notice or lapse of time and notice, constitute any Servicer Default,
      Event of Default, Program Termination Event, Pool A Termination Event or
      Pool B Termination Event).

     

    (s) Each
      of
      the Servicer (if the Servicer is LEAF Financial or an Affiliate thereof) and
      the
      Borrower shall take all actions (in the case of Obligor Collateral with an
      original cost over $100,000) and all commercially reasonable actions (in the
      case of Obligor Collateral with an original cost of $100,000 or less) necessary
      to ensure that the Originator is at all times named as loss payee under each
      Insurance Policy with respect to Obligor Collateral related to a Pledged
      Receivable.

     

    (t) On
      each
      Borrowing Date, a Qualifying Interest Rate Swap, in form and substance
      satisfactory to the Lender, shall be duly executed by the Borrower and a
      Qualifying Swap Counterparty, and any amounts required to have been paid
      thereunder as of such Remittance Date shall have been paid and any obligations
      required to have been performed thereunder as of such Remittance Date shall
      have
      been performed.

     

    (u) Each
      of
      the Servicer (if the Servicer is LEAF Financial or an Affiliate thereof) and
      the
      Borrower shall take all actions necessary to ensure that each Pool B Contract
      purchased by the Borrower under the Purchase and Sale Agreement contains “Seller
      Events of Default” or similar events of default (“Parallel
      Defaults”)
      which
      (i) would occur if a Pool B Termination Event with respect to the related
      Underlying Originator occurred, (ii) would entitle the Borrower, as assignee
      of
      the Originator’s rights under such Contract, to deliver, or cause the delivery
      of, redirection notices which would require all Underlying Obligors to make
      all
      payments under Underlying Contracts sold or pledged to the Originator under
      such
      Contract to the Lockbox Account or an account designated by the Borrower or
      such
      Servicer and (iii) would entitle the Borrower, as assignee of the Originator’s
      rights under the Contract, to receive 100% of all payments under the Underlying
      Contracts sold or pledged to the Originator under such Contract in the event
      of
      such a Parallel Default. If a Parallel Default or any “Seller Events of Default”
or similar events of default under a Pool B Contract related to the financial
      condition of the applicable Underlying Originator, the tangible net worth of
      the
      applicable Underlying Originator or any cross default (a Parallel Default or
      any
      such “Seller Events of Default” or similar events of default being referred to
      herein as “Critical
      Defaults”)
      shall
      occur, then each of the Servicer (if the Servicer is LEAF Financial or an
      Affiliate thereof) and the Borrower shall take all actions

     

    
      
         

      

      
        64

        
          

        

      

      
         

      

    

     

    necessary
      to ensure (x) that no such Critical Default is waived and (y) the prompt
      delivery to all related Underlying Obligors of a redirection notice which would
      require such Underlying Obligors to make all payments under Underlying Contracts
      sold or pledged to the Originator under such Contract to the Lockbox Account.
      Each of the Servicer and the Borrower shall notify the Lender promptly upon
      learning of the occurrence of any “Seller Event of Default” or similar event of
      default under any Pool B Contract.

     

    (v) The
      Borrower shall not acquire any debt obligation or interest therein if, after
      giving effect to such acquisition, more than 40 percent of the debt obligations
      or interests therein held by the Borrower (as determined under the rules of
      Treasury Regulation 301.7701(i)-1(c)) would consist of real estate mortgages
      or
      interests therein (as defined in Treasury Regulation
      301.7701(i)-1(d)).

     

    ARTICLE
      VI.

     

    ADMINISTRATION
      AND SERVICING; CERTAIN COVENANTS

     

    SECTION
      6.01 Appointment
      and Designation of the Servicer.
      viii)
      The
      Borrower and the Lender hereby appoint the Person designated by the Lender
      from
      time to time, pursuant to this Section 6.01
      (the
“Servicer”),
      as
      their agent to service, administer and collect the Pledged Receivables and
      otherwise to enforce their respective rights and interests in and under the
      Pledged Receivables and the other Pledged Assets. The Servicer shall collect
      such Pledged Receivables under the conditions referred to above by means of
      the
      collection procedures as set forth in the Credit and Collection Policy, to
      the
      extent consistent with the provisions of this Article VI.
      Unless
      otherwise specified by the Borrower, the Servicer’s authorization under this
      Agreement shall terminate on the Collection Date. Until the Lender gives notice
      to the Borrower of a designation of a new Servicer upon the occurrence and
      during the continuance of any Servicer Default, or consents in writing to the
      appointment by the Borrower of a new Servicer, LEAF Financial is hereby
      designated as, and hereby agrees to perform the duties and obligations of,
      the
      Servicer, pursuant to the terms hereof at all times until the earlier of the
      Lender’s designation of the Backup Servicer or any other Person as the new
      Servicer (upon the occurrence and during the continuance of any Servicer
      Default), the delivery by the Lender of its written consent to the appointment
      by the Borrower of a new Servicer or the Collection Date. Upon the occurrence
      and during the continuance of any Servicer Default, the Lender may at any time
      designate as Servicer the Backup Servicer, or any other Person with demonstrated
      experience in servicing equipment leases and loans, to succeed LEAF Financial
      or
      any successor Servicer, on the condition in each case that any such Person
      so
      designated shall agree to perform the duties and obligations of the Servicer
      pursuant to the terms hereof. Each of the Borrower and LEAF Financial hereby
      grants to any successor Servicer an irrevocable power of attorney to take any
      and all steps in the Borrower’s, LEAF Financial’s or the Servicer’s name, as
      applicable, and on behalf of the Borrower or LEAF Financial, necessary or
      desirable, in the determination of such successor Servicer, to service,
      administer or collect any and all Pledged Receivables including, without
      limitation, to make withdrawals from the Security Deposit Account pursuant
      to
Section 2.05
      and any
      Cash Reserve Account pursuant to Section 2.06.

     

    (b) The
      Servicer is hereby authorized to act for the Borrower and the Lender and, in
      such capacity, shall manage, service, administer and arrange collections on
      the
      Pledged Receivables

     

    
      
         

      

      
        65

        
          

        

      

      
         

      

    

     

    and
      perform the other actions required by the Servicer under this Agreement for
      the
      benefit of the Lender. The Servicer agrees that its servicing of the Pledged
      Receivables shall be carried out in accordance with customary and usual
      procedures of institutions which service equipment lease and loan contracts
      and
      receivables and, to the extent more exacting, the degree of skill and attention
      that the Servicer exercises from time to time, with respect to all comparable
      equipment lease and loan contracts and receivables that it services for itself
      or others in accordance with the Credit and Collection Policy (or if the Backup
      Servicer has been appointed as Servicer, the Backup Servicer’s customary
      collection policies) and, to the extent more exacting, the requirements of
      this
Article VI.
      The
      Servicer’s duties shall include, without limitation, collecting and posting of
      all Collections with respect to any Pledged Receivable, responding to inquiries
      of Obligors on the Pledged Receivables, investigating delinquencies, sending
      invoices, payment statements or payment books to Obligors, reporting any
      required tax information to Obligors, policing the collateral, enforcing the
      terms of the Contracts (and any documents related thereto) related to any
      Pledged Receivables, complying with the terms of the Lockbox Agreement,
      accounting for Collections with respect to any Pledged Receivable, furnishing
      monthly and annual statements to the Lender with respect to distributions and
      performing the other duties specified herein.

     

    (c) The
      Servicer will require each Underlying Originator to (i) service all
      Underlying Contracts in a manner consistent with the applicable Underlying
      Originator Credit and Collection Policy (which the Servicer has reviewed and
      approved in accordance with the Credit and Collection Policy) and
      (ii) provide to the Servicer a monthly data feed, which shall be in form
      and content satisfactory to the Servicer. The Servicer shall, or shall cause
      a
      third party servicer appointed by the Servicer and approved by the Lender (such
      approval not to be unreasonably withheld) to, provide servicing similar to
      the
      servicing that the Servicer is obligated to provide hereunder with respect
      to
      any Underlying Contracts to the extent that the related Underlying Originator
      fails to service such Underlying Contracts in a manner consistent with the
      applicable Underlying Originator Credit and Collection Policy.

     

    (d) To
      the
      extent consistent with the standards, policies and procedures otherwise required
      hereby, the Servicer shall have full power and authority, acting alone, to
      do
      any and all things in connection with such managing, servicing, administration
      and collection that it may deem necessary or desirable. The Servicer is
      authorized to release liens on Obligor Collateral in order to collect insurance
      proceeds with respect thereto and to liquidate such Obligor Collateral in
      accordance with its customary standards, policies and procedures; provided,
      however,
      that,
      notwithstanding the foregoing, the Servicer shall not, (i) except pursuant
      to an order from a court of competent jurisdiction, release an Obligor from
      payment of any unpaid amount under any Pledged Receivable or (ii) waive the
      right to collect the unpaid balance of any Pledged Receivable from such Obligor,
      except that, subject to Section 6.02(a),
      the
      Servicer may forego collection efforts if the amount which the Servicer, in
      its
      reasonable judgment, expects to realize in connection with such collection
      efforts is determined by the Servicer, in its reasonable judgment, to be less
      than the reasonably expected costs of pursuing such collection efforts and
      if
      the Servicer would forego such collection efforts in accordance with its
      customary procedures. The Servicer is hereby authorized to commence, in its
      own
      name (in its capacity as Servicer), if possible, or in the name of the Borrower
      or the Lender (provided
      that if
      the Servicer is acting in the name of the Borrower or the Lender, the Servicer
      shall have obtained the Borrower’s or the Lender’s consent, as the case may be,
      which consent shall not be unreasonably withheld), a legal

     

    
      
         

      

      
        66

        
          

        

      

      
         

      

    

     

    proceeding
      to enforce any Pledged Receivable (or any terms or provisions of the related
      Contract) or to commence or participate in any other legal proceeding
      (including, without limitation, a bankruptcy proceeding) relating to or
      involving a Pledged Receivable or any related Contract, Obligor or Obligor
      Collateral. If the Servicer commences or participates in such a legal proceeding
      in its own name, the Borrower or the Lender, as the case may be, shall thereupon
      be deemed to have automatically assigned such Pledged Receivable to the Servicer
      solely for purposes of commencing or participating in any such proceeding as
      a
      party or claimant, and the Servicer is authorized and empowered by the Borrower
      or the Lender, as the case may be, to execute and deliver in the Servicer’s name
      any notices, demands, claims, complaints, responses, affidavits or other
      documents or instruments in connection with any such proceeding. The Borrower
      or
      the Lender, as the case may be, shall furnish the Servicer with any powers
      of
      attorney and other documents which the Servicer may reasonably request in
      writing and which the Servicer deems necessary or appropriate and take any
      other
      steps which the Servicer may deem necessary or appropriate to enable the
      Servicer to carry out its servicing and administrative duties under this
      Agreement. If, however, in any suit or legal proceeding it is held that the
      Servicer may not prosecute such suit or legal proceeding on the grounds that
      it
      is not an actual party in interest or a holder entitled to enforce such suit
      or
      legal proceeding, the Borrower shall take such steps as the Servicer deems
      necessary to prosecute such suit or legal proceeding, including bringing suit
      in
      its name.

     

    SECTION
      6.02 Collection
      of Receivable Payments; Modification and Amendment of Receivables; Lockbox
      Agreements.
      ix)
      Consistent with and subject to the standards, policies and procedures required
      by this Agreement, the Servicer shall collect all payments called for under
      the
      terms and provisions of the Contracts related to the Pledged Receivables (and
      the terms and provisions of any documents related thereto) as and when the
      same
      shall become due and shall follow such collection procedures with respect to
      the
      Pledged Receivables and the related Contracts and Insurance Policies as will,
      in
      the reasonable judgment of the Servicer, maximize the amount to be received
      by
      the Borrower and the Lender with respect thereto.

     

    (b) The
      Servicer shall remit all payments by or on behalf of the Obligors received
      directly by the Servicer to the Collection Account, without deposit into any
      intervening account as soon as practicable, but in no event later than the
      end
      of business on the Business Day of identification thereof as payments by or
      on
      behalf of the Obligors.

     

    SECTION
      6.03 Realization
      Upon Receivables.
      Consistent with the standards, policies and procedures required by this
      Agreement, the Servicer shall use its best efforts to repossess (or otherwise
      comparably convert the ownership of) and liquidate any Obligor Collateral
      securing a Pledged Receivable within a number of days consistent with the Credit
      and Collection Policy of an uncured failure of the related Obligor to make
      any payment which it is obligated to make under the related Contract or an
      earlier date that would be customary under the circumstances involved (as
      determined in accordance with the Credit and Collection Policy) and, in any
      case, in a manner as will, in the reasonable judgment of the Servicer, maximize
      the amount to be received by the Borrower and the Lender with respect thereto;
      provided,
      however,
      that
      the Servicer need not repossess (or otherwise comparably convert the ownership
      of) and liquidate the Obligor Collateral securing such a Pledged Receivable
      if,
      in the reasonable opinion of the Servicer, the value of such Obligor Collateral
      does not exceed by more than an insignificant amount the cost to repossess
      (or
      otherwise comparably convert the ownership of) and liquidate

     

    
      
         

      

      
        67

        
          

        

      

      
         

      

    

     

    such
      Obligor Collateral. The Servicer is authorized to follow such customary
      practices and procedures as it shall deem necessary or advisable, consistent
      with the standard of care required by Section 6.01,
      which
      practices and procedures may include reasonable efforts to realize upon any
      guaranties, selling the related Obligor Collateral at public or private sale,
      the submission of claims under an Insurance Policy and other actions by the
      Servicer in order to realize upon such Pledged Receivable. The foregoing is
      subject to the provision that, in any case in which the Obligor Collateral
      shall
      have suffered damage, the Servicer shall not expend funds in connection with
      any
      repair or towards the repossession of such Obligor Collateral, unless it shall
      determine in its discretion that such repair and/or repossession shall increase
      the proceeds of liquidation of the related Pledged Receivable by an amount
      greater than the amount of such expenses. All Liquidation Proceeds shall be
      remitted directly by the Servicer to the Collection Account without deposit
      into
      any intervening account as soon as practicable, but in no event later than
      one
      (1) Business Day after identification thereof as Liquidation Proceeds. The
      Servicer shall pay on behalf of the Borrower any personal property taxes
      assessed on repossessed Obligor Collateral, and the Servicer shall be entitled
      to reimbursement of any such tax as a Servicer Advance.

     

    SECTION
      6.04 Insurance
      Regarding Equipment.
      x)
      At the
      time of the Pledge of any Receivable hereunder, the Servicer shall require
      each
      Obligor to obtain and maintain (or with respect to an Underlying Originator,
      cause the Underlying Obligor to obtain and maintain) Insurance Policies in
      accordance with the terms of the Credit and Collection Policy and its customary
      servicing procedures and shall furnish evidence of such insurance (except if
      the
      Equipment or Underlying Equipment relating to such Obligor or Underlying
      Obligor, as applicable, has an aggregate original cost of $100,000 or less)
      to
      the Lender.

     

    (b) The
      Servicer may, and upon the request of the Lender shall, sue to enforce or
      collect upon the Insurance Policies, in its own name (but in its capacity as
      Servicer), if possible, or as agent of the Borrower and the Lender. If the
      Servicer elects to commence a legal proceeding to enforce an Insurance Policy,
      the act of commencement shall be deemed to be an automatic assignment of the
      rights of the Borrower and the Lender under such Insurance Policy to the
      Servicer for purposes of collection only. If, however, in any enforcement suit
      or legal proceeding it is held that the Servicer may not enforce an Insurance
      Policy on the grounds that it is not an actual party in interest or a holder
      entitled to enforce the Insurance Policy, the Borrower shall take such steps
      as
      the Servicer deems necessary to enforce such Insurance Policy, including
      bringing suit in its name.

     

    SECTION
      6.05 Maintenance
      of Security Interests in Obligor Collateral.
      xi)
      The
      initial Servicer and the Borrower shall take all steps necessary, under all
      applicable law, in order to (i) cause a valid, subsisting and enforceable
      first priority perfected security interest to exist in favor of the Collateral
      Agent in the Borrower’s interests in the Obligor Collateral, all Other Conveyed
      Property and all Related Security related to each Receivable (and the proceeds
      thereof) being Pledged hereunder, to secure a Loan on the Borrowing Date thereof
      including (A) the filing of a UCC financing statement in the applicable
      jurisdiction adequately describing the Obligor Collateral, Other Conveyed
      Property and all Related Security and naming the Borrower as debtor and the
      Collateral Agent as the secured party, (B) filing Obligor Financing
      Statements against all Obligors purchasing or leasing Obligor Collateral,
      (C) other than with respect to an Underlying Lease Contract related to
      Equipment which has an original cost of less than $25,000 if such Underlying
      Lease Contract is a Dollar Purchase Option Contract or $50,000

     

    
      
         

      

      
        68

        
          

        

      

      
         

      

    

     

    if
      such
      Underlying Lease Contract is a FMV Contract, causing the filing of UCC-3
      assignment statements in the applicable jurisdictions adequately describing
      the
      Underlying Originator Loan Collateral being transferred thereunder and naming
      the applicable Underlying Originator as the assignor and Originator as the
      assignee, and (D) other than with respect to an Underlying Lease Contract
      related to Equipment which has an original cost of less than $25,000 if such
      Underlying Lease Contract is a Dollar Purchase Option Contract or $50,000 if
      such Underlying Lease Contract is a FMV Contract, causing the filing of UCC-3
      assignment statements in the applicable jurisdictions adequately describing
      the
      Underlying Originator Loan Collateral being transferred thereunder and naming
      the applicable Underlying Originator as the assignor and Originator as the
      assignee (ii) ensure that such security interest is and shall be prior to
      all other liens upon and security interests in the Borrower’s interests in such
      Obligor Collateral, Other Conveyed Property and Related Security (and the
      proceeds thereof) that now exist, or may hereafter arise or be created other
      than Permitted Liens, and (iii) ensure that immediately prior to the Pledge
      of such Receivable by the Borrower to the Collateral Agent, such Obligor
      Collateral, Other Conveyed Property and Related Security is free and clear
      of
      all Adverse Claims other than Permitted Liens; and

     

    (b) The
      initial Servicer shall take all steps, as are necessary (subject to Section 6.05(a)),
      to
      maintain perfection of the security interest in the Borrower’s interests in the
      Obligor Collateral, Other Conveyed Property and Related Security related to
      each
      Pledged Receivable (and the proceeds thereof) in favor of the Collateral Agent
      including but not limited to, obtaining the execution by the Borrower and the
      recording, registering, filing, rerecording, refiling, and reregistering of
      all
      security agreements, financing statements and continuation statements as are
      necessary to maintain and/or perfect such security interests granted by the
      Borrower and the recordation of the Collateral Agent’s lien on such Obligor
      Collateral’s Certificate of Title (if such Obligor Collateral is a Vehicle and
      the related Receivable is not a Vehicle Sublimit Pledged Receivable). Without
      limiting the generality of the foregoing, the Borrower and the Lender each
      hereby authorizes the initial Servicer, and the initial Servicer agrees, to
      take
      any and all steps necessary (subject to Section 6.05(a))
      to
      re-perfect the security interest in the Borrower’s interests in any Obligor
      Collateral (and the Borrower’s interests therein), Other Conveyed Property and
      Related Security related to each Pledged Receivable (and the proceeds thereof)
      in favor of the Collateral Agent as may be necessary, due to the relocation
      of
      such Obligor Collateral or for any other reason.

     

    (c) In
      the
      event that the combination of the sale of a Receivable by Originator to the
      Borrower under the Purchase and Sale Agreement and the Pledge of such Receivable
      by the Borrower to the Collateral Agent hereunder are insufficient, without
      a
      notation on a related Vehicle’s Certificate of Title, or without fulfilling any
      additional administrative requirements under the laws of the state in which
      such
      Vehicle is located, to assign the ownership of such Vehicle to the Borrower
      or
      to perfect a security interest in such Vehicle (and the proceeds thereof) in
      favor of the Collateral Agent, the parties hereto agree that Originator’s
      designation, if any, as the owner on the Certificate of Title with respect
      to
      such Vehicle is in its capacity as agent of the Borrower and the Collateral
      Agent as their interests may appear, until such notations are made or additional
      administrative requirements are fulfilled, and the Servicer (if the Servicer
      is
      LEAF Funding) shall take all steps necessary to ensure that the Originator
      acts
      in such capacity.

     

    
      
         

      

      
        69

        
          

        

      

      
         

      

    

    (d) The
      initial Servicer shall promptly (or, if the initial Servicer is unable or
      refuses to act, the Lender may) take all steps as are necessary to evidence
      the
      Borrower’s ownership in any Vehicle related to each Pledged Receivable other
      than a Vehicle Sublimit Pledged Receivable (which is a lease or secured by
      lease
      payments) and to create and maintain perfection of the security interest of
      the
      Collateral Agent in any Vehicle related to each Pledged Receivable other than
      a
      Vehicle Sublimit Pledged Receivable (and the proceeds of such Vehicle),
      including, if required by applicable law, having a notation of the Borrower’s
      ownership (in the case of a Vehicle which is subject to a lease), and the
      Collateral Agent’s security interest, recorded on such Vehicle’s certificate of
      title.

     

    SECTION
      6.06 Pledged
      Receivable Receipts.
      The
      Servicer shall make a deposit into the Collection Account in an amount equal
      to
      the Collections with respect to any Pledged Receivable received, or made by,
      or
      on behalf of it, within one Business Day of such Collections being received,
      or
      made by, or on behalf of it.

     

    SECTION
      6.07 No
      Rights of Withdrawal.
      Until
      the Collection Date, the Borrower shall have no rights of direction or
      withdrawal, with respect to amounts held in the Collection Account or the
      Lockbox Account, except with respect to funds not related to any Pledged Assets,
      which were incorrectly deposited into any such account.

     

    SECTION
      6.08 Permitted
      Investments.
      The
      Borrower shall, pursuant to written instruction, direct the Lender’s Bank (and
      if the Borrower fails to do so, the Lender may, pursuant to written instruction,
      direct the Lender’s Bank) to invest, or cause the investment of, funds on
      deposit in the Collection Account in Permitted Investments, from the date of
      this Agreement until the Collection Date. Absent any such written instruction,
      the Lender’s Bank shall invest, or cause the investment of, such funds in
      Permitted Investments described in clause (v) of the definition thereof. A
      Permitted Investment acquired with funds deposited in the Collection Account
      shall mature not later than the Business Day immediately preceding any
      Remittance Date, and shall not be sold or disposed of prior to its maturity.
      All
      such Permitted Investments shall be registered in the name of the Securities
      Intermediary (as defined in the Securities Account Agreement) or its nominee
      for
      the benefit of the Lender, and otherwise comply with assumptions of the legal
      opinion of Thacher Proffitt & Wood LLP, delivered in connection with this
      Agreement. All income and gain realized from any such investment, as well as
      any
      interest earned on deposits in the Collection Account, shall be distributed
      in
      accordance with the provisions of Article II
      hereof.
      The Borrower shall deposit in the Collection Account, as the case may be (with
      respect to investments made hereunder of funds held therein), an amount equal
      to
      the amount of any actual loss incurred, in respect of any such investment,
      immediately upon realization of such loss. None of the Lender’s Bank or the
      Lender shall be liable for the amount of any loss incurred, in respect of any
      investment, or lack of investment, of funds held in the Collection
      Account.

     

    SECTION
      6.09 Servicing
      Compensation.
      As
      compensation for its activities hereunder, the Servicer shall be entitled to
      be
      paid the Servicing Fee from the Collection Account as provided in Section 2.04(c).
      The
      Servicer shall be required to pay all expenses incurred by it in connection
      with
      its servicing activities hereunder and shall not be entitled to reimbursement
      therefor, except with respect to reasonable expenses of the Servicer incurred
      in
      connection with the repossession and disposition of any Obligor Collateral
      (which the Servicer may retain from the proceeds of

     

    
      
         

      

      
        70

        
          

        

      

      
         

      

    

     

    the
      disposition of such Obligor Collateral) and any Servicer Advances made by the
      Servicer pursuant hereto. The Servicing Fee may not be transferred in whole,
      or
      in part, except in connection with the transfer of all the Servicer’s
      responsibilities and obligations under this Agreement. At any time after the
      occurrence of a Servicer Default and the appointment of the Backup Servicer
      as
      the Servicer hereunder, the Backup Servicer shall be entitled to receive an
      amount, payable out of Collections on the Pledged Receivables and amounts
      applied to the payment of, or treated as payments on, the Pledged Receivables,
      equal to expenses incurred by the Backup Servicer, acting in its capacity as
      the
      Servicer, in connection with its obligations under Sections 6.05(a),
      (b)
      and
(d)
      hereof
      (such expenses, the “Active
      Backup Servicer’s Indemnified Amounts”).

     

    SECTION
      6.10 Reports
      to the Lender; Account Statements; Servicing Information.
      xii)
      The
      Borrower will deliver to the Lender and each Qualifying Swap Counterparty,
      (i) on the Program Termination Date, a report identifying the Pledged
      Receivables (and any information with respect thereto requested by the Lender)
      on the day immediately preceding the Program Termination Date, and
      (ii) upon the Lender’s reasonable request and upon reasonable notice, on
      any other Business Day, a report identifying the Pledged Receivables (and any
      information with respect thereto, reasonably requested by the Lender) as of
      such
      day.

     

    (b) At
      least
      four (4) Business Days prior to each Remittance Date, the Servicer shall prepare
      and deliver, or have delivered to the Lender and each Qualifying Swap
      Counterparty, (i) a Monthly Remittance Report and any other information
      reasonably requested by the Lender, relating to all Pledged Receivables
      (including, if requested, a Computer Tape or Listing), all information in the
      Monthly Remittance Report and all other such information to be accurate as
      of
      the last day of the immediately preceding Collection Period, and (ii) in an
      electronic format mutually acceptable to the Servicer and the Lender, all
      information reasonably requested by the Lender relating to all Pledged
      Receivables. If any Monthly Remittance Report indicates the existence of a
      Borrowing Base Deficiency, the Borrower shall, on the date of delivery of such
      Monthly Remittance Report, prepay to the Lender, for the account of the Lender,
      a portion of the Loans as is necessary to cure such Borrowing Base Deficiency
      (or otherwise cure such Borrowing Base Deficiency).

     

    (c) By
      no
      later than 12:00 noon (New York City time) on the third Business Day immediately
      preceding a Borrowing, the Borrower (or the initial Servicer on its behalf)
      shall also prepare and deliver to the Lender a Borrowing Base Certificate
      containing information accurate as of the date of delivery of such Borrowing
      Base Certificate. If any Borrowing Base Certificate indicates the existence
      of a
      Borrowing Base Deficiency, the Borrower shall on the date of delivery of such
      Borrowing Base Certificate prepay to the Lender, for the account of the Lender,
      a portion of the Loans or Pledge additional Eligible Receivables, in either
      case, to the extent necessary to cure such Borrowing Base
      Deficiency.

     

    (d) At
      least
      four (4) Business Days prior to each Remittance Date (each such day, a
“Backup
      Servicer Delivery Date”),
      the
      Servicer shall prepare and deliver, or have delivered, to the Backup Servicer
      (i) a Monthly Remittance Report in respect of the immediately-preceding
      Collection Period and (ii) a computer tape or a diskette or any other
      electronic transmission in a format acceptable to the Backup Servicer containing
      the information with respect to the Pledged

     

    
      
         

      

      
        71

        
          

        

      

      
         

      

    

     

    Receivables
      during such Collection Period which was necessary for preparation of such
      Monthly Remittance Report or is reasonably requested by the Backup
      Servicer.

     

    (e) The
      Borrower shall deliver to the Lender all reports it receives pursuant to the
      Purchase and Sale Agreement within one Business Day of the receipt
      thereof.

     

    SECTION
      6.11 Statements
      as to Compliance; Financial Statements.
      xiii)
      The
      Servicer shall deliver to the Backup Servicer, the Borrower and the Lender
      on or
      before March 31st of each year, beginning with 2007, an Officers’ Certificate
      stating, as to each signatory thereof, that (x) a review of the activities
      of the Servicer during the preceding calendar year (or the portion of the
      preceding calendar year commencing on the date of this Agreement and ending
      December 31, 2006 in the case of the first such review) and of its
      performance under this Agreement has been made under such officer’s supervision,
      and (y) to the best of such officers’ knowledge, based on such review, the
      Servicer has fulfilled all of its obligations under this Agreement throughout
      such calendar year (or portion thereof, as the case may be) or, if there has
      been a default in the fulfillment of any such obligation, specifying each such
      default known to such officers and the nature and status thereof and the action
      being taken to cure such default.

     

    (b) The
      Servicer (if LEAF Financial or an Affiliate thereof) shall, at its expense,
      cause a firm of nationally recognized independent certified public accountants
      acceptable to the Lender (the “Independent
      Accountants”),
      who
      may also render other services to the Servicer, the Backup Servicer or to the
      Borrower, to deliver to the Borrower and the Lender, on or before March 31st
      of
      each year, beginning 2007, with respect to the twelve (12) months ended the
      immediately preceding December 31, a statement (the “Accountant’s
      Report”)
      addressed to the Board of Directors of the Servicer and to the Lender, to the
      effect that such firm has examined such Borrowing Base Certificates and Monthly
      Remittance Reports prepared by the Servicer during the twelve (12) months ended
      the immediately preceding December 31 as it deemed necessary in order to
      issue the Accountants’ Report and issued its report thereon, and that such
      examination was made in accordance with generally accepted auditing standards
      and, accordingly, included such tests of the accounting records and such other
      auditing procedures as such firm considered necessary in the circumstances.
      The
      Accountants’ Report shall further state that (i) a review in accordance
      with agreed upon procedures was made; and (ii) except as disclosed in the
      Accountant’s Report, no exceptions or errors in the Borrowing Base Certificates
      and Monthly Remittance Reports examined were found except for (A) such
      exceptions as the Independent Accountants believe to be immaterial and
      (B) such other exceptions as shall be set forth in the Accountants’ Report.
      The Accountants’ Report shall also indicate that the firm is independent of the
      Borrower and the Servicer within the meaning of the Code of Professional Ethics
      of the American Institute of Certified Public Accountants.

     

    (c) As
      soon
      as available and no later than forty-five (45) days after the end of each
      calendar quarter in each fiscal year of the Borrower or Resource America, the
      Borrower shall deliver to the Lender two copies of:

     

    (i)     a
      balance
      sheet of the Borrower and Resource America as of the end of such calendar
      quarter, setting forth in comparative form the corresponding figures for the
      most recent year-end for which an audited balance sheet has been prepared,
      which
      balance sheet shall be prepared and presented in accordance with, 

     

    
      
         

      

      
        72

        
          

        

      

      
         

      

    

           
      and provide all necessary disclosure required by, GAAP and shall be accompanied
      by a certificate signed by the financial vice president, treasurer, chief
      financial officer or controller of the Borrower or Resource America, as
      applicable, stating that such balance sheet presents fairly the financial
      condition of the Borrower or Resource America, as the case may be, and has
      been
      prepared in accordance with GAAP consistently applied; and

     

    (ii)     statements
      of
      income, stockholders’ equity and cash flow of the Borrower and Resource America
      for such calendar quarter setting forth in comparative form the corresponding
      figures for the comparable period one year prior thereto (subject to normal
      year-end adjustments), which such statements shall be prepared and presented
      in
      accordance with, and provide all necessary disclosure required by, GAAP and
      shall be accompanied by a certificate signed by the financial vice president,
      treasurer, chief financial officer or controller of the Borrower or Resource
      America, as applicable, stating that such financial statements present fairly
      the financial condition and results of operations of the Borrower or Resource
      America, as the case may be, and have been prepared in accordance with GAAP
      consistently applied.

     

    (d) As
      soon
      as available and no later than forty-five (45) days after the end of each
      calendar quarter in each fiscal year of Resource America, LEAF Financial shall
      deliver to the Lender two copies of:

     

    (i)     a
      consolidated balance sheet of Resource America and its consolidated subsidiaries
      (including Originator and Servicer) as of the end of such calendar quarter,
      setting forth in comparative form the corresponding figures for the most recent
      year-end for which an audited balance sheet has been prepared, which such
      balance sheet shall be prepared and presented in accordance with, and provide
      all necessary disclosure required by, GAAP and shall be accompanied by a
      certificate signed by the financial vice president, treasurer, chief financial
      officer or controller of Resource America stating that such balance sheet
      presents fairly the financial condition of the companies being reported upon
      and
      has been prepared in accordance with GAAP consistently applied; and

     

    (ii)     consolidated
      statements of income, stockholders’ equity and cash flow of Resource America and
      its consolidated subsidiaries (including Originator and Servicer) for such
      calendar quarter, in each case, setting forth in comparative form the
      corresponding figures for the comparable period one year prior thereto (subject
      to normal year-end adjustments), which such statements shall be prepared and
      presented in accordance with, and provide all necessary disclosure required
      by,
      GAAP and shall be accompanied by a certificate signed by the financial vice
      president, treasurer, chief financial officer or controller of Resource America
      stating that such financial statements present fairly the financial condition
      and results of operations of the companies being reported upon and have been
      prepared in accordance with GAAP consistently applied.

     

    
      
         

      

      
        73

        
          

        

      

      
         

      

    

     

           
      (e)  As
      soon
      as available and no later than ninety (90) days after the end of each fiscal
      year of the Borrower or Resource America, LEAF Financial shall deliver to the
      Lender two copies of:

     

    (i)     a
      balance
      sheet of the Borrower and Resource America as of the end of the fiscal year,
      setting forth in comparative form the figures for the previous fiscal year
      and
      accompanied by an opinion of a firm of independent certified public accountants
      of nationally recognized standing acceptable to the Lender stating that such
      balance sheet presents fairly the financial condition of the Borrower or
      Resource America, as applicable, and has been prepared in accordance with GAAP
      consistently applied (except for changes in application in which such
      accountants concur); and

     

    (ii)     statements
      of income, stockholders’ equity and cash flow of the Borrower and Resource
      America for such fiscal year, setting forth in comparative form the figures
      for
      the previous fiscal year and accompanied by an opinion of a firm of independent
      certified public accountants of nationally recognized standing acceptable to
      the
      Lender stating that such financial statements present fairly the financial
      condition of the Borrower or Resource America, as applicable, and have been
      prepared in accordance with GAAP consistently applied (except for changes in
      application in which such accountants concur).

     

    (f) As
      soon
      as available and no later than ninety (90) days after the end of each fiscal
      year of Resource America, LEAF Financial shall deliver to the Lender two copies
      of:

     

    (i)     a
      consolidated and consolidating balance sheet of Resource America and its
      consolidated subsidiaries (including Originator and Servicer) as of the end
      of
      the fiscal year, setting forth in comparative form the figures for the previous
      fiscal year and accompanied by an opinion of a firm of independent certified
      public accountants of nationally recognized standing acceptable to the Lender
      stating that such balance sheet presents fairly the financial condition of
      the
      companies being reported upon and has been prepared in accordance with GAAP
      consistently applied (except for changes in application in which such
      accountants concur); and

     

    (ii)     consolidated
      and consolidating statements of income, stockholders’ equity and cash flow of
      Resource America and its consolidated subsidiaries (including Originator) for
      such fiscal year; in each case setting forth in comparative form the figures
      for
      the previous fiscal year and accompanied by an opinion of a firm of independent
      certified public accountants of nationally recognized standing acceptable to
      the
      Lender stating that such financial statements present fairly the financial
      condition of the companies being reported upon and have been prepared in
      accordance with GAAP consistently applied (except for changes in application
      in
      which such accountants concur).

     

    SECTION
      6.12 Access
      to Certain Documentation; Obligors; Background Check.
      xiv)
      The
      Lender (and its agents or professional advisors) shall at the expense of the
      Borrower, have the

     

    
      
         

      

      
        74

        
          

        

      

      
         

      

    

     

    right
      under this Agreement, once during each calendar quarter until the first
      anniversary of the date hereof, and semi-annually thereafter, to examine and
      audit, during business hours or at such other times as might be reasonable
      under
      applicable circumstances, any and all of the books, records, financial
      statements or other information of the Servicer and the Borrower, or held by
      another for the Servicer or the Borrower or on its behalf, concerning this
      Agreement, provided,
      that,
      prior to the occurrence of an Event of Default, the Borrower shall not be
      responsible for the expenses of the Lender to the extent that such expenses
      exceed $25,000 in the aggregate in any calendar year. The Lender (and its agents
      or professional advisors) shall, at the expense of the Borrower and as
      frequently as the Lender may desire, have the right under this Agreement after
      the occurrence and during the continuance of an Event of Default, to examine
      and
      audit, during business hours or at such other times as might be reasonable
      under
      applicable circumstances, any and all of the books, records or other information
      of the Servicer or the Borrower, or held by another for the Servicer or the
      Borrower or on its behalf, concerning this Agreement. The Lender (and its agents
      and professional advisors) shall coordinate examinations and audits under this
      Section
      6.12(a)
      in order
      to minimize expense and inconvenience to the Borrower. The Lender (and its
      agents and professional advisors) shall treat as confidential any information
      obtained during the aforementioned examinations which is not already publicly
      known or available; provided,
      however,
      that
      the Lender may disclose such information if required to do so by law or by
      any
      regulatory authority.

     

    (b) The
      Lender (and its agents or professional advisors) shall, at its own expense,
      have
      the right under this Agreement to contact Pool A Obligors and Pool B Obligors
      once with respect to any Receivable which is Pledged hereunder to request that
      each such Obligor verify and confirm by return letter the existence and amount
      of such Receivable, the type of Equipment leased under or securing the related
      Contract and such other information as the Lender deems reasonable under the
      circumstances (each such return letter to be mailed to a post office box
      established by the Lender). The Servicer and the Borrower hereby agree to
      cooperate with the Lender (and its agents or professional advisors) in
      connection with any attempt thereby to contact any such Obligor and shall
      provide to the Lender such information as is needed in order to facilitate
      such
      contact. The Lender (and its agents and professional advisors) shall treat
      as
      confidential any information obtained during any such contact with any such
      Obligor which is not already publicly known or available; provided, however,
      that the Lender (and its agents or professional advisors) may disclose such
      information if required to do so by law or by any regulatory
      authority.

     

    (c) The
      Lender (or its agents and/or third party professional advisors) may, from time
      to time, cause comprehensive background checks on newly-hired senior management,
      key employees and principals of each of Resource Capital Corp., the initial
      Servicer and Originator to be completed by an investigation service acceptable
      to the Lender, at the Borrower’s expense.

     

    SECTION
      6.13 Backup
      Servicer.
      If a
      Servicer Default shall occur, then the Lender may, by notice to the Servicer,
      the Borrower and the Backup Servicer, terminate all of the rights and
      obligations of the Servicer under this Agreement. Upon the delivery to the
      Servicer of such notice, all authority and power of the Servicer under this
      Agreement, whether with respect to the Pledged Assets or otherwise, shall pass
      to and be vested in the Backup Servicer pursuant to and under this Section
      (unless the Lender shall have appointed a different successor Servicer pursuant
      to Section 6.01
      hereof
      or the Backup Servicer is unable to act as Servicer and a

     

    
      
         

      

      
        75

        
          

        

      

      
         

      

    

     

    successor
      is appointed as provided in the fourth paragraph of this Section 6.13),
      and,
      without limitation, the Backup Servicer is hereby authorized and empowered
      to
      execute and deliver, on behalf of the Servicer, as attorney-in-fact or
      otherwise, any and all documents and other instruments, and to do or accomplish
      all other acts or things necessary or appropriate to effect the purposes of
      such
      notice of termination or to perform the duties of the Servicer under this
      Agreement including, without limitation, to make withdrawals from the Security
      Deposit Account pursuant to Section 2.05
      and any
      Cash Reserve Account pursuant to Section 2.06.
      The
      Servicer agrees to cooperate with the Lender and the Backup Servicer in
      effecting the termination of the Servicer’s responsibilities and rights
      hereunder, including, without limitation, providing notification to the Obligors
      of the assignment of the servicing function, providing notification to the
      Lender’s Bank of the Backup Servicer’s right to make withdrawals from the
      Security Deposit Account pursuant to Section 2.05 and any Cash Reserve Account
      pursuant to Section 2.06, providing the Backup Servicer, at the Servicer's
      expense, with all records, in electronic or other form, reasonably requested
      by
      the Backup Servicer, in such form as the Backup Servicer may reasonably request
      and at such times as the Backup Servicer may reasonably request, to enable
      the
      Backup Servicer to assume the servicing functions hereunder and the transfer
      to
      the Backup Servicer for administration by it of all cash amounts which at the
      time should be or should have been deposited by the Servicer in the Collection
      Account or thereafter be received by the Servicer with respect to the Pledged
      Receivables. Additionally, the Servicer agrees to cooperate in providing, at
      the
      Servicer’s expense, the Backup Servicer as successor Servicer, with reasonable
      access (including at the premises of the Servicer) to Servicer’s employees and
      any and all books, records or other information reasonably requested by it
      to
      enable the Backup Servicer, as successor Servicer, to assume the servicing
      functions hereunder. Neither the Lender nor the Backup Servicer shall be deemed
      to have breached any obligation hereunder as a result of a failure to make
      or
      delay in making any distribution as and when required hereunder caused by the
      failure of the Servicer to remit any amounts received by it or to deliver any
      documents held by it with respect to the Pledged Assets. The Backup Servicer
      (including as successor Servicer) undertakes to perform only such duties and
      obligations as are specifically set forth in this Agreement, it being understood
      by all parties hereto that there are no implied duties or obligations of the
      Backup Servicer hereunder.

     

    The
      Active Backup Servicer’s Fees and Transition Costs shall be paid out of
      Collections with respect to any Pledged Receivable as set forth in Section 2.04(c)
      on and
      after the date, if any, that the Backup Servicer assumes the responsibilities
      of
      the Servicer pursuant to this Section. The Standby Backup Servicer’s Fees and
      Transition Costs shall be paid out of Collections with respect to any Pledged
      Receivable as set forth in Section 2.04(c)
      prior to
      the date, if any, that the Backup Servicer assumes the responsibilities of
      the
      Servicer pursuant to this Section.

     

    Any
      obligations of LEAF Financial under any Transaction Document other than in
      its
      capacity as Servicer shall continue in effect notwithstanding LEAF Financial’s
      termination as Servicer.

     

    On
      and
      after the time the Servicer receives a notice of termination pursuant to this
      Section 6.13,
      the
      Backup Servicer shall be (and the Backup Servicer hereby agrees to be) the
      successor in all respects to the Servicer in its capacity as Servicer under
      this
      Agreement and the transactions set forth or provided for herein and shall have
      all the rights and powers and be

     

    
      
         

      

      
        76

        
          

        

      

      
         

      

    

     

    subject
      thereafter to all the responsibilities, duties and liabilities relating thereto
      placed on the Servicer by the terms and provisions hereof; provided,
      however,
      that
      any failure to perform such duties or responsibilities caused by the Servicer’s
      failure to provide information required by this Section 6.13
      shall
      not be considered a default by the Backup Servicer hereunder; provided,
      further,
      however,
      that
      the Backup Servicer, as successor Servicer, shall have (i) no liability
      with respect to any obligation which was required to be performed by the
      terminated Servicer prior to the date that the Backup Servicer becomes the
      successor to the Servicer or any claim of a third party based on any alleged
      action or inaction of the terminated Servicer, (ii) no obligation to
      perform any repurchase or advancing obligations, if any, of the Servicer,
      (iii) no obligation to pay any taxes required to be paid by the Servicer
      (provided that the Backup Servicer shall pay any income taxes for which it
      is
      liable), (iv) no obligation to pay any of the fees and expenses of any
      other party to the transactions contemplated hereby, and (v) no liability
      or obligation with respect to any Servicer indemnification obligations of any
      prior Servicer, including the original Servicer. The indemnification obligations
      of the Backup Servicer, upon becoming a successor Servicer, are expressly
      limited to those arising on account of its failure to act in good faith and
      with
      reasonable care under the circumstances. In addition, the Backup Servicer shall
      have no liability relating to the representations and warranties of the Servicer
      contained in Article IV.
      Notwithstanding the above, the Lender may, or shall, if the Backup Servicer
      is
      unable to so act, appoint itself, or appoint any other established servicing
      institution acceptable to the Lender in its sole discretion, as the successor
      to
      the Servicer hereunder in the assumption of all or any part of the
      responsibilities, duties or liabilities of the Servicer hereunder. Pending
      appointment of a successor to the Servicer hereunder, and after the Lender
      notifies the Servicer to discontinue performing servicing functions under this
      Agreement, the Backup Servicer (or the Lender if there is no Backup Servicer)
      shall act in such capacity as hereinabove provided. In connection with such
      appointment and assumption, the Lender may make such arrangements for the
      compensation of such successor out of payments on Pledged Receivables as it
      and
      such successor shall agree; provided,
      however,
      that,
      except as provided herein, no such compensation shall be in excess of that
      permitted the Servicer hereunder, unless (i) agreed to by the Lender and
      (ii) such compensation shall be on commercially competitive terms and
      rates. The Borrower, the Lender and such successor shall take such action,
      consistent with this Agreement, as shall be necessary to effectuate any such
      succession. The parties hereto agree that in no event will the Backup Servicer
      be liable for any special, indirect or consequential damages.

     

    The
      Backup Servicer hereby agrees that it shall, and shall take all actions
      necessary so that it shall at all times be ready to, assume all the rights
      and
      powers and all of the responsibilities, obligations and duties of the Servicer
      hereunder, within ten (10) Business Days of receiving from the Lender a notice
      requesting the Backup Servicer to do so.

     

    Notwithstanding
      anything contained in this Agreement to the contrary, absent specific knowledge
      by any Lyon Financial Services, Inc. account representative assigned to this
      transaction from time to time, or written notice detailing specific Errors
      (as
      defined below) or other deficiencies, Lyon Financial Services, Inc., as
      successor Servicer, is authorized to accept and rely on all accounting records
      (including computer records) and work product of the prior Servicer hereunder
      relating to the Contracts (collectively, the “Predecessor
      Servicer Work Product”)
      without any audit or other examination thereof, and Lyon Financial Services,
      Inc. shall have no duty, responsibility, obligation or liability for the acts
      and omissions of the prior Servicer. If any error, inaccuracy, commission or
      incorrect or nonstandard practice or procedure

     

    
      
         

      

      
        77

        
          

        

      

      
         

      

    

     

    (collectively,
      “Errors”)
      exists
      in any Predecessor Servicer Work Product and such Errors cause Lyon Financial
      Services, Inc. to make or continue any errors (collectively, “Continued
      Errors”),
      Lyon
      Financial Services, Inc. shall have no liability for such Continued Errors;
      provided,
      however,
      that
      Lyon Financial Services, Inc. agrees to use its best efforts to prevent
      Continued Errors. In the event that Lyon Financial Services, Inc. becomes aware
      of Errors or Continued Errors, Lyon Financial Services, Inc. shall, with the
      prior consent of the Lender, use its best efforts to reconstruct and reconcile
      any affected data as is commercially reasonable to correct such Errors and
      Continued Errors and to prevent future Continued Errors. Lyon Financial
      Services, Inc. shall be entitled to recover its costs thereby expended as
      Servicer Advances in accordance with Section 2.04(c)
      hereof.

     

    Within
      four (4) Business Days after each Remittance Date, provided that the Backup
      Servicer shall have received the information specified in Section 6.10(d)
      within
      the time specified therein, the Backup Servicer shall compare the information
      on
      the computer tape or diskette (or other means of electronic transmission
      acceptable to the Backup Servicer) most recently delivered to the Backup
      Servicer by the Servicer pursuant to Section 6.10(d)
      with
      respect to such Remittance Date to the corresponding Monthly Remittance Report
      delivered to the Backup Servicer by the Servicer pursuant to Section 6.10(d)
      and
      shall:

     

    (a) confirm
      that such Monthly Remittance Report is complete on its face;

     

    (b) confirm
      the distributions to be made on such Remittance Date pursuant to Section 2.04(c)
      hereof
      to the extent the Backup Servicer is able to do so given the information
      provided to it by the Servicer (it being hereby agreed that the Backup Servicer
      shall promptly notify the Servicer and the Lender if such information is
      insufficient and that the Servicer shall promptly provide to the Backup Servicer
      any additional information required by the Backup Servicer);

     

    (c) confirm
      the mathematical computations of information in such Monthly Remittance Report;
      and

     

    (d) confirm
      such other information as the Backup Servicer and the Lender may
      agree;

     

    In
      the
      event of any discrepancy between the information set forth in
      subparagraphs (b) or (c) above as calculated by the Servicer and that
      determined or calculated by the Backup Servicer, the Backup Servicer shall
      promptly report such discrepancy to the Servicer and the Lender. In the event
      of
      a discrepancy as described in the preceding sentence, the Servicer and the
      Backup Servicer shall attempt to reconcile such discrepancy within five (5)
      Business Days after reporting such discrepancy, but in the absence of a
      reconciliation, distributions on the related Remittance Date shall be made
      consistent with the information calculated by the Servicer, the Servicer and
      the
      Backup Servicer shall attempt to reconcile such discrepancy prior to the next
      Remittance Date, and the Servicer shall promptly report to the Lender regarding
      the progress, if any, which shall have been made in reconciling such
      discrepancy. If the Backup Servicer and the Servicer are unable to reconcile
      such discrepancy with respect to such Monthly Remittance Report by the next
      Remittance Date that falls in April, July, October or January, the Servicer
      shall cause independent accountants acceptable to the Lender, at the Servicer’s
      expense, to examine such Monthly Remittance Report and attempt to reconcile
      such
      discrepancy at the earliest possible

     

    
      
         

      

      
        78

        
          

        

      

      
         

      

    

     

    date
      (and
      the Servicer shall promptly provide the Lender with a report regarding such
      event). The effect, if any, of such reconciliation shall be reflected in the
      Monthly Remittance Report for the next succeeding Remittance Date.

     

    Other
      than as specifically set forth in this Agreement, the Backup Servicer shall
      have
      no obligation to supervise, verify, monitor or administer the performance of
      the
      Servicer and shall have no liability for any action taken or omitted by the
      Servicer.

     

    The
      Backup Servicer may allow a subservicer to perform any and all of its duties
      and
      responsibilities hereunder, including but not limited to its duties as successor
      Servicer hereunder, should the Backup Servicer become the successor Servicer
      pursuant to the terms of this Agreement; provided,
      however,
      that
      the Backup Servicer shall remain liable for the performance of all of its duties
      and obligations hereunder to the same extent as if no such subservicing had
      occurred.

     

    In
      no
      event shall the Backup Servicer (either prior to or after its appointment
      hereunder as Servicer) be responsible or liable for any failure or delay in
      the
      performance of its obligations hereunder arising out of or caused by, directly
      or indirectly, forces beyond its control, including without limitation, acts
      of
      terrorism, civil or military disturbances, nuclear or natural catastrophes
      or
      acts of God.

     

    SECTION
      6.14 Additional
      Remedies of Lender Upon Event of Default.
      During
      the continuance of any Event of Default, the Lender, in addition to the rights
      specified in Section 7.01,
      shall
      have the right to take all actions now or hereafter existing at law, in equity
      or by statute to protect its interests and enforce its rights and remedies
      (including the institution and prosecution of all judicial, administrative
      and
      other proceedings and the filings of proofs of claim and debt in connection
      therewith). Except as otherwise expressly provided in this Agreement, no remedy
      provided for by this Agreement shall be exclusive of any other remedy, each
      and
      every remedy shall be cumulative and in addition to any other remedy, and no
      delay or omission to exercise any right or remedy shall impair any such right
      or
      remedy or shall be deemed to be a waiver of any Event of Default.

     

    SECTION
      6.15 Waiver
      of Defaults.
      The
      Lender may waive any default by the Servicer in the performance of its
      obligations hereunder and its consequences. Upon any such waiver of a past
      default, such default shall cease to exist, and any Event of Default arising
      therefrom shall be deemed to have been remedied for every purpose of this
      Agreement. No such waiver shall be effective unless it shall be in writing
      and
      signed by the Lender and no such waiver shall extend to any subsequent or other
      default or impair any right consequent thereon except to the extent expressly
      so
      waived.

     

    SECTION
      6.16 Maintenance
      of Certain Insurance.
      On the
      date hereof the Servicer shall obtain, and at all times thereafter during the
      term of its service as Servicer the Servicer shall maintain, in force an “errors
      and omissions” insurance policy in an amount not less than $1,000,000 naming the
      Lender as loss payee and with an insurance company reasonably acceptable to
      the
      Lender.

     

    
      
         

      

      
        79

        
          

        

      

      
         

      

    

          
      The Servicer shall deliver a copy of the insurance policy required under this
      Section 6.16 to the Lender on the date hereof together with a certification
      from
      the applicable insurance company that such policy is in force on the date
      hereof.

     

    The
      Servicer shall prepare and present, on behalf of itself and the Lender, claims
      under any such policy in a timely fashion in accordance with the terms of such
      policy, and upon, the filing of any claim on any policy described in this
      Section, the Servicer shall promptly notify the Lender of such
      claim.

     

    SECTION
      6.17 Segregation
      of Collections.
      The
      Servicer shall not commingle funds constituting Collections with respect to
      any
      Pledged Receivable with any other funds of the Servicer; provided,
      that
      such commingling may occur in the Lockbox Account so long as the Lockbox
      Intercreditor Agreement is in full force and effect.

     

    SECTION
      6.18 UCC
      Matters; Protection and Perfection of Pledged Assets.
      The
      Borrower will not change the jurisdiction of its formation, make any change
      to
      its corporate name or use any tradenames, fictitious names, assumed names,
      “doing business as” names or other names (other than those listed on
Schedule II
      hereto,
      as such schedule may be revised from time to time to reflect name changes and
      name usage permitted under the terms of this Section 6.18
      after
      compliance with all terms and conditions of this Section 6.18
      related
      thereto) unless, prior to the effective date of any such jurisdiction change,
      name change or use, the Borrower notifies the Collateral Agent of such change
      in
      writing and delivers to the Collateral Agent such executed financing statements
      as the Collateral Agent may request to reflect such jurisdiction, name change
      or
      use, together with such other documents and instruments as the Collateral Agent
      may request in connection therewith. The Borrower will not change the location
      of its chief executive office or the location of its records regarding the
      Pledged Receivables unless, prior to the effective date of any such change
      of
      location, the Borrower notifies the Collateral Agent of such change of location
      in writing and delivers to the Collateral Agent such executed financing
      statements as the Collateral Agent may reasonably request to reflect such change
      of location, together with such Opinions of Counsel, documents and instruments
      as the Collateral Agent may request in connection therewith. The Borrower agrees
      that from time to time, at its expense, it will promptly execute and deliver
      all
      further instruments and documents, and take all further action that the
      Collateral Agent may reasonably request in order to perfect, protect or more
      fully evidence the Collateral Agent’s interest in the Pledged Assets acquired
      hereunder, or to enable the Collateral Agent to exercise or enforce any of
      its
      respective rights hereunder. Without limiting the generality of the foregoing,
      the Borrower will, upon the request of the Collateral Agent: (i) execute
      (if necessary) and file such financing or continuation statements, or amendments
      thereto or assignments thereof, and such other instruments or notices, as may
      be
      necessary or appropriate or as the Collateral Agent may request, and
      (ii) mark its master data processing records evidencing such Pledged
      Receivables with a legend acceptable to the Collateral Agent, evidencing that
      the Collateral Agent has acquired an interest therein as provided in this
      Agreement. The Collateral Agent shall be entitled to conclusively rely on the
      filings or registrations made by or on behalf of the Borrower without any
      independent investigation and the Borrower’s obligation to make such filings as
      evidence that such filings have been made. The Borrower hereby authorizes the
      Collateral Agent to file one or more financing or continuation statements,
      and
      amendments thereto and assignments thereof, relative to all or any of the
      Pledged Receivables and the Other Conveyed Property and the Related

     

    
      
         

      

      
        80

        
          

        

      

      
         

      

    

     

    Security
      related thereto and the proceeds of the foregoing now existing or hereafter
      arising, without the signature of the Borrower where permitted by law. The
      Borrower hereby ratifies and authorizes the filing by the Collateral Agent
      of
      any such financing statement made prior to the date hereof. A carbon,
      photographic or other reproduction of this Agreement or any financing statement
      covering the Pledged Receivables, or any part thereof, shall be sufficient
      as a
      financing statement. The Borrower shall, upon the request of the Collateral
      Agent at any time after the occurrence of an Event of Default and at the
      Borrower’s expense, notify the Obligors obligated to pay any Pledged
      Receivables, or any of them, of the security interest of the Collateral Agent
      in
      the Pledged Assets. If the Borrower fails to perform any of its agreements
      or
      obligations under this Section 6.18,
      the
      Collateral Agent may (but shall not be required to) itself perform, or cause
      performance of, such agreement or obligation, and the expenses of the Collateral
      Agent incurred in connection therewith shall be payable by the Borrower upon
      the
      Collateral Agent’s demand therefor. For purposes of enabling the Collateral
      Agent to exercise its rights described in the preceding sentence and elsewhere
      in this Article VI,
      the
      Borrower hereby authorizes the Collateral Agent and its successors and assigns
      to take any and all steps in the Borrower’s name and on behalf of the Borrower
      necessary or desirable, in the determination of the Collateral Agent, to collect
      all amounts due under any and all Pledged Receivables, including, without
      limitation, endorsing the Borrower’s name on checks and other instruments
      representing Collections with respect to any Pledged Receivable and enforcing
      such Pledged Receivables and the related Contracts and, if any, the related
      guarantees.

     

    SECTION
      6.19 Servicer
      Advances.
      The
      Servicer may, in its sole discretion, make an advance in respect of any payment
      due on a Pledged Receivable (other than a Defaulted Receivable) to the extent
      such payment has not been received by the Servicer as of its due date and the
      Servicer reasonably expects such payment will be ultimately recoverable (a
      “Servicer
      Advance”).
      The
      Servicer shall deposit into the Collection Account in immediately available
      funds the aggregate of all Servicer Advances to be made during a Fee Period
      on
      or prior to the Business Day immediately preceding the related Remittance Date.
      The Servicer shall be entitled to reimbursement for such Servicer Advances
      from
      monies in the Collection Account as provided in Section 2.04(c)
      hereof.

     

    SECTION
      6.20 Repurchase
      of Receivables Upon Breach of Covenant or Representation and Warranty by
      Servicer.
      The
      Borrower or the Servicer, as the case may be, shall inform the other parties
      to
      this Agreement and the Initial Qualifying Swap Counterparty promptly, in
      writing, upon the discovery of any breach of the Servicer’s representations,
      warranties and/or covenants pursuant to Section 4.02,
      Section 6.05
      or
Article V;
      provided,
      however,
      that
      the failure to provide any such notice shall not diminish, in any manner
      whatsoever, any obligation of the Servicer hereunder to repurchase any Pledged
      Receivable. Unless such breach shall have been cured by the last day of the
      first full calendar month following the discovery by or notice to the Servicer
      of such breach (and provided that a Borrowing Base Deficiency exists on such
      last day), the Servicer (if LEAF Financial or an Affiliate thereof) shall have
      an obligation, and the Borrower shall and the Collateral Agent may, enforce
      such
      obligation of the Servicer (if LEAF Financial or an Affiliate thereof), to
      repurchase any Pledged Receivable materially and adversely affected by such
      breach. The Borrower shall notify the Collateral Agent promptly, in writing,
      of
      any failure by the Servicer to so repurchase any such Pledged Receivable. In
      consideration of the repurchase of such Pledged Receivable, the Servicer shall
      remit funds in an amount equal to the Release Price for such Pledged Receivable
      to the Collection Account on the date of such

     

    
      
         

      

      
        81

        
          

        

      

      
         

      

    

     

    repurchase.
      The obligations of the Servicer under this Section 6.20
      are in
      addition to, and in no way limit, any obligations of the Servicer in its
      individual capacity under the Purchase and Sale Agreement. It is understood
      and
      agreed that the obligation of the Servicer to purchase any Receivables is not
      intended to, and shall not, constitute a guaranty of the collectibility or
      payment of any Receivable which is not collected, not paid or uncollectible
      on
      account of the insolvency, bankruptcy, or financial inability to pay of the
      related Obligor.

     

    SECTION
      6.21 Compliance
      with Applicable Law.
      The
      Servicer and the Borrower shall at all times comply in all material respects
      with all requirements of applicable federal, state and local laws, and
      regulations thereunder (including, without limitation, usury laws, the Federal
      Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing
      Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act,
      the
      Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the Federal
      Reserve Board’s Regulations “B” and “Z”, the Soldiers’ and Sailors’ Civil Relief
      Act of 1940 and state adaptations of the National Consumer Act and of the
      Uniform Consumer Credit Code and all other consumer credit laws and equal credit
      opportunity and disclosure laws) in the conduct of its business.

     

    SECTION
      6.22 Receipt
      of Certificates of Title.
      Any
      Receivable (other than a Vehicle Sublimit Pledged Receivable) with respect
      to
      which the Obligor Collateral includes a Vehicle and for which the Servicer
      shall
      not have (i) received a Certificate of Title indicating the Borrower as the
      owner of the related Vehicle and “Morgan Stanley Bank” as the sole lienholder
      with respect to such Vehicle from the applicable Registrar of Titles and
      (ii) delivered such Certificate of Title to the Custodian within
      90 days of the first day of inclusion of such Pledged Receivable in the
      calculation of the Eligible Receivables Balance, shall no longer be deemed
      to be
      an Eligible Receivable and, therefore, shall no longer be included in the
      calculation of the Eligible Receivables Balance. In the case of any Receivable
      excluded from the calculation of the Eligible Receivables Balance pursuant
      to
      the previous sentence, the Receivable so excluded from the calculation of the
      Eligible Receivables Balance may at a later time be included in the calculation
      of the Eligible Receivables Balance, provided,
      that
      (i) the Custodian shall have received the Certificate of Title described
      above with respect to such Receivable from the applicable Registrar of Titles
      and delivered such Certificate of Title to the Custodian and (ii) such
      Receivable is otherwise an Eligible Receivable at such time.

     

    SECTION
      6.23 Lender’s
      Bank Limitation of Liability.
      xv)
      The
      Lender’s Bank undertakes to perform only such duties and obligations as are
      specifically set forth in this Agreement, it being expressly understood by
      the
      parties hereto that there are no implied duties or obligations under this
      Agreement. Neither the Lender’s Bank nor any of its officers, directors,
      employees or agents shall be liable, directly or indirectly, for any damages
      or
      expenses arising out of the services performed under this Agreement other than
      damages which result from the gross negligence or willful misconduct of it
      or
      them. In no event will the Lender’s Bank or any of its officers, directors,
      employees or agents be liable for any consequential, indirect or special
      damages.

     

    (b) The
      Lender’s Bank shall not be liable for any error of judgment, or for any act done
      or step taken or omitted by it, in good faith, or for any mistakes of fact
      or
      law, or for anything which it may do or refrain from doing in connection
      herewith.

     

    
      
         

      

      
        82

        
          

        

      

      
         

      

    

    (c) The
      Lender’s Bank may rely on and shall be protected in acting upon any certificate,
      instrument, opinion, notice, letter, telegram or other document delivered to
      it
      by any other Person and which in good faith it believes to be genuine and which
      has been signed by the proper party or parties. The Lender’s Bank may rely on
      and shall be protected in acting upon the written instructions of any designated
      officer of the Borrower, the Servicer or the Lender.

     

    (d) The
      Lender’s Bank may consult with counsel reasonably satisfactory to it and the
      opinion of such counsel shall be full and complete authorization and protection
      in respect of any action taken, suffered or omitted by it hereunder in good
      faith and in accordance with the opinion of such counsel.

     

    (e) The
      Lender’s Bank shall not be required to expend or risk its own funds or otherwise
      incur financial liability in the performance of any of its duties hereunder,
      or
      in the exercise of its rights or powers, if the Lender’s Bank believes that
      repayment of such funds (repaid in accordance with the terms of this Agreement)
      or adequate indemnity against such risk or liability is not reasonably assured
      to it.

     

    (f) The
      Lender’s Bank shall not be deemed to be a fiduciary of any party
      hereto.

     

    (g) The
      parties hereto agree that in no event will the Lender’s Bank be liable for
      special, indirect or consequential damages.

     

    ARTICLE
      VII.

     

    EVENTS
      OF DEFAULT

     

    SECTION
      7.01 Events
      of Default.
      If any
      of the following events (“Events
      of Default”)
      shall
      occur:

     

    (a) the
      occurrence of any Bankruptcy Event with respect to the Borrower, Owner, Resource
      America, the Originator or the Servicer; or 

     

    (b) any
      representation or warranty made or deemed to be made by the Borrower or the
      Servicer (or any of its officers) under or in connection with this Agreement
      (or
      any remittance report or other information or report delivered pursuant hereto)
      or any other Transaction Document shall prove to be false or incorrect in any
      respect and shall remain false or incorrect for a period fifteen (15) Business
      Days after the Servicer or the Borrower become aware, or are notified by the
      Lender, the Custodian or any other Person, that such representation or warranty
      is false or incorrect; provided,
      however,
      that if
      any breach described above is cured by the repurchase of Receivables pursuant
      to
Article VI
      of the
      Purchase and Sale Agreement or by a repayment hereunder, or repurchase pursuant
      to Sections 4.03
      or
6.20
      hereof,
      such breach shall cease to constitute an Event of Default; or

     

    (c) (i) the
      Borrower or the Servicer shall fail to perform or observe any term, covenant
      or
      agreement hereunder or under any other Transaction Document (other than
      described in clause (ii) below) in any material respect and such failure
      remains unremedied for fifteen (15) Business Days or (ii) either the
      Servicer or the Borrower shall fail to make any payment or

     

    
      
         

      

      
        83

        
          

        

      

      
         

      

    

     

    deposit
      to be made by it when due hereunder or under any other Transaction Document
      and
      such failure remains unremedied for two (2) Business Days; or

     

    (d) the
      Borrower, Owner, Resource America or the Servicer shall fail to pay (and such
      failure remains unremedied for two (2) Business Days) any principal of or
      premium or interest on any Debt in an amount in excess of $10,000,000, when
      the
      same becomes due and payable (whether by scheduled maturity, required
      prepayment, acceleration, demand or otherwise); or any other default under
      any
      agreement or instrument relating to any Debt of the Borrower or the Servicer
      or
      any other event, shall occur if the effect of such default or event is to
      accelerate, or to permit the acceleration of, the maturity of such Debt; or
      any
      such Debt shall be declared to be due and payable or required to be prepaid
      (other than by a regularly scheduled required prepayment) prior to the stated
      maturity thereof; or

     

    (e) the
      Originator, the Borrower or any of their respective subsidiaries shall have
      suffered any material adverse change to its business, financial condition or
      any
      other condition which, in Lender’s sole discretion, constitutes a material
      impairment of the Originator or the Borrower’s ability to perform its
      Obligations; or

     

    (f) (i) the
      Collateral Agent shall at any time fail to have a valid, perfected, first
      priority security interest in any of the Pledged Assets (other than Equipment
      which has a value of less than (x) $25,000 if such Equipment is leased
      under Dollar Purchase Option Contracts or (y) $50,000 if such Equipment is
      leased under FMV Contracts) or (ii) any purchase by the Borrower of a
      Receivable and the Collections, Related Security and Other Conveyed Property
      with respect thereto under the Purchase and Sale Agreement shall, for any
      reason, cease to create in favor of the Borrower a perfected ownership interest
      in such Receivable and the Collections, Related Security and the Other Conveyed
      Property with respect thereto; provided,
      however,
      that if
      an event described in the foregoing clause (i) or (ii) is cured by the
      repurchase of Receivables pursuant to Article VI
      of the
      Purchase and Sale Agreement or by a repayment hereunder or repurchase pursuant
      to Sections 4.03
      or
6.20
      hereof,
      within five Business Days, such event shall cease to constitute an Event of
      Default; or

     

    (g) the
      Borrower or the Servicer shall have suffered any material adverse change to
      its
      financial condition or operations which would affect the collectibility of
      the
      Pledged Receivables or the Borrower’s or the Servicer’s ability to conduct its
      business or fulfill its obligations hereunder or under any other Transaction
      Document; or

     

    (h) the
      Servicer’s or the Borrower’s activities are terminated for any reason, including
      any termination thereof by a regulatory, tax or accounting body; or

     

    (i) the
      occurrence of a Change of Control; or

     

    (j) the
      Purchase and Sale Agreement or any other Transaction Document or any material
      provision of any of them shall cease to be in full force and effect and
      enforceable in accordance with its terms, or the Servicer, the Borrower, or
      any
      Affiliate of the Servicer or the Borrower shall so assert in writing;
      or

     

    (k) the
      occurrence of a Servicer Default; or

     

    
      
         

      

      
        84

        
          

        

      

      
         

      

    

    (l) (i) the
      Facility Amount exceeds the lesser of (x) the Borrowing Limit and such
      event shall remain unremedied for one Business Day or (y) the Borrowing
      Base and such event shall remain unremedied for two Business Days; (ii) the
      aggregate Facility Amount hereunder, calculated solely with respect to Loans
      made with respect to Pool A Receivables, exceeds the Pool A Borrowing
      Base and such event shall remain unremedied for two Business Days or
      (iii) the aggregate Facility Amount hereunder, calculated solely with
      respect to Loans made with respect to Pool B Receivables, exceeds the
      Pool B Borrowing Base and such event shall remain unremedied for two
      Business Days; or

     

    (m) the
      auditor’s opinion accompanying the audited annual financial statements of the
      Servicer or the Borrower is qualified in any manner; or

     

    (n) (i) any
      Qualifying Interest Rate Swap shall cease to be in full force and effect,
      (ii) the Borrower or the Servicer fail to comply with any hedging
      requirement hereunder or (iii) the counterparty under any Qualifying
      Interest Rate Swap or former or purported Qualifying Interest Rate Swap fails
      to
      qualify as a Qualifying Swap Counterparty and does not post cash collateral
      in a
      manner satisfactory to the Lender is not replaced by a Qualifying Swap
      Counterparty within 45 days of such counterparty’s failure to so qualify,
      (iv) the occurrence of any default by the Borrower or Servicer in the
      observance or performance of any of the terms or provisions of any Qualifying
      Interest Rate Swap or (v) any interest rate swap agreement represented by
      the Borrower or the Servicer to be a Qualifying Interest Rate Swap shall fail
      to
      be, or cease to be, a Qualifying Interest Rate Swap; or

     

    (o) Resource
      America shall, at any time, permit its Tangible Net Worth to be less than the
      Minimum Tangible Net Worth; or

     

    (p) either
      (i) the provisions of the Transaction Documents relating to the Backup
      Servicer or its duties under any of the Transaction Documents cease to be in
      full force and effect and enforceable in accordance with their terms, or the
      Backup Servicer shall so assert in writing, (ii) Lyon Financial Services,
      Inc. or any successor Backup Servicer resigns, is removed by the Lender, or
      otherwise ceases to act as the Backup Servicer, and such Backup Servicer is
      not
      replaced by a new Backup Servicer satisfactory to the Lender within 45 days
      of
      such resignation, removal or other event;

     

    then
      the
      Lender may, by notice to the Borrower and each Qualifying Swap Counterparty,
      declare the Program Termination Date to have occurred; provided,
      that,
      in the case of any event described in Section 7.01(a)
      above,
      the Program Termination Date shall be deemed to have occurred automatically
      upon
      the occurrence of such event. Upon any such declaration or automatic occurrence,
      (i) the Borrower shall cease purchasing Receivables from Originator under
      the Purchase and Sale Agreement, (ii) at the option of the Lender in its
      sole discretion, the Lender may declare the Loans made to the Borrower hereunder
      and all interest and all Fees accrued on such Loans and any other Obligations
      to
      be immediately due and payable (and the Borrower shall pay such Loans and all
      such amounts and Obligations immediately), (iii) the Lender, in its sole
      discretion, may direct the Obligors to make all payments under the Pledged
      Receivables directly to the Backup Servicer, the Lender or any lockbox or
      account established by any of such parties. Any Collections received in any
      such
      account (or received directly by the Lender) shall be applied to the Obligations
      in accordance with the priority of payments set forth

     

    
      
         

      

      
        85

        
          

        

      

      
         

      

    

     

    in
      Section
      2.04(c).
      In
      addition, upon any such declaration or upon any such automatic occurrence,
      the
      Lender and the Collateral Agent shall have, in addition to all other rights
      and
      remedies under this Agreement or otherwise, all other rights and remedies
      provided under the UCC of the applicable jurisdiction and other applicable
      laws,
      which rights shall be cumulative. If any Event of Default shall have occurred,
      the Interest Rate shall be increased to the Default Funding Rate, effective
      as
      of the date of the occurrence of such Event of Default, and shall remain at
      the
      Default Funding Rate.

     

    SECTION
      7.02 Additional
      Remedies of the Lender.
      xvi)
      If,
      (i) upon the Lender’s declaration that the Loans made to the Borrower
      hereunder are immediately due and payable pursuant to Section 7.01
      or
      (ii) on the Facility Maturity Date, the aggregate outstanding principal
      amount of the Loans, all accrued Fees and interest and any other Obligations
      are
      not immediately paid in full, then the Collateral Agent, in addition to all
      other rights specified hereunder, shall have the right to immediately sell
      in a
      commercially reasonable manner, in a recognized market (if one exists) at such
      price or prices as the Collateral Agent may reasonably deem satisfactory, any
      or
      all Pledged Assets and shall apply the proceeds thereof to the Obligations
      in
      accordance with the priority of payments set forth in Section
      2.04(c).

     

    (b) The
      parties recognize that it may not be possible to sell all of the Pledged Assets
      on a particular Business Day, or in a transaction with the same purchaser,
      or in
      the same manner because the market for such Pledged Assets may not be liquid.
      Accordingly, the Collateral Agent may elect, in its sole discretion, the time
      and manner of liquidating any Pledged Assets, and nothing contained herein
      shall
      obligate the Collateral Agent to liquidate any Pledged Assets on the date the
      Lender declares the Loans made to the Borrower hereunder to be immediately
      due
      and payable pursuant to Section 7.01
      or to
      liquidate all Pledged Assets in the same manner or on the same Business
      Day.

     

    (c) Any
      amounts received from any sale or liquidation of the Pledged Assets pursuant
      to
      this Section 7.02
      in
      excess of the Obligations will be returned to the Borrower, its successors
      or
      assigns, or to whosoever may be lawfully entitled to receive the same, or as
      a
      court of competent jurisdiction may otherwise direct.

     

    (d) Each
      of
      the Lender, Collateral Agent and the Initial Qualifying Swap Counterparty shall
      have, in addition to all the rights and remedies provided herein and provided
      by
      applicable federal, state, foreign, and local laws (including, without
      limitation, the rights and remedies of a secured party under the Uniform
      Commercial Code of any applicable state, to the extent that the Uniform
      Commercial Code is applicable, and the right to offset any mutual debt and
      claim), all rights and remedies available to such Person at law, in equity
      or
      under any other agreement between such Person and the Borrower.

     

    (e) Except
      as
      otherwise expressly provided in this Agreement, no remedy provided for by this
      Agreement shall be exclusive of any other remedy, each and every remedy shall
      be
      cumulative and in addition to any other remedy, and no delay or omission to
      exercise any right or remedy shall impair any such right or remedy or shall
      be
      deemed to be a waiver of any Program Termination Event or Event of
      Default.

     

    
      
         

      

      
        86

        
          

        

      

      
         

      

    

     

    ARTICLE
      VIII.

     

    INDEMNIFICATION

     

    SECTION
      8.01 Indemnities
      by the Borrower.
      Without
      limiting any other rights which the Lender, the Collateral Agent, the Backup
      Servicer (whether in its capacity as Backup Servicer or successor Servicer),
      the
      Lender’s Bank, the Custodian, the Initial Qualifying Swap Counterparty or any of
      their respective Affiliates may have hereunder or under applicable law, the
      Borrower hereby agrees to indemnify the Lender, the Collateral Agent, the
      Custodian, the Backup Servicer, the Lender’s Bank, the Initial Qualifying Swap
      Counterparty and each of their respective Affiliates (each, an “Indemnified
      Party”
for
      purposes of this Article VIII)
      from
      and against any and all damages, losses, claims, liabilities and related costs
      and expenses, including reasonable attorneys’ fees and disbursements (all of the
      foregoing being collectively referred to as “Indemnified
      Amounts”),
      awarded against or incurred by any of them arising out of or as a result of
      this
      Agreement or in respect of any Pledged Assets, excluding, however, (A)
      Indemnified Amounts to the extent resulting solely from gross negligence, bad
      faith or willful misconduct on the part of an Indemnified Party, (B) taxes
      (including interest and penalties imposed thereon) imposed by the jurisdiction
      in which such Indemnified Party’s principal executive office is located, on or
      measured by the overall net income of such Indemnified Party or (C) Indemnified
      Amounts to the extent that they are or result from lost profits (other than
      principal, interest and Fees with respect to the Loans). Without limiting the
      foregoing, the Borrower shall indemnify each Indemnified Party for Indemnified
      Amounts relating to or resulting from any of the following (to the extent not
      resulting solely from gross negligence, bad faith or willful misconduct on
      the
      part of an Indemnified Party):

     

    (i)     any
      Pledged Receivable treated as or represented by the Borrower to be an Eligible
      Receivable which is not at the applicable time an Eligible
      Receivable;

     

    (ii)     reliance
      on any representation or warranty made or deemed made by the Borrower or any
      of
      its officers under or in connection with this Agreement, which shall have been
      false or incorrect in any material respect when made or deemed made or
      delivered;

     

    (iii)     the
      failure
      by the Borrower to comply with any term, provision or covenant contained in
      this
      Agreement or any agreement executed in connection with this Agreement, or with
      any applicable law, rule or regulation with respect to any Pledged Assets,
      or
      the nonconformity of any Pledged Assets with any such applicable law, rule
      or
      regulation;

     

    (iv)     the
      failure to vest and maintain vested in the Collateral Agent or to transfer
      to
      the Collateral Agent a first priority perfected security interest in the
      Receivables which are, or are purported to be, Pledged Receivables, together
      with all related Other Conveyed Property, Collections, Related Security and
      other Pledged Assets related thereto (including, without limitation, the
      Borrower’s interest in and to any and all Obligor Collateral with respect to
      such Receivables), free and clear of any Adverse Claim whether existing at
      the
      time of the related Borrowing or at any time thereafter;

     

    
      
         

      

      
        87

        
          

        

      

      
         

      

    

    (v)     the
      failure to maintain, as of the close of business on each Business Day prior
      to
      the Collection Date, a Facility Amount which is less than or equal to the lesser
      of (x) the Borrowing Limit on such Business Day and (y) the Borrowing
      Base on such Business Day;

     

    (vi)     the
      failure to maintain, as of the close of business on each Business Day prior
      to
      the Collection Date, a Facility Amount, calculated solely with respect to Loans
      secured by Pool A Receivables, which is less than or equal to the
      Pool A Borrowing Base;

     

    (vii)     the
      failure to maintain, as of the close of business on each Business Day prior
      to
      the Collection Date, a Facility Amount, calculated solely with respect to Loans
      secured by Pool B Receivables, which is less than or equal to the Pool B
      Borrowing Base;

     

    (viii)     the
      failure to file, or any delay in filing, financing statements or other similar
      instruments or documents under the UCC of any applicable jurisdiction or other
      applicable laws with respect to any Receivables which are, or are purported
      to
      be, Pledged Receivables or the other Pledged Assets related thereto, whether
      at
      the time of any Borrowing or at any subsequent time;

     

    (ix)     any
      dispute, claim, offset or defense (other than the discharge in bankruptcy of
      an
      Obligor) to the payment of any Receivable which is, or is purported to be,
      a
      Pledged Receivable (including, without limitation, a defense based on such
      Receivable (or the Contract evidencing such Receivable) not being a legal,
      valid
      and binding obligation of such Obligor enforceable against it in accordance
      with
      its terms);

     

    (x)     any
      failure of the Borrower to perform its duties or obligations in accordance
      with
      the provisions of this Agreement or any other Transaction Document;

     

    (xi)     the
      failure
      of the Borrower to pay when due any taxes payable in connection with the Pledged
      Receivables or the Pledged Assets related thereto;

     

    (xii)     any
      repayment by the Lender of any amount previously distributed in payment of
      Loans
      or payment of interest or Fees or any other amount due hereunder, in each case
      which amount the Lender believes in good faith is required to be
      repaid;

     

    (xiii)     the
      commingling by the Borrower of Collections of Pledged Receivables at any time
      with other funds;

     

    (xiv)     any
      investigation, litigation or proceeding related to this Agreement or the use
      of
      proceeds of Loans or the Pledged Assets;

     

    (xv)     any
      failure by the Borrower to give reasonably equivalent value to Originator in
      consideration for the transfer by Originator to the Borrower of any

    
      
         

      

      
        88

        
          

        

      

      
         

      

    

     

              Receivable
      or any attempt by any
      Person to void or otherwise avoid any such transfer under any statutory
      provision or 

                 
      common law or equitable action, including, without limitation, any provision
      of
      the Bankruptcy Code;

     

    (xvi)     [Reserved];

     

    (xvii)     any
      failure of the Borrower or any of its agents or representatives to remit to
      the
      Collection Account, Collections of Pledged Receivables remitted to the Borrower
      or any such agent or representative;

     

    (xviii)     any
      failure on the part of the Borrower duly to observe or perform in any material
      respect any covenant or agreement under any Qualifying Interest Rate Swap;
      and/or

     

    (xix)     any
      Contract
      related to any Pledged Receivable being rejected by an Obligor under
      Section 365 of the Bankruptcy Code in the event that a Bankruptcy Event has
      occurred with respect to such Obligor.

     

    Any
      amounts subject to the indemnification provisions of this Section 8.01
      shall be
      paid by the Borrower to the Lender on behalf of the applicable Indemnified
      Party
      within two (2) Business Days following the Lender’s written demand therefor on
      behalf of the applicable Indemnified Party (and the Lender shall pay such
      amounts to the applicable Indemnified Party promptly after the receipt by the
      Lender of such amounts). The Lender, on behalf of any Indemnified Party making
      a
      request for indemnification under this Section 8.01,
      shall
      submit to the Borrower a certificate setting forth in reasonable detail the
      basis for and the computations of the Indemnified Amounts with respect to which
      such indemnification is requested, which certificate shall be conclusive absent
      demonstrable error.

     

    If
      the
      Borrower has made any payments in respect of Indemnified Amounts to the Lender,
      on behalf of an Indemnified Party pursuant to this Section 8.01
      and such
      Indemnified Party thereafter collects any of such amounts from others, such
      Indemnified Party will promptly repay such amounts collected to the Borrower,
      without interest.

     

    SECTION
      8.02 Indemnities
      by Servicer.
      xvii)
      Without
      limiting any other rights which any Indemnified Party may have hereunder or
      under applicable law, the Servicer (if LEAF Financial or one of its Affiliates)
      hereby agrees to indemnify each Indemnified Party from and against any and
      all
      damages, losses, claims, liabilities and related costs and expenses (including
      reasonable attorneys’ fees and disbursements) (all of the foregoing being
      collectively referred to as “Servicer
      Indemnified Amounts”)
      suffered or sustained by any Indemnified Party as a consequence of any of the
      following, excluding, however, Servicer Indemnified Amounts resulting solely
      from (A) any gross negligence, bad faith or willful misconduct of any
      Indemnified Party claiming indemnification hereunder, (B) taxes (including
      interest and penalties imposed thereon) imposed by the jurisdiction in which
      such Indemnified Party’s principal executive office is located, on or measured
      by the overall net income of such Indemnified Party; (C) Indemnified Amounts
      to
      the extent that they are or result from lost profits (other than principal,
      interest and Fees with respect to the Loans); and (D) Indemnified Amounts to
      the
      extent the same includes losses that arise solely due to Receivables being
      uncollectible on

     

    
      
         

      

      
        89

        
          

        

      

      
         

      

    

     

    account
      of the insolvency, bankruptcy or lack of creditworthiness of the related Obligor
      or would constitute recourse to Servicer for such losses:

     

    (i)     the
      inclusion, in any computations made by it in connection with any Borrowing
      Base
      Certificate or Monthly Remittance Report or other report prepared by it
      hereunder, of any Pledged Receivables which were not Eligible Receivables as
      of
      the date of any such computation;

     

    (ii)     reliance
      on any representation or warranty made by the Servicer (if LEAF Financial or
      one
      of its Affiliates) or any of its officers under or in connection with this
      Agreement, which shall have been false or incorrect in any material respect
      when
      made or delivered;

     

    (iii)     the
      failure by the Servicer (if LEAF Financial or any of its Affiliates) to comply
      with (A) any term, provision or covenant contained in this Agreement, or
      any agreement executed in connection with this Agreement, or (B) any
      applicable law, rule or regulation applicable to it with respect to any Pledged
      Assets;

     

    (iv)     any
      action or inaction by the Servicer (if LEAF Financial or one of its Affiliates)
      that causes the Collateral Agent not to have a first priority perfected security
      interest in the Receivables that are, or are purported to be, Pledged
      Receivables, together with all related Other Conveyed Property, Collections,
      Related Security and other Pledged Assets related thereto (including without
      limitation, the Borrower’s interest in and to any and all Obligor Collateral
      with respect to such Receivables), free and clear of any Adverse Claim whether
      existing at the time of the related Borrowing or any time
      thereafter;

     

    (v)     the
      commingling by the Servicer (if LEAF Financial or one of its Affiliates) of
      the
      Collections of Pledged Receivables at any time with any other
      funds;

     

    (vi)     any
      failure of the Servicer (if LEAF Financial or one of its Affiliates) or any
      of
      its agents or representatives (including, without limitation, agents,
      representatives and employees of the Servicer acting pursuant to authority
      granted under Section 6.01
      hereof)
      to remit to Collection Account, Collections of Pledged Receivables remitted
      to
      the Servicer or any such agent or representative;

     

    (vii)     the
      failure by the Servicer (if LEAF Financial or any of its Affiliates) to perform
      any of its duties or obligations in accordance with the provisions of this
      Agreement or errors or omissions related to such duties; and/or

     

    (viii)     notwithstanding
      whether any Pledged Receivable shall have been repurchased by the Servicer
      pursuant to Section 6.20,
      any of
      the events or facts giving rise to a breach of any of the Servicer’s
      representations, warranties, agreements and/or covenants set forth in
Article V
      or
Article VI.

     

    (b) Any
      Servicer Indemnified Amounts shall be paid by the Servicer (if LEAF Financial
      or
      one of its Affiliates) to the Lender, for the benefit of the applicable
      Indemnified Party, within 

    
      
         

      

      
        90

        
          

        

      

      
         

      

    

     

    two
      (2)
      Business Days following receipt by the Servicer of the Lender’s written demand
      therefor (and the Lender shall pay such amounts to the applicable Indemnified
      Party promptly after the receipt by the Lender of such amounts).

     

    (c) If
      the
      Servicer has made any indemnity payments to the Lender, on behalf of an
      Indemnified Party pursuant to this Section 8.02
      and such
      Indemnified Party thereafter collects any of such amounts from others, such
      Indemnified Party will promptly repay such amounts collected to the Servicer,
      without interest.

     

    Each
      applicable Indemnified Party shall deliver to the indemnifying party under
      Section 8.01
      and
Section 8.02,
      within
      a reasonable time after such Indemnified Party’s receipt thereof, copies of all
      notices and documents (including court papers) received by such Indemnified
      Party relating to the claim giving rise to the Indemnified Amounts.

     

    ARTICLE
      IX.

     

    MISCELLANEOUS

     

    SECTION
      9.01 Amendments
      and Waivers.
      xviii)
      Except
      as provided in Section 9.01(b),
      no
      amendment or modification of any provision of this Agreement shall be effective
      without the written agreement of the Borrower, the Servicer, the Lender and,
      to
      the extent any of their rights or obligations hereunder are adversely affected
      thereby, the Backup Servicer, the Custodian, the Lender’s Bank, and/or each
      Qualifying Swap Counterparty, and no termination or waiver of any provision
      of
      this Agreement or consent to any departure therefrom by the Borrower or the
      Servicer shall be effective without the written concurrence of the Backup
      Servicer and the Lender. Any waiver or consent shall be effective only in the
      specific instance and for the specific purpose for which given.

     

    (b) Notwithstanding
      the provisions of Section 9.01(a),
      in the
      event that there is more than one Lender, the written consent of each Lender
      shall be required for any amendment, modification or waiver (i) reducing
      any outstanding Loans, or the interest thereon, (ii) postponing any date
      for any payment of any Loan, or the interest thereon, (iii) modifying the
      provisions of this Section 9.01,
      or
      (iv) increasing the Borrowing Base or the Borrowing Limit.

     

    SECTION
      9.02 Notices,
      Etc.
      All
      notices and other communications provided for hereunder shall, unless otherwise
      stated herein, be in writing (including telex communication, communication
      by
      facsimile copy or electronic mail) and mailed, telexed, transmitted or
      delivered, as to each party hereto, at its address set forth on Schedule
      VI
      hereto
      or specified in such party’s Assignment and Acceptance or at such other address
      (including, without limitation, an electronic mail address) as shall be
      designated by such party in a written notice to the other parties hereto. All
      such notices and communications shall be effective, upon receipt, or in the
      case
      of  notice by facsimile copy or electronic mail, when verbal communication
      of receipt is obtained, except that notices and communications pursuant to
      Article II
      shall
      not be effective until received.

     

    SECTION
      9.03 No
      Waiver; Remedies.
      No
      failure on the part of the Lender to exercise, and no delay in exercising,
      any
      right hereunder shall operate as a waiver thereof; nor shall any

    
      
         

      

      
        91

        
          

        

      

      
         

      

    

     

    single
      or
      partial exercise of any right hereunder preclude any other or further exercise
      thereof or the exercise of any other right. The remedies herein provided are
      cumulative and not exclusive of any remedies provided by law.

     

    SECTION
      9.04 Binding
      Effect; Assignability; Multiple Lenders.
      xix)
      This
      Agreement shall be binding upon and inure to the benefit of the Borrower, the
      Servicer, the Lender, the Backup Servicer, the Custodian, the Lender’s Bank and
      their respective successors and permitted assigns. This Agreement and the
      Lender’s rights and obligations hereunder and interest herein shall be
      assignable in whole or in part (including by way of the sale of participation
      interests therein) by the Lender and its successors and assigns. None of the
      Borrower, the Servicer or the Backup Servicer may assign any of its rights
      and
      obligations hereunder or any interest herein without the prior written consent
      of the Lender. The parties to each assignment or participation made pursuant
      to
      this Section 9.04
      shall
      execute and deliver to the Lender, for its acceptance and recording in its
      books
      and records, an assignment and acceptance agreement (an “Assignment
      and Acceptance”)
      or a
      participation agreement or other transfer instrument reasonably satisfactory
      in
      form and substance to the Lender and the Borrower. Each such assignment or
      participation shall be effective as of the date specified in the applicable
      Assignment and Acceptance or other agreement or instrument only after the
      execution, delivery, acceptance and recording thereof as described in the
      preceding sentence. The Lender shall notify the Borrower of any assignment
      or
      participation thereof made pursuant to this Section 9.04.
      The
      Lender may, in connection with any assignment or participation or any proposed
      assignment or participation pursuant to this Section 9.04,
      disclose to the assignee or participant or proposed assignee or participant
      any
      information relating to the Borrower and the Pledged Assets furnished to the
      Lender by or on behalf of the Borrower or the Servicer; provided,
      however,
      that
      the Lender shall not disclose any such information until it has obtained an
      agreement from such assignee or participant or proposed assignee or participant
      that it shall treat as confidential (under terms mutually satisfactory to the
      Lender, the Borrower, the Servicer and such assignee or participant or proposed
      assignee or participant) any information obtained which is not already publicly
      known or available.

     

    (b) Whenever
      the term “Lender” is used herein, it shall mean Morgan Stanley and/or any other
      Person which shall have executed an Assignment and Acceptance; provided,
      however,
      that
      each such party shall have a pro rata share of the rights and obligations of
      the
      Lender hereunder in such percentage amount (the “Commitment
      Percentage”)
      as
      shall be obtained by dividing such party’s commitment to fund Loans hereunder by
      the total commitment of all parties to fund Loans hereunder. Unless otherwise
      specified herein, any right at any time of the Lender to enforce any remedy,
      shall be exercised by the Lender only upon direction by such parties that hold
      a
      majority of the Commitment Percentages at such time.

     

    (c) Subject
      to Section 9.04(a),
      each of
      the parties hereto hereby agrees to execute any amendment to this Agreement
      that
      is required in order to facilitate the addition of any new Lender hereunder
      as
      contemplated by this Section 9.04
      and
      which does not have any adverse effect on the Borrower, the Originator, the
      Servicer or any Affiliate thereof.

     

    SECTION
      9.05 Term
      of This Agreement.
      This
      Agreement including, without limitation, the Borrower’s obligation to observe
      its covenants set forth in Articles V
      and
VI
      and the
      Servicer’s obligation to observe its covenants set forth in Articles V
      and
VI,
      shall
      remain in full 

    
      
         

      

      
        92

        
          

        

      

      
         

      

    

     

    force and effect until the Collection Date; provided,
      however,
      that
      the rights and remedies with respect
      to any breach of any representation and warranty made or deemed made by the
      Borrower or the Servicer pursuant to Articles III
      and
IV
      and the
      indemnification and payment provisions of Article VIII
      and
Article IX
      and the
      provisions of Section 9.08
      and
Section 9.09
      shall be
      continuing and shall survive any termination of this Agreement.

     

    SECTION
      9.06 GOVERNING
      LAW; JURY WAIVER; CONSENT TO JURISDICTION.
      xx)
      THIS
      AGREEMENT SHALL, IN ACCORDANCE WITH SECTION 5-1401 OF THE GENERAL
      OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE GOVERNED BY THE LAWS OF THE STATE
      OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS OF LAW PRINCIPLES THEREOF THAT
      WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION, EXCEPT
      TO
      THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE INTERESTS OF THE LENDER IN
      THE
      PLEDGED RECEIVABLES, OR REMEDIES HEREUNDER, IN RESPECT THEREOF, ARE GOVERNED
      BY
      THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. 

     

    (b) EACH
      OF
      THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT
      IT
      MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING DIRECTLY OR
      INDIRECTLY OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
      TRANSACTIONS CONTEMPLATED HEREUNDER.

     

    (c) ANY
      LEGAL
      ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE
      COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
      DISTRICT OF NEW YORK; AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH
      OF
      THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO
      THE
      NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO
      IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION,
      INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
      NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
      ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY
      DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE
      OF
      ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH SERVICE MAY BE MADE BY ANY
      OTHER MEANS PERMITTED BY NEW YORK LAW.

     

    SECTION
      9.07 Costs,
      Expenses and Taxes.
      xxi)
      In
      addition to the rights of indemnification granted to the Backup Servicer
      (whether in its capacity as Backup Servicer or successor Servicer), the
      Custodian, the Lender’s Bank, the Lender and its Affiliates under Section 8.01
      hereof,
      the Borrower agrees to pay on demand all reasonable (and reasonably documented)
      costs and expenses of the Backup Servicer, the Custodian, the Lender’s Bank and
      the Lender incurred in connection with the preparation, execution or delivery
      of, or any waiver or consent issued or amendment prepared in connection with,
      this Agreement, the other Transaction Documents and the other documents to
      be
      delivered hereunder or in connection herewith or therewith or incurred in
      connection with any amendment, waiver or modification of this Agreement, any
      other 

    
      
         

      

      
        93

        
          

        

      

      
         

      

    

     

    Transaction
      Document, and any other documents to be delivered hereunder or thereunder or
      in
      connection herewith or therewith that is necessary or requested (and, with
      respect to the Lender, actually entered into) by any of the Borrower, the
      Servicer, the Lender or made necessary or desirable as a result of the actions
      of any regulatory, tax or accounting body affecting the Lender and its
      Affiliates, or which is related to an Event of Default, including, without
      limitation, the reasonable fees and out-of-pocket expenses of counsel for the
      Backup Servicer, the Custodian, the Lender’s Bank and the Lender with respect
      thereto and with respect to advising the Backup Servicer, the Custodian, the
      Lender’s Bank and the Lender as to their respective rights and remedies under
      this Agreement and the other documents to be delivered hereunder or in
      connection herewith, and all costs and expenses, if any (including reasonable
      counsel fees and expenses), incurred by the Backup Servicer, the Custodian,
      the
      Lender’s Bank or the Lender in connection with the enforcement of this Agreement
      and the other documents to be delivered hereunder or in connection
      herewith.

     

    (b) The
      Borrower shall pay on demand any and all stamp, sales, excise and other taxes
      and fees payable or determined to be payable in connection with the execution,
      delivery, filing and recording of this Agreement, the other documents to be
      delivered hereunder or any agreement or other document providing liquidity
      support, credit enhancement or other similar support to the Lender which is
      specific to this Agreement or the funding or maintenance of Loans
      hereunder.

     

    (c) The
      Borrower shall pay on demand all other costs, expenses and taxes (excluding
      franchise and income taxes) incurred by the Lender or the Initial Qualifying
      Swap Counterparty or any shareholder thereof related to this Agreement, any
      other Transaction Document or any Qualifying Interest Rate Swap or similar
      interest rate cap agreement (“Other
      Costs”),
      including, without limitation, the reasonable fees and out-of-pocket expenses
      of
      counsel for the Lender or the Initial Qualifying Swap Counterparty with respect
      to (i) advising such Person as to its rights and remedies under this
      Agreement and the other documents to be delivered hereunder or in connection
      herewith and (ii) the enforcement of this Agreement and the other documents
      to be delivered hereunder or in connection herewith; provided,
      however,
      that
      the Borrower shall have no obligation to pay the fees and out-of-pocket expenses
      of counsel to the Initial Qualifying Swap Counterparty related to the initial
      negotiation, execution and delivery of any Qualifying Interest Rate
      Swap.

     

    (d) Without
      limiting any other provision hereof, the Borrower shall pay on demand all costs,
      expenses and fees of the Backup Servicer prior to the occurrence of a Servicer
      Default and the appointment of the Backup Servicer as Servicer hereunder related
      to its duties under this Agreement.

     

    (e) Any
      Person making a claim under this Section 9.07
      shall
      submit to the Borrower a notice setting forth in reasonable detail the basis
      for
      and the computations of the applicable costs, expenses, taxes or similar
      items.

     

    SECTION
      9.08 No
      Proceedings.
      The
      Servicer, the Backup Servicer, the Custodian, the Lender and the Lender’s Bank
      each hereby agree that it will not institute against, or join any other Person
      in instituting against, the Borrower any proceedings of the type referred to
      in
      the definition of Bankruptcy Event prior to the Collection Date.

     

    
      
         

      

      
        94

        
          

        

      

      
         

      

    

    SECTION
      9.09 Recourse
      Against Certain Parties.
      No
      recourse under or with respect to any obligation, covenant or agreement
      (including, without limitation, the payment of any fees or any other
      obligations) of the Lender as contained in this Agreement or any other
      agreement, instrument or document entered into by the Borrower or the Lender
      pursuant hereto or in connection herewith shall be had against any administrator
      of the Borrower or the Lender or any incorporator, affiliate, stockholder,
      officer, employee or director of the Borrower or the Lender or of any such
      administrator, as such, by the enforcement of any assessment or by any legal
      or
      equitable proceeding, by virtue of any statute or otherwise; it being expressly agreed and understood
      that the
      agreements of each party hereto contained in this Agreement and all of the
      other
      agreements, instruments and documents entered into by the Borrower or the Lender
      pursuant hereto or in connection herewith are, in each case, solely the
      corporate obligations of such party (and nothing in this Section 9.09
      shall be
      construed to diminish in any way such corporate obligations of such party),
      and
      that no personal liability whatsoever shall attach to or be incurred by any
      administrator of the Borrower or the Lender or any incorporator, stockholder,
      affiliate, officer, employee or director of the Borrower or the Lender or of
      any
      such administrator, as such, or any of them, under or by reason of any of the
      obligations, covenants or agreements of the Borrower or the Lender contained
      in
      this Agreement or in any other such instruments, documents or agreements, or
      which are implied therefrom, and that any and all personal liability of every
      such administrator of the Borrower or the Lender and each incorporator,
      stockholder, affiliate, officer, employee or director of the Borrower or the
      Lender or of any such administrator, or any of them, for breaches by the
      Borrower or the Lender of any such obligations, covenants or agreements, which
      liability may arise either at common law or in equity, by statute or
      constitution, or otherwise, is hereby expressly waived as a condition of and
      in
      consideration for the execution of this Agreement. The provisions of this
Section 9.09
      shall
      survive the termination of this Agreement.

     

    SECTION
      9.10 Execution
      in Counterparts; Severability; Integration.
      This
      Agreement may be executed in any number of counterparts and by different parties
      hereto in separate counterparts, each of which when so executed shall be deemed
      to be an original and all of which when taken together shall constitute one
      and
      the same agreement. Delivery of an executed counterpart of a signature page
      to
      this Agreement by facsimile shall be effective as delivery of a manually
      executed counterpart of this Agreement. In the event that any provision in
      or
      obligation under this Agreement shall be invalid, illegal or unenforceable
      in
      any jurisdiction, the validity, legality and enforceability of the remaining
      provisions or obligations, or of such provision or obligation in any other
      jurisdiction, shall not in any way be affected or impaired thereby. This
      Agreement contains the final and complete integration of all prior expressions
      by the parties hereto with respect to the subject matter hereof and shall
      constitute the entire agreement among the parties hereto with respect to the
      subject matter hereof, superseding all prior oral or written understandings
      other than the Fee Letter.

     

    SECTION
      9.11 Tax
      Characterization.
      Notwithstanding any provision of this Agreement, the parties hereto intend
      that
      the Loans advanced hereunder shall constitute indebtedness of the Borrower
      for
      federal income tax purposes.

     

    SECTION
      9.12 Calculation
      of Performance Triggers.
      Notwithstanding anything to the contrary herein, Included Repurchased
      Receivables shall be treated as Pool Receivables for purposes of each
      calculation of the Annualized Default Rate, Annualized Net Loss
      Rate,

     

    
      
         

      

      
        95

        
          

        

      

      
         

      

    

     

    Delinquency
      Rate, Pool A Annualized Net Loss Rate and the Pool B Annualized Net Loss Rate
      required to be made hereunder (but for no other purpose).

     

    ARTICLE
      X.

     

    THE
      COLLATERAL AGENT

     

    SECTION
      10.01 No
      Implied Duties.
      The
      Collateral Agent shall be obligated to perform only the duties as are
      specifically set forth in this Agreement, and no implied covenants or
      obligations shall be read into this Agreement against the Collateral Agent.
      

     

    SECTION
      10.02 Limits
      on Liability.
      The
      Collateral Agent shall not be liable for any acts, omissions, errors of judgment
      or mistakes of fact or law made, taken or omitted to be made or taken by it
      in
      accordance with this Agreement and the other Transaction Documents (including
      acts, omissions, errors or mistakes with respect to the Collateral), except
      for
      those arising out of or in connection with the Collateral Agent’s gross
      negligence or willful misconduct. The Collateral Agent may consult with counsel,
      accountants and other experts, and any opinion or advice of any such counsel,
      any such accountant and any such other expert shall be full and complete
      authorization and protection in respect of any action taken or suffered by
      the
      Collateral Agent hereunder in accordance therewith. The Collateral Agent shall
      have the right at any time to seek instructions concerning the administration
      of
      the Pledged Assets from any court of competent jurisdiction. The Collateral
      Agent may conclusively rely, and shall be fully protected in acting, upon any
      resolution, statement, certificate, instrument, opinion, report, notice,
      request, consent, order, bond or other paper or document which it has no
      reasonable reason to believe to be other than genuine and to have been signed
      or
      presented by the proper party or parties or, in the case of cables, telecopies
      and telexes, to have been sent by the proper party or parties. Absent its gross
      negligence or willful misconduct, the Collateral Agent may conclusively rely,
      as
      to the truth of the statements and the correctness of the opinions expressed
      therein, upon any certificates or opinions furnished to the Collateral Agent
      and
      conforming to the requirements of this Agreement and the other Transaction
      Documents, if any.

     

    SECTION
      10.03 Acknowledgement.
      The
      Lender hereby acknowledges and agrees that its rights and obligations as
“Lender” under the Collection Account Agreement, Security Deposit Account
      Agreement and each Cash Reserve Account Agreement are being held in its capacity
      as Collateral Agent for the benefit of the Secured Parties. 

     

    [Signature
      page to follow.]

     

    

    
      
        
           

        

         

      

      
        96

        
          

        

      

      
         

        
        

      

    

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

     

    
      	
              THE
                BORROWER:

            	
              RESOURCE
                CAPITAL FUNDING II, LLC

               

              By: _____                

                     
                Name:

                     
                Title:

               

            
	
              THE
                SERVICER:

            	
              LEAF
                FINANCIAL CORPORATION

               

              By: _________________________

                    
                Name:

                    
                Title:

               

            
	 	 
	
              THE
                LENDER:

            	
              MORGAN
                STANLEY BANK

               

              By: _________________________

                    
                Name:

                    
                Title:

               

            
	
              THE
                CUSTODIAN AND

              THE
                LENDER’S BANK:

            	
              U.S.
                BANK NATIONAL ASSOCIATION

               

              
                By: _________________________

                      
                  Name:

                      
                  Title:

              

               

            
	 	 
	
              THE
                BACKUP SERVICER

            	
              LYON
                FINANCIAL SERVICES, INC. (D/B/A 

               

              U.S.
                BANK PORTFOLIO SERVICES)

               

              
                By: _________________________

                      
                  Name:

                      
                  Title:

              

               

            

    

     

    
      
        
           

        

         

      

      
        S-1

        
          

        

      

      
         

        
        

      

    

     

    
      	
              BACKUP
                SERVICER

            	
              LYON
                FINANCIAL SERVICES, INC. (D/B/A 

               

              U.S.
                BANK PORTFOLIO SERVICES)

               

              
                By: _________________________

                      
                  Name:

                      
                  Title:

              

               

            

    
      
         

      

      
        S-2

        
          

        

      

      
         

      

    

    SCHEDULE
      I

     

    CONDITION
      PRECEDENT DOCUMENTS

     

    As
      required by Section 3.01
      of the
      Agreement, each of the following items must be delivered to the Lender prior
      to
      the date of the initial Borrowing:

     

    (a) A
      copy of
      this Agreement duly executed by each of the parties hereto;

     

    (b) A
      certificate of the Secretary or Assistant Secretary of each of the Borrower,
      the
      Originator and the Servicer, dated the date of this Agreement, certifying
      (i) the names and true signatures of the incumbent officers authorized to
      sign on behalf of the such Person each Transaction Document to which it is
      a
      party (on which certificate the Lender may conclusively rely until such time
      as
      the Lender shall receive from such Person a revised certificate meeting the
      requirements of this paragraph (b)), (ii) that the copy of the
      certificate of incorporation or formation of each such Person attached thereto
      is a complete and correct copy and that such certificate of incorporation or
      formation has not been amended, modified or supplemented and is in full force
      and effect, (iii) that the copy of the organizational documents of such
      Person attached thereto is a complete and correct copy, and that such
      organizational documents have not been amended, modified or supplemented and
      is
      in full force and effect, and (iv) the resolutions of the board of
      directors or members of such Person approving and authorizing the execution,
      delivery and performance by such Person of each Transaction Document to which
      it
      is a party;

     

    (c) Good
      standing certificate, dated as of a recent date for each of the Borrower, the
      Originator and the Servicer, issued by its jurisdiction of
      organization;

     

    (d) Executed,
      original copies of proper financing statements (the “Facility
      Financing Statements”)
      describing the Pledged Receivables, Other Conveyed Property, Related Security
      and other Pledged Assets, and (a) filed against Originator in favor of the
      Borrower as assignor secured party and naming the Collateral Agent as total
      assignee and (b) filed against the Borrower and in favor of the Collateral
      Agent, as secured party, and other, similar instruments or documents, as may
      be
      necessary or, in the opinion of the Collateral Agent, desirable under the UCC
      of
      all appropriate jurisdictions or any comparable law to perfect the Collateral
      Agent’s interests in all Pledged Receivables, Other Conveyed Property, Related
      Security and other Pledged Assets;

     

    (e) Executed,
      original copies of proper financing statements, if any, necessary to release
      all
      security interests and other rights of any Person in the Pledged Receivables,
      Other Conveyed Property, Related Security and other Pledged Assets previously
      granted by Originator or the Borrower;

     

    (f) Certified
      copies of requests for information or copies (or a similar UCC search report
      certified by a party acceptable to the Lender), dated a date reasonably near
      to
      the date of the initial Borrowing, listing all effective financing statements
      (including the Facility Financing Statements), which name any of the Borrower
      or
      the Originator (under such party’s present name and any previous name) as debtor
      and which are filed in the jurisdictions in which the Facility

     

    
      
         

      

      
        Sch.
          I-1

        
          

        

      

      
         

      

    

     

    Financing
      Statements were filed, together with copies of such financing statements (none
      of which, other than the Facility Financing Statements, shall cover any Pledged
      Assets);

     

    (g) One
      or
      more favorable Opinions of Counsel, of counsel to the Originator and the
      Borrower, with respect to such matters as the Lender may reasonably request
      (including an opinion, with respect to 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);

     

    (h) One
      or
      more favorable Opinions of Counsel, of counsel to the Originator and the
      Borrower, with respect to the true conveyance of the Receivables under the
      Purchase and Sale Agreement, and issues of substantive
      consolidation;

     

    (i) One
      or
      more favorable Opinions of Counsel, of counsel to the Originator, the Borrower,
      the Custodian and the Backup Servicer with respect to, among other things,
      the
      due authorization, execution and delivery of, and enforceability of, this
      Agreement and the other Transaction Documents;

     

    (j) A
      favorable Opinion of Counsel of counsel to the Borrower, with respect to the
      first priority perfected security interest of the Collateral Agent in the
      Collection Account, the Security Deposit Account and the Cash Reserve Account
      and the funds therein;

     

    (k) Any
      necessary third party consents to the closing of the transactions contemplated
      hereby;

     

    (l) A
      copy of
      each of the other Transaction Documents duly executed by the parties
      thereto;

     

    (m) A
      copy of
      the fidelity insurance policy referred to in Section 6.16
      hereof
      together with a certification from the applicable insurance company that such
      policy is in full force and effect on the date hereof; and

     

    (n) The
      results of comprehensive background checks (completed by an investigation
      service acceptable to the Lender) on the senior management, key employees and
      principals of each of Resource America and LEAF Financial.

     

    
      
        
          Sch.
            I-2

        

         

      

      
         

        
          

        

      

      
         

        
        

      

    

    SCHEDULE
      II

     

    PRIOR
      NAMES, TRADENAMES, FICTITIOUS NAMES

     

    AND
      “DOING BUSINESS AS” NAMES

     

    1. Borrower:
      None

     

    2. Servicer:
      LEAF Financial Corp.

     

    LEAF
      Financial Corporation was previously named Fidelity Leasing Corporation.
      Effective February 28, 1996, Fidelity Leasing Corporation changed its name
      to
      F.L. Partnership Management, Inc. Effective May 1, 2000, F.L. Partnership
      Management, Inc. and FL Financial Services, Inc. merged, with F.L. Partnership
      Management, Inc. as the surviving entity. Effective December 13, 2001, F.L.
      Partnership Management, Inc. changed its name to LEAF Financial Corporation.
      Effective June 29, 2004, LEAF Asset Management, Inc. and LEAF Financial Corp.
      merged, with LEAF Financial Corp. as the surviving entity. None

     

    
      
        
          Sch.
            II-1

        

         

      

      
         

        
          

        

      

      
         

        
        

      

    

    SCHEDULE
      III-A

     

    REPRESENTATIONS
      AND WARRANTIES WITH

    RESPECT
      TO ELIGIBLE POOL A RECEIVABLES

     

    The
      following representations and warranties are made by the Borrower with respect
      to the Pool A Contracts related to Pledged Pool A Receivables which
      are designated as being Eligible Pool A Receivables on a Borrowing Base
      Certificate or a Monthly Remittance Report, or are otherwise represented to
      the
      Lender as being Eligible Pool A Receivables, or are included as Eligible
      Pool A Receivables in any calculation set forth herein.

     

    1. Each
      such
      Contract represents the genuine, legal, valid, binding and full recourse payment
      obligation of the Obligor thereunder, enforceable by the Borrower in accordance
      with its terms and the Obligor, with respect to such Contract (and any guarantor
      of the Obligor’s obligations thereunder), had full legal capacity to execute and
      deliver such Contract and any other documents related thereto.

     

    2. [Intentionally
      omitted.]

     

    3. To
      the
      extent that such Contract consists of a “Term Note (Level Payments)” or “Term
      Note (Step Payments)” or similar promissory note, together with the “Master Loan
      and Security Agreement” or similar agreement related thereto and incorporated by
      reference therein, each other “Term Note (Level Payments)” or “Term Note (Step
      Payments)” or similar promissory note related to the same “Master Loan and
      Security Agreement” or similar agreement is also a Contract related to a Pledged
      Receivable. To the extent that such Contract consists of a “Master Lease
      Schedule” or similar agreement together with a “Master Lease Agreement” or
      similar agreement which is related to, and incorporated by reference therein,
      each other “Master Lease Schedule” or similar agreement related to the same
“Master Lease Agreement” or similar agreement is also a Contract related to a
      Pledged Receivable

     

    4. Each
      such
      Contract, at the time of origination and at all times thereafter, conformed
      to
      all requirements of the Credit and Collection Policy applicable to such Contract
      and, in any case, no such Contract would be required to be written off pursuant
      to the Credit and Collection Policy.

     

    5. Each
      such
      Contract (i) was (a) originated by Originator in the ordinary course of
      Originator’s business and Originator had all necessary licenses and permits to
      originate Contracts in the State where the related Obligor and the related
      Obligor Collateral were located or (b) purchased by Originator, in a transaction
      that would constitute a “true sale” for bankruptcy purposes, from a Person (a
“Seller”)
      who
      originated such Contract in the ordinary course of Seller’s business and who had
      all necessary licenses and permits to originate Contracts in the State where the
      related Obligor and the related Obligor Collateral were located, (ii) was
      sold by Originator to the Borrower under the Purchase and Sale Agreement and
      the
      Borrower has all necessary licenses and permits to own Receivables and enter
      into Contracts in the state where the related Obligor and the related Obligor
      Collateral are located, (iii) contains customary and enforceable
      provisions, such as to render the rights and remedies of the Borrower (and
      any

     

    
      
         

      

      
        Sch.III-A-1

        
          

        

      

      
         

      

    

     

    assignee
      thereof) adequate for realization against the collateral security related
      thereto and (iv) provides for level Scheduled Payments during the term of such
      Contract or such Contract is a Non-Level Payment Contract.

     

    6. Each
      such
      Contract was originated by Originator or the Seller without any fraud or
      material misrepresentation on the part of the related Obligor or Originator
      or
      the Seller. Each such Contract was sold by Originator to the Borrower without
      any fraud or material misrepresentation on the part of Originator.

     

    7. No
      such
      Contract is the subject of any litigation, nor is it subject to any right of
      rescission, setoff, counterclaim or defense on the part of the Obligor
      thereunder.

     

    8. Each
      such
      Contract has had no provision thereof waived, amended, altered or modified
      in
      any respect since its origination except in conformity with the Credit and
      Collection Policy.

     

    9. The
      Obligor, with respect to each such Contract, has a billing address in the United
      States and, except as otherwise permitted in writing by the Lender from time
      to
      time, the Equipment which is the subject of each such Contract and all other
      Obligor Collateral with respect thereto is located in the United
      States.

     

    10. Each
      such
      Contract (i) is calculated at a fixed yield, (ii) is fully amortizing
      in periodic installments over its remaining term (which may include a Balloon
      Payment or Put Payment not in excess of 45% of the Discounted Balance of such
      Contract at the time of origination), (iii) has a remaining term of 180
      months or less and does not permit renewal or extension, (iv) provides for
      acceleration of the Scheduled Payments thereunder if the related Obligor is
      in
      default under or has otherwise violated or breached any material provision
      of
      such Contract, (v) prohibits the related Obligor from applying any part of
      the Security Deposit or cash collateral paid under such Contract to the
      Scheduled Payments due under such Contract (and neither the Originator, the
      Servicer, the Borrower or any other Person has applied any part of the Security
      Deposit or cash collateral paid under such Contract to any of the Scheduled
      Payments due under such Contract) and (vi) has not been assigned by the
      related Obligor nor has there been any sub-lease of the Obligor
      Collateral.

     

    11. [Intentionally
      omitted.]

     

    12. Each
      such
      Contract (i) is payable by a single Obligor, that is a corporate Person,
      or, if the collateral is Equipment used in a business, an individual and
      (ii) provides for the financing or lease of Obligor Collateral to be used
      in the business of the related Obligor.

     

    13. Each
      such
      Contract was originated in the United States and is denominated and payable
      solely in United States Dollars.

     

    14. Each
      such
      Contract (i) if a Lease Contract, contains “hell or high water” provisions,
      (ii) requires the related Obligor to assume all risk of loss or malfunction
      of the related Obligor Collateral; (iii) requires the related Obligor to
      pay all maintenance, repair, insurance and taxes, together with all other
      ancillary costs and expenses, with respect to the related Obligor

     

    
      
         

      

      
        Sch.III-A-2

        
          

        

      

      
         

      

    

    Collateral;
      and (iv) requires the related Obligor to pay, in full, when due, all
      Scheduled Payments notwithstanding any casualty, loss or other damage to the
      related Obligor Collateral.

     

    15. Each
      such
      Contract is by its terms an absolute and unconditional obligation of the related
      Obligor and is non-cancelable (in the case of a Lease Contract) and
      non-cancelable and non-prepayable without the payment in full of principal
      and
      accrued interest and finance charges prior to the expiration of the term of
      such
      Contract; such Contract does not provide for the substitution, exchange or
      addition of any other items of Obligor Collateral related to such Contract
      if
      the effect thereof would be to reduce or extend the Scheduled Payments related
      thereto; and the rights with respect to such Contract are assignable by
      Originator (and its successors and assigns, including the Borrower) without
      the
      consent of or notice to any Person.

     

    16. Each
      such
      Contract is in the form of one of the form contracts attached hereto as
Exhibit D-1,
      Exhibit D-2
      or
Exhibit D-3
      or in a
      form otherwise approved by the Servicer in compliance with the Credit and
      Collection Policy.

     

    17. The
      Security Deposit, if any, related to such Contract has been deposited into
      the
      Security Deposit Account within ten Business Days of the Pledge of the related
      Receivable.

     

    18. All
      material requirements of applicable federal, state and local laws, and
      regulations thereunder in respect of each such Contract, the origination
      thereof, and the Obligor Collateral related thereto, have been complied with
      in
      all respects.

     

    19. The
      applicable Obligor (other than a lessee under a Lease Contract that is a “true
      lease”) has good and marketable title to the Equipment which is the subject of
      each such Contract and such Equipment is free and clear of all Adverse
      Claims.

     

    20. Each
      such
      Contract constitutes either an “Instrument” or “Chattel Paper” or a “Payment
      Intangible” within the meaning of the UCC.

     

    21. Each
      such
      Contract contains language by which the related Obligor grants a security
      interest to Originator in the Obligor Collateral which is the subject of each
      such Contract.

     

    22. (A) The
      Originator shall have taken or caused to be taken all steps necessary under
      all
      applicable law (including the filing of an Obligor Financing Statement with
      respect to each such Contract) in order to cause a valid, subsisting and
      enforceable perfected, first priority security interest to exist in Originator’s
      favor in the Obligor Collateral securing each such Contract (other than with
      respect to Equipment which has a value of less than $25,000 if such Equipment
      is
      leased under Dollar Purchase Option Contracts or $50,000 if such Equipment
      is
      leased under FMV Contracts), (B) Originator shall have assigned the
      perfected, first priority security interest in the Obligor Collateral referred
      to in clause (A) above to the Borrower pursuant to the Purchase and Sale
      Agreement and (C) the Borrower shall have assigned the perfected, first
      priority security interest in the Obligor Collateral referred to in clause
      (A)
      above to the Collateral Agent pursuant to Section 2.11
      hereof.

     

    23. The
      Borrower has taken all steps necessary under all applicable law in order to
      perfect the security interest of the Collateral Agent in (i) the Borrower’s
      interest in the Obligor

     

    
      
         

      

      
        Sch.III-A-3

        
          

        

      

      
         

      

    

     

    Collateral
      related to each such Contract (other than Equipment which has a value of less
      than $25,000 if such Equipment is leased under Dollar Purchase Option Contracts
      or $50,000 if such Equipment is leased under FMV Contracts) and (ii) each
      such Contract and the Receivable, Related Security and Other Conveyed Property
      related thereto (and the proceeds thereof), and there exists in favor of the
      Collateral Agent as secured party, a valid, subsisting and enforceable first
      priority perfected security interest in (i) the Borrower’s interest in such
      Obligor Collateral and (ii) such Contract and the Receivable, Related
      Security and Other Conveyed Property related thereto (and the proceeds thereof)
      and such security interest is and shall be prior to all other liens upon and
      security interests in (i) the Borrower’s interest in such Obligor
      Collateral and (ii) such Contract and the Receivable, Related Security and
      Other Conveyed Property related thereto (and the proceeds thereof) that now
      exist or may hereafter arise or be created (other than Permitted
      Liens).

     

    24. If
      the
      Obligor Collateral related to such Contract (other than a Contract related
      to a
      Vehicle Sublimit Pledged Receivable) includes a Vehicle, the Borrower or the
      Servicer shall have delivered to the applicable Registrar of Titles an
      application for a Certificate of Title for such Vehicle which such Certificate
      of Title shall indicate the Borrower as the owner of the related Vehicle and
      indicate “Morgan Stanley Bank” as the sole lienholder with respect to such
      Vehicle.

     

    25. No
      such
      Contract is a Defaulted Receivable or, at the time of its Pledge hereunder,
      a
      Delinquent Receivable.

     

    26. Each
      such
      Contract is payable by an Obligor which is not subject to any bankruptcy,
      insolvency, reorganization or similar proceeding.

     

    27. The
      information pertaining to each such Contract set forth in the Schedule of
      Contracts (as defined in the Purchase and Sale Agreement), the related
      Assignment and each Borrowing Base Certificate and Monthly Remittance Report
      is
      true and correct in all respects.

     

    28. With
      respect to each such Contract, by the Borrowing Date on which such Contract
      is
      Pledged hereunder and on each relevant date thereafter, Originator will have
      caused its master computer records relating to such Contract to be clearly
      and
      unambiguously marked to show that such Contract has been Pledged under this
      Agreement.

     

    29. With
      respect to each such Contract there exists a Receivable File and such Receivable
      File contains each item listed in the definition of Receivable File with respect
      to such Contract and such Receivable File has been delivered to the
      Custodian.

     

    30. No
      such
      Contract has been repaid, prepaid, satisfied, subordinated or rescinded, and
      the
      Obligor Collateral securing such Contract has not been released from the lien
      of
      the Lender in whole or in part (except for releases of Equipment from a Contract
      prior to the date of the Pledge thereof and which releases have been noted
      in
      the Collateral Receipt related to such document).

     

    31. No
      such
      Contract was originated in, or is subject to the laws of, any jurisdiction
      the
      laws of which would make unlawful, void or voidable the sale, transfer, pledge
      and/or assignment of such Contract under this Agreement or the Purchase and
      Sale
      Agreement, and

     

    
      
         

      

      
        Sch.III-A-4

        
          

        

      

      
         

      

    

     

    Originator
      has not entered into any agreement with any Obligor that prohibits, restricts
      or
      conditions the sale, transfer, pledge and/or assignment of such
      Contract.

     

    32. [Intentionally
      Omitted].

     

    33. No
      such
      Contract has been sold, transferred, assigned or pledged by Originator to any
      Person other than the Borrower. Borrower has not taken any action to convey
      any
      right to any Person that would result in such Person having a right to payments
      due under any such Contract or payments received under the related Insurance
      Policy or otherwise to impair the rights of the Borrower or the Lender in such
      Contract, the related Insurance Policy or any proceeds thereof. There is an
      Insurance Policy in full force and effect with respect to the Equipment related
      to such Contract if such Equipment had an original cost over
      $100,000.

     

    34. No
      such
      Contract is assumable by another Person in a manner which would release the
      Obligor thereof from such Obligor’s obligations to Originator or the
      Borrower.

     

    35. There
      has
      been no default, breach, violation or event permitting acceleration under the
      terms of any such Contract, and no condition exists or event has occurred and
      is
      continuing that with notice, the lapse of time or both would constitute a
      default, breach, violation or event permitting acceleration under the terms
      of
      any such Contract, and there has been no waiver of any of the
      foregoing.

     

    36. No
      selection procedures adverse to the Borrower or the Lender have been utilized
      in
      selecting any such Contract from all other similar Contracts originated or
      purchased by Originator.

     

    37. The
      Obligor Collateral related to any such Contract is not subject to any tax or
      mechanic’s lien or any other Adverse Claim.

     

    38. [Intentionally
      omitted.]

     

    39. The
      Borrower has delivered to the Custodian the sole original counterpart of each
      such Contract (or a true and correct copy thereof) and such document constitutes
      the entire agreement between the parties thereto in respect of the related
      Obligor Collateral.

     

    40. Each
      such
      Contract is in full force and effect in accordance with its terms and neither
      the Borrower nor the Obligor has or will have suspended or reduced any payments
      or obligations due or to become due thereunder by reason of a default by any
      other party to such Contract; there are no proceedings pending or threatened
      asserting insolvency of such Obligor; there are no proceedings pending or
      threatened wherein such Obligor, any other obligated party or any governmental
      agency has alleged that such Contract is illegal or unenforceable.

     

    41. The
      origination and collection practices used by the Servicer with respect to each
      such Contract have been in all respects customary in the equipment financing
      and
      servicing business.

     

    42. The
      Obligor Collateral related to each such Contract was properly delivered to
      the
      Obligor in good repair and is in proper working order. Each Obligor has accepted
      the related

     

    
      
         

      

      
        Sch.III-A-5

        
          

        

      

      
         

      

    

     

    Equipment.
      The related Obligor is the end user of the Equipment that is the subject of
      any
      such Contract and no Obligor has sublet the Equipment to any other
      party.

     

    43. The
      Obligor with respect to any such Contract is not a merchant with respect to
      the
      Equipment related to such Contract.

     

    44. Except
      with respect to a breach of an Obligor’s right of quiet enjoyment of the related
      Equipment, neither the operation of any of the terms of any such Contract nor
      the exercise by the Borrower, the Servicer or the Obligor of any right under
      any
      such Contract will render such Contract unenforceable in whole or in part nor
      subject to any right of rescission, setoff, claim, counterclaim or defense,
      and
      no such right of rescission, set-off, claim, counterclaim or defense, including
      a defense arising out of a breach of the Obligor’s right of quiet enjoyment of
      the Equipment, has been asserted with respect thereto.

     

    45. The
      Borrower and the Servicer have duly fulfilled all obligations on their part
      to
      be fulfilled under or in connection with the origination, acquisition and
      assignment of such Contract, including, without limitation, giving any notices
      and obtaining any consents necessary to effect the acquisition of such Contract
      by the Borrower, and have done nothing to impair the rights of the Borrower
      or
      the Lender in the Contract or payments with respect thereto.

     

    46. Originator
      and the Servicer have duly fulfilled all obligations on their part to be
      fulfilled under or in connection with the origination, acquisition and
      assignment of such Contract, and have done nothing to impair the rights of
      the
      Borrower in such Contract or payments with respect thereto. Originator, the
      Servicer and Borrower have duly fulfilled all continuing obligations on their
      part to be fulfilled under or in connection with such Contract.

     

    47. [Intentionally
      Omitted].

     

    48. The
      sale
      from the Originator to the Borrower of each such Contract and the Other Conveyed
      Property and Related Security related thereto does not violate the terms or
      provisions of any agreement to which the Borrower is a party or by which it
      is
      bound.

     

    49. The
      transfer, assignment and conveyance of the Contract and the related Related
      Security and Other Conveyed Property from the Originator to the Borrower
      pursuant to the Purchase and Sale Agreement is not subject to nor will result
      in
      any tax, fee or governmental charge payable by the Borrower or any other Person
      to any federal, state or local government.

     

    50. No
      such
      Contract (other than a “true lease”) may be (i) an executory contract or
      (ii) in any event, deemed to be an executory contract or unexpired lease
      subject to rejection by an Obligor under Section 365 of the Bankruptcy Code
      in the event that a Bankruptcy Event has occurred with respect to such
      Obligor.

     

    51. Each
      such
      Contract contains enforceability provisions (i) permitting the acceleration
      of the payments thereunder if the Obligor is in default under such Contract
      and
      (ii) sufficient to enable the Borrower to repossess or foreclose upon the
      Obligor Collateral related thereto.

     

    
      
         

      

      
        Sch.III-A-6

        
          

        

      

      
         

      

    

    52. Each
      such
      Contract generally contains provisions requiring the payment of both interest
      and principal (or, in the case of a Lease Contract, lease payments) in each
      calendar month or quarter during the term of such Contract.

     

    53. The
      promissory note, if any, related to each such Contract (i) was payable to
      the Originator immediately prior to its transfer to the Borrower under the
      Purchase and Sale Agreement, and (ii) was payable to the Borrower
      immediately prior to its Pledge hereunder and has not been endorsed by
      Originator to any Person other than the Borrower.

     

    54. The
      final
      Scheduled Payment required by each such Contract is less than or equal to the
      Discounted Balance of such Contract at the time of origination.

     

    55. The
      Obligor Collateral related to such Contract is not one or more Vehicles
      regularly engaged in the long-haul transportation of goods.

     

    56. The
      Obligor with respect to any such Contract which is a lease of, or is secured
      by,
      Equipment related to the practice of dentistry, medicine or veterinary medicine
      is a dentist, doctor or veterinarian.

     

    57. The
      vendor of the Equipment relating to such Receivable has received payment in
      full
      from the Obligor prior to the Pledge of such Receivable hereunder and has no
      remaining obligations with respect to such Equipment except for any applicable
      warranty.

     

    
      
        
           

        

         

      

      
        Sch.III-A-7

        
          

        

      

      
         

        
        

      

    

    SCHEDULE
      III-B

     

    REPRESENTATIONS
      AND WARRANTIES WITH RESPECT TO

    ELIGIBLE
      POOL B RECEIVABLES

     

    The
      following representations and warranties are made by the Borrower with respect
      to the Pool B Contracts related to Pledged Pool B Receivables which
      are designated as being Eligible Pool B Receivables on a Borrowing Base
      Certificate or a Monthly Remittance Report, or are otherwise represented to
      the
      Lender as being Eligible Pool B Receivables, or are included as Eligible
      Pool B Receivables in any calculation set forth herein.

     

    1. Each
      such
      Contract represents the genuine, legal, valid, binding and full recourse payment
      obligation of the Obligor thereunder, enforceable by the Borrower in accordance
      with its terms and the Obligor, with respect to such Contract (and any guarantor
      of the Obligor’s obligations thereunder), had full legal capacity to execute and
      deliver such Contract and any other documents related thereto.

     

    2. [Intentionally
      omitted.]

     

    3. The
      Obligor under such Contract has been continuously originating lease or loan
      agreements related to equipment with an original cost of less than $100,000
      for
      at least three (3) complete calendar years unless such Obligor is Pentech
      Financial Services, Inc.

     

    4. Each
      such
      Contract, at the time of origination and at all times thereafter, conformed
      to
      all requirements of the Credit and Collection Policy applicable to such Contract
      and, in any case, no such Contract would be required to be written off pursuant
      to the Credit and Collection Policy.

     

    5. Each
      such
      Contract (i) was originated by Originator in the ordinary course of
      Originator’s business and Originator had all necessary licenses and permits to
      originate Contracts in the State where the related Obligor and the related
      Obligor Collateral were located, (ii) was sold by Originator to the
      Borrower under the Purchase and Sale Agreement and the Borrower has all
      necessary licenses and permits to own Receivables and enter into Contracts
      in
      the state where the related Obligor and the related Obligor Collateral are
      located, (iii) contains customary and enforceable provisions, such as to
      render the rights and remedies of the Borrower (and any assignee thereof)
      adequate for realization against the collateral security related thereto and
      (iv) provides for level Scheduled Payments during the term of such Contract
      or
      such Contract is a Non-Level Payment Contract.

     

    6. Each
      such
      Contract was originated by Originator without any fraud or material
      misrepresentation on the part of the related Obligor or Originator. Each such
      Contract was sold by Originator to the Borrower without any fraud or material
      misrepresentation on the part of Originator.

     

    7. No
      such
      Contract is the subject of any litigation, nor is it subject to any right of
      rescission, setoff, counterclaim or defense on the part of the Obligor
      thereunder.

     

    
      
         

      

      
        Sch.III-B-1

        
          

        

      

      
         

      

    

    8. Each
      such
      Contract has had no provision thereof waived, amended, altered or modified
      in
      any respect since its origination except in conformity with the Credit and
      Collection Policy.

     

    9. The
      Obligor with respect to each such Contract has a billing address in the United
      States and, except as otherwise permitted in writing by the Lender from time
      to
      time, all Obligor Collateral with respect thereto is located in the United
      States.

     

    10. Each
      such
      Contract (i) is calculated at a fixed yield, (ii) is fully amortizing
      in periodic installments over its remaining term (which amortization may include
      a Balloon Payment or Put Payment not in excess of 10% of the aggregate original
      cost of the related Underlying Equipment), (iii) has a remaining term of
      120 months or less and does not permit renewal or extension, (iv) provides
      for acceleration of the Scheduled Payments thereunder if the related Obligor
      is
      in default under or has otherwise violated or breached any material provision
      of
      such Contract, (v) prohibits the related Obligor from applying any part of
      the Cash Reserve (if any) paid under such Contract to the Scheduled Payments
      due
      under such Contract (and neither the Originator, the Servicer, the Borrower
      or
      any other Person has applied any part of the Cash Reserve paid under such
      Contract to any of the Scheduled Payments due under such Contract) and
      (vi) has not been assigned by the related Obligor nor has there been any
      sub-lease of the Obligor Collateral.

     

    11. The
      obligations of the Obligor under each such Contract are secured by Underlying
      Originator Loan Collateral which includes Eligible Pool B Underlying Lease
      Contracts and Eligible Pool B Underlying Loan Contracts with aggregate
      Discounted Balances equal to or greater than the Discounted Balance of such
      Contract.

     

    12. Each
      such
      Contract (i) is payable by a single Obligor, that is a corporate Person or,
      if the collateral is Equipment used in a business, an individual and
      (ii) provides for the financing or lease of Obligor Collateral to be used
      in the business of the related Obligor.

     

    13. Each
      such
      Contract was originated in the United States and is denominated and payable
      solely in United States Dollars.

     

    14. [Intentionally
      omitted.]

     

    15. Each
      such
      Contract is by its terms an absolute and unconditional obligation of the related
      Obligor and is non-cancelable and non-prepayable without the payment in full
      of
      principal and accrued interest and finance charges prior to the expiration
      of
      the term of such Contract; such Contract does not provide for the substitution,
      exchange or addition of any other items of Underlying Originator Loan Collateral
      related to such Contract if the effect thereof would be to reduce or extend
      the
      Scheduled Payments related thereto; and the rights with respect to such Contract
      are assignable by Originator (and its successors and assigns, including the
      Borrower) without the consent of or notice to any Person.

     

    16. Each
      such
      Contract conforms with the criteria set forth in Exhibit D-4
      hereto.

     

    17. The
      Cash
      Reserve, if any, related to such Contract has been deposited into a Cash Reserve
      Account within ten Business Days of the Pledge of the related
      Receivable.

     

    
      
         

      

      
        Sch.III-B-2

        
          

        

      

      
         

      

    

    18. All
      material requirements of applicable federal, state and local laws, and
      regulations thereunder in respect of each such Contract, the origination
      thereof, and the Obligor Collateral related thereto, have been complied with
      in
      all respects.

     

    19. The
      applicable Underlying Obligor (other than a lessee under an Underlying Lease
      Contract that is a “true lease”) has good and marketable title to Underlying
      Originator Loan Collateral related to such Contract and such Underlying
      Originator Loan Collateral is free and clear of all Adverse Claims.

     

    20. Each
      such
      Contract constitutes either an “Instrument” or “Chattel Paper” or a “Payment
      Intangible” within the meaning of the UCC.

     

    21. Each
      such
      Contract contains language by which the related Obligor grants a security
      interest to Originator in the Obligor Collateral which is the subject of each
      such Contract.

     

    22. (A) The
      Originator shall have taken or caused to be taken all steps necessary under
      all
      applicable law (including the filing of an Obligor Financing Statement with
      respect to each such Contract) in order to cause a valid, subsisting and
      enforceable perfected, first priority security interest to exist in Originator’s
      favor in the Obligor Collateral securing each such Contract (other than with
      respect to Underlying Equipment relating to such Contract which has an original
      value of less than $25,000 if such Underlying Equipment is leased under Dollar
      Purchase Option Contracts or $50,000 if such Underlying Equipment is leased
      under FMV Contracts), (B) Originator shall have assigned the perfected,
      first priority security interest in the Obligor Collateral referred to in
      clause (A) above to the Borrower pursuant to the Purchase and Sale
      Agreement and (C) the Borrower shall have assigned the perfected, first
      priority security interest in the Obligor Collateral referred to in
      clause (A) above to the Collateral Agent pursuant to Section 2.13
      hereof.

     

    23. The
      Borrower has taken all steps necessary under all applicable law in order to
      perfect the security interest of the Collateral Agent in (i) the Borrower’s
      interest in the Obligor Collateral related to each such Contract (other than
      with respect to Underlying Equipment relating to such Contract which has an
      original value of less than $25,000 if such Underlying Equipment is leased
      under
      Dollar Purchase Option Contracts or $50,000 if such Underlying Equipment is
      leased under FMV Contracts) and (ii) each such Contract and the Receivable,
      Related Security and Other Conveyed Property related thereto (and the proceeds
      thereof), and there exists in favor of the Collateral Agent as secured party,
      a
      valid, subsisting and enforceable first priority perfected security interest
      in
      (i) the Borrower’s interest in such Obligor Collateral and (ii) such
      Contract and the Receivable, Related Security and Other Conveyed Property
      related thereto (and the proceeds thereof) and such security interest is and
      shall be prior to all other liens upon and security interests in (i) the
      Borrower’s interest in such Obligor Collateral and (ii) such Contract and
      the Receivable, Related Security and Other Conveyed Property related thereto
      (and the proceeds thereof) that now exist or may hereafter arise or be created
      (other than Permitted Liens).

     

    24. [Intentionally
      omitted.]

     

    
      
         

      

      
        Sch.III-B-3

        
          

        

      

      
         

      

    

    25. No
      such
      Contract is a Defaulted Receivable or, at the time of its Pledge hereunder,
      a
      Delinquent Receivable.

     

    26. Each
      such
      Contract is payable by an Obligor which is not subject to any bankruptcy,
      insolvency, reorganization or similar proceeding.

     

    27. The
      information pertaining to each such Contract set forth in the Schedule of
      Contracts (as defined in the Purchase and Sale Agreement), the related
      Assignment and each Borrowing Base Certificate and Monthly Remittance Report
      is
      true and correct in all respects.

     

    28. With
      respect to each such Contract, by the Borrowing Date on which such Contract
      is
      Pledged hereunder and on each relevant date thereafter, Originator will have
      caused its master computer records relating to such Contract to be clearly
      and
      unambiguously marked to show that such Contract has been Pledged under this
      Agreement.

     

    29. With
      respect to each such Contract there exists a Receivable File and such Receivable
      File contains each item listed in the definition of Receivable File with respect
      to such Contract and such Receivable File is in the possession of the
      Custodian.

     

    30. No
      such
      Contract has been repaid, prepaid, satisfied, subordinated or rescinded, and
      the
      Obligor Collateral securing such Contract has not been released from the lien
      of
      the Lender in whole or in part.

     

    31. No
      such
      Contract was originated in, or is subject to the laws of, any jurisdiction
      the
      laws of which would make unlawful, void or voidable the sale, transfer, pledge
      and/or assignment of such Contract under this Agreement or the Purchase and
      Sale
      Agreement, and the Originator has not entered into any agreement with any
      Obligor that prohibits, restricts or conditions the sale, transfer, pledge
      and/or assignment of such Contract.

     

    32. [Intentionally
      Omitted].

     

    33. No
      such
      Contract has been sold, transferred, assigned or pledged by the Originator
      to
      any Person other than the Borrower. Borrower has not taken any action to convey
      any right to any Person that would result in such Person having a right to
      payments due under any such Contract or payments received under the related
      Insurance Policy or otherwise to impair the rights of the Borrower or the Lender
      in such Contract, the related Insurance Policy or any proceeds
      thereof.

     

    34. No
      such
      Contract is assumable by another Person in a manner which would release the
      Obligor thereof from such Obligor’s obligations to Originator or the
      Borrower.

     

    35. There
      has
      been no default, breach, violation or event permitting acceleration under the
      terms of any such Contract, and no condition exists or event has occurred and
      is
      continuing that with notice, the lapse of time or both would constitute a
      default, breach, violation or event permitting acceleration under the terms
      of
      any such Contract, and there has been no waiver of any of the
      foregoing.

     

    
      
         

      

      
        Sch.III-B-4

        
          

        

      

      
         

      

    

    36. No
      selection procedures adverse to the Borrower or the Lender have been utilized
      in
      selecting any such Contract from all other similar Contracts originated or
      purchased by Originator.

     

    37. The
      Obligor Collateral related to any such Contract is not subject to any Adverse
      Claim.

     

    38. [Intentionally
      omitted.]

     

    39. The
      Borrower has delivered to the Custodian the sole original counterpart (or a
      true
      and correct copy) of each such Contract and such document constitutes the entire
      agreement between the parties thereto in respect of the related Obligor
      Collateral.

     

    40. Each
      such
      Contract is in full force and effect in accordance with its terms and neither
      the Borrower nor the Obligor has or will have suspended or reduced any payments
      or obligations due or to become due thereunder by reason of a default by any
      other party to such Contract; there are no proceedings pending or threatened
      asserting insolvency of such Obligor; there are no proceedings pending or
      threatened wherein such Obligor, any other obligated party or any governmental
      agency has alleged that such Contract is illegal or unenforceable.

     

    41. The
      origination and collection practices used by the Servicer with respect to each
      such Contract have been in all respects customary in the equipment financing
      and
      servicing business.

     

    42. [Intentionally
      omitted.]

     

    43. [Intentionally
      omitted.]

     

    44. Neither
      the operation of any of the terms of any such Contract nor the exercise by
      the
      Borrower, the Servicer or the Obligor of any right under any such Contract
      will
      render such Contract unenforceable in whole or in part nor subject to any right
      of rescission, setoff, claim, counterclaim or defense, and no such right of
      rescission, set-off, claim, counterclaim or defense has been asserted with
      respect thereto.

     

    45. The
      Borrower and the Servicer have duly fulfilled all obligations on their part
      to
      be fulfilled under or in connection with the origination, acquisition and
      assignment of the Contract, including, without limitation, giving any notices
      and obtaining any consents necessary to effect the acquisition of the Contract
      by the Borrower, and have done nothing to impair the rights of the Borrower
      or
      the Lender in the Contract or payments with respect thereto.

     

    46. The
      Originator and the Servicer have duly fulfilled all obligations on their part
      to
      be fulfilled under or in connection with the origination, acquisition and
      assignment of the Contract, including, without limitation, giving any notices
      and obtaining any consents necessary to effect the acquisition of the Contract
      by the Borrower pursuant to the Purchase and Sale Agreement, and have done
      nothing to impair the rights of the Borrower in the Contract or payments with
      respect thereto. Originator, the Servicer and Borrower have duly fulfilled
      all
      continuing obligations on their part to be fulfilled under or in connection
      with
      such Contract.

     

    
      
         

      

      
        Sch.III-B-5

        
          

        

      

      
         

      

    

    47. The
      sale
      from the Originator to the Borrower of each such Contract and the Other Conveyed
      Property and Related Security related thereto does not violate the terms or
      provisions of any agreement to which the Borrower is a party or by which it
      is
      bound.

     

    48. The
      transfer, assignment and conveyance of the Contract and the related Related
      Security and Other Conveyed Property from Originator to the Borrower pursuant
      to
      the Purchase and Sale Agreement is not subject to nor will result in any tax,
      fee or governmental charge payable by the Borrower or any other Person to any
      federal, state or local government.

     

    49. No
      such
      Contract may be (i) an executory contract or (ii) in any event, deemed
      to be an executory contract or unexpired lease subject to rejection by an
      Obligor under Section 365 of the Bankruptcy Code in the event that a
      Bankruptcy Event has occurred with respect to such Obligor.

     

    50. Each
      such
      Contract contains enforceability provisions (i) permitting the acceleration
      of the payments thereunder if the Obligor is in default under such Contract
      and
      (ii) sufficient to enable the Borrower to repossess or foreclose upon the
      Obligor Collateral related thereto.

     

    51. [Intentionally
      omitted.]

     

    52. The
      promissory note, if any, related to each such Contract (i) was payable to the
      Originator immediately prior to its transfer to the Borrower under the Purchase
      and Sale Agreement, and (ii) was payable to the Borrower immediately prior
      to its Pledge hereunder and has not been endorsed by Originator to any Person
      other than the Borrower.

     

    53. The
      final
      Scheduled Payment required by each such Contract is less than or equal to the
      Discounted Balance of such Contract at the time of origination.

     

    54. [Intentionally
      omitted.]

     

    55. [Intentionally
      omitted.]

     

    56. Such
      Contract contains “Seller Events of Default” or similar events of default which
      (i) would occur if a Pool B Termination Event with respect to the related
      Underlying Originator occurred, (ii) would entitle the Borrower, as assignee
      of
      the Originator’s rights under the Contract, to deliver, or cause the delivery
      of, a redirection notice which would require all Underlying Obligors to make
      all
      payments under Underlying Contracts sold or pledged to the Originator under
      such
      Contract to Lockbox Account or an account designated by the Borrower or the
      Servicer and (iii) would entitle the Borrower, as assignee of the Originator’s
      rights under the Contract, to receive 100% of all payments under the Underlying
      Contracts sold or pledged to the Originator under such Contract.

     

    57. Each
      such
      Contract shall require all amounts payable thereunder to be paid before the
      return to the applicable Obligor of, and without setoff with respect to, the
      amount of any loan principal or purchase price which would otherwise have been
      advanced by the Originator to the applicable Obligor pursuant to the terms
      of
      such Contract, but which was held back by the Originator as a liquidity reserve
      or similar reserve.

     

    
      
        
           

        

         

      

      
        Sch.III-B-6

        
          

        

      

      
         

        
        

      

    

    SCHEDULE
      III-C

     

    REPRESENTATIONS
      AND WARRANTIES WITH RESPECT TO

    ELIGIBLE
      POOL B UNDERLYING CONTRACTS

     

    The
      following representations and warranties are made by the Borrower with respect
      to the Underlying Contracts related to Pledged Pool B Receivables, which
      are designated as being Eligible Pool B Receivables on a Borrowing Base
      Certificate or a Monthly Remittance Report, or are otherwise represented to the
      Lender as being Eligible Pool B Receivables, or are included as Eligible
      Pool B Receivables in any calculation set forth herein.

     

    1. Each
      such
      Underlying Contract represents the genuine, legal, valid, binding and full
      recourse payment obligation of the Underlying Obligor thereunder, enforceable
      by
      the Underlying Originator in accordance with its terms and the Underlying
      Obligor, with respect to such Underlying Contract (and any guarantor of the
      Underlying Obligor’s obligations thereunder), had full legal capacity to execute
      and deliver such Underlying Contract and any other documents related
      thereto.

     

    2. [Intentionally
      omitted.]

     

    3. [Intentionally
      omitted.]

     

    4. Each
      such
      Underlying Contract at the time of origination and at all times thereafter,
      conformed to all requirements of the credit and collection policy of the
      applicable Underlying Originator applicable to such Underlying Contract and,
      in
      any case, no such Underlying Contract would be required to be written off
      pursuant to such credit and collection policy.

     

    5. Each
      such
      Underlying Contract (i) was originated by an Eligible Underlying Originator
      in the ordinary course of its business and such Underlying Originator had all
      necessary licenses and permits to originate Underlying Contracts in the State
      where the related Underlying Obligor and the related Underlying Collateral
      were
      located, (ii) was pledged by such Underlying Originator to the Originator
      under the applicable Pool B Contract and (iii) contains customary and
      enforceable provisions, such as to render the rights and remedies of such
      Underlying Originator (and any assignee thereof, including, without limitation,
      the Borrower) adequate for realization against the collateral security related
      thereto.

     

    6. Each
      such
      Underlying Contract was originated by the applicable Underlying Originator
      without any fraud or material misrepresentation on the part of the related
      Underlying Obligor or Underlying Originator. Each such Underlying Contract
      was
      pledged by such Underlying Originator to Originator without any fraud or
      material misrepresentation on the part of such Underlying Originator or
      Originator, as applicable.

     

    7. No
      such
      Underlying Contract is the subject of any litigation, nor is it subject to
      any
      right of rescission, setoff, counterclaim or defense on the part of the
      Underlying Obligor thereunder.

     

    
      
         

      

      
        Sch.III-C-1

        
          

        

      

      
         

      

    

    8. Each
      such
      Underlying Contract has had no provision thereof waived, amended, altered or
      modified in any respect since its origination except in conformity with the
      credit and collection policy of the applicable Underlying
      Originator.

     

    9. The
      Underlying Obligor, with respect to each such Underlying Contract, has a billing
      address in the United States and, except as otherwise permitted in writing
      by
      the Lender from time to time, the Underlying Equipment which is the subject
      of
      each such Underlying Contract and all other Obligor Collateral with respect
      thereto is located in the United States.

     

    10. Each
      such
      Underlying Contract (i) is calculated at a fixed yield, (ii) is fully
      amortizing in periodic installments over its remaining term (which may include
      a
      Balloon Payment or Put Payment not in excess of  10% of the original cost
      of the related Underlying Equipment), (iii) has an remaining term of 120
      months or less and does not permit renewal or extension, (iv) provides for
      acceleration of the Underlying Scheduled Payments thereunder if the related
      Underlying Obligor is in default under or has otherwise violated or breached
      any
      material provision of such Underlying Contract, (v) prohibits the related
      Underlying Obligor from applying any part of the Underlying Security Deposit
      (if
      any) paid under such Underlying Contract to the Underlying Scheduled Payments
      due under such Underlying Contract (and neither the Underlying Originator,
      the
      Originator, the Servicer, the Borrower or any other Person has applied any
      part
      of the Underlying Security Deposit paid under such Underlying Contract to any
      of
      the Underlying Scheduled Payments due under such Underlying Contract) and
      (vi) has not been assigned by the related Underlying Obligor nor has there
      been any sub-lease of the Underlying Obligor Collateral.

     

    11. Such
      Underlying Contract has a Discounted Balance of not greater than
      $800,000.

     

    12. Each
      such
      Underlying Contract (i) is payable by a single Underlying Obligor, that is
      a corporate Person or, if the collateral is Equipment used in a business, an
      individual and (ii) provides for the financing or lease of Underlying
      Collateral to be used in the business of the related Underlying
      Obligor.

     

    13. Each
      such
      Underlying Contract was originated in the United States and is denominated
      and
      payable solely in United States Dollars.

     

    14. Each
      such
      Underlying Contract (i) if an Underlying Lease Contract, contains “hell or
      high water” provisions, (ii) requires the related Underlying Obligor to
      assume all risk of loss or malfunction of the related Underlying Collateral;
      (iii) requires the related Underlying Obligor to pay all maintenance,
      repair, insurance and taxes, together with all other ancillary costs and
      expenses, with respect to the related Underlying Collateral; and
      (iv) requires the related Underlying Obligor to pay, in full, when due, all
      Underlying Scheduled Payments notwithstanding any casualty, loss or other damage
      to the related Underlying Collateral.

     

    15. Each
      such
      Underlying Contract is by its terms an absolute and unconditional obligation
      of
      the related Underlying Obligor and is non-cancelable (in the case of an
      Underlying Lease Contract) and non-cancelable and non-prepayable without the
      payment in full of principal and accrued interest and finance charges prior
      to
      the expiration of the term of such Underlying Contract; such Underlying Contract
      does not provide for the substitution, exchange or addition of

     

    
      
         

      

      
        Sch.III-C-2

        
          

        

      

      
         

      

    

     

    any
      other
      items of Underlying Collateral related to such Underlying Contract if the effect
      thereof would be to reduce or extend the Underlying Scheduled Payments related
      thereto; and the rights with respect to such Underlying Contract are assignable
      by the applicable Underlying Originator (and its successors and assigns,
      including Originator and the Borrower) without the consent of or notice to
      any
      Person.

     

    16. [Intentionally
      omitted.]

     

    17. [Intentionally
      omitted.]

     

    18. All
      material requirements of applicable federal, state and local laws, and
      regulations thereunder in respect of each such Underlying Contract, the
      origination thereof, and the Underlying Collateral related thereto, have been
      complied with in all respects.

     

    19. The
      applicable Underlying Obligor (other than a lessee under an Underlying Lease
      Contract that is a “true lease”) has good and marketable title to the Underlying
      Equipment which is the subject of each such Underlying Contract and such
      Underlying Equipment is free and clear of all Adverse Claims.

     

    20. Each
      such
      Underlying Contract constitutes either an “Instrument” or “Chattel Paper” or a
“Payment Intangible” within the meaning of the UCC.

     

    21. Each
      such
      Underlying Contract contains language by which the related Underlying Obligor
      grants a security interest to the related Underlying Originator in the
      Underlying Collateral which is the subject of each such Underlying
      Contract.

     

    22. (A) The
      applicable Underlying Originator shall have taken or caused to be taken all
      steps necessary under all applicable law (including the filing of a sufficient
      UCC-1 Financing Statement with respect to each such Underlying Contract) in
      order to cause a valid, subsisting and enforceable perfected, first security
      interest to exist in such Underlying Contract’s favor in the Underlying
      Collateral securing each such Underlying Contract (other than with respect
      to
      Equipment which has a value of less than $25,000 and is leased under Dollar
      Purchase Option Contracts or $50,000 and is leased under FMV Contracts) and
      (B) such Underlying Originator shall have assigned the perfected, first
      priority security interest in the Underlying Collateral referred to in
      clause (A) above to Originator pursuant to the applicable Pool B
      Contract. Such security interest is and shall be prior to all other liens upon
      and security interests in (i) the Underlying Originator’s in such
      Underlying Collateral and (ii) such Underlying Contract (and the proceeds
      thereof) that now exist or may hereafter arise or be created.

     

    23. [Intentionally
      omitted.]

     

    24. If
      the
      Underlying Collateral related to such Underlying Contract (other than an
      Underlying Contract related to a Vehicle Sublimit Pledged Receivable) includes
      a
      Vehicle, the Borrower or the Servicer shall have delivered to the applicable
      Registrar of Titles an application for a Certificate of Title for such Vehicle
      which such Certificate of Title shall indicate “Morgan Stanley Bank” as the sole
      lienholder with respect to such Vehicle.

     

    25. No
      such
      Underlying Contract meets any of the following criteria:

     

    
      
         

      

      
        Sch.III-C-3

        
          

        

      

      
         

      

    

           (i)               
      any
      part
      of any Underlying Scheduled Payment (or other amount payable under the terms
      of
      the related Underlying 

        Contract)
      remains unpaid for more than 120 days after the due date therefor set forth
      in such Underlying Contract;

     

    (ii)     the
      first
      or second Underlying Scheduled Payment is not paid in full when due under the
      related Underlying Contract;

     

    (iii)    any
      payment or other material terms of the related Underlying Contract have been
      modified due to credit related reasons after such Underlying Contract was
      acquired by the Originator pursuant to the applicable Pool B
      Contract;

     

    (iv)     a
      Bankruptcy Event has occurred with respect to the related Underlying Obligor
      or
      such Underlying Contract has been or should otherwise be deemed uncollectible
      by
      the Underlying Originator in accordance with its credit and collection
      policy;

     

    (v)     with
      respect to such Underlying Contract the Underlying Originator has repossessed
      the related Underlying Equipment;

     

    (vi)     any
      Underlying Scheduled Payment (or other amount payable under the terms of such
      Underlying Contract) remains unpaid for more than 30 days but not more than
      120 days after the due date therefor set forth in such Underlying
      Contract.

     

    26. Each
      such
      Underlying Contract is payable by an Underlying Obligor which is not subject
      to
      any bankruptcy, insolvency, reorganization or similar proceeding.

     

    27. The
      information pertaining to each such Underlying Contract set forth in the
      Schedule of Contracts (as defined in the Purchase and Sale Agreement), the
      related Assignment and each Borrowing Base Certificate and Monthly Remittance
      Report is true and correct in all respects.

     

    28. With
      respect to each such Underlying Contract, by the Borrowing Date on which the
      related Pool B Contract is Pledged hereunder and on each relevant date
      thereafter, the related Underlying Originator will have caused its master
      computer records relating to such Underlying Contract to be clearly and
      unambiguously marked to show that such Underlying Contract has been pledged
      to
      Originator.

     

    29. [Intentionally
      omitted.]

     

    30. No
      such
      Underlying Contract has been repaid, prepaid, satisfied, subordinated or
      rescinded, and the Underlying Collateral securing such Underlying Contract
      has
      not been released from the lien of the related Underlying Originator, in whole
      or in part.

     

    31. No
      such
      Underlying Contract was originated in, or is subject to the laws of, any
      jurisdiction the laws of which would make unlawful, void or voidable the sale,
      transfer, pledge and/or assignment of such Underlying Contract under this
      Agreement, the Purchase and Sale Agreement or the related Pool B Contract,
      and the related Underlying Originator has not entered

     

    
      
         

      

      
        Sch.III-C-4

        
          

        

      

      
         

      

    

     

    into
      any
      agreement with any Underlying Obligor that prohibits, restricts or conditions
      the sale, transfer, pledge and/or assignment of such Underlying
      Contract.

     

    32. No
      such
      Underlying Contract has been sold, transferred, assigned or pledged by the
      related Underlying Originator to any Person other than Originator. Such
      Underlying Originator has not taken any action to convey any right to any Person
      that would result in such Person having a right to payments due under any such
      Underlying Contract or payments received under any related Underlying Insurance
      Policy or otherwise to impair the rights of Originator in such Underlying
      Contract, any Underlying Insurance Policy or any proceeds thereof. There is
      an
      Underlying Insurance Policy in full force and effect with respect to the
      Equipment related to such Underlying Contract if such Equipment had an original
      cost over $100,000.

     

    33. [Intentionally
      omitted.]

     

    34. No
      such
      Underlying Contract is assumable by another Person in a manner which would
      release the Underlying Obligor thereof from such Underlying Obligor’s
      obligations to the Underlying Originator.

     

    35. There
      has
      been no default, breach, violation or event permitting acceleration under the
      terms of any such Underlying Contract, and no condition exists or event has
      occurred and is continuing that with notice, the lapse of time or both would
      constitute a default, breach, violation or event permitting acceleration under
      the terms of any such Underlying Contract, and there has been no waiver of
      any
      of the foregoing.

     

    36. No
      selection procedures adverse to Originator have been utilized in selecting
      any
      such Underlying Contract from all other similar Underlying Contracts originated
      or purchased by the related Underlying Originator.

     

    37. The
      Underlying Collateral related to any such Underlying Contract is not subject
      to
      any Adverse Claim.

     

    38. [Intentionally
      omitted.]

     

    39. The
      related Underlying Originator has delivered to the Originator the sole original
      counterpart (or a true and correct copy) of each such Underlying Contract and
      such document constitutes the entire agreement of the parties thereto in respect
      of the related Underlying Collateral.

     

    40. Each
      such
      Underlying Contract is in full force and effect in accordance with its terms
      and
      neither the related Underlying Originator nor the Underlying Obligor has or
      will
      have suspended or reduced any payments or obligations due or to become due
      thereunder by reason of a default by any other party to such Underlying
      Contract; there are no proceedings pending or threatened asserting insolvency
      of
      such Underlying Obligor; there are no proceedings pending or threatened wherein
      such Underlying Obligor, any other obligated party or any governmental agency
      has alleged that such Underlying Contract is illegal or
      unenforceable.

     

    
      
         

      

      
        Sch.III-C-5

        
          

        

      

      
         

      

    

    41. The
      origination and collection practices used by the related Underlying Originator
      with respect to each such Underlying Contract have been in all respects
      customary in the equipment financing and servicing business.

     

    42. The
      Underlying Collateral related to each such Underlying Contract was properly
      delivered to the Underlying Obligor in good repair and is in proper working
      order. Each Underlying Obligor has accepted the related Underlying Equipment.
      The related Underlying Obligor is the end user of the Underlying Equipment
      that
      is the subject of any such Underlying Contract and no Underlying Obligor has
      sublet the Underlying Equipment to any other party.

     

    43. The
      Underlying Obligor with respect to any such Underlying Contract is not a
      merchant with respect to the Underlying Equipment related to such Underlying
      Contract and is not a partner, member or Affiliate of the Underlying
      Originator.

     

    44. Except
      with respect to a breach of an Underlying Obligor’s right of quiet enjoyment of
      the related Underlying Equipment, neither the operation of any of the terms
      of
      any such Underlying Contract nor the exercise by the Underlying Originator,
      the
      Borrower, the Servicer or the Obligor of any right under any such Underlying
      Contract will render such Underlying Contract unenforceable in whole or in
      part
      nor subject to any right of rescission, setoff, claim, counterclaim or defense,
      and no such right of rescission, set-off, claim, counterclaim or defense,
      including a defense arising out of a breach of the Underlying Obligor’s right of
      quiet enjoyment of the Underlying Equipment, has been asserted with respect
      thereto.

     

    45. The
      Underlying Originator has duly fulfilled all obligations on its part to be
      fulfilled under or in connection with the origination, acquisition and
      assignment of the Underlying Contract, including, without limitation, giving
      any
      notices and obtaining any consents necessary to effect, as applicable, the
      acquisition of the Underlying Contract by, or the pledge of the Underlying
      Contract to, the Originator, and has done nothing to impair the rights of
      Originator in the Underlying Contract or payments with respect thereto. The
      Underlying Originator, Originator, the Servicer and Borrower, as applicable,
      have duly fulfilled all continuing obligations on their part to be fulfilled
      under or in connection with such Underlying Contract.

     

    46. [Intentionally
      omitted.]

     

    47. The
      sale
      from the related Underlying Originator to Originator of each such Underlying
      Contract does not violate the terms or provisions of any agreement to which
      either of them is a party or by which it is bound.

     

    48. [Intentionally
      omitted.]

     

    49. The
      pledge of the Underlying Contract from the related Underlying Originator to
      Originator pursuant to the related Pool B Contract is not subject to or
      will result in any tax, fee or governmental charge payable by Originator or
      any
      other Person to any federal, state or local government.

     

    50. No
      such
      Underlying Contract (other than a “true lease”) may be (i) an executory
      contract or (ii) in any event, deemed to be an executory contract or
      unexpired lease subject to

     

    
      
         

      

      
        Sch.III-C-6

        
          

        

      

      
         

      

    

     

    rejection
      by an Underlying Obligor under Section 365 of the Bankruptcy Code in the
      event that a Bankruptcy Event has occurred with respect to such Underlying
      Obligor.

     

    51. Each
      such
      Underlying Contract contains enforceability provisions (i) permitting the
      acceleration of the payments thereunder if the Underlying Obligor is in default
      under such Underlying Contract and (ii) sufficient to enable the related
      Underlying Originator (or any assignee thereof) to repossess or foreclose upon
      the Underlying Collateral related thereto.

     

    52. Each
      such
      Underlying Contract generally contains provisions requiring the payment of
      both
      interest and principal (or, in the case of an Underlying Lease Contract, lease
      payments) in each calendar month or quarter during the term of such Underlying
      Contract.

     

    53. The
      promissory note, if any, related to each such Underlying Contract (i) was
      payable to the related Underlying Originator immediately prior to its transfer
      to Originator pursuant to the related Pool B Contract and has not been
      endorsed by the related Underlying Originator to any Person other than
      Originator.

     

    54. The
      final
      Underlying Scheduled Payment required by each such Underlying Contract is less
      than or equal to the Discounted Balance of such Underlying Contract at the
      time
      of origination.

     

    55. The
      Underlying Collateral related to such Underlying Contract is not one or more
      Vehicles regularly engaged in the long-haul transportation of
      goods.

     

    56. The
      related Underlying Originator is not a guarantor under any Underlying
      Contract.

     

    57. The
      vendor of the Underlying Equipment relating to such Underlying Contract has
      received payment in full from the Underlying Obligor prior to the pledge of
      such
      Underlying Contract under the related Pool B Contract and has no remaining
      obligations with respect to such Underlying Equipment except for any applicable
      warranty.

     

    
      
        
           

        

         

      

      
        Sch.III-C-7

        
          

        

      

      
         

        
        

      

    

    SCHEDULE
      IV

     

    CREDIT
      AND COLLECTION POLICY

     

    Attached.

     

    

    
      
        
           

        

         

      

      
        Sch.IV-1

        
          

        

      

      
         

        
        

      

    

    SCHEDULE
      V

     

    EQUIPMENT
      CATEGORIES

     

    

    
      
        
           

        

         

      

      
        Sch.V-1

        
          

        

      

      
         

        
        

      

    

    SCHEDULE
      VI

     

    ADDRESSES
      FOR NOTICE

     

    Resource
      Capital Funding II, LLC

    c/o
      Leaf
      Funding Inc.

    1818
      Market Street, 9th Floor

    Philadelphia,
      PA 19103 

    Attention:
      Matthew Goldenberg

    Facsimile
      No.: (215) 640-6370

    Confirmation
      No.: (215) 231-7070

     

    LEAF
      Financial Corporation

    1818
      Market Street, 9th
      Floor,

    Philadelphia,
      PA 19103

    Attention:
      Miles Herman

    Facsimile
      No.: (215) 640-6363

    Confirmation
      No.: (215) 717-3358

    

    Morgan
      Stanley Capital Services Inc.

    Transaction
      Management Group 

    1585
      Broadway

    New
      York,
      NY 10236-8293

    Attention:
      Chief Legal Officer

    Facsimile
      No.: 001-212-507-4022

    

    Morgan
      Stanley Credit

    750
      Seventh Avenue

    New
      York,
      NY 10019

    Facsimile
      No.: (212) 507-5890

    E-mail:
      spvmonthlyreport@morganstanley.com

    

    Morgan
      Stanley Bank

    1221
      Avenue of the Americas

    New
      York,
      NY 10020

    Attention:
      Peter Woroniecki

    Facsimile
      No.: (212) 762-6943

    Confirmation
      No.: (212) 762-6942

     

    
      
         

      

      
        Sch.VI-1

        
          

        

      

      
         

      

    

    U.S.
      Bank
      National Association

    EP-MN-WS3D

    60
      Livingston Ave.

    St.
      Paul,
      MN 55107

    Attention:
      Diane Reynolds

    Facsimile
      No.: (651) 495-8090

    Confirmation
      No.: (651) 495-3923

    

    Lyon
      Financial Services, Inc. (d/b/a U.S. Bank Portfolio Services)

    U.S.
      Bank
      Portfolio Services

    1310
      Madrid Street

    Marshall,
      MN 56258

    Attention:
      Joe Andries

    Facsimile
      No.: (866) 806-0775

    Confirmation
      No.: (507) 532-7129

     

    
      
        
           

        

        Sch.VI-2

      

      
         

        
          

        

      

      
         

        
        

      

    

    EXHIBIT
      A

     

    FORM
      OF
      BORROWING BASE CERTIFICATE

     

    BORROWING
      BASE CERTIFICATE

     

    __________,
      200__ 

     

    To:         
      Morgan
      Stanley Bank 

    1221
      Avenue of the Americas 

    New
      York,
      NY 10020 

    Attn:
      Peter Woroniecki 

     

    Ladies
      and Gentlemen: 

     

    Reference
      is made to the Receivables Loan and Security Agreement dated as of October
      31,
      2006 (the “Loan
      Agreement”),
      among
      Resource Capital Funding II, LLC, (the “Borrower”), Leaf Financial Corporation,
      as the Servicer, Morgan Stanley Bank, as Lender, U.S. Bank National Association,
      as the Custodian and the Lender’s Bank and Lyon Financial Services, Inc. (d/b/a
      U.S. Bank Portfolio Services) as the Backup Servicer. Capitalized terms used
      herein but not defined herein shall have the meanings assigned to such terms
      in
      the Loan Agreement.

     

    In
      accordance with Section
      6.10(c)
      of the
      Loan Agreement, the Borrower hereby certifies that, after giving effect to
      the
      Borrowing requested to occur on ---__________, 200__: 

     

    
      	 	
              (1)

            	
              the
                aggregate Facility Amount under the Loan Agreement does not exceed
                the
                lesser of (A) the Borrowing Limit and (B) the Borrowing Base;
                

            

    

     

    
      	 	
              (2)

            	
              if
                such Borrowing is to be secured by Pool A Receivables, the aggregate
                Facility Amount under the Loan Agreement, calculated solely with
                respect
                to Loans secured by Pool A Receivables, does not exceed the Pool
                A
                Borrowing Base; 

            

    

     

    
      	 	
              (3)

            	
              if
                such Borrowing is to be secured by Pool B Receivables, the aggregate
                Facility Amount under the Loan Agreement, calculated solely with
                respect
                to Loans secured by Pool B Receivables, does not exceed the Pool
                B
                Borrowing Base; 

            

    

     

    
      	 	
              (4)

            	
              no
                Program Termination Event exists; 

            

    

     

    
      	 	
              (5)

            	
              if
                such Borrowing is to be secured by Pool A Receivables, no Pool A
                Termination Event exists; 

            

    

     

    
      	 	
              (6)

            	
              if
                such Borrowing is to be secured by Pool B Receivables, no Pool B
                Termination Event exists; and

            

    

     

    
      
         

      

      
        Exh.A-1

        
          

        

      

      
         

      

    

    The
      Borrower hereby further certifies that attached hereto as Schedule
      A
      are true
      and correct calculations evidencing the accuracy of the statements set forth
      in
      paragraphs (1) and, as applicable, (2) or (3) above.

     

    Very
      truly yours,

     

    RESOURCE
      CAPITAL FUNDING II, LLC

     

    By:                           

    Name: Miles
      Herman

    Title: Vice
      President

     

    
      
        
           

        

         

      

      
        Exh.A-2

        
          

        

      

      
         

        
        

      

    

    EXHIBIT
      B

     

    FORM
      OF
      REQUIRED DATA FIELDS

     

     

    (a) Obligor
      lease number;

     

    (b) Obligor
      name;

     

    (c) Underlying
      Obligor name;

     

    (d) Obligor
      Credit risk rating (if available);

     

    (e) Collateral
      location (city and state);

     

    (f) Contract
      type (pool A or B);

     

    (g) Equipment
      category/type;

     

    (h) Non
      Level
      Payment Contract flag;

     

    (i) Balloon
      flag and put payment flag;

     

    (j) Stand
      Alone Working Capital Loan Flag;

     

    (k) New/used
      flag (if available);

     

    (l) Lease
      type (true/installment);

     

    (m) Serial
      Number (if available);

     

    (n) SIC
      Code
      (if available);

     

    (o) Vendor;

     

    (p) Commencement
      Date

     

    (q) Maturity
      Date;

     

    (r) Date
      Next
      Due;

     

    (s) Original
      Term;

     

    (t) Remaining
      Term;

     

    (u) Payment
      Frequency;

     

    (v) Original
      Receivable Balance;

    
      
         

      

      
        Exh.
          B-1

        
          

        

      

      
         

      

    

     

    (w) Current
      Receivable Balance;

     

    (x) Original
      Equipment Cost;

     

    (y) Amortized
      Equipment Cost;

     

    (z) Scheduled
      Payment; and

     

    (aa) Discounted
      Balance.

    

     

    

    
      
        
           

        

        Exh.
          B-2

      

      
         

        
          

        

      

      
         

        
        

      

    

    EXHIBIT
      C

     

    FORM
      OF
      MONTHLY REMITTANCE REPORT

     

    (See
      attached.)

     

    
      
        
           

        

        Exh.
          C-1

      

      
         

        
          

        

      

      
         

        
        

      

    

    EXHIBIT
      D

     

    FORMS
      OF
      CONTRACT

     

    (See
      attached.)

     

    
      
        
           

        

        Exh.
          D-1

      

      
         

        
          

        

      

      
         

        
        

      

    

    EXHIBIT
      E

     

    (Intentionally
      Omitted.)

     

    
      
        
           

        

        Exh.
          E-1

      

      
         

        
          

        

      

      
         

        
        

      

    

    EXHIBIT
      F

     

    FORM
      OF
      NOTICE OF BORROWING

     

    NOTICE
      OF BORROWING

     

    __________,
      200__ 

     

    To:         
      Morgan
      Stanley Bank 

    1221
      Avenue of the Americas 

    New
      York,
      NY 10020 

    Attn:
      Peter Woroniecki 

     

    Notice
      of
      Borrowing No.: [1] 

     

    Gentlemen:
      

     

    Reference
      is made to the Receivables Loan and Security Agreement dated as of October
      31,
      2006 (the “Loan
      Agreement”),
      among
      Resource Capital Funding II, LLC, (the “Borrower”), Leaf Financial Corporation,
      as the Servicer, Morgan Stanley Bank, as Lender, U.S. Bank National Association,
      as the Custodian and the Lender’s Bank and Lyon Financial Services, Inc. (d/b/a
      U.S. Bank Portfolio Services) as the Backup Servicer. Capitalized terms used
      herein but not defined herein shall have the meanings assigned to such terms
      in
      the Loan Agreement. 

     

    In
      accordance with Sections
      2.02(c) and 6.10(c)
      of the
      Loan Agreement, the Borrower hereby certifies that, after giving effect to
      the
      Borrowing requested to occur on __________, 200__: 

     

    1. Requested
      aggregate amount of Borrowing: $__________
      

     

    To
      be
      comprised of 

     

    a. Requested
      Pool A Loans  $__________
      

     

    and;
      

     

    b. Requested
      Pool B Loans;  $__________
      

     

    
      	 	
              2.

            	
              Requested
                date of Borrowing: __________,
                200__

            

    

     

    
      	 	
              3.

            	
              In
                connection with this Borrowing we Pledge to you the Eligible Pool
                A
                Receivables and the Eligible Pool B Receivables set forth on the
                Schedule
                of Receivables attached hereto.

            

    

     

    
      
         

      

      
        Exh.
          F-1

        
          

        

      

      
         

      

    

    Payments
      in connection with this Borrowing should be deposited to the following account:
      _________________________.

      

     

     

    (Signature
      page to follow)

     

    
      
         

      

      
        Exh.
          F-2

        
          

        

      

      
         

      

    

    Very
      truly yours,

     

    RESOURCE
      CAPITAL FUNDING II, LLC

     

    By:                            

    Name: Miles
      Herman

    Title: Vice
      President

    

     

    
      
        
           

        

         

      

      
        Exh.
          F-3

        
          

        

      

      
         

        
        

      

    

    EXHIBIT
      G

     

    FORM
      OF
      ALLONGE

     

    (See
      attached.)

     

    
      
        
           

        

         

      

      
        Exh.
          G-1

        
          

        

      

      
         

        
        

      

    

     

    TABLE
      OF
      CONTENTS

    ARTICLE
      I.    DEFINITIONS                                                                                                                       1

       
SECTION
      1.01    Certain
      Defined
      Terms                                                                                                                                            
1

           
      SECTION 1.02    Other
      Terms                                                           
      37

    SECTION
      1.03    Computation
      of Time Periods                                                      37

    ARTICLE
      II.    THE
      RECEIVABLES FACILITY                                                     37

    SECTION
      2.01    Borrowings                                                             37

    SECTION
      2.02    The
      Initial Borrowing and Subsequent
      Borrowings                                                                                        37

    SECTION
      2.03    Determination
      of Interest Periods and Interest Rates                                      38

    SECTION
      2.04    Remittance
      Procedures                                                         39

    SECTION
      2.05    Security
      Deposit Account                                                   43

    SECTION
      2.06    Cash
      Reserve Account                                                        
      44

    SECTION
      2.07    Payments
      and Computations, Etc                                                      
      45

    SECTION
      2.08    Fees                                                                
      46

    SECTION
      2.09    Increased
      Costs; Capital Adequacy                                                 
      46

    SECTION
      2.10    Collateral
      Assignment of Agreements                                             
      47

    SECTION
      2.11    Grant
      of
      a Security
      Interest                                                                                                                                
48

    SECTION
      2.12    Evidence
      of
      Debt                                                                                                                                                 
49

    SECTION
      2.13    Release
      of
      Pledged
      Receivables                                                                                                                        
49

    SECTION
      2.14    Treatment
      of
      Amounts Paid by the
      Borrower                                                                                                 
50

    SECTION
      2.15    Prepayment;
      Certain Indemnification Rights;
      Termination                                                                           
50

    SECTION
      2.16    Increase
      of Borrowing
      Limit                                                                                                                               
51

    ARTICLE
      III.    CONDITIONS
      OF
      LOANS                                                                                        
                                                           
51

    SECTION
      3.01    Conditions
      Precedent to Initial
      Borrowing                                                                                                       
51

    SECTION
      3.02    Conditions
      Precedent to All
      Borrowings                                                                                                          
51

    SECTION
      3.03    Advances
      Do Not Constitute a
      Waiver                                                                                                            
54

    ARTICLE
      IV.    REPRESENTATIONS
      AND WARRANTIES                                                                 
      54

    SECTION
      4.01    Representations
      and Warranties of the
      Borrower                                                                                          
 54

    SECTION
      4.02    Representations
      and
      Warranties of the
      Servicer                                                                                             
57

    SECTION
      4.03    Resale
      of
      Receivables Upon Breach of Covenant or Representation and Warranty by
      Borrower          60

     

    
      
         

      

      
        i

        
          

        

      

      
         

      

    

    SECTION
      4.04    Representations
      and Warranties of the
      Lender                                                                                                60

    ARTICLE
      V.    GENERAL
      COVENANTS OF THE BORROWER AND THE
      SERVICER                                                                       
 60

    SECTION
      5.01    General
      Covenants                                                                                                                                                60

    ARTICLE
      VI.    ADMINISTRATION
      AND SERVICING; CERTAIN
      COVENANTS                                                                               
64

    SECTION
      6.01    Appointment
      and Designation of the Servicer                                                
      64

    SECTION
      6.02    Collection
      of Receivable Payments; Modification and Amendment of Receivables; Lockbox
      Agreements                                                
66

    SECTION
      6.03    Realization
      Upon
      Receivables                                                                                                                            
67

    SECTION
      6.04    Insurance
      Regarding
      Equipment                                                                                                                        
67

    SECTION
      6.05    Maintenance
      of Security Interests in Obligor Collateral                        
68

    SECTION
      6.06    Pledged
      Receivable
      Receipts                                                                                                                              
69

    SECTION
      6.07    No
      Rights
      of
      Withdrawal                                                                                                                                     69

    SECTION
      6.08    Permitted
      Investments                                                                                                                                         
69

    SECTION
      6.09    Servicing
      Compensation                                                                                                                                     
70

    SECTION
      6.10    Reports
      to the Lender; Account Statements; Servicing
      Information                                                           
70

    SECTION
      6.11    Statements
      as
      to Compliance; Financial
      Statements                                                                                        71

    SECTION
      6.12    Access
      to
      Certain Documentation; Obligors; Background
      Check                                                               
74

    SECTION
      6.13    Backup
      Servicer                                                                                                                                                    
75

    SECTION
      6.14    Additional
      Remedies of Lender Upon Event of
      Default                                                                                 
78

    SECTION
      6.15    Waiver
      of
      Defaults                                                                                                                                               
79

    SECTION
      6.16    Maintenance
      of Certain
      Insurance                                                                                                                     79

    SECTION
      6.17    Segregation
      of
      Collections                                                                                                                                   79

    SECTION
      6.18    UCC
      Matters; Protection and Perfection of Pledged
      Assets                                                                         79

    SECTION
      6.19    Servicer
      Advances                                                                                                                                               
80

    SECTION
      6.20    Repurchase
      of Receivables Upon Breach of Covenant or Representation and Warranty by
      Servicer   80

    SECTION
      6.21    Compliance
      with Applicable
      Law                                                                                                                       
81

    SECTION
      6.22    Receipt
      of Certificates of
      Title                                                                                                                            
81

    SECTION
      6.23    Lender’s
      Bank Limitation of
      Liability                                                                                                                 81

    
      
         

      

      
        ii

        
          

        

      

      
         

      

    

     

    ARTICLE
      VII.    EVENTS
      OF
      DEFAULT                                                                                                                                                         82

    SECTION
      7.01    Events
      of
      Default                                                   82

    SECTION
      7.02    Additional
      Remedies of the Lender                                           
      85

    ARTICLE
      VIII.    INDEMNIFICATION                                                          
      86

    SECTION
      8.01    Indemnities
      by the Borrower                                                      
      86

    SECTION
      8.02    Indemnities
      by Servicer                                                                       
      88

    ARTICLE
      IX.    MISCELLANEOUS                                                                
      90

    SECTION
      9.01    Amendments
      and Waivers                                                         
      90

    SECTION
      9.02    Notices,
      Etc                                                           
      90

    SECTION
      9.03    No
      Waiver; Remedies                                                          
      91

    SECTION
      9.04    Binding
      Effect; Assignability; Multiple Lenders                                             91

    SECTION
      9.05    Term
      of
      This Agreement                                                     
      92

    SECTION
      9.06    GOVERNING
      LAW; JURY WAIVER; CONSENT TO JURISDICTION                       
      92

    SECTION
      9.07    Costs,
      Expenses and Taxes                                                 92

    SECTION
      9.08    No
      Proceedings                                                    
      93

    SECTION
      9.09    Recourse
      Against Certain Parties                                              
      94

    SECTION
      9.10    Execution
      in Counterparts; Severability; Integration                             
94

    SECTION
      9.11    Tax
      Characterization                                             94

    SECTION
      9.12    Calculation
      of Performance Triggers                                        
      95

    ARTICLE
      X.    THE
      COLLATERAL AGENT                                                                
      95

    SECTION
      10.01    No
      Implied Duties                                                              
      95

    SECTION
      10.02    Limits
      on
      Liability                                                              
      96

    SECTION
      10.03    Acknowledgment                                                              
      96

    
      
        
           

        

         

      

      
        iii

        
          

        

      

      
         

        
        

      

    

    LIST
      OF SCHEDULES AND EXHIBITS

     

    SCHEDULES

    SCHEDULE
      I Condition
      Precedent Documents

    SCHEDULE
      II Prior
      Names, Tradenames, Fictitious Names and “Doing Business As” Names

    SCHEDULE
      III Representations
      and Warranties with Respect to Eligible Receivables, Eligible Underlying
      Contracts and Eligible Underlying Originators

    SCHEDULE
      IV Credit
      and Collection Policy

    SCHEDULE
      V Equipment
      Categories

    SCHEDULE
      VI Addresses
      for Notice

     

    

     

    EXHIBITS

    EXHIBIT
      A Form
      of
      Borrowing Base Certificate

    EXHIBIT
      B Form
      of
      Required Data Fields

    EXHIBIT
      C Form
      of
      Monthly Remittance Report

    EXHIBIT
      D-1(a) Form
      of
      Master Lease Agreement

    EXHIBIT
      D-1(b) Form
      of
      Master Lease Schedule (Dollar Purchase Option)

    EXHIBIT
      D-1(c) Form
      of
      Master Lease Schedule (FMV Purchase Option)

    EXHIBIT
      D-1(d) Form
      of
      Master Lease Schedule (Put)

    EXHIBIT
      D-1(e) Form
      of
      Stand Alone Lease Agreement

    EXHIBIT
      D-2(a) Form
      of
      Loan Contract

    EXHIBIT
      D-2(b) Form
      of
      Loan Contract

    EXHIBIT
      D-3 Form
      of
      Practice Acquisition Loan Contract

    EXHIBIT
      D-4 Eligibility
      Requirements for Pool B Transactions (Documentation Criteria)

    EXHIBIT
      E [Intentionally
      Omitted]

    EXHIBIT
      F Form
      of
      Notice of Borrowing

    EXHIBIT
      G Form
      of
      Allonge

    

    
      
         

      

      
        iv

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00116-of-00352.parquet"}]]