Document:

leafiiifirstamdmt.htm

     

    
      

      

    

     

    FIRST
      AMENDMENT TO CREDIT AGREEMENT

    

    This
      FIRST AMENDMENT TO CREDIT
      AGREEMENT (the “First Amendment”) dated May __, 2007, is by and between LEAF
      EQUIPMENT LEASING INCOME FUND III, L.P., a Delaware limited partnership (the
      “Borrower”), and National City Bank, as the sole Lender on the date hereof (the
“Lender”), and as administrative agent and collateral agent (in such capacity,
      the “Agent”) for the Lender and other lenders from time to time (the
“Lenders”).

    

    BACKGROUND

    

    A.           Pursuant
      to that certain Credit Agreement dated March 30, 2007, by and among the
      Borrowers, the Lenders and the Agent (as the same may be modified and amended
      from time to time, including by this First Amendment, the “Credit Agreement”),
      the Lenders agreed, inter alia, to extend to the Borrower a revolving
      credit facility in the maximum aggregate principal amount of
      $25,000,000.

    

    B.           The
      Borrower has requested an increase of $25,000,000 to the facility, to which
      the
      Lenders are willing to agree, on the terms and subject to the conditions set
      forth herein.

    

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

    

    1.      Definitions.

    

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

    

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

    

    “First
      Amendment” means the First Amendment to this Agreement dated May __,
      2007.

    

    (c)           Amended
      Definition.  The following definition in Article 1 of the Credit
      Agreement shall be amended and restated to read in its entirety as
      follows:

    

    “Aggregate
      Commitment”  means the aggregate amount of the Lenders’
Commitments hereunder, as such amount may be reduced or modified at any
      time or
      from time to time pursuant to the terms hereof.  On the date of the
      First Amendment, the Aggregate Commitment is Fifty Million Dollars
      ($50,000,000).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.      Amendment
      to Schedule I.  Schedule I to the Credit Agreement is hereby
      amended and restated in its entirety with Schedule I attached
      hereto.

    

    3.      Amendment
      to Note.  The existing Note issued in favor of the Lender is
      hereby amended and restated in its entirety with the Note from the Borrower,
      dated the date hereof (the “Restated Note”), in the amount of Fifty Million
      Dollars ($50,000,000).

    

    4.      Representations
      and Warranties.  The Borrower hereby represents and warrants to
      the Agent and each Lender that:

    

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

    

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

    

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

    

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

    

    (e)           No
      Material Adverse Effect.  No Material Adverse Effect has occurred
      since March 30, 2007.

    

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

    

    (a)           Amendment
      Documents.  This First Amendment and the Restated Note, each duly
      executed by the Borrower;

    
      
        
        

      

      
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          2
          -

        
          

        

      

      
        
        

      

    

    

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

    

    (c)           Secretary’s
      Certificate.  A certificate, dated the date hereof, duly executed
      and delivered by the Borrower’s secretary as to: (i) resolutions approved by
      Asset Management’s board of directors then in full force and effect authorizing
      the execution, delivery and performance by the Borrower of each Credit Document
      to be executed by the Borrower, and the transactions contemplated hereby and
      thereby; (ii) the incumbency and signatures of its Authorized Officers,
      authorized to act with respect to each Amendment Document to be executed by
      the
      Borrower; and (iii) the full force and validity of each Organizational Document
      of the Borrower delivered as of March 30, 2007, pursuant to the Credit
      Agreement;

    

    (d)           Opinion
      of Counsel. An opinion, dated the date hereof, and addressed to the Agent
      and all Lenders, from Ledgewood, counsel to the Borrower, in form and substance
      reasonably satisfactory to the Agent;

    

    (e)           Fees
      and Expenses.  Payment of any fees and expenses of the Agent in
      preparation and negotiation of the Amendment Documents; and

    

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

    

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

    

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

    

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

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    

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

    

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

    

     

    [Remainder
      of page intentionally left blank]

     

    
      
        
        

      

      
        -
          4
          -

        
          

        

      

      
        
        

      

    

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

     

    

     

    LEAF
      EQUIPMENT LEASING INCOMEFUND III,
      L.P., by its general partner

    LEAF
      ASSET MANAGEMENT,
      LLC

    

    By:
      ________________________________

           Name:

           Title:

    

    

    NATIONAL
      CITY BANK,

    as
      Agent and as the
      Lender

    

    By:
      ________________________________

           Name:

           Title:

    

    
      
              

                  First
            Amendment to Credit
            Agreement      
    

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    SCHEDULE
      I

    

    INITIAL
      COMMITMENTS

    

    

    
      	
              Lender
                Name

            	
              Loan
                Commitment

            	
              Loan
                Percentages

            
	
              National
                City Bank

            	
              $50,000,000

            	
              100%

            
	 	 	 
	
              Total

            	
              $50,000,000

            	
              100%

            

    

    

    

    

    
      
              

                  First
            Amendment to Credit
            Agreementsecuredloanagrmt061907.htm

     

    
      

      

    

     

    SECURED
      LOAN AGREEMENT

     

    Dated
      as of June 19, 2007

     

    LEAF
      FUND III, LLC,

    as
      Borrower

     

    LEAF
      FUNDING, INC.,

     

    as
      Originator

     

    LEAF
      EQUIPMENT LEASING INCOME FUND III, L.P.,

     

    as
      Seller

     

    LEAF
      FINANCIAL CORPORATION,

     

    as
      Servicer

     

    U.S.
      BANK NATIONAL ASSOCIATION,

     

    as
      Collateral Agent and Securities Intermediary

     

    and

     

    WESTLB
      AG, NEW YORK BRANCH,

    as
      Lender

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Table
      of Contents

     

                                                                                                                                                                                                                                                                                                                                                                                      Page

     

    Article
      I

    DEFINITIONS
      AND ACCOUNTING MATTERS

     

    
      	
              Section
                1.01

            	
              Defined
                Terms

            	
              1

            
	
              Section
                1.02

            	
              Accounting
                Terms and Determinations

            	
              1

            

    

     

    Article
      II

    ADVANCES,
      NOTE AND PREPAYMENTS

     

    
      	
              Section
                2.01

            	
              Advances.

            	
              2

            
	
              Section
                2.02

            	
              The
                Note.

            	
              2

            
	
              Section
                2.03

            	
              Procedures
                for Borrowing.

            	
              3

            
	
              Section
                2.04

            	
              [Reserved].

            	
              3

            
	
              Section
                2.05

            	
              Repayment
                of Advances; Interest.

            	
              3

            
	
              Section
                2.06

            	
              Illegality;
                Substituted Interest Rates

            	
              4

            
	
              Section
                2.07

            	
              Determination
                of Borrowing Base; Mandatory Prepayments or Pledge.

            	
              5

            
	
              Section
                2.08

            	
              Optional
                Prepayments; Indemnity.

            	
              6

            
	
              Section
                2.09

            	
              Requirements
                of Law.

            	
              6

            
	
              Section
                2.10

            	
              Purpose
                of Advances

            	
              7

            
	
              Section
                2.11

            	
              Extension
                of Expected Facility Termination Date.

            	
              7

            
	
              Section
                2.12

            	
              Taxes.

            	
              8

            

    

     

    Article
      III

    PAYMENTS;
      COMPUTATIONS

     

    
      	
              Section
                3.01

            	
              Payments.

            	
              9

            
	
              Section
                3.02

            	
              Computations

            	
              9

            
	
              Section
                3.03

            	
              Settlement
                Procedures.

            	
              9

            

    

     

    Article
      IV

    COLLATERAL
      SECURITY

     

    
      	
              Section
                4.01

            	
              Collateral;
                Security Interest.

            	
              11

            
	
              Section
                4.02

            	
              Further
                Documentation

            	
              13

            
	
              Section
                4.03

            	
              Changes
                in Locations, Name, etc

            	
              14

            
	
              Section
                4.04

            	
              Collateral
                Agent’s Appointment as Attorney-in-Fact.

            	
              14

            
	
              Section
                4.05

            	
              Reimbursement
                for Performance by Collateral Agent of Borrower’s
                Obligations

            	
              16

            
	
              Section
                4.06

            	
              Proceeds

            	
              16

            
	
              Section
                4.07

            	
              Remedies

            	
              16

            
	
              Section
                4.08

            	
              Servicing
                Rights

            	
              17

            
	
              Section
                4.09

            	
              Limitation
                on Duties Regarding Preservation of Collateral

            	
              17

            
	
              Section
                4.10

            	
              Powers
                Coupled with an Interest

            	
              18

            
	
              Section
                4.11

            	
              Release
                of Security Interest

            	
              18

            
	
              Section
                4.12

            	
              Rights
                of Secured Parties; Limitations on Secured Parties’
                Obligations

            	
              18

            
	
              Section
                4.13

            	
              [Reserved].

            	
              19

            

    

     

    i

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Article
      V

    CONDITIONS
      PRECEDENT

     

    
      	
              Section
                5.01

            	
              Initial
                Advance

            	
              19

            
	
              Section
                5.02

            	
              Initial
                and Subsequent Advances

            	
              21

            

    

     

    Article
      VI

    REPRESENTATIONS
      AND WARRANTIES

     

    
      	
              Section
                6.01

            	
              Representations
                and Warranties Relating to the Borrower

            	
              24

            
	
              Section
                6.02

            	
              Representations
                and Warranties of LEAF

            	
              29

            
	
              Section
                6.03

            	
              Representations
                and Warranties of the Servicer

            	
              33

            

    

     

    Article
      VII

    COVENANTS

     

    
      	
              Section
                7.01

            	
              Covenants
                of Borrower

            	
              37

            
	
              Section
                7.02

            	
              Covenants
                of LEAF

            	
              43

            
	
              Section
                7.03

            	
              Covenants
                of the Servicer

            	
              50

            

    

     

    Article
      VIII

    EVENTS
      OF
      DEFAULT

     

    
      	
              Section
                8.01

            	
              Events
                of Default

            	
              56

            

    

     

    Article
      IX

    REMEDIES
      UPON DEFAULT

     

    
      	
              Section
                9.01

            	
              Remedies.

            	
              60

            

    

     

    Article
      X

    NO
      DUTY
      OF COLLATERAL AGENT

     

    
      	
              Section
                10.01

            	
              No
                Duty of Collateral Agent

            	
              61

            

    

     

    Article
      XI

    PURCHASE
      OF RELEASE AND SUBSTITUTION OF CONTRACTS

     

    
      	
              Section
                11.01

            	
              Purchase
                of Release and Substitution.

            	
              62

            
	
              Section
                11.02

            	
              Procedure.

            	
              63

            
	
              Section
                11.03

            	
              Objection
                and Purchase.

            	
              65

            
	
              Section
                11.04

            	
              Borrower’s,
                Servicer’s and Collateral Agent’s Subsequent Obligations.

            	
              65

            

    

    
ii

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Article
      XIII

    
      
        [INTENTIONALLY
          OMITTED]

        

        
          	
                  Section
                    14.01

                	
                  No
                    Waiver; Remedies Cumulative

                	
                  71

                
	
                  Section
                    14.02

                	
                  Notices

                	
                  71

                
	
                  Section
                    14.03

                	
                  Indemnification
                    and Expenses.

                	
                  72

                
	
                  Section
                    14.04

                	
                  Amendments;
                    Waivers

                	
                  74

                
	
                  Section
                    14.05

                	
                  Severability

                	
                  74

                
	
                  Section
                    14.06

                	
                  Survival

                	
                  74

                
	
                  Section
                    14.07

                	
                  Captions

                	
                  75

                
	
                  Section
                    14.08

                	
                  Counterparts

                	
                  75

                
	
                  Section
                    14.09

                	
                  GOVERNING
                    LAW; ETC

                	
                  75

                
	
                  Section
                    14.10

                	
                  SUBMISSION
                    TO JURISDICTION; WAIVERS

                	
                  75

                
	
                  Section
                    14.11

                	
                  Acknowledgments

                	
                  76

                
	
                  Section
                    14.12

                	
                  No
                    Proceedings

                	
                  76

                
	
                  Section
                    14.13

                	
                  Assignments;
                    Participations.

                	
                  76

                
	
                  Section
                    14.14

                	
                  [Reserved].

                	
                  76

                
	
                  Section
                    14.15

                	
                  Periodic
                    Due Diligence Review

                	
                  77

                
	
                  Section
                    14.16

                	
                  Set-Off

                	
                  77

                
	
                  Section
                    14.17

                	
                  Confidentiality

                	
                  78

                
	
                  Section
                    14.18

                	
                  Entire
                    Agreement

                	
                  78

                
	
                  Section
                    14.19

                	
                  Future
                    Assurances

                	
                  78

                
	
                  Section
                    14.20

                	
                  [Reserved].

                	
                  78

                
	
                  Section
                    14.21

                	
                  Third-Party
                    Beneficiaries

                	
                  78

                

        

      

       

      iii

        

        
          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

      

    

    

    APPENDICES

     

    APPENDIX
      A                                           Defined
      Terms

    

    EXHIBITS

     

    EXHIBIT
      A                                           [Intentionally
      Omitted]

    EXHIBIT
      B                                           Form
      of Custodial Agreement

    EXHIBIT
      C                                           Form
      of Interest Rate Hedging Agreement

    EXHIBIT
      D                                           Eligibility
      Criteria

    EXHIBIT
      E                                           Form
      of Contract

    EXHIBIT
      F                                           Financial
      Statements of the Servicer

    EXHIBIT
      G                                           Underwriting
      Guidelines

    EXHIBIT
      H                                           Form
      of Note

    EXHIBIT
      I                                           Notice
      of Borrowing and Pledge

    EXHIBIT
      J                                           Forms
      of Opinion of Counsel to LEAF Parties

    EXHIBIT
      K                                           Filing
      Jurisdictions and Offices

    EXHIBIT
      L                                           Trade
      Names, Etc.

    EXHIBIT
      M                                           Form
      of Borrowing Base Deficiency Notice

    EXHIBIT
      N                                           Schedule
      of LEAF Indebtedness

    EXHIBIT
      O                                           Schedule
      of LEAF Insurance

    EXHIBIT
      P                                           Form
      of Vehicle Lienholder Nominee Agreement

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    SECURED
      LOAN AGREEMENT

     

    SECURED
      LOAN AGREEMENT, dated as of June 19, 2007, among LEAF FUND III, LLC, a Delaware
      limited liability company (the “Borrower”), LEAF FUNDING, INC., a
      Delaware corporation (in its capacity as originator of Contracts from Approved
      Originators, “LEAF Originator”), LEAF EQUIPMENT LEASING INCOME FUND III,
      L.P., a Delaware limited partnership (“LEAF” or the “Seller”),
      LEAF FINANCIAL CORPORATION, a Delaware corporation (the “Servicer”), U.S.
      BANK NATIONAL ASSOCIATION, a national banking association (in its capacity
      as
      collateral agent, the “Collateral Agent” and, in its capacity as
      securities intermediary, the “Securities Intermediary”) and WESTLB AG,
      NEW YORK BRANCH (the “Lender”).

     

    WITNESSETH:

     

    WHEREAS,
      the Borrower wishes to borrow certain sums from time to time to provide
      financing of the purchase of certain Contracts;

     

    WHEREAS,
      pursuant to the terms and conditions of the Servicing Agreement such Contracts
      shall be serviced by the Servicer;

     

    WHEREAS,
      such Contracts and related Collateral shall secure Advances to be made by Lender
      hereunder and the other Secured Obligations; and

     

    NOW,
      THEREFORE, for good and valuable consideration, the receipt and
      sufficiency of which are hereby acknowledged, the parties hereto hereby agree
      as
      follows:

     

    Article
      I

     

    DEFINITIONS
      AND ACCOUNTING MATTERS

     

    Section
      1.01                                Defined
      Terms.  Whenever used in this Agreement (including, without limitation,
      in the preambles and the exhibits hereto), capitalized terms used and not
      otherwise defined herein shall have the meanings set forth in Appendix A
      attached hereto.  Any
      and
      all terms used in this Agreement which are defined in the UCC shall be construed
      and defined in accordance with the meaning and definition ascribed to such
      terms
      under the UCC, unless otherwise defined in Appendix A.

     

    Section
      1.02                                Accounting
      Terms and Determinations.  Except as otherwise expressly provided
      herein, all accounting terms used herein shall be interpreted, and all financial
      statements and certificates and reports as to financial matters required to
      be
      delivered to the Lender hereunder shall be prepared, in accordance with
      GAAP.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Article
      II

     

    ADVANCES,
      NOTE AND PREPAYMENTS

     

    Section
      2.01                                Advances.

     

    (a)  Subject
      to the terms and conditions of this Loan Agreement, and relying on the
      representations, warranties and covenants of the Borrower hereinafter set forth,
      the Lender agrees to make one or more loans (each, an “Advance”; and
      collectively, the “Advances”) to the Borrower from time to time during
      the Commitment Period up to a maximum principal amount at any one time
      outstanding equal to the Advance Amount; provided, however, that
      no Advance shall be made (i) on a day other than a Permitted Advance Date,
      (ii)
      in an amount less than the Minimum Advance Amount, (iii) in an amount which
      would exceed the Available Commitment on such Permitted Advance Date or (iv)
      in
      an amount which, when added to the Total Outstanding Advances on such Permitted
      Advance Date (before giving effect to the Advance to be made on such Permitted
      Advance Date), would result in a Borrowing Base Deficiency after giving effect
      to such Advance.

     

    (b)  Subject
      to the terms and conditions of this Loan Agreement, during the Commitment Period
      the Borrower may borrow, repay and reborrow hereunder in accordance with the
      procedures set forth in Sections 2.03 and 2.05.

     

    (c)  In
      no event shall an Advance be made (i) when any Default has occurred and is
      continuing or would occur as a result of such Advance or (ii) when any Facility
      Termination Event has occurred and is continuing or would occur as a result
      of
      such Advance.

     

    (d)  The
      Lender shall have no obligation to make an Advance unless each condition
      precedent set forth in Section 5.01 (in connection with the initial
      Advance) and Section 5.02 (in connection with the initial Advance and
      each subsequent Advance), as applicable, shall have been satisfied as of the
      applicable Funding Date.

     

    Section
      2.02                                The
      Note.

     

    (a)  The
      Advances made by the Lender shall be evidenced by a single promissory note
      of
      the Borrower substantially in the form of Exhibit H hereto (the
“Note”), duly executed by Borrower, dated the date hereof, payable
      to the
      order of Lender in a principal amount up to the Maximum Facility Amount and
      otherwise duly completed.  The Lender shall have the right to have the
      Note subdivided, by exchange for promissory notes of lesser denominations or
      otherwise.

     

    (b)  The
      date and amount of each Advance made by the Lender to the Borrower, and each
      payment made on account of the principal and interest thereof, shall be recorded
      by the Lender on its books and endorsed by the Lender on the schedule attached
      to and constituting part of the Note and any continuation
      thereof.  Such recordation and endorsement shall be conclusive in the
      absence of manifest error; provided that the failure of the Lender to
      make any such recordation or endorsement or any error in such recordation or
      endorsement shall not affect the obligations of the Borrower to make a payment
      when due of any amount owing hereunder or under the Note.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    Section
      2.03                                Procedures
      for Borrowing.

     

    (a)  The
      Borrower may request an Advance hereunder, on any Business Day during the
      Commitment Period, by delivering to the Lender, with a copy to the Collateral
      Agent, an irrevocable written Notice of Borrowing and Pledge substantially
      in
      the form of Exhibit I hereto (a “Notice of Borrowing and Pledge”),
      appropriately completed and executed by a Responsible Officer of the Borrower,
      which Notice of Borrowing and Pledge must be received by the Lender, with a
      copy
      to the Collateral Agent, no later than 12:00 p.m., New York City time, three
      (3)
      Business Days prior to the requested Funding Date of such Advance;
provided, that the Borrower shall not request more than one (1) Advance
      in any calendar week.  Such Notice of Borrowing and Pledge shall (i)
      attach a Contract Schedule identifying the Eligible Contracts that the Borrower
      proposes to pledge to the Collateral Agent, for the benefit of the Lender and
      the Hedge Counterparty, and to be included in the Borrowing Base in connection
      with such Advance, (ii) contain the amount of the requested Advance, which
      shall
      in all events be at least equal to the Minimum Advance Amount, to be made on
      such Funding Date and shall also contain the Funding Date Reserve Account
      Deposit in connection with such Advance, (iii) specify the requested Funding
      Date, (iv) attach an officer’s certificate signed by a Responsible Officer of
      the Borrower as to the satisfaction of all of the matters referred to in
Sections 5.02 (a), (b) and (c) hereof (a “Borrowing Base
      Certificate”), and (v) attach such other information reasonably requested by
      the Lender from time to time prior to the Funding Date set forth in the related
      Notice of Borrowing and Pledge.

     

    (b)  With
      respect to each requested Advance, upon satisfaction of all conditions precedent
      set forth in Sections 5.01 (in connection with the initial Advance) and
5.02 (in connection with the initial Advance and each subsequent
      Advance)
      hereof and the satisfaction of all procedures set forth in this Section
      2.03 and Sections 2 and 3 of the Custodial Agreement, (i) the
      Lender shall transfer the amount of such Advance to the Collateral Agent for
      deposit in the Funding Account on the specified Funding Date; (ii) on the
      specified Funding Date, the Collateral Agent shall transfer from the Funding
      Account an amount equal to the excess of (x) the amount of such Advance over
      (y)
      the Funding Date Reserve Account Deposit with respect to such Advance, to such
      account as the Borrower shall designate to the Collateral Agent in writing;
      and
      (iii) unless a Reserve Account Limitation Event would occur, the Collateral
      Agent shall deposit in the Reserve Account on the specified Funding Date the
      Funding Date Reserve Account Deposit with respect to such Advance.

     

    Section
      2.04                                [Reserved].

     

    Section
      2.05                                Repayment
      of Advances; Interest.

     

    (a)  No
      later than the Final Payment Date, the Borrower shall pay to the Lender the
      Total Outstanding Advances, plus all accrued and unpaid interest thereon, and
      shall pay all other Secured Obligations then accrued, in full.  Upon
      the Facility Termination Date, (i) the Lender’s commitment to make any new
      Advances shall be terminated, (ii) subject to Section 2.11(c), the
      Applicable Margin will be equal to the amount in clause (ii) of the definition
      of “Applicable Margin” and (iii) the Lender will be entitled to receive the
      Additional Principal Payment Amount.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (b)  The
      Borrower hereby promises to pay to the Lender interest on the unpaid principal
      amount of each Advance for each Accrual Period for such Advance until the
      principal amount of such Advance is paid in full, at a rate per annum equal
      to
      the LIBOR Rate for such Advance plus the Applicable Margin, calculated on
      the basis of the actual number of days elapsed in a year of 360
      days.  Notwithstanding the foregoing, the Borrower hereby promises to
      pay to the Lender interest at the LIBOR Rate plus the Applicable Margin on
      any
      principal of any Advance and on any other amount payable by the Borrower
      hereunder or under the other Loan Documents that shall not be paid in full
      when
      due (whether at stated maturity, by acceleration or by mandatory prepayment
      or
      otherwise) for the period from and including the due date thereof to but
      excluding the date the same is paid in full.  Accrued interest on each
      Advance shall be payable on each Payment Date; provided, however,
      that, the initial Payment Date for each Advance will be the Payment Date
      occurring in the second calendar month following the month in which the Advance
      was made.

     

    (c)  If,
      by the terms of this Loan Agreement or the Note, Borrower at any time is
      required or obligated to pay interest at a rate in excess of the maximum rate
      permitted by applicable law, the rate of interest shall be deemed to be
      immediately reduced to such maximum rate and the portion of all prior interest
      payments in excess of such maximum rate shall be applied and shall be deemed
      to
      have been payments made in reduction of the principal amount due hereunder
      and
      under the Note.

     

    Section
      2.06                           Illegality;
      Substituted Interest Rates.  Notwithstanding any other provisions
      herein, (a) if any Requirement of Law or any change therein or in the
      interpretation or application thereof shall make it unlawful for the Lender
      to
      make or maintain any Advances at the LIBOR Rate as contemplated by this Loan
      Agreement, or (b) in the event that the Lender shall have determined (which
      determination shall be conclusive and binding upon the Borrower) that by reason
      of circumstances affecting the LIBOR interbank market neither adequate nor
      reasonable means exist for ascertaining the LIBOR Rate, or (c) the Lender shall
      have determined (which determination shall be conclusive and binding on the
      Borrower) that the LIBOR Rate will not adequately and fairly reflect the cost
      to
      the Lender of maintaining or funding the Advances based on such LIBOR Rate,
      (x)
      the obligation of the Lender to make or maintain Advances at the LIBOR Rate
      shall forthwith be suspended and the Lender shall promptly notify the Borrower
      thereof (by telephone confirmed in writing) and (y) each Advance then
      outstanding, if any, shall, from and including the date of the Borrower’s
      receipt of notice from the Lender of the occurrence of any condition set forth
      in clause (a) , (b) or (c) above, or at such earlier date
      as may be required by law, until payment in full thereof, bear interest at
      the
      rate per annum equal to the greater of the Base Rate and the rate of interest
      (including the Applicable Margin) in effect on the date immediately preceding
      the date any event described in clause (a), (b) or (c)
      above occurred (calculated on the basis of the actual number of days elapsed
      in
      a year of 360 days).  If subsequent to such suspension of the
      obligation of the Lender to make or maintain the Advances at the LIBOR Rate
      it
      becomes lawful for the Lender to make or maintain the Advances at the LIBOR
      Rate, or the circumstances described in clause (b) or (c) above no
      longer exist, the Lender shall so notify the Borrower and its obligation to
      do
      so shall be reinstated effective as of the date it becomes lawful for Lender
      to
      make or maintain the Advances at the LIBOR Rate or the circumstances described
      in clause (b) or (c) above no longer exist.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    Section
      2.07                           Determination
      of Borrowing Base; Mandatory Prepayments or Pledge.

     

    (a)  If
      at any time the Total Outstanding Advances exceeds the Borrowing Base,
      including, without limitation, as a result of any Contract ceasing to be an
      Eligible Contract (a “Borrowing Base Deficiency”) the Borrower shall no
      later than (i) 12:00 p.m., New York City time, on the second (2nd) Business
      Day
      after the discovery of such Borrowing Base Deficiency, prepay the outstanding
      principal amount of Advances in part or in whole, together with accrued and
      unpaid interest on, and other costs relating to, such prepayment under this
      Agreement payable by the Borrower with respect to, the principal amount prepaid,
      or (ii) 12:00 p.m., New York City time, on the second (2nd) Business Day after
      the discovery of such Borrowing Base Deficiency, pledge additional Eligible
      Contracts to the Collateral Agent, for the benefit of the Lender and the Hedge
      Counterparty, such that after giving effect to such prepayment or pledge the
      Total Outstanding Advances do not exceed the Borrowing Base.  It is
      understood and agreed that, if the Borrower notifies the Lender pursuant to
      Section 7.01(m) that it has elected to cure such Borrowing Base
      Deficiency pursuant to clause (ii) above and the Collateral Agent shall
      have not issued to the Lender a Certification with respect to such additional
      pledged Eligible Contracts, complete and free of exceptions, other than those
      resolved in accordance with the Custodial Agreement, by 12:00 p.m., New York
      City time, on the Certification Date for such additional pledged Contracts,
      such
      failure to comply with clause (ii) above (or resolve such exceptions in
      accordance with the Custodial Agreement) shall be an Event of Default as set
      forth in Section  8.01(f).

     

    (b)  If
      any Contract is not an Eligible Contract by reason of the violation, with
      respect to such Contract as of the related Funding Date, of any of the
      Eligibility Criteria set forth in Exhibit D hereto, the Borrower shall,
      no later than 12:00 p.m., New York City time, on the fifth (5th) Business Day
      after the discovery of such violation, obtain the release of the Collateral
      Agent’s security interest in such Contract, pursuant to Section 4.11, by
      depositing (or causing to be deposited) into the Collection Account the Release
      Price for such Contract; provided, however, that, if a Borrowing
      Base Deficiency would otherwise occur as a result of such release and payment
      of
      the related Release Price, the Borrower shall, on the date of such release,
      cure
      such prospective Borrowing Base Deficiency in the manner set forth in Section
      2.07(a)(i) or (a)(ii).

     

    (c)  If
      any Contract is purchased from the Borrower by the Servicer pursuant to
Section 3.09 of the Servicing Agreement, the Collateral Agent, on the
      date of such purchase, shall release its security interest in such Contract,
      pursuant to Section 4.11, upon deposit (by or on behalf of the Borrower)
      into the Collection Account of the Release Price for such Contract;
provided, however, that, if a Borrowing Base Deficiency would
      otherwise occur as a result of such release and payment of the related Release
      Price, the Borrower shall, on the date of such release, cure such prospective
      Borrowing Base Deficiency in the manner set forth in Section 2.07(a)(i)
      or (a)(ii).

     

    (d)  If
      the Borrower shall purchase the release of any Replaceable Contract from the
      security interest of the Collateral Agent hereunder on any Business Day pursuant
      to Section 11.01(a), the Collateral Agent shall release its security
      interest in such Contract, pursuant to Section 4.11, upon deposit (by or
      on behalf of the Borrower) into the Collection Account of the Release Price
      for
      such Contract; provided, however, that, if a Borrowing Base
      Deficiency would otherwise occur as a result of such release and payment of
      the
      related Release Price, the

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    Borrower
      shall, on the date of such release, cure such prospective Borrowing Base
      Deficiency in the manner set forth in Section 2.07(a)(i) or
(a)(ii); providedfurther that no such purchase of a release
      shall be permissible unless the removal of such Replaceable Contract from the
      pool of Contracts is in accordance with the terms of Section 11.01(c) and
Section 11.01(d).

     

    Section
      2.08                                Optional
      Prepayments; Indemnity.

     

    (a)  The
      Borrower may prepay, in whole but not in part (unless expressly permitted by
      a
      Loan Document or the Lender consents in writing to a partial prepayment), the
      Total Outstanding Advances at any time.  Any amounts prepaid shall be
      applied to repay the outstanding principal amount of any Advances (together
      with
      interest thereon) until paid in full.  Amounts repaid may be
      reborrowed in accordance with the terms of this Loan Agreement.  If
      the Borrower intends to prepay the Total Outstanding Advances in whole, but
      not
      in part, from any source, the Borrower shall give five (5) Business Days’ prior
      written notice thereof to the Lender, specifying the date and amount of
      prepayment.  All other Secured Obligations then due and owing shall be
      paid in connection with any prepayment of the Total Outstanding
      Advances.  If such notice is given, the amount specified in such
      notice shall be due and payable on the date specified therein, together with
      accrued interest to such date on the amount prepaid.  Notwithstanding
      the foregoing, any payment by the Borrower pursuant to Section 2.07 or
Section 11.01 hereof shall not be considered a prepayment and therefore
      not subject to this Section 2.08(a).

     

    (b)  The
      Borrower agrees to indemnify the Lender and to hold it harmless from any cost,
      loss or expense which Lender may sustain or incur as a consequence of (i) the
      Borrower making any payment or prepayment (other than pursuant to Section
      2.07 hereof) of principal of any Advance on a day which is not a Payment
      Date, (ii) any failure by the Borrower to take an Advance hereunder after notice
      of such Advance has been given pursuant to this Loan Agreement, (iii) any
      default by the Borrower in making any prepayment of the Total Outstanding
      Advances on the due date therefor, (iv) any acceleration of the maturity of
      any
      Advances by the Lender in accordance with the terms of this Loan Agreement
      (other than by reason of the occurrence of the Expected Facility Termination
      Date), including, but not limited to, any cost, loss or expense arising in
      liquidating the Collateral and from interest or fees payable by the Lender
      to
      lenders of funds obtained by it in order to maintain the Advances hereunder,
      or
      (v) arising from a violation with respect to any Contract of an eligibility
      criterion set forth in the Eligibility Criteria annexed hereto as Exhibit
      D.  Indemnification pursuant to this Section shall survive the
      termination of this Loan Agreement and shall include reasonable fees and
      expenses of counsel and expenses of litigation.

     

    Section
      2.09                                Requirements
      of Law.

     

    (a)  If
      any Requirement of Law or any change in the interpretation or application
      thereof or compliance by the Lender with any request or directive (whether
      or
      not having the force of law) from any central bank or other Governmental
      Authority made subsequent to the date hereof:

     

    (i)           shall
      subject the Lender to any tax, duty or other charge of any kind whatsoever
      with
      respect to this Loan Agreement, the Note or any Advance made by it (excluding
      taxes imposed on or measured by the Lender’s net or taxable income)
      or

    
      
        
        

      

      
        6

        
          

        

      

      
        
        
change
        the basis of taxation of payments to the Lender in respect thereof or in
        respect
        of any other amounts payable by the Borrower to the Lender pursuant to this
        Loan
        Agreement or any other Loan Document; or

    

     

    (ii)           shall
      impose, modify or hold applicable any reserve, special deposit, compulsory
      advance or similar requirement against receivables or other assets held by,
      deposits or other liabilities in or for the account of, advances or other
      extensions of credit by, or any other acquisition of funds by, any office of
      the
      Lender which is not otherwise included in the determination of the LIBOR Rate
      hereunder;

     

    and
      the
      result of any of the foregoing is to increase the cost to the Lender, by an
      amount which the Lender deems to be material, of making, continuing or
      maintaining any Advance or to reduce any amount receivable hereunder in respect
      thereof, then, in any such case, the Borrower shall pay the Lender, within
      ten
      (10) Business Days after demand by the Lender, such additional amount or amounts
      as will compensate the Lender for such increased cost or reduced amount
      receivable.

     

    (b)  If
      the Lender shall have determined that the adoption of or any change in any
      Requirement of Law regarding capital adequacy or in the interpretation or
      application thereof or compliance by the Lender or any Person controlling the
      Lender with any request or directive regarding capital adequacy (whether or
      not
      having the force of law) from any Governmental Authority made subsequent to
      the
      date hereof shall have the effect of reducing the rate of return on the Lender’s
      or such Person’s capital as a consequence of its obligations hereunder by an
      amount deemed by the Lender to be material, then from time to time, the Borrower
      shall pay to the Lender, within twenty (20) days after demand by the Lender,
      such additional amount or amounts as will compensate the Lender for such
      reduction.

     

    (c)  If
      the Lender becomes entitled to claim any additional amounts pursuant to this
      Section 2.09, it shall notify the Borrower of the event by reason of
      which it has become so entitled.  A certificate as to any additional
      amounts payable pursuant to this Section 2.09 submitted by the Lender to
      the Borrower shall be conclusive in the absence of manifest
      error.  For clarity, any amounts payable by the Borrower to the Lender
      pursuant to this Section 2.09 shall be paid directly to the Lender in
      accordance with Section 3.01 (and shall not be deposited in the
      Collection Account).

     

    Section
      2.10                                Purpose
      of Advances.  Each Advance shall be used solely to finance the purchase
      by the Borrower from LEAF of Eligible Contracts that were originated by an
      Approved Originator and that are identified to the Lender in writing on each
      Contract Schedule, as such Contract Schedule may be amended from time to time
      in
      accordance with the Custodial Agreement.

     

    Section
      2.11                                Extension
      of Expected Facility Termination Date.

     

    (a)  The
      Expected Facility Termination Date may only be extended in the Lender’s sole
      discretion, upon written request from the Borrower.

     

    (b)  If
      the Expected Facility Termination Date has not been extended and no other
      Facility Termination Event has occurred and is continuing, then the Borrower
      shall have no

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        
obligation
        to prepay any of the Advances, the Borrower shall have the right to prepay
        any
        or all of the Advances (without premium or penalty but shall be liable for
        any
        loss or expense the Lender may suffer from interest or fees payable by the
        Lender to lenders of funds obtained by it in order to maintain such Advances
        hereunder) and the Applicable Margin shall be the amount described in clause
        (i)
        of the definition thereof.

    

     

    Section
      2.12                                Taxes.

     

    (a)  All
      payments made by the Borrower under this Loan Agreement and the Note shall
      be
      made free and clear of, and without deduction or withholding for or on account
      of, any present or future income, stamp or other taxes, levies, imposts, duties,
      charges, fees, deductions or withholdings, now or hereafter imposed, levied,
      collected, withheld or assessed by any Governmental Authority, excluding taxes
      imposed on or measured by Lender’s net or taxable income or imposed on the
      Lender as a result of a present or former connection between the Lender and
      the
      jurisdiction of the Governmental Authority imposing such tax or any political
      subdivision or taxing authority thereof or therein (other than any such
      connection arising solely from Lender having executed, delivered or performed
      its obligations or received a payment under, or enforced, this Agreement or
      the
      Note).  If any such non-excluded taxes, levies, imposts, duties,
      charges, fees, deductions or withholdings (“Non-Excluded Taxes”) are
      required to be imposed on the Lender hereunder or under the Note, the Borrower
      shall pay such taxes by having the amounts so payable to the Lender increased
      to
      the extent necessary to yield to the Lender (after payment of all Non-Excluded
      Taxes) interest or any such other amounts payable hereunder at the rates or
      in
      the amounts specified in this Loan Agreement and the Note.  Whenever
      any Non-Excluded Taxes are payable by the Borrower, as promptly as possible
      thereafter the Borrower shall send to the Lender a certified copy of an original
      official receipt received by the Borrower showing payment thereof.  If
      the Borrower fails to pay any Non-Excluded Taxes when due to the appropriate
      taxing authority or fails to remit to the Lender the required receipts or other
      required documentary evidence, the Borrower shall indemnify the Lender for
      any
      incremental taxes, interest or penalties that may become payable by the Lender
      as a result of any such failure.  The agreements in this Section shall
      survive the termination of this Loan Agreement and the payment of the Advances
      and all other amounts payable hereunder and under the Note.  For
      clarity, any amounts payable by the Borrower to the Lender pursuant to this
      Section 2.12 shall be paid directly to the Lender in accordance with
Section 3.01 (and shall not be deposited in the Collection
      Account).

     

    (b)  The
      Lender hereby agrees and covenants to deliver to the Borrower on or before
      the
      Closing Date (or the date such Person becomes a Lender) two valid and complete
      original signed copies of either (a) United States IRS Form W-8BEN (or successor
      form) including documentation evidencing the Lender’s qualification for a
      complete exemption from withholding taxes; (b) United States IRS Form W-8ECI
      (or
      any successor form) relating to the Lender and entitling it to complete
      exemption from withholding on any amounts payable in respect of any Advance;
      (c)
      United States IRS Form W-8IMY (including any applicable certification,
      information, documentation or other reporting requirements required by statute
      or regulation); or (d) a United States IRS Form W-9 reflecting that the Lender
      is a “United States Person” (within the same meaning of Section 7701(a)(30) of
      the IRC), in each case, as applicable.  In addition, the Lender agrees
      that, from time to time, when a lapse in time or change in circumstances renders
      the previous certification obsolete or inaccurate in any material respect,
      that
      it will

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    deliver
      to the Borrower either United States IRS Form W-8BEN, United States IRS Form
      W-8ECI, United States IRS Form W-8IMY or United States IRS Form W-9, as
      applicable, in order to establish that the Lender is either a “United States
      Person” (within the meaning of Section 7701(a)(30) of the IRC) or is entitled to
      a continued complete exemption from withholding tax with respect to any amounts
      payable in respect of any Advance.

     

    Article
      III

     

    PAYMENTS;
      COMPUTATIONS

     

    Section
      3.01                                Payments.

     

    (a)  Except
      to the extent otherwise provided herein, all payments of principal, interest
      and
      other amounts to be made by the Borrower to the Lender under this Loan
      Agreement, the Note and the other Loan Documents shall be made in Dollars,
      in
      immediately available funds, without deduction, set-off or counterclaim, to
      the
      Lender at the following account maintained by WestLB: Account No. 920-1-060663
      maintained at JPMorgan Chase Bank, New York, ABA #021000021, Ref: LEAF Fund
      III,
      not later than 12:00 p.m., New York City time, on the date on which such payment
      shall become due (and each such payment made after such time on such due date
      shall be deemed to have been made on the next succeeding Business
      Day).  Each of LEAF, the Servicer and the Borrower acknowledges that
      it has no rights of withdrawal from the foregoing account.

     

    (b)  Except
      to the extent otherwise expressly provided herein, if the due date of any
      payment under this Loan Agreement, the Note or the other Loan Documents would
      otherwise fall on a day that is not a Business Day, such date shall be extended
      to the next succeeding Business Day, and interest shall accrue and be payable
      at
      the then applicable rate for any principal so extended for the period of such
      extension.

     

    Section
      3.02                                Computations. 
Interest on the Advances shall be computed on the basis of a 360-day
      year for
      the actual days elapsed in the period for which payable.

     

    Section
      3.03                                Settlement
      Procedures.

     

    (a)  All
      Receivables paid by Customers in respect of the Contracts shall be collected
      and
      deposited in the manner set forth under Sections 3.01 and 3.03 of
      the Servicing Agreement.  Notwithstanding the foregoing, if, on any
      day, LEAF, the Borrower or the Servicer receives any Receivables in respect
      of
      any Contract (other than amounts otherwise on deposit in the Lockbox Account),
      LEAF, the Borrower or the Servicer, as applicable, shall deposit such
      Receivables to the Lockbox Account no later than the second (2nd) Business
      Day
      immediately following such receipt.  The Servicer shall cause the
      withdrawal of all Receivables on deposit in the Lockbox Account and shall
      deposit such Receivables into the Collection Account on the second (2nd) Business
      Day
      after identification thereof by the Servicer.  The Servicer shall use
      best efforts to identify Receivables on deposit in the Lockbox Account within
      five (5) Business Days after the deposit of such Receivables to the Lockbox
      Account and in any event shall identify all Receivables on deposit in the
      Lockbox Account within fourteen (14) days after the deposit of such Receivables
      to the Lockbox Account.  Each of LEAF and the Borrower shall (and
      shall

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        
cause
        the
        Servicer to) use its best efforts to prevent the deposit of any funds other
        than
        Proceeds of Collateral into the Collection Account.

    

     

    (b)  Funds
      deposited in the Collection Account during any month shall be held therein,
      in
      trust for the Collateral Agent, for the benefit of the Lender and the Hedge
      Counterparty, until the next Payment Date.  On each Payment Date the
      Collateral Agent shall (based on the Monthly Servicer’s Report delivered by the
      Servicer pursuant to Section 4.01 of the Servicing Agreement for such
      Payment Date) withdraw from the Collection Account all Available Funds and
      any
      Reserve Account Available Amount then on deposit therein, and apply such funds,
      after payment of (i) any amounts necessary to reimburse the Servicer for the
      payment of the taxes described in the Servicing Agreement and (ii) any
      amounts received from Customers to pay the taxes described in the Servicing
      Agreement, to the extent deposited in the Collection Account, as
      follows:

     

    first,
      from Available Funds and, if Available Funds are insufficient, from the Reserve
      Account Available Amount, to the Hedge Counterparty, payment of any Swap
      Obligations then due and owing pursuant to each Interest Rate Hedging Agreement,
      plus any other amounts then due and owing to the Hedge Counterparty pursuant
      to
      any Interest Rate Hedging Agreement (including, without limitation, any breakage
      fee payable in accordance with any such agreement), plus any past due amounts
      not previously paid;

     

    second,
      from Available Funds and, if Available Funds are insufficient, from the Reserve
      Account Available Amount, pro rata in accordance with the respective amounts
      then due and owing to the Servicer, (1) the Servicing Fee then due and owing
      plus any past due amounts not previously paid, (2) the amount necessary to
      reimburse the Servicer for any Nonrecoverable Advance, (3) solely from the
      portion of Available Funds comprised of Receivables with respect to a particular
      Contract, the Servicer Advance Reimbursement Amount with respect to such
      Contract plus any past due Servicer Advance Reimbursement Amounts with respect
      to such Contract not previously paid, (4) all Servicing Charges and (5) if
      the
      Servicer is no longer LEAF Financial Corporation or one of its Affiliates,
      the
      amount necessary to reimburse the Servicer for any costs and expenses that
      have
      been incurred by the Servicer and are reimbursable to it under Section 3.08
      of
      the Servicing Agreement;

     

    third,
      from Available Funds and, if Available Funds are insufficient, from the Reserve
      Account Available Amount, pro rata in accordance with the respective amounts
      then due and owing, (1) to the Backup Servicer, the Backup Servicer Fee then
      due
      and owing plus any past due amounts not previously paid, (2) to the successor
      Servicer, following the appointment of such successor as Servicer pursuant
      to
      the Servicing Agreement, an amount equal to (x) $60,000 if such successor
      Servicer is the Backup Servicer and (y) the lesser of (A) the actual transition
      costs incurred by such successor in connection with such appointment and (B)
      $60,000, if such successor Servicer is other than Backup Servicer, and (3)
      to
      the Collateral Agent, any fees and expenses owed to the Collateral Agent
      pursuant to Section 7 of the Custodial Agreement that are due but have not
      been
      paid by Borrower; provided reimbursement pursuant to clause (3) shall not
      exceed $100,000 during any calendar year;

     

    fourth,
      from Available Funds and, if Available Funds are insufficient, from the Reserve
      Account Available Amount, to the Lender, the Monthly Interest Payment
      Amount;

     

    
      
        
        

      

      
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    fifth,
      from Available Funds and, if Available Funds are insufficient, from the Reserve
      Account Available Amount, to the Lender, the Non-Use Fee then due and owing
      plus
      any past due amounts not previously paid in respect of the Non-Use
      Fee;

     

    sixth,
      from Available Funds and, if Available Funds are insufficient, from the Reserve
      Account Available Amount, to the Lender, the Monthly Principal Payment
      Amount;

     

    seventh,
      on or after the Facility Termination Date, from Available Funds and, if
      Available Funds are insufficient, from the Reserve Account Available Amount,
      to
      the Lender, the Additional Principal Payment Amount, in accordance with Section
      12.02(f) hereof;

     

    eighth,
      from Available Funds, to the Reserve Account, the amount required to cause
      the
      Reserve Account Available Amount (after giving effect to payments made pursuant
      to clauses first through sixth above on such Payment Date) to
      equal the Required Reserve Account Amount; provided, that the
      amount of such deposit shall be limited to the extent necessary to prevent
      a
      Reserve Account Limitation Event;

     

    ninth,
      from Available Funds, pro rata in accordance with the respective amounts then
      due and owing, to the Lender, the Servicer, the Backup Servicer, the Collateral
      Agent and the Securities Intermediary, respectively, any fees or reimbursements
      due to such Person pursuant to this Loan Agreement or any other Loan Document
      and previously unpaid; and

     

    tenth,
      to the Borrower (or to such other Person as the Borrower shall direct), all
      remaining Available Funds together with any amounts released from the Reserve
      Account in excess of the Required Reserve Account Amount in accordance with
      Section 12.02(h) hereof.

     

    The
      allocations to be made under this Section shall be described in the related
      Monthly Servicer’s Report delivered pursuant to Section 4.01 of the
      Servicing Agreement.

     

    Article
      IV

     

    COLLATERAL
      SECURITY

     

    Section
      4.01                                Collateral;
      Security Interest.

     

    (a)  The
      Collateral Agent shall hold the Required Documents delivered to it pursuant
      to
      terms of the Custodial Agreement, as secured party for the benefit of the Lender
      and the Hedge Counterparty pursuant to Section 4.01(c), and shall deliver
      Certifications to the Lender each to the effect that it has reviewed such
      Contract Documents in the manner and to the extent required by the Custodial
      Agreement and identifying any exceptions in such Contract Documents as so
      reviewed in the Contract Exception Reports.

     

    (b)  The
      “Collateral” shall consist of all of the personal property of the Borrower,
      wherever located, and now owned or hereafter acquired, including, without
      limitation:

     

    (i)           all
      Contracts identified on a Notice of Borrowing and Pledge delivered by the
      Borrower to the Lender and the Collateral Agent from time to time,
      including,

     

    
      
        
        

      

      
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    without
      limitation, all amounts paid or payable thereon or in respect thereof on or
      after the related Cut-Off Date;

     

    (ii)           all
      Substitute Contracts identified on any amendment to Schedule A of the
      Acquisition Agreement delivered by the Borrower pursuant to Section
      11.02(c) to LEAF, the Servicer, the Lender and the Collateral Agent from
      time to time, including, without limitation, all amounts paid or payable thereon
      or in respect thereof on or after the related Cut-Off Date;

     

    (iii)           all
      Contract Documents, and any and all other documents that LEAF or any other
      Servicer keeps on file in accordance with its customary procedures relating
      to
      the Contracts, the Receivables, the Customers or the Equipment;

     

    (iv)           all
      rights and interests, including security interests, in the Equipment related
      to
      the Contracts and any other interest of the Borrower in such
      Equipment;

     

    (v)           all
      Receivables (including, without limitation, all Scheduled Payments, prepayments,
      Servicing Charges, Recoveries, Residual Proceeds, Guaranty Amounts and Insurance
      Proceeds) received—and all rights to receive any Receivables—related to each
      Contract due on or after the related Cut-Off Date;

     

    (vi)           all
      of its rights and benefits, but none of its obligations or burdens, under the
      Acquisition Agreement, including its rights related to the delivery
      requirements, representations and warranties and the cure, repurchase and
      indemnification obligations of LEAF under the Acquisition
      Agreement;

     

    (vii)           all
      of its rights and benefits, but none of the obligations and burdens, under
      the
      Interest Rate Hedging Agreement;

     

    (viii)                      [reserved];

     

    (ix)           [reserved];

     

    (x)           the
      Collection Account, the Reserve Account and the balances, investments and all
      Proceeds thereof and other items of value attributable or credited to the
      Collection Account and the Reserve Account and all rights with respect
      thereto;

     

    (xi)           all
      Receivables on deposit from time to time in the Lockbox Account;

     

    (xii)           all
      of its “money”, “fixtures”, “accounts”, “chattel paper” (including tangible
      chattel paper and electronic chattel paper), “inventory” (including computer
      programs embedded therein), “equipment” (including computer programs embedded
      therein), “instruments” (including promissory notes), “investment property”,
“documents”, “deposit accounts”, “letters of credit”, “letter of credit rights”,
“general intangibles” (including payment intangibles and software), and
“supporting obligations” as defined in the UCC relating to or constituting any
      and all of the foregoing, together with any books and records relating thereto;
      and

     

    
      
        
        

      

      
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    (xiii)                      any
      and all replacements, substitutions, distributions on, or Proceeds or products
      of any and all of the foregoing, including, without limitation, all present
      and
      future claims, demands, causes and choses in action in respect of any or all
      of
      the foregoing and all payments on or under and all Proceeds of every kind and
      nature whatsoever in respect of any or all of the foregoing, including all
      Proceeds of the conversion, voluntary or involuntary, into cash or other liquid
      property, all cash Proceeds, accounts, accounts receivable, notes, drafts,
      acceptances, chattel paper, checks, deposit accounts, insurance Proceeds,
      condemnation awards, rights to payment of any and every kind and other forms
      of
      receivables, instruments and other supporting obligations and other property
      which at any time constitute all or part of or are included in the Proceeds
      of
      any of the foregoing.

     

    (c)  As
      collateral security for the prompt and complete payment and performance when
      due
      (whether at the stated maturity, by acceleration or otherwise) of the Secured
      Obligations, the Borrower hereby pledges, assigns and transfers to the
      Collateral Agent, for the benefit of the Lender and the Hedge Counterparty
      and
      their respective successors, endorsees, transferees and assigns, and hereby
      grants to the Collateral Agent, for the benefit of the Lender and the Hedge
      Counterparty and their respective successors, endorsees, transferees and
      assigns, a continuing security interest in all of the Borrower’s right, title
      and interest in, to and under all of the Collateral whether now owned or
      existing or at any time hereafter acquired or arising by the Borrower or in
      which the Borrower now has or at any time in the future may acquire any right,
      title or interest.  The Borrower agrees to mark its master computer
      records and tapes to evidence the interests granted to the Collateral Agent
      hereunder.

     

    (d)  The
      foregoing pledge, assignment, transfer and grant is made solely to secure the
      payment by the Borrower of the Secured Obligations and to secure compliance
      with
      the provisions of this Loan Agreement and the other Loan
      Documents.  The Collateral Agent, solely for the benefit of the Lender
      and the Hedge Counterparty, accepts such pledge, assignment, transfer and grant,
      and agrees to perform to the best of its ability the duties required of it
      in
      this Loan Agreement and the other Loan Documents to which it is a party, such
      that the interests of the Lender and the Hedge Counterparty arising out of
      or
      related to this Loan Agreement and the other Loan Documents are adequately
      and
      effectively protected.

     

    Section
      4.02                                Further
      Documentation.  a)At any time and from time to time, and at the sole
      expense of the Borrower, the Borrower will promptly and duly execute and
      deliver, or will promptly cause to be executed and delivered, such further
      instruments and documents and take such further actions as are necessary (or
      as
      are reasonably requested by the Lender or, at the direction of the Lender,
      the
      Collateral Agent) for the purpose of obtaining or preserving the full benefits
      of this Loan Agreement and of the rights and powers herein granted, including,
      without limitation, the filing of any financing or continuation statements
      under
      the UCC in effect in any jurisdiction with respect to the Liens created hereby
      or the taking of any other action necessary to preserve the status of the Liens
      on the Collateral created hereby as first priority perfected liens, except
      that
      UCC financing statements are not required to have been filed against the related
      Customer for any Equipment related to any Contract that had an original
      equipment cost at origination of less than $25,000, or if such Contract provides
      for a “fair market value” purchase option, of less than $50,000.  All
      financing statements filed by or on behalf of the Borrower with respect to
      the
      Liens created hereby shall contain the following statement: “A purchase of
      a

     

    
      
        
        

      

      
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security
        interest in the collateral described in this financing statement will violate
        the rights of the secured party.”  The Borrower also hereby authorizes
        the Collateral Agent to file any such financing or continuation statement
        without the signature of the Borrower to the extent permitted by applicable
        law.  A photographic or other reproduction of this Loan Agreement
        shall be sufficient as a financing statement for filing in any
        jurisdiction.

    

     

    (b)  With
      respect to any item of Collateral released pursuant to the terms of this
      Agreement, the Borrower shall have the right to require the Collateral Agent
      and/or Lender to execute (if necessary) and/or deliver a UCC amendment
      statement, UCC release or a release agreement (prepared by or on behalf of
      the
      Borrower) on the date such Collateral is released (or on the next Business
      Day,
      if such date is not a Business Day) and such other evidence as may be reasonably
      requested by the Borrower to evidence the termination of the Collateral Agent’s
      security interest in the item of released Collateral.  In connection
      with any permitted replacement of an item of Equipment under a Contract, all
      of
      the Collateral Agent and/or Lender’s right, title and interest in and to the
      replaced item of Equipment shall terminate and the Collateral Agent, for the
      benefit of the Lender and the Hedge Counterparty, shall have a security interest
      in all of the Borrower’s right, title and interest in and to any replacement
      Equipment.

     

    Section
      4.03                                Changes
      in Locations, Name, etc.  The Borrower shall not change its name,
      identity, organizational structure (or the equivalent) or jurisdiction of
      formation or change the location where it maintains its records with respect
      to
      the Collateral unless it shall have given the Collateral Agent and the Lender
      at
      least thirty (30) days’ prior written notice thereof and shall have delivered to
      the Collateral Agent all UCC financing statements and amendments thereto and
      taken all other actions as are necessary (or as are requested by the Lender
      or,
      at the direction of the Lender, the Collateral Agent) to continue the status
      of
      the Collateral Agent’s Liens on the Collateral as perfected first priority
      liens, except that UCC financing statements are not required to have been filed
      against the related Customer for any Equipment related to any Contract that
      had
      an original equipment cost at origination of less than $25,000, or if such
      Contract provides for a “fair market value” purchase option, of less than
      $50,000.

     

    Section
      4.04                                Collateral
      Agent’s Appointment as Attorney-in-Fact.

     

    (a)  If
      an Event of Default shall have occurred and be continuing, the Borrower hereby
      irrevocably constitutes and appoints the Collateral Agent and any officer or
      agent thereof, with full power of substitution, as its true and lawful
      attorney-in-fact with full irrevocable power and authority in the place and
      stead of the Borrower, and in the name of the Borrower, or in its own name,
      from
      time to time at the written direction of the Lender, for the purpose of carrying
      out the terms of this Loan Agreement and the other Loan Documents, to take
      any
      and all appropriate action and to execute any and all documents and instruments
      related to the Collateral which may be necessary to accomplish the purposes
      of
      this Loan Agreement and the other Loan Documents, and, without limiting the
      generality of the foregoing, the Borrower hereby gives the Collateral Agent
      the
      power and right, on behalf of the Borrower, without assent by, but with notice
      to, the Borrower, if an Event of Default shall have occurred and be continuing,
      to do the following:

     

    (i)           in
      the name of the Borrower, or its own name, or otherwise, to take possession
      of
      and endorse and collect any checks, drafts, notes, acceptances or other
      instruments for the payment of moneys due with respect to any Collateral and
      to
      file any

     

    
      
        
        

      

      
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claim
        or
        to take any other action or proceeding in any court of law or equity or
        otherwise appropriate, for the purpose of collecting any and all such moneys
        due
        with respect to any Collateral whenever payable;

    

     

    (ii)           to
      pay or discharge taxes and Liens levied or placed on or threatened against
      the
      Collateral; and

     

    (iii)           (A)
      to direct any party liable for any payment under any Collateral to make payment
      of any and all moneys due or to become due thereunder directly to the Lender
      or
      as the Lender shall direct; (B) to ask or demand for, collect, receive payment
      of and receipt for, any and all moneys, claims and other amounts due or to
      become due at any time in respect of or arising out of any Collateral; (C)
      to
      sign and endorse any invoices, assignments, verifications, notices and other
      documents in connection with any of the Collateral; (D) to commence and
      prosecute any suits, actions or proceedings at law or in equity in any court
      of
      competent jurisdiction to collect the Collateral or any thereof and to enforce
      any other right in respect of any Collateral; (E) to defend any suit, action
      or
      proceeding brought against the Borrower with respect to any Collateral; (F)
      to
      settle, compromise or adjust any suit, action or proceeding described in clause
      (E) above and, in connection therewith, to give such discharges or releases
      as
      the Lender may deem appropriate but, in all cases, will maximize the value
      of
      the Collateral; (G) generally, to sell, transfer, pledge and make any agreement
      with respect to or otherwise deal with any of the Collateral as fully and
      completely as though the Collateral Agent were the absolute owner thereof for
      all purposes, and to do, at the Lender’s option and the Borrower’s expense, at
      any time, and from time to time, all acts and things which the Lender deems
      necessary to protect, preserve or realize upon the Collateral and the Collateral
      Agent’s Liens thereon and to effect the intent of this Loan Agreement and the
      other Loan Documents, all as fully and effectively as the Borrower might do;
      and
      (H) generally, at any time, or from time to time, to take all other actions
      in
      the exercise of any right or remedy available to a secured party under the
      UCC
      of each applicable jurisdiction, any Contract Document, or otherwise by law
      or
      agreement.

     

    The
      Borrower hereby ratifies all that said attorneys shall lawfully do or cause
      to
      be done by virtue hereof.  This power of attorney is a power coupled
      with an interest and shall be irrevocable until the payment in full of the
      Secured Obligations and the termination of this Loan Agreement.

     

    (b)  The
      Borrower also authorizes the Collateral Agent, at any time and from time to
      time, to execute at the direction of the Lender, in connection with any sale
      provided for in Section 4.07 of this Loan Agreement, any endorsements,
      assignments or other instruments of conveyance or transfer with respect to
      the
      Collateral.

     

    (c)  The
      powers conferred on the Collateral Agent are solely to protect the Collateral
      Agent’s interests (for the benefit of the Lender and the Hedge Counterparty) in
      the Collateral and shall not impose any duty other than those expressly stated
      in the Loan Documents upon the Collateral Agent to exercise any such
      powers.

     

    
      
        
        

      

      
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    Section
      4.05                                Reimbursement
      for Performance by Collateral Agent of Borrower’s Obligations.  If LEAF
      or the Borrower fails to perform or comply with any of its agreements contained
      in this Loan Agreement or the other Loan Documents and the Collateral Agent,
      at
      the direction of the Lender, shall itself perform or comply, or otherwise cause
      performance or compliance, with such agreement, the out-of-pocket costs and
      expenses of the Collateral Agent incurred in connection with such performance
      or
      compliance, together with interest thereon at a rate per annum equal to the
      LIBOR Rate for a period of one month plus the margin specified in clause (ii)
      of
      the definition of “Applicable Margin” herein, shall be payable by LEAF or the
      Borrower, as the case may be, to the Collateral Agent on demand and shall
      constitute Secured Obligations.  For clarity, it is hereby
      acknowledged that this Section 4.05 does not create any obligation of the
      Collateral Agent to comply with any direction of the Lender other than such
      obligations of the Collateral Agent that are expressly set forth elsewhere
      in
      this Loan Agreement.

     

    Section
      4.06                                Proceeds. 
If an Event of Default shall occur and be continuing, (a) all Proceeds
      of
      Collateral received by LEAF or the Borrower consisting of cash, checks and
      other
      cash equivalents shall be held by LEAF or the Borrower in trust for the
      Collateral Agent, for the benefit of the Lender and the Hedge Counterparty,
      subject to the Intercreditor Agreement segregated from other funds of LEAF
      or
      the Borrower, and subject to the Intercreditor Agreement shall forthwith upon
      receipt by LEAF or the Borrower be turned over to the Collateral Agent in the
      exact form received by LEAF or the Borrower (duly endorsed by LEAF or the
      Borrower to the Collateral Agent, as applicable) and (b) any and all such
      Proceeds received by the Collateral Agent (whether from LEAF or the Borrower
      or
      otherwise) shall, upon the direction to the Collateral Agent by the Lender,
      be
      held by the Collateral Agent as collateral security for, and shall be applied
      by
      the Collateral Agent against, the Secured Obligations (whether matured or
      unmatured) in the order set forth in Section 3.03(b).  Any
      balance of such Proceeds remaining after the Secured Obligations shall have
      been
      paid in full and this Loan Agreement shall have been terminated shall be paid
      over to the Borrower.  For purposes hereof, Proceeds shall include,
      but not be limited to, all principal and interest payments, all prepayments
      and
      payoffs, insurance claims, recoveries against Customers, sale and foreclosure
      Proceeds, and any other income and all other amounts received with respect
      to
      the Collateral.

     

    Section
      4.07                                Remedies. 
If an Event of Default shall occur and be continuing, the Lender may
      direct the
      Collateral Agent to exercise, in addition to all other rights and remedies
      granted to it in this Loan Agreement and in any other instrument or agreement
      securing, evidencing or relating to the Secured Obligations, all rights and
      remedies of a secured party under the UCC.  Without limiting the
      generality of the foregoing, the Lender, without further demand of performance
      or other further demand, presentment, protest, advertisement or notice of any
      kind (except any notice required by law referred to below) to or upon the
      Borrower or any other Person (each and all of which further demands,
      presentments, protests, advertisements and notices are hereby waived), may
      direct the Collateral Agent in such circumstances forthwith to collect, receive,
      appropriate and realize upon the Collateral, or any part thereof, and/or may
      forthwith sell (on a servicing released basis, at the option of the Lender),
      lease, assign, give option or options to purchase, or otherwise dispose of
      and
      deliver the Collateral or any part thereof (or contract to do any of the
      foregoing), in one or more parcels or as an entirety at public or private sale
      or sales, at any exchange, broker’s board or office of the Collateral Agent or
      elsewhere upon such terms and conditions as it may deem advisable and at such
      prices as it may deem best, for cash or on credit or for future delivery without
      assumption of any credit risk.  The

     

    
      
        
        

      

      
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Lender
        shall have the right upon any such public sale or sales, and, to the extent
        permitted by law, upon any such private sale or sales, to purchase the whole
        or
        any part of the Collateral so sold, free of any right or equity of redemption
        in
        the Borrower, which right or equity is hereby waived or released.  In
        the event that the Lender elects to direct the Collateral Agent to take any
        action described in this Section 4.07, the Borrower further agrees, at
        the request of the Lender, to assemble the Collateral and make it available
        to
        the Collateral Agent at places which the Lender shall reasonably select,
        whether
        at the Borrower’s premises or elsewhere.  The Collateral Agent shall
        apply the net Proceeds of any such collection, recovery, receipt, appropriation,
        realization or sale, after deducting all costs and expenses of every kind
        incurred therein or incidental to the care or safekeeping of any of the
        Collateral or in any way relating to the Collateral or the rights of the
        Lender
        or the Hedge Counterparty hereunder, including, without limitation, reasonable
        attorneys’ fees and disbursements, to the payment in whole or in part of the
        Secured Obligations, in the order and priority specified in Section
        3.03(b).  To the extent permitted by applicable law, each of LEAF
        and the Borrower waives all claims, damages and demands it may acquire against
        the Collateral Agent or the Lender arising out of the exercise by the Collateral
        Agent or the Lender of any of their respective rights hereunder, other than
        those claims, damages and demands arising from the gross negligence or willful
        misconduct of the Collateral Agent or the Lender, respectively.  The
        Collateral Agent shall provide to the Borrower at least ten (10) days’ prior
        notice of a proposed sale or other disposition of Collateral following an
        Event
        of Default, or such shorter notice as is permissible pursuant to the UCC
        under
        the circumstances in which such sale or disposition arises.  The
        Borrower shall remain liable for any deficiency (plus accrued interest thereon
        as contemplated pursuant to Section 2.05(b) hereof) if the Proceeds of
        any sale or other disposition of the Collateral are insufficient to pay the
        Secured Obligations, including the fees and disbursements of any attorneys
        employed by the Lender and the Collateral Agent to collect such
        deficiency.  The Collateral Agent may sell Collateral pursuant to this
Section 4.07 without giving warranties of any kind.  In the
        event that the purchaser fails to pay for the Collateral, the Collateral
        Agent
        may resell the Collateral, and the Borrower will be credited with the proceeds
        of such sale received by the Lender.

    

     

    Section
      4.08                                 Servicing
      Rights.  Any sale or other disposition by the Collateral Agent of all
      or any part of the Collateral shall be made free and clear of any of the
      Servicer’s and the Borrower’s rights pursuant to the Servicing Agreement, and
      each and every right of the Servicer and the Borrower with respect thereto
      shall
      terminate as to such Collateral as of the date of such sale or other
      disposition.

     

    Section
      4.09                                Limitation
      on Duties Regarding Preservation of Collateral.  The Collateral Agent’s
      sole duty with respect to the custody, safekeeping and physical preservation
      of
      the Collateral in its possession, under the UCC or otherwise, shall be to deal
      with it in a commercially reasonable manner and in the same manner as the
      Collateral Agent deals with similar property for its own
      account.  None of the Lender, the Hedge Counterparty, the Collateral
      Agent or any of their respective directors, managers, officers or employees
      shall be liable for failure to demand, collect or realize upon all or any part
      of the Collateral or for any delay in doing so or shall be under any obligation
      to sell or otherwise dispose of any Collateral upon the request of the Borrower
      or otherwise if doing (or not doing) so was in a commercially reasonable
      manner.

    
      
        
        

      

      
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    Section
      4.10                                Powers
      Coupled with an Interest.  All authorizations and agencies herein
      contained with respect to the Collateral are irrevocable and are powers coupled
      with an interest.

     

    Section
      4.11                                Release
      of Security Interest.  (x) Upon termination of this Loan Agreement and
      repayment to the Lender and the Hedge Counterparty of all interest, principal,
      fees and any other amounts then due and payable (including, without limitation,
      payment of any Swap Obligations), the Collateral Agent’s security interest
      therein shall automatically terminate and the Collateral Agent shall evidence
      the release of its security interest in any remaining Collateral in a writing
      in
      form and substance reasonably satisfactory to the Borrower or (y) upon payment
      of a Contract in full by or on behalf of the related Customer or transfer of
      a
      Contract by the Borrower to the Seller to the extent required or permitted
      under
Sections 2.07(b), (c) or (d) of this Loan Agreement and
Section 3.03 or 3.04 of the Acquisition Agreement or Section
      3.09 of the Servicing Agreement, as applicable, the Collateral Agent’s
      security interest shall automatically terminate, and the Collateral Agent shall
      evidence the release of its security interest in any Collateral related to
      such
      Contract and the related Collateral in a writing in form and substance
      reasonably satisfactory to the Borrower; provided that, in either case of
clause (x) or (y) above, if any payment, or any part thereof, of
      any of the Secured Obligations is rescinded or must otherwise be restored or
      returned by the Lender or the Hedge Counterparty upon the insolvency,
      bankruptcy, dissolution, liquidation or reorganization of LEAF or the Borrower,
      or upon or as a result of the appointment of a receiver, intervenor or
      conservator of, or a trustee or similar officer for, LEAF or the Borrower or
      any
      substantial part of its property, or otherwise, this Loan Agreement, all rights
      hereunder and the Liens created hereby (other than Liens referred to in
clause (y) above) shall continue to be effective, or be reinstated, as
      though such payments had not been made.  For clarity, if each
      requirement set forth in clause (x) above shall have been met, the
      Collateral Agent’s security interest in any remaining Collateral shall, subject
      to the proviso in the immediately preceding sentence, be released in accordance
      with this Section 4.11, regardless of whether any of the Secured
      Obligations paid by the Borrower prior to such release would be susceptible
      to
      recovery from the Lender or the Hedge Counterparty after such release in
      connection with any insolvency or bankruptcy proceeding with respect to LEAF,
      the Borrower or any Customer.  In addition, and without limitation of
      the foregoing, no release of a security interest in a Contract and the
      Collateral related to such Contract in accordance with clause (y) above
      shall occur unless and until the entire amount of Insurance Proceeds, Recoveries
      and/or Residual Proceeds received with respect to such Contract and related
      Equipment following the sale, lease or other disposition of the related
      Equipment in accordance with Section 3.01(c)(vii) of the Servicing
      Agreement, shall have been delivered to the Collateral Agent for deposit in
      the
      Collection Account.

     

    Section
      4.12                                Rights
      of Secured Parties; Limitations on Secured Parties’ Obligations. None
      of the Collateral Agent, the Lender or the Hedge Counterparty shall have any
      obligation or liability under any Contract or any other Collateral by reason
      of
      or arising out of this Loan Agreement or the receipt by the Collateral Agent,
      the Lender or the Hedge Counterparty of any payment relating to such Contract
      or
      any other Collateral pursuant hereto, nor shall the Collateral Agent, the Lender
      or the Hedge Counterparty be obligated in any manner to perform any of the
      obligations of LEAF Originator, the Borrower or LEAF under or pursuant to any
      Contract or any other Collateral, to make any payment, to make any inquiry
      as to
      the nature or the sufficiency of any payment received by it or as to the
      sufficiency of any performance by any party under any Contract or any other
      Collateral, to present or file any claim, to take any action to enforce
      any

    
      
        
        

      

      
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performance
        or to collect the payment of any amounts which may have been assigned to
        it or
        to which it may be entitled at any time or times.

    

     

    Section
      4.13                                [Reserved].

     

    Article
      V

     

    CONDITIONS
      PRECEDENT

     

    Section
      5.01                                Initial
      Advance.  The obligation of the Lender to make the initial Advance
      requested to be made by it hereunder is subject to the satisfaction, immediately
      prior to or concurrently with the making of such Advance, of the following
      conditions precedent:

     

    (a)  Loan
      Agreement.  The Lender shall have received this Loan Agreement,
      executed and delivered by a duly authorized officer of the Borrower, the
      Collateral Agent, LEAF Originator, the Servicer and LEAF.

     

    (b)  Note.  The
      Lender shall have received the Note, conforming to the requirements hereof
      and
      executed and delivered by a duly authorized officer of the
      Borrower.

     

    (c)  Custodial
      Agreement.  The Lender shall have received the Custodial
      Agreement, conforming to the requirements hereof and executed and delivered
      by a
      duly authorized officer of LEAF, the Borrower and the Collateral
      Agent.

     

    (d)  Servicing
      Agreement.  The Lender shall have received the Servicing
      Agreement, conforming to the requirements hereof and executed and delivered
      by a
      duly authorized officer of the Borrower, the Servicer, the Backup Servicer
      and
      the Collateral Agent.

     

    (e)  Date
      and Amount of Initial Advance.  The initial Advance shall occur no
      later than 30 days after the Closing Date and the amount of such Advance shall
      be not less than $100,000,000.

     

    (f)  Servicer’s
      Certificate.  The Lender shall have received a certificate of the
      Servicer, dated as of the date hereof, and certifying that each of the Contracts
      (i) was underwritten in conformance with the Underwriting Guidelines set forth
      in Exhibit G hereto, (ii) meets the Eligibility Criteria set forth in Exhibit
      D
      hereto and (iii) upon acquisition by LEAF Funding Inc. and its successors in
      title, will be serviced by the Servicer in accordance with the Servicing
      Agreement.

     

    (g)  Organizational
      Documents.  The Lender shall have received copies of the
      certificate of incorporation (or certificate of formation) of each LEAF Party
      and each amendment thereto, certified under recent date, from the Secretary
      of
      State (or other appropriate authority) of the jurisdiction under which such
      LEAF
      Party is organized.

     

    (h)  Filings,
      Registrations, Recordings; Lien Searches.  All documents
      (including, without limitation, financing statements) required to be filed,
      registered or recorded in order to create in favor of the Collateral Agent,
      for
      the benefit of the Lender, and the Hedge Counterparty a perfected first-priority
      security interest in the Collateral, subject to no Liens other than
      Permitted

    
      
        
        

      

      
        19

        
          

        

      

      
        
        
Encumbrances
        and those created hereunder, shall have been properly prepared and authorized
        (and if required, executed) for filing, registration or recording in each
        office
        in each jurisdiction in which such filings, registrations and recordations
        are
        required to perfect such first-priority security interest; evidence that
        all
        other actions necessary to perfect Collateral Agent’s first-priority security
        interest in the Collateral granted under this Loan Agreement have been taken,
        except that UCC financing statements are not required to have been filed
        against
        the related Customer for any Equipment related to any Contract that had an
        original equipment cost at origination of less than $25,000, or if such Contract
        provides for a “fair market value” purchase option, of less than $50,000; and
        lien search results with respect to LEAF and Borrower (dated as of a date
        that
        is as close to the Closing Date as is practicable, but in no event dated
        as of a
        date occurring more than seven calendar days prior to the Closing Date) in
        each
        such jurisdiction (and in each other jurisdiction as may be advisable in
        accordance with the UCC) that are in form and substance satisfactory to the
        Lender.

    

     

    (i)  Closing
      Certificates.  The Lender shall have received a certificate of the
      Secretary or Assistant Secretary of each LEAF Party, dated as of the date
      hereof, and certifying (A) that attached thereto is a true, complete and correct
      copy of (a) the organizational documents of such LEAF Party, and (b) resolutions
      duly adopted by such LEAF Party authorizing the execution, delivery and
      performance of this Loan Agreement, the Note and the other Loan Documents to
      which it is a party, as applicable, and the borrowings contemplated hereunder,
      and that such resolutions have not been amended, modified, revoked or rescinded,
      and (B) as to the incumbency and specimen signature of each officer executing
      any Loan Documents on behalf of such LEAF Party and authorized to execute any
      Notice of Borrowing and Pledge, and such certificate and the resolutions
      attached thereto shall be in form and substance satisfactory to the
      Lender.

     

    (j)  Good
      Standing Certificates.  The Lender shall have received copies of
      certificates evidencing the good standing of each LEAF Party, dated as of a
      recent date, from the Secretary of State (or other appropriate authority) of
      the
      jurisdiction under which such LEAF Party is organized, and, with respect to
      the
      LEAF Originator, each of Pennsylvania, California, Florida, New York and
      Texas.

     

    (k)  Legal
      Opinions.  The Lender shall have received the executed legal
      opinions of counsel of the LEAF Parties, addressing the matters set forth in
      the
      forms attached hereto as Exhibit J, dated the Closing Date and otherwise
      in form and substance acceptable to the Lender and covering such other matters
      incident to the transactions contemplated by the Loan Documents as the Lender
      shall reasonably request.

     

    (l)  Fees
      and Expenses.  The Lender shall have received all fees and
      expenses required to be paid by LEAF or the Borrower on or prior to the initial
      Funding Date pursuant to Section 14.03(b) hereof.

     

    (m)  Financial
      Statements.  The Lender shall have received the financial
      statements for the Servicer as of September 30, 2006 and the Seller, as
      referenced in Section 7.02(rr)(ii), as of December 31, 2006.

     

    
      
        
        

      

      
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    (n)  Underwriting
      Guidelines; Standard Forms.  The Lender shall have received a
      certified copy of the Underwriting Guidelines for Contracts originated by a
      LEAF
      Party, together with a certified copy of each of LEAF’s standard forms of
      Contract.

     

    (o)  Consents,
      Licenses, Approvals, etc.  The Lender shall have received copies
      certified by each LEAF Party of all consents, licenses and approvals, if any,
      required in connection with the execution, delivery and performance by such
      LEAF
      Party of, and the validity and enforceability of, the Loan Documents, which
      consents, licenses and approvals shall be in full force and effect.

     

    (p)  Due
      Diligence Review.  The Lender shall have completed to its
      satisfaction its standard and customary credit and due diligence review of
      the
      LEAF Parties and shall have approved, in its sole discretion, the operations,
      financial condition and standard loan documents of the LEAF Parties, and shall
      have approved, in its sole discretion, that each applicable LEAF Party is
      qualified as a lessor and servicer.

     

    (q)  [Reserved].

     

    (r)  No
      Material Adverse Change.  No Material Adverse Change with respect
      to any LEAF Party shall have occurred since December 31, 2006.

     

    (s)  Interest
      Rate Hedging Agreement.  The Borrower shall have executed and
      delivered by a duly authorized officer of the Borrower, to the Hedge
      Counterparty, the Interest Rate Hedging Agreement.

     

    (t)  Additional
      Documents.  The Lender shall have received copies of all documents
      required to be delivered to the Borrower pursuant to Section 2.03(a) of
      the Acquisition Agreement, to the extent that such delivery of such documents
      is
      not otherwise required pursuant to clauses (a) through (s) of this
Section 5.01.

     

    (u)  Additional
      Matters.  All corporate and other proceedings, and all documents,
      instruments and other legal matters in connection with the transactions
      contemplated by this Loan Agreement, the Note and the other Loan Documents
      shall
      be satisfactory in form and substance to the Lender, and the Lender shall have
      received such other documents and legal opinions in respect of any aspect or
      consequence of the transactions contemplated hereby or thereby as it shall
      request.

     

    Section
      5.02                                Initial
      and Subsequent Advances.  Lender’s obligation to make any Advance to
      the Borrower (including the initial Advance) on any Funding Date is subject
      to
      the satisfaction of the following further conditions precedent and the giving
      of
      a Notice of Borrowing and Pledge by Borrower pursuant to Section 2.03(a),
      and the acceptance of the proceeds of any Advance by Borrower shall constitute
      certification by Borrower that, unless waived by the Lender, the following
      conditions shall have been satisfied, as applicable, both immediately prior
      to
      the making of such Advance and also after giving effect thereto and to the
      intended use thereof:

     

    (a)  No
      Facility Termination Event.  No Facility Termination Event shall
      have occurred, and no Facility Termination Event will occur as a result of
      making such Advance.

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    (b)  Representations
      and Warranties.  Each representation and warranty made by a LEAF
      Party in this Loan Agreement and in each other Loan Document to which it is
      a
      party shall be true and correct when made (or, if any such representation or
      warranty is expressly stated to have been made as of a specific date, as of
      such
      specific date).  Each LEAF Party shall also be in compliance with all
      governmental licenses and authorizations and qualified to do business and in
      good standing in all required jurisdictions where the failure to be in
      compliance or so qualified could reasonably be expected to have a Material
      Adverse Effect.

     

    (c)  Borrowing
      Base.  The Total Outstanding Advances shall not exceed the
      Borrowing Base (after giving effect to such Advance).

     

    (d)  Notice
      of Borrowing and Pledge; Payoff Letters.  The Lender shall have
      received a Notice of Borrowing and Pledge (including, without limitation, the
      Borrowing Base Certificate and Contract Schedule required to be attached
      thereto) with respect to such Advance, as required to be delivered in accordance
      with Section 2.03(a) hereof, and the Lender shall have received any
      Payoff Letters and related Officer’s Certificates from the Borrower required by
Section 3(c) of the Custodial Agreement, each appropriately
      completed and duly executed and delivered.

     

    (e)  Certification;
      Contract Exception Report.  The Collateral Agent shall have
      received a complete Contract File with respect to each pledged Eligible Contract
      to be funded on the Funding Date and which was required to have been received
      by
      the Collateral Agent at least two (2) Business Days prior to the funding of
      such
      Advance, and the Lender shall have received from the Collateral Agent a
      Certification in respect of all Contracts to be pledged hereunder prior to
      12:00
      p.m., New York City time, on the date of such Advance and a corresponding
      Contract Exception Report, with only Deficiencies in respect of such Eligible
      Contracts as are acceptable to the Lender in its discretion.

     

    (f)  Additional
      Documents.  The Lender shall have received with regard to all
      Contracts, such information, documents, agreement, opinions or instruments
      as
      the Lender requires with respect to Contracts to be pledged hereunder on such
      Business Day, each in form and substance satisfactory to the
      Lender.

     

    (g)  No
      Material Adverse Effect.  There shall not have occurred one or
      more events that constitutes, or could reasonably be expected to constitute,
      a
      Material Adverse Effect.

     

    (h)  [Reserved].

     

    (i)  Principal
      Balance.  The principal amount of such Advance (i) does not exceed
      the Available Commitment on such Funding Date and (ii) when added to the Total
      Outstanding Advances on such Permitted Advance Date (before giving effect to
      the
      Advance to be made on such Permitted Advance Date), does not result in a
      Borrowing Base Deficiency after giving effect to such Advance.

     

    (j)  Eligible
      Contract.  Each Contract to be funded with such Advance shall be
      an Eligible Contract.  No Contract was originated in any jurisdiction
      in which LEAF or Borrower is required to be licensed in order to own such
      Contract and such license has not been obtained prior to LEAF or Borrower,
      as
      the case may be, owning such Contract.  With respect to each
      Contract,

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        
the
        applicable Originator has been paid by LEAF for all proceeds from the sale
        of
        such Contract to LEAF.

    

     

    (k)  [Reserved].

     

    (l)  [Reserved].

     

    (m)  Filings,
      Registrations, Recordings.  All documents (including, without
      limitation, financing statements) required to be filed, registered or recorded
      in order to create, in favor of the Collateral Agent, for the benefit of the
      Lender and the Hedge Counterparty, a perfected, first-priority security interest
      in the Collateral, subject to no Liens other than those created hereunder,
      shall
      have been properly prepared (and if required, executed) for filing, registration
      or recording in each office in each jurisdiction in which such filings,
      registrations and recordations are required to perfect such first-priority
      security interest, except that UCC financing statements are not required to
      have
      been filed against the related Customer for any Equipment related to any
      Contract that had an original equipment cost at origination of less than
      $25,000, or if such Contract provides for a “fair market value” purchase option,
      of less than $50,000.

     

    (n)  Data
      File.  Borrower shall have delivered to the Lender and Collateral
      Agent at least three (3) Business Days prior to the proposed Funding Date in
      computer readable form, a detailed listing of all Contracts to be pledged by
      the
      Borrower to the Collateral Agent under this Loan Agreement in connection with
      the Advance and such other data relating to the Contracts and the other
      Collateral as the Lender may request.

     

    (o)  Payoff
      Letters.  The Collateral Agent (with a copy to the Lender or its
      agent) shall have received UCC-3 Partial Release Statements (or other
      appropriate forms including any “in-lieu” financing statements or amendments to
      financing statements) in appropriate form for filing, together with one or
      more
      Payoff Letters, in each case duly executed by the applicable Prior Lender
      releasing the Contracts to be pledged by the Borrower to the Collateral Agent
      under this Loan Agreement on such Funding Date from the security interest of
      such Prior Lender, and the Lender shall have received a copy of each such Payoff
      Letter and each Officer’s Certificate of the Borrower related thereto, in
      accordance with the Custodial Agreement.

     

    (p)  [Intentionally
      Omitted].

     

    (q)  Reserve
      Account.  The Reserve Account Available Amount shall equal or
      exceed the Required Reserve Account Amount after giving effect to such Advance
      and any Funding Date Reserve Account Deposit related thereto and the deposit
      of
      such Funding Date Reserve Account Deposit shall not cause a Reserve Account
      Limitation Event.

     

    (r)  Hedging
      Strategy.  Borrower shall be in compliance with the Hedging
      Strategy with respect to each Advance.  Borrower shall have directed
      the Hedge Counterparty to deposit into the Collection Account all Swap Payments
      payable to the Borrower in respect of any Interest Rate Hedging Agreement and
      any Interest Rate Hedging Transaction thereunder.

     

    (s)  Audit
      Reports.  The Lender shall have timely received each Required
      Audit Report and each other report required pursuant to Section 4.04 of
      the Servicing Agreement.

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    (t)  Fees
      and Expenses.  The Lender shall have received all fees, expenses
      and other amounts required to be paid by LEAF or the Borrower on or prior to
      such Funding Date pursuant to Section 14.03(b) hereof.

     

    (u)  Servicing
      Audit Report.  Lender shall have received a copy of the most
      recent servicing audit report prepared pursuant to Section 4.03 of the
      Servicing Agreement.

     

    (v)  [Reserved].

     

    Article
      VI

     

    REPRESENTATIONS
      AND WARRANTIES

     

    Section
      6.01                                Representations
      and Warranties Relating to the Borrower.  As of the Effective Date and
      each Certification Date, the Borrower represents and warrants to the Lender
      and
      the Hedge Counterparty that:

     

    (a)  Organization
      and Good Standing.  The Borrower has been duly organized and is
      validly existing as a limited liability company in good standing under the
      laws
      of the State of Delaware, with power and authority to own its properties and
      to
      conduct its business as such properties are currently owned and such business
      is
      currently conducted, and had at all relevant times, and now has, power,
      authority and legal right to acquire, own and pledge the Contracts and the
      other
      Collateral that is granted to the Collateral Agent, for the benefit of the
      Lender, and the Hedge Counterparty pursuant to this Loan
      Agreement.  The Borrower is organized solely under the laws of the
      State of Delaware.

     

    (b)  Approvals.  The
      Borrower is duly qualified to do business as a foreign business entity in good
      standing and has obtained all necessary licenses, authorizations, consents
      and
      approvals in all jurisdictions where the failure to do so (either individually
      or in the aggregate) would materially and adversely affect the Borrower’s
      ability to own the Contracts and the other Collateral that is granted to the
      Collateral Agent pursuant to this Loan Agreement, or the validity or
      enforceability of the Contracts and the other Collateral or to otherwise perform
      the Borrower’s obligations hereunder, under the Note and under the other Loan
      Documents; and Borrower is in compliance with all material Requirements of
      Law.

     

    (c)  Power
      and Authority.  The Borrower has the power and authority, and the
      legal right, to execute, deliver and perform this Loan Agreement, the Note
      and
      each other Loan Document to which it is a party, and to borrow and to grant
      Liens hereunder, and has taken all necessary action (corporate and other) to
      duly authorize the borrowings and the granting of Liens on the terms and
      conditions of this Loan Agreement, the Note and each other Loan Document to
      which it is a party; and the execution, delivery and performance of this Loan
      Agreement, the Note and each other Loan Document to which it is a party have
      been duly authorized by the Borrower by all necessary action (corporate and
      other).

     

    (d)  Agreements
      Binding.  This Loan Agreement, the Note and each other Loan
      Document to which the Borrower is a party has been duly and validly executed
      and
      delivered by the Borrower and constitutes a legal, valid and binding obligation
      of the Borrower, enforceable against the Borrower in accordance with its terms,
      except as enforceability may be limited by

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        
applicable
        bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
        the
        enforcement of creditors’ rights generally and by general equitable principles
        (whether enforcement is sought by proceedings in equity or at
        law).

    

     

    (e)  No
      Conflicts.  The execution, delivery and performance of this Loan
      Agreement, the Note and each other Loan Document to which the Borrower is a
      party, the consummation of the transactions contemplated hereby and thereby,
      and
      the fulfillment of the terms hereof and thereof shall not conflict with, result
      in any breach of any of the terms and provisions of or constitute (with or
      without notice, lapse of time or both) a default under the certificate of
      formation or limited liability company agreement of the Borrower, or any
      material indenture, agreement, mortgage, deed of trust or other instrument
      to
      which the Borrower is a party or by which it is bound, or result in the creation
      or imposition of any Lien upon any of its properties pursuant to the terms
      of
      any such indenture, agreement, mortgage, deed of trust or other instrument,
      other than this Loan Agreement, or violate any material law, order, rule or
      regulation applicable to the Borrower of any court or of any federal or state
      regulatory body, administrative agency or other Governmental Authority having
      jurisdiction over the Borrower or any of its properties.

     

    (f)  Litigation.  There
      are no actions, suits or proceedings at law or in equity or investigations
      pending or, to the best of the Borrower’s knowledge, threatened by or against
      the Borrower, before any court, regulatory body, administrative agency or other
      tribunal or Governmental Authority having jurisdiction over the Borrower or
      its
      properties (A) which challenge or affect the legality, validity or
      enforceability of this Loan Agreement, the Note or any of the other Loan
      Documents or the transactions contemplated hereby or thereby, or (B) seeking
      any
      determination or ruling that might have a material adverse effect on the
      performance by the Borrower of its obligations under, or the validity or
      enforceability of, this Loan Agreement, the Note or any of the other Loan
      Documents.

     

    (g)  Consents.  All
      material licenses, approvals, authorizations, consents, orders or other actions
      of any person, corporation or other organization, or of any court, governmental
      bureau, agency or body or official, required in connection with the conduct
      of
      the Borrower’s business or the execution, delivery and performance by the
      Borrower of this Loan Agreement, the Note and the other Loan Documents to which
      the Borrower is a party and the consummation of the transactions contemplated
      hereby and thereby have been or will be taken or obtained on or prior to the
      Effective Date.

     

    (h)  Filing
      Offices.  Exhibit K-1 correctly describes the jurisdictions
      and recording offices in which financing statements should be filed to perfect
      the security interests of the Collateral Agent in the Collateral.  The
      Borrower has been formed solely under the laws of the State of Delaware, and
      it
      has not changed its jurisdiction of formation since its formation.

     

    (i)  Legal
      Name.  The complete and exact legal name of the Borrower is LEAF
      Fund III, LLC.  The Borrower has not changed its name since
      formation.  The Borrower does not and has not since its formation used
      any other legal names, trade names, fictitious names, assumed names or “doing
      business as” names.

     

    (j)  Borrowing
      Base.  Each Contract included as an Eligible Contract in any
      Contract Schedule, Monthly Servicer’s Report or other information provided to
      the Lender by or on behalf

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        
of
        the
        Borrower or the Servicer, or any calculation of the Borrowing Base made by
        or on
        behalf of the Borrower or the Servicer is (or was) as of the date of such
        schedule, tape, report, other information or calculation, an Eligible
        Contract.

    

     

    (k)  No
      Liens.  The Borrower has not assigned, pledged, or otherwise
      conveyed or, subject to Permitted Encumbrances, encumbered any of the Collateral
      to any Person other than the Collateral Agent, and immediately prior to the
      pledge of such Collateral, the Borrower was the sole owner of the Collateral
      and
      had good and marketable title thereto, free and clear of all Liens, in each
      case
      except for Permitted Encumbrances or Liens that have been released or are to
      be
      released simultaneously with the Liens granted in favor of the Collateral Agent
      hereunder.  No effective security agreement, financing statement or
      other public notice similar in effect with respect to all or any part of the
      Collateral is or will be on file or of record in any public office, except
      such
      as have been or may hereinafter be filed pursuant to this Loan Agreement or
      a
      Loan Document.

     

    (l)  Security
      Interest.  The provisions of this Loan Agreement are effective to
      create in favor of the Collateral Agent, for the benefit of the Lender and
      the
      Hedge Counterparty a valid and enforceable security interest in all right,
      title
      and interest of the Borrower in, to and under the Collateral.  The
      security interests and Liens granted hereunder constitute fully perfected
      first-priority security interests in, to and under the Collateral, free and
      clear of all other Liens other than Permitted Encumbrances, and such security
      interests are enforceable against all other Persons, except that UCC financing
      statements are not required to have been filed against the related Customer
      for
      any Equipment related to any Contract that had an original equipment cost at
      origination of less than $25,000, or if such Contract provides for a “fair
      market value” purchase option, of less than $50,000.  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 Collateral
      contemplated by Section 4.01.

     

    (m)  No
      Adverse Selection.  The Borrower has not selected Contracts to be
      pledged to the Collateral Agent in accordance with the terms of this Loan
      Agreement and the other Loan Documents through a process that is adverse to
      the
      Lender or the Hedge Counterparty.

     

    (n)  Servicing
      Programs.  No license or approval is required for the Borrower’s
      use of any program used by the Servicer in the servicing of the Contracts,
      other
      than those which have been obtained and are in full force and
      effect.

     

    (o)  Special
      Purpose Entity; No Other Business.  The Borrower has been formed
      solely for the purpose of engaging in transactions of the types contemplated
      by
      this Loan Agreement.  The Borrower engages in no other business
      activities other than the purchase of leases of office-, medical-, technology-,
      industrial- and other miscellaneous equipment, pledging such leases to warehouse
      finance providers, transferring such leases in connection with securitizations
      and, to the extent otherwise permitted under the Loan Documents, sale-of-lease
      transactions, and other activities relating to the foregoing to the extent
      permitted by the organizational documents of the Borrower as in effect on the
      date hereof, or as amended with the prior written consent of the
      Lender.

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    (p)  Bulk
      Transfers, etc.  The grant of the security interest in the
      Collateral by the Borrower to the Collateral Agent pursuant to this Loan
      Agreement is in the ordinary course of business for the Borrower and is not
      in
      violation of the bulk transfer or any similar statutory provisions in effect
      in
      any applicable jurisdiction. No such Collateral has been or will be sold,
      transferred, assigned or pledged by the Borrower to any Person other than the
      pledge of such Collateral to the Collateral Agent pursuant to the terms of
      this
      Loan Agreement.

     

    (q)  No
      Indebtedness.  The Borrower has no Indebtedness, other than
      Indebtedness incurred under (or contemplated by) the terms of this Loan
      Agreement and the other Loan Documents.

     

    (r)  Insolvency.  The
      Borrower is not insolvent, and will not be made insolvent after giving effect
      to
      the transactions contemplated by this Agreement.

     

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

     

    (t)  Tax
      Returns.  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.  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 in connection with the execution
      and delivery of this Loan Agreement, the Note and the other Loan Documents
      and
      the transactions contemplated hereby or thereby have been paid or shall have
      been paid if and when due.

     

    (u)  [Intentionally
      Omitted].

     

    (v)  No
      Fraudulent Conveyance.  As of the Effective Date and immediately
      after giving effect to each Advance, the fair value of the assets of the
      Borrower is greater than the fair value of its liabilities (including, without
      limitation, contingent liabilities of the Borrower), and the Borrower is and
      will be solvent, is and will be able to pay its debts as they mature and does
      not and will not have an unreasonably small capital to engage in the business
      in
      which it is engaged and proposes to engage.  Borrower does not intend
      to incur, or believe that it has incurred, debts beyond its ability to pay
      such
      debts as they mature.  Borrower is not contemplating the commencement
      of insolvency, bankruptcy, liquidation or consolidation proceedings or the
      appointment of a receiver, liquidator, conservator, trustee or similar official
      in respect of Borrower or any of its assets.  Borrower is not
      transferring any Collateral with any intent to hinder, delay or defraud any
      of
      its creditors.  The Borrower has given fair consideration and
      reasonably equivalent value in exchange for the sale of the Contracts and
      related assets by LEAF under the Acquisition Agreement.

     

    (w)  No
      Subsidiaries.  The Borrower has no subsidiaries.

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    (x)  Accurate
      Disclosure.  The information, reports, financial statements,
      exhibits and schedules furnished in writing by or on behalf of the LEAF Parties
      to the Lender or the Collateral Agent in connection with the negotiation,
      preparation or delivery of this Loan Agreement, the Note and the other Loan
      Documents or included herein or therein or delivered pursuant hereto or thereto
      are true and correct in every material respect, or (in the case of projections)
      are based on good faith reasonable estimates, on the date as of which such
      information is stated or certified and does not and will not contain an untrue
      statement of a material fact, or omit to state any material fact necessary
      to
      make the statements herein or therein contained, in the light of the
      circumstances under which they were made, not misleading.  There is no
      fact known to a Responsible Officer of the Borrower that, after due inquiry,
      would reasonably be expected to have a Material Adverse Effect that has not
      been
      disclosed herein, in the other Loan Documents or in a report, financial
      statement, exhibit, schedule, disclosure letter or other writing furnished
      to
      the Lender and the Collateral Agent for use in connection with the transactions
      contemplated hereby or thereby.

     

    (y)  Use
      of Proceeds.  No proceeds of any Advances 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.  No part of the
      proceeds of any Advances will be used for “purchasing” or “carrying” any “margin
      stock” within the respective meanings of each of the quoted terms under, or for
      any other purpose which violates or would be inconsistent with the provisions
      of, Regulation T, U or X.

     

    (z)  Investment
      Company Act.  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,
      nor is the Borrower otherwise subject to regulation thereunder.  The
      Borrower is not subject to regulation under any Federal or state statute or
      regulation which limits its ability to incur Indebtedness.

     

    (aa)  No
      Default.  No Default has occurred and is
      continuing.  Borrower is not in default in the performance, observance
      or fulfillment of any obligation, covenant or condition in any agreement or
      instrument to which it is a party or by which it is bound the result of which
      could reasonably be expected to have a Material Adverse Effect.

     

    (bb)  Underwriting
      Standards.  Each of the Contracts was underwritten and is being
      serviced in conformance with the Underwriting Guidelines and the Servicing
      Agreement.

     

    (cc)  ERISA.  The
      Borrower is in compliance with ERISA and has not incurred and does not expect
      to
      incur any liabilities (except for premium payments arising in the ordinary
      course of business) to the PBGC (or any successor thereto) under
      ERISA.

     

    (dd)  [Reserved].

     

    (ee)  Ownership
      of Borrower.  LEAF owns beneficially and of record 100% of the
      issued and outstanding beneficial ownership interest in the Borrower free and
      clear of all Liens.

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

    Section
      6.02                                Representations
      and Warranties of LEAF.  As of the Effective Date and each Purchase
      Date, LEAF represents and warrants to the Lender and the Hedge Counterparty
      that:

     

    (a)  Organization
      and Good Standing.  LEAF has been duly organized and is validly
      existing as a limited partnership in good standing under the laws of the State
      of Delaware, with power and authority to own its properties and to conduct
      its
      business as such properties are currently owned and such business is currently
      conducted, and had at all relevant times, and now has, power, authority and
      legal right to acquire, own and sell the Contracts and the other Collateral
      that
      is sold to the Borrower pursuant to the Acquisition Agreement and pledged to
      the
      Collateral Agent, for the benefit of the Lender and the Hedge Counterparty,
      pursuant to this Loan Agreement.  LEAF is organized solely under the
      laws of the State of Delaware.

     

    (b)  Approvals.  LEAF
      is duly qualified to do business as a foreign business entity in good standing
      and has obtained all necessary licenses, authorizations, consents and approvals,
      in each state in which any Equipment relating to the Contracts or other
      Collateral or any Customer is located, or is not required under applicable
      law
      to effect such qualification, except where failure to do so would not have
      a
      material adverse effect on (a) the ability of LEAF to perform its obligations
      under the Loan Documents or otherwise to conduct its business (including,
      without limitation, the origination, purchase, ownership, servicing and sale
      of
      the Contracts), (b) any of the Contracts, the Receivables or the Equipment
      relating to the Contracts or the other Collateral, (c) the ability of LEAF,
      the
      Borrower or the Collateral Agent to realize upon or enforce any of the
      Contracts, the Receivables or the Equipment relating to the Contracts or the
      other Collateral or (d) the perfection or priority of any Lien in favor of
      the
      Borrower and required by the Loan Documents or any Lien created under the Loan
      Documents in favor of the Collateral Agent.  LEAF is in compliance
      with all material Requirements of Law.

     

    (c)  Power
      and Authority.  LEAF has the power and authority, and the legal
      right, to execute, deliver and perform this Loan Agreement and each other Loan
      Document to which it is a party; and the execution, delivery and performance
      of
      this Loan Agreement and each other Loan Document to which it is a party have
      been duly authorized by LEAF by all necessary action (corporate and
      other).

     

    (d)  Agreements
      Binding.  This Loan Agreement and each other Loan Document to
      which LEAF is a party has been duly and validly executed and delivered by LEAF
      and constitutes a legal, valid and binding obligation of LEAF, enforceable
      against LEAF in accordance with its terms, except as enforceability may be
      limited by applicable bankruptcy, insolvency, reorganization, moratorium or
      similar laws affecting the enforcement of creditors’ rights generally and by
      general equitable principles (whether enforcement is sought by proceedings
      in
      equity or at law).

     

    (e)  No
      Conflicts.  The execution, delivery and performance of this Loan
      Agreement and each other Loan Document to which LEAF is a party, the
      consummation of the transactions contemplated hereby and thereby and the
      fulfillment of the terms hereof and thereof shall not conflict with, result
      in
      any breach of any of the terms and provisions of or constitute (with or without
      notice, lapse of time or both) a default under the certificate of formation
      or
      limited partnership agreement of LEAF, or any material indenture, agreement,
      mortgage, deed of trust or

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        
other
        instrument to which LEAF is a party or by which it is bound, or result in
        the
        creation or imposition of any Lien (except the Liens created by the Loan
        Documents) upon any of its properties pursuant to the terms of any such
        indenture, agreement, mortgage, deed of trust or other instrument to which
        LEAF
        is a party, or violate any material law, order, rule or regulation applicable
        to
        LEAF of any court or of any federal or state regulatory body, administrative
        agency or other Governmental Authority having jurisdiction over LEAF or any
        of
        its properties or in any way have a material adverse effect on the interest
        of
        the Collateral Agent, the Lender or the Borrower in any Contract or affect
        LEAF’s ability to perform its obligations under this Agreement or any other Loan
        Document to which LEAF is a party.

    

     

    (f)  Litigation.  There
      are no actions, suits or proceedings at law or in equity or investigations
      pending or, to the best of LEAF’s knowledge, threatened against LEAF, before any
      court, regulatory body, administrative agency or other tribunal or Governmental
      Authority having jurisdiction over LEAF or the Borrower or its respective
      properties (A) asserting the invalidity of this Loan Agreement, the Note or
      any of the other Loan Documents, (B) seeking to prevent the consummation of
      any of the transactions contemplated by this Loan Agreement, the Note or any
      other Loan Documents to which LEAF or the Borrower is a party, or
      (C) seeking any determination or ruling that would, if adversely decided,
      reasonably be expected to have a material adverse effect on the performance
      by
      LEAF or the Borrower of its respective obligations under, or the validity or
      enforceability of, this Loan Agreement, the Note or any of the other Loan
      Documents or the business, operations, condition (financial or otherwise) or
      prospects of LEAF or the Borrower.

     

    (g)  Consents.  All
      material licenses, approvals, authorizations, consents, orders or other actions
      of any person, corporation or other organization, or of any court, governmental
      bureau, agency, or body or official, required in connection with the conduct
      of
      LEAF’s business or the execution, delivery and performance by LEAF of this Loan
      Agreement and the other Loan Documents to which LEAF is a party and the
      consummation of the transactions contemplated hereby and thereby have been
      or
      will be taken or obtained on or prior to the Effective Date.

     

    (h)  No
      Default.  LEAF is not in default in the performance, observance or
      fulfillment of any obligation, covenant or condition in any agreement or
      instrument to which it is a party or by which it is bound the result of which
      could reasonably be expected to have a material adverse effect on its ability
      to
      perform its obligations under the Loan Documents.

     

    (i)  Filing
      Offices.  Exhibit K-1 correctly describes the jurisdictions
      and recording offices in which financing statements should be filed to perfect
      the security interests of the Borrower in the Collateral.  Exhibit
      K-2 correctly describes the jurisdictions and recording offices in which
      financing statements filed prior to the effective date of Revised Article 9
      of
      the UCC may have been filed and remain effective with respect to the
      Collateral.  LEAF has been formed solely under the laws of the State
      of Delaware, and it has not changed its jurisdiction of formation since its
      formation.

     

    (j)  Legal
      Name.  The complete and exact legal name of LEAF is LEAF Equipment
      Leasing Income Fund III, L.P.  LEAF has not changed its name since
      formation.  LEAF does not and has not since its formation used any
      other legal names, trade names, fictitious names, assumed names or “doing
      business as” names, other than as disclosed on Exhibit L
      hereto.

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

    (k)  [Reserved].

     

    (l)  No
      Liens.  LEAF has not assigned, pledged, or otherwise conveyed or
      encumbered (other than Permitted Encumbrances) any of the Collateral to any
      Person other than the Borrower, and immediately prior to the sale of such
      Collateral to the Borrower, LEAF was the sole owner of the Collateral and had
      good and marketable title thereto, free and clear of all Liens (other than
      Permitted Encumbrances), in each case except for Liens that have been released
      or are to be released simultaneously with such sale, or for Equipment relating
      to any Contract that had an original equipment cost of less than (x) $25,000
      or
      (y) if such Contract provides for a “fair market value” purchase option,
      $50,000.  No security agreement, financing statement or other public
      notice similar in effect with respect to all or any part of the Collateral
      is or
      will be on file or of record in any public office, except such as have been
      or
      may hereinafter be filed pursuant to this Loan Agreement or a Loan Document
      or
      such as have been released or are to be released simultaneously with the sale
      of
      such Collateral to the Borrower.

     

    (m)  Security
      Interest.  The provisions of the Acquisition Agreement are
      effective to create in favor of the Borrower a valid and enforceable
      precautionary security interest in all right, title and interest of LEAF in,
      to
      and under the Collateral.  The precautionary security interests and
      Liens granted under the Acquisition Agreement, if the sales are recharacterized,
      will constitute fully perfected first-priority security interests in, to and
      under the Collateral, free and clear of all other Liens (other than Permitted
      Encumbrances), and such security interests are enforceable against all other
      Persons, except that UCC financing statements are not required to have been
      filed against the related Customer for any Equipment related to any Contract
      that had an original equipment cost at origination of less than $25,000, or
      if
      such Contract provides for a “fair market value” purchase option, of less than
      $50,000.  There are no agreements in effect adversely affecting the
      rights of LEAF to sell the Collateral to the Borrower pursuant to the
      Acquisition Agreement.

     

    (n)  No
      Adverse Selection.  LEAF has not selected Contracts to be sold to
      the Borrower in accordance with the terms of the Acquisition Agreement and
      the
      other Loan Documents through a process that is adverse to the Lender or the
      Hedge Counterparty.

     

    (o)  [Intentionally
      Omitted].

     

    (p)  [Intentionally
      Omitted].

     

    (q)  Bulk
      Transfers, Etc.  The sale of the Collateral by LEAF to the
      Borrower pursuant to the Acquisition Agreement is in the ordinary course of
      business for LEAF and does not violate the bulk transfer or any similar
      statutory provisions in effect in any applicable jurisdiction.

     

    (r)  No
      Indebtedness.  LEAF has no Indebtedness, other than Indebtedness
      set forth in the Schedule of LEAF Indebtedness attached to this Loan Agreement
      as Exhibit N hereto; provided that the Schedule of LEAF
      Indebtedness may be amended in accordance with the terms of Section
      7.02(c).

     

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

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    (t)  Tax
      Returns.  LEAF 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 (other than Customers in respect of the
      related Equipment in accordance with the Contracts and its customary practices)
      and has paid or made adequate provisions for the payment of all taxes,
      assessments and other governmental charges due from LEAF.  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 except for
      those being contested in good faith and for which adequate reserves have been
      made.  Any taxes, fees and other governmental charges payable by LEAF
      in connection with the execution and delivery of this Loan Agreement and the
      other Loan Documents and the transactions contemplated hereby or thereby have
      been paid or shall have been paid if and when due except for those being
      contested in good faith and for which adequate reserves have been
      made.

     

    (u)  [Intentionally
      Omitted].

     

    (v)  No
      Fraudulent Conveyance.  As of the Effective Date and immediately
      after giving effect to each sale of Contracts pursuant to the Acquisition
      Agreement, the fair saleable value of the assets of LEAF is greater than the
      fair value of its liabilities (including, without limitation, contingent
      liabilities of LEAF), and LEAF is and will be solvent, is and will be able
      to
      pay its debts as they mature and does not and will not have an unreasonably
      small capital or remaining assets to engage in the business in which it is
      engaged and proposes to engage.  LEAF does not intend to incur, or
      believe that it has incurred, debts beyond its ability to pay such debts as
      they
      mature.  LEAF is not contemplating the commencement of insolvency,
      bankruptcy, liquidation or consolidation proceedings or the appointment of
      a
      receiver, liquidator, conservator, trustee or similar official in respect of
      LEAF or any of its assets.  LEAF is not transferring any Collateral
      with any intent to hinder, delay or defraud any of its
      creditors.  LEAF has received fair consideration and reasonably
      equivalent value in exchange for the sale of the Contracts by LEAF under the
      Acquisition Agreement.

     

    (w)  Accurate
      Disclosure.  The information, reports, financial statements,
      exhibits and schedules furnished in writing by or on behalf of the LEAF Parties
      to the Lender or the Collateral Agent in connection with the negotiation,
      preparation or delivery of this Loan Agreement and the other Loan Documents
      or
      included herein or therein or delivered pursuant hereto or thereto are true
      and
      correct in every material respect, or (in the case of projections) are based
      on
      reasonable estimates, on the date as of which such information is stated or
      certified and does not and will not contain an untrue statement of a material
      fact, or omit to state any material fact necessary to make the statements herein
      or therein contained, in the light of the circumstances under which they were
      made, not misleading.  There is no fact known to a Responsible Officer
      of LEAF that, after due inquiry, would reasonably be expected to have a Material
      Adverse Effect that has not been disclosed herein, in the other Loan Documents
      or in a report, financial statement, exhibit, schedule, disclosure letter or
      other writing furnished to the Lender and the Collateral Agent for use in
      connection with the transactions contemplated hereby or thereby.

     

    (x)  Use
      of Proceeds.  No proceeds of any Advances will be used by LEAF to
      acquire any security in any transaction which is subject to Section 13 or 14
      of
      the Securities Exchange Act.

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

    No
      part
      of the proceeds of any sale of Collateral to the Borrower or Advances will
      be
      used for “purchasing” or “carrying” any “margin stock” within the respective
      meanings of each of the quoted terms under, or for any other purpose which
      violates or would be inconsistent with the provisions of, Regulation T, U or
      X.

     

    (y)  Investment
      Company Act.  LEAF 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,
      nor is LEAF otherwise subject to regulation thereunder.  LEAF is not
      subject to regulation under any Federal or state statute or regulation which
      limits its ability to incur Indebtedness.

     

    (z)  [Reserved].

     

    (aa)  Underwriting
      Standards.  Each of the Contracts was underwritten conformance
      with the Underwriting Guidelines.

     

    (bb)  ERISA.  LEAF
      is in compliance with ERISA and has not incurred and does not expect to incur
      any liabilities (except for premium payments arising in the ordinary course
      of
      business) to the PBGC (or any successor thereto) under ERISA.

     

    (cc)  Compliance
      with Law.  The Contracts to be pledged as Collateral were
      originated by an Approved Originator of LEAF, and the origination and collection
      practices used by such Approved Originator and LEAF with respect to the
      Contracts have been, in all respects legal, proper, prudent and customary in
      the
      equipment lease origination business.

     

    (dd)  No
      Other Business.  LEAF engages in no other business activities
      other than (i) the origination and the purchase from Approved Originators of
      leases of office-, medical-, technology-, industrial- and other miscellaneous
      equipment, pledging such leases to warehouse finance providers, transferring
      such leases in connection with securitizations and asset sale transactions
      and
      other activities relating to the foregoing to the extent permitted by the
      organizational documents of LEAF as in effect on the date hereof, or as amended
      with the prior written consent of the Lender, or (ii) any other business
      activity, so long as such business activity does not cause a material adverse
      effect on the business activities specified above.

     

    (ee)  Financial
      Statements.  The unaudited balance sheets of LEAF as at March 31,
      2007 and the related statements of income for the fiscal periods ended on such
      date, heretofore furnished to Lender, have been prepared in accordance with
      GAAP.

     

    (ff)  Insurance.  Set
      forth on Exhibit O hereto or as otherwise delivered to the Lender from
      time to time, is a true and accurate list of all insurance maintained by
      LEAF.  Each such policy is in full force and effect and all premiums
      due and owing thereon are current.

     

    Section
      6.03                                Representations
      and Warranties of the Servicer.  As of the Effective Date and each
      Purchase Date, the Servicer represents and warrants to the Lender and the Hedge
      Counterparty that:

     

    (a)  Organization
      and Good Standing.  The Servicer has been duly organized and is
      validly existing as a corporation in good standing under the laws of the State
      of Delaware, with

     

    
      
        
        

      

      
        33

        
          

        

      

      
        
        
power
        and
        authority to own its properties and to conduct its business as such properties
        are currently owned and such business is currently conducted pursuant to
        this
        Loan Agreement.  The Servicer is organized solely under the laws of
        the State of Delaware.

    

     

    (b)  Approvals.  The
      Servicer is duly qualified to do business as a foreign corporation in good
      standing and has obtained all necessary licenses, authorizations, consents
      and
      approvals, in each state in which any Equipment relating to the Contracts or
      other Collateral or any Customer is located, or is not required under applicable
      law to effect such qualification, except where the failure to so qualify would
      not have a material adverse effect on the ability of the Servicer to perform
      its
      duties under the Loan Documents to which the Servicer is a party.  The
      Servicer is in compliance with all material Requirements of Law.

     

    (c)  Power
      and Authority.  The Servicer has the power and authority, and the
      legal right, to execute, deliver and perform this Loan Agreement and each other
      Loan Document to which it is a party; and the execution, delivery and
      performance of this Loan Agreement and each other Loan Document to which it
      is a
      party have been duly authorized by the Servicer by all necessary action
      (corporate and other).

     

    (d)  Agreements
      Binding.  This Loan Agreement and each other Loan Document to
      which the Servicer is a party has been duly and validly executed and delivered
      by the Servicer and constitutes a legal, valid and binding obligation of the
      Servicer, enforceable against the Servicer in accordance with its terms, except
      as enforceability may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or similar laws affecting the enforcement of
      creditors’ rights generally and by general equitable principles (whether
      enforcement is sought by proceedings in equity or at law).

     

    (e)  No
      Conflicts.  The execution, delivery and performance of this Loan
      Agreement and each other Loan Document to which the Servicer is a party, the
      consummation of the transactions contemplated hereby and thereby and the
      fulfillment of the terms hereof and thereof shall not conflict with, result
      in
      any breach of any of the terms and provisions of or constitute (with or without
      notice, lapse of time or both) a default under the certificate of incorporation
      or by-laws of the Servicer, or any material indenture, agreement, mortgage,
      deed
      of trust or other instrument to which the Servicer is a party or by which it
      is
      bound, or result in the creation or imposition of any Lien (except the Liens
      created by the Loan Documents) upon any of its properties pursuant to the terms
      of any such indenture, agreement, mortgage, deed of trust or other instrument
      to
      which the Servicer is a party, or violate any material law, order, rule or
      regulation applicable to the Servicer of any court or of any federal or state
      regulatory body, administrative agency or other Governmental Authority having
      jurisdiction over the Servicer or any of its properties or in any way have
      a
      material adverse effect on the interest of the Collateral Agent, the Lender
      or
      the Borrower in any Contract or affect the Servicer’s ability to perform its
      obligations under this Agreement or any other Loan Document to which the
      Servicer is a party.

     

    (f)  Litigation.  There
      are no actions, suits or proceedings at law or in equity or investigations
      pending or, to the best of the Servicer’s knowledge, threatened against the
      Servicer, before any court, regulatory body, administrative agency or other
      tribunal or Governmental Authority having jurisdiction over the Servicer or
      the
      Borrower or its respective properties (A) asserting the invalidity of this
      Loan Agreement, the Note or any of the other Loan

     

    
      
        
        

      

      
        34

        
          

        

      

      
        
        
Documents,
        (B) seeking to prevent the consummation of any of the transactions
        contemplated by this Loan Agreement, the Note or any other Loan Documents
        to
        which the Servicer or the Borrower is a party, or (C) seeking any
        determination or ruling that would, if adversely decided, reasonably be expected
        to have a material adverse effect on the performance by the Servicer or the
        Borrower of its respective obligations under, or the validity or enforceability
        of, this Loan Agreement, the Note or any of the other Loan Documents or the
        business, operations, condition (financial or otherwise) or prospects of
        the
        Servicer or the Borrower.

    

     

    (g)  Consents.  All
      licenses, approvals, authorizations, consents, orders or other actions of any
      person, corporation or other organization, or of any court, governmental bureau,
      agency, or body or official, required in connection with the conduct of the
      Servicer’s business or the execution, delivery and performance by the Servicer
      of this Loan Agreement and the other Loan Documents to which the Servicer is
      a
      party and the consummation of the transactions contemplated hereby and thereby
      have been or will be taken or obtained on or prior to the Effective
      Date.

     

    (h)  No
      Default.  The Servicer is not in default in the performance,
      observance or fulfillment of any obligation, covenant or condition in any
      agreement or instrument to which it is a party or by which it is bound the
      result of which could reasonably be expected to have a material adverse effect
      on its ability to perform its obligations under the Loan Documents.

     

    (i)  Filing
      Offices.  The Servicer is incorporated solely under the laws of
      the State of Delaware, and it has not changed its jurisdiction of incorporation
      since its formation.

     

    (j)  Legal
      Name.  The complete and exact legal name of the Servicer is LEAF
      Financial Corporation.  The Servicer has not changed its name since
      formation (except the Servicer was previously Fidelity Leasing Corporation
      and
      F.L. Partnership Management, Inc.).  The Servicer does not and has not
      since its formation used any other legal names, trade names, fictitious names,
      assumed names or “doing business as” names, other than as disclosed on
Exhibit L hereto.

     

    (k)  Borrowing
      Base.  As of each Certification Date, each Monthly Servicer’s
      Report or other information provided to the Lender by the Servicer, or any
      calculation of the Borrowing Base made by the Servicer is (or was) as of the
      date of such schedule, tape, report, other information or calculation, true
      and
      correct.

     

    (l)  No
      Liens.  The Servicer has not assigned, pledged, or otherwise
      conveyed or encumbered any of the Collateral to any Person other than the
      Seller, the Borrower or the Collateral Agent.  No security agreement,
      financing statement or other public notice similar in effect with respect to
      all
      or any part of the Collateral is or will be on file or of record in any public
      office, except such as have been or may hereinafter be filed pursuant to this
      Loan Agreement or a Loan Document or such as have been released or are to be
      released simultaneously with the sale of such Collateral to the
      Borrower.

     

    
      
        
        

      

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

     

    (n)  Tax
      Returns.  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 (other than Customers in
      respect of the related Equipment in accordance with the Contracts and the
      Servicer’s customary practices) and has paid or made adequate provisions for the
      payment of all taxes, assessments and other governmental charges due from the
      Servicer.  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, except for those that are being contested in good faith
      and
      for which adequate reserves have been made.  Any taxes, fees and other
      governmental charges payable by the Servicer in connection with the execution
      and delivery of this Loan Agreement and the other Loan Documents and the
      transactions contemplated hereby or thereby have been paid or shall have been
      paid if and when due, except for those that are being contested in good faith
      and for which adequate reserves have been made.

     

    (o)  Accurate
      Disclosure.  The information, reports, financial statements,
      exhibits and schedules furnished in writing by or on behalf of the LEAF Parties
      to the Lender or the Collateral Agent in connection with the negotiation,
      preparation or delivery of this Loan Agreement and the other Loan Documents
      or
      included herein or therein or delivered pursuant hereto or thereto are true
      and
      correct in every material respect, or (in the case of projections) are based
      on
      reasonable estimates, on the date as of which such information is stated or
      certified and does not and will not contain an untrue statement of a material
      fact, or omit to state any material fact necessary to make the statements herein
      or therein contained, in the light of the circumstances under which they were
      made, not misleading.  There is no fact known to a Responsible Officer
      of the Servicer that, after due inquiry, would reasonably be expected to have
      a
      Material Adverse Effect that has not been disclosed herein, in the other Loan
      Documents or in a report, financial statement, exhibit, schedule, disclosure
      letter or other writing furnished to the Lender and the Collateral Agent for
      use
      in connection with the transactions contemplated hereby or thereby.

     

    (p)  [Reserved.]

     

    (q)  Servicing
      Standards.  Each of the Contracts is being serviced in conformance
      with the Servicing Agreement.

     

    (r)  ERISA.  The
      Servicer is in compliance with ERISA and has not incurred and does not expect
      to
      incur any liabilities (except for premium payments arising in the ordinary
      course of business) to the PBGC (or any successor thereto) under
      ERISA.

     

    (s)  Compliance
      with Law.  The servicing and collection practices used by the
      Servicer with respect to the Contracts have been, in all material respects
      in
      accordance with the servicing standard set forth in Section 3.02 of the
      Servicing Agreement.

     

    
      (t)  Financial
        Statements.  The unaudited balance sheets of the Servicer as of
        March 31, 2007 and the related statements of income for the fiscal periods
        ended
        on such date, attached hereto as Exhibit F, furnished to Lender, have
        been prepared in accordance with GAAP.

    

     

    
      
        
        

      

      
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    Article
      VII

     

    COVENANTS

     

    Section
      7.01                                Covenants
      of Borrower.  The Borrower covenants and agrees with the Lender and the
      Hedge Counterparty that, so long as any Advance is outstanding and until the
      later to occur of the payment in full of all Secured Obligations and the
      termination of this Loan Agreement:

     

    (a)  The
      Borrower will at all times ensure that (A) its managers and officers act
      independently and in its interests, (B) it shall at all times maintain at
      least one independent manager who is not currently and has not been formerly
      an
      officer, director, manager or employee of the Borrower or an Affiliate thereof
      (other than 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 LEAF or an Affiliate thereof), (C) its assets are not commingled with
      those of LEAF, any other Affiliate of the Borrower or any other Person,
      (D) its board of managers duly authorizes all of its corporate actions, and
      (E) it maintains separate and accurate records and books of account and
      such books and records are kept separate from those of LEAF and any other
      Person.

     

    (b)  The
      Borrower shall hold such appropriate meetings of its board of managers or
      distribute appropriate unanimous consents in lieu of a meeting as are necessary
      to authorize all the Borrower’s corporate actions required by law to be
      authorized by the board of managers, shall keep minutes of such meetings and
      of
      meetings of its stockholder(s) and observe all other customary corporate
      formalities.

     

    (c)  The
      Borrower shall at all times hold itself out to the public under the Borrower’s
      own name as a legal entity separate and distinct from its
      Affiliates.

     

    (d)  The
      Borrower shall not incur any Indebtedness, other than the Indebtedness
      contemplated by this Loan Agreement and the other Loan Documents.

     

    (e)  To
      the extent that the Borrower and any of its stockholders or Affiliates have
      offices in the same location, there shall be a fair and appropriate allocation
      of overhead costs among them, and each such entity shall bear its fair share
      of
      such expenses.

     

    (f)  The
      Borrower will preserve and maintain its legal existence as a Delaware limited
      liability company organized solely under the laws of the State of
      Delaware.

     

    (g)  The
      Borrower will preserve and maintain all of its material rights, privileges,
      licenses and franchises.

     

    (h)  The
      Borrower will comply with the requirements of all applicable Requirements of
      Law
      (including, without limitation, the Truth in Lending Act and all environmental
      laws).

     

    (i)  The
      Borrower will maintain accurate and complete records and books of account with
      respect to the Collateral and the Borrower’s business, in which complete entries
      will be made in accordance with GAAP.

     

    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

    

    (j)  The
      Borrower shall give notice to the Lender and the Hedge Counterparty,
      promptly:  (i) upon the Borrower becoming aware of, and in any
      event within one (1) Business Day after, the occurrence of any Default or any
      event of default or default under any other Loan Document, any Other Financing
      Facility, or any other material agreement of the Borrower; (ii) upon, and
      in any event within three (3) Business Days after, service of process on the
      Borrower, or any agent thereof for service of process, in respect of any legal
      or arbitrable proceedings affecting the Borrower (1) that questions or
      challenges the validity or enforceability of any of the Loan Documents or (2)
      in
      which the amount in controversy exceeds $1,000,000; (iii) upon the Borrower
      becoming aware of any event or change in circumstances which could reasonably
      be
      expected to have a Material Adverse Effect or to cause a Default; and
      (iv) of entry of a judgment or decree in respect of the Borrower, its
      assets or the Collateral in an amount in excess of $1,000,000.  Each
      notice pursuant to this clause (j) shall be accompanied by a statement of a
      Responsible Officer of the Borrower setting forth details of the occurrence
      referred to therein and stating what action the Borrower has taken or proposes
      to take with respect thereto.

     

    (k)  The
      Borrower shall furnish to the Lender and the Hedge Counterparty, as soon as
      available, copies of any and all proxy statements, financial statements and
      reports which the Borrower sends to its shareholders, and copies of all (if
      any)
      regular, periodic and special reports, and all registration statements filed
      with the Securities and Exchange Commission or any Governmental Authority which
      supervises the issuance of securities by the Borrower and any press releases
      concerning the Borrower.

     

    (l)  The
      Borrower will furnish to the Lender and the Hedge Counterparty from time to
      time
      statements and schedules further identifying and describing the Collateral
      and
      such other reports in connection with the Collateral as the Lender or the Hedge
      Counterparty may reasonably request, all in reasonable detail.

     

    (m)  Upon
      discovery by the Borrower of any Borrowing Base Deficiency (including, without
      limitation, pursuant to a notice delivered by the Lender or the Servicer to
      the
      Borrower), the Borrower shall deliver a Borrowing Base Deficiency Notice to
      the
      Lender no later than 12:00 p.m., New York City time, on the second (2nd)
      Business Day succeeding such discovery (and, in any event, prior to any
      prepayment to be made by the Borrower pursuant to Section 2.07(a)(i)),
      which Borrowing Base Deficiency Notice shall (x) contain a description of the
      cause of such deficiency, and (y) set forth the manner in which the Borrower
      will cure such deficiency pursuant to, and in accordance with, Section
      2.07(a). If at any time there exists a Borrowing Base Deficiency, the
      Borrower shall cure the same in accordance with Section 2.07(a)
      hereof.  If the Borrower has elected to cure such Borrowing Base
      Deficiency in the manner described in Section 2.07(a)(i), the Borrower
      shall prepay the amount described therein on the second (2nd) Business
      Day
      immediately succeeding such discovery.  If the Borrower has elected to
      cure such Borrowing Base Deficiency in the manner described in Section
      2.07(a)(ii), it shall deliver the necessary Funding Date Documentation and
      related Contract Schedule (identifying the Eligible Contracts to be pledged
      as
      additional Collateral) to the Collateral Agent on the second (2nd) Business
      Day
      succeeding such discovery.

     

    (n)  Prior
      to the termination of this Loan Agreement and each other Loan Document and
      the
      payment of all outstanding Secured Obligations and any other amounts payable
      pursuant hereto and thereto, the Borrower will not sell all or substantially
      all
      of its assets without the prior written consent of the Lender.

     

    
      
        
        

      

      
        38

        
          

        

      

      
        
        

      

    

    (o)  [Reserved].

     

    (p)  The
      Borrower shall (i) not enter into any transaction of merger or consolidation
      or
      amalgamation, or liquidate, wind up or dissolve itself (or suffer any
      liquidation, winding up or dissolution) without the prior written consent of
      the
      Lender, and (ii) preserve and maintain its corporate existence, rights,
      franchises and privileges in the jurisdiction of its organization.

     

    (q)  The
      Borrower will defend the Collateral against, and will take such other action
      as
      is necessary to remove, any Lien, security interest or claim on or to the
      Collateral, other than the security interests created under this Loan Agreement,
      and the Borrower will defend the right, title and interest of the Collateral
      Agent in and to any of the Collateral against the claims and demands of all
      Persons whomsoever.

     

    (r)  The
      Borrower will not incur or permit any Lien to exist on its assets other than
      Liens arising under the Loan Documents.

     

    (s)  Except
      as contemplated by the Loan Documents (including the Servicing Agreement),
      the
      Borrower will not lease, transfer, assign, sell or otherwise dispose of any
      Collateral without the prior written consent of the Lender, and in any case
      unless the Proceeds of such sale are applied to repay the Advances, and after
      giving effect to such transaction, any Advances then outstanding do not exceed
      the Borrowing Base.

     

    (t)  The
      Lender shall not authorize the Borrower to, and the Borrower shall not (without
      the prior written consent of the Lender), enter into any transaction, including,
      without limitation, any purchase, sale, lease or exchange of property or the
      rendering of any service, with any Person (including, without limitation any
      Affiliate, any shareholder, director, manager, officer or employee (or any
      relative thereof) of the Borrower or any such Affiliate) unless such transaction
      is (a) not otherwise prohibited under this Loan Agreement or any other Loan
      Document, (b) in the ordinary course of the Borrower’s business and
      (c) upon fair and reasonable terms no less favorable to the Borrower than
      it would obtain in a comparable arm’s-length transaction.

     

    (u)  Without
      the prior written consent of the Lender, the Borrower will not, nor will it
      permit or allow others to, amend, modify, terminate or waive any provision
      of
      any Contract Document, except in accordance with the Loan
      Documents.  Notwithstanding the foregoing, the Borrower may, without
      the prior written consent of the Lender, waive any assumption fees, late payment
      charges, charges for checks returned for insufficient funds, or other fees
      which
      may be collected in the ordinary course of servicing the
      Contracts.  The Borrower shall take such actions as the Lender shall
      request to enforce the Borrower’s rights under the Contracts, and, at any time
      during which a Default shall have occurred and be continuing, shall take such
      actions as are necessary to enable the Collateral Agent (at the direction of
      the
      Lender) to exercise such rights in the Collateral Agent’s own name.

     

    (v)  The
      Borrower will observe all corporate procedures required by its certificate
      of
      formation, its limited liability company agreement and the laws of its

    
      
        
        

      

      
        39

        
          

        

      

      
        
        
jurisdiction
        of formation.  The Borrower will maintain its corporate 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
        business entity in any other state in which it does business and in which
        it is
        required to so qualify.

    

     

    (w)  The
      Borrower will pay its operating expenses and liabilities from its own assets;
      provided, however, that the Borrower’s organizational expenses and
      the expenses incurred in connection with the negotiation and execution of this
      Loan Agreement and the other Loan Documents may be paid by LEAF.

     

    (x)  The
      Borrower will not have any of its indebtedness guaranteed by LEAF or any
      Affiliate of LEAF.  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 LEAF and the Borrower will not engage in business transactions
      with LEAF, except on an arm’s-length basis.  The Borrower will not
      hold LEAF out to third parties as other than an entity with assets and
      liabilities distinct from the Borrower.  The Borrower will cause any
      financial statements consolidated with those of LEAF to state that the Borrower
      is a separate corporate entity 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.

     

    (y)  The
      Borrower shall take all actions necessary to maintain the accuracy of the
      factual assumptions set forth in the legal opinions of Thacher Proffitt &
Wood LLP, special counsel to LEAF and the Borrower, issued in connection with
      the Acquisition Agreement and relating to the issues of substantive
      consolidation and true sale of the Contracts.

     

    (z)  Except
      as otherwise provided herein or in any other Loan Document, the Borrower shall
      not (i) sell, assign (by operation of law or otherwise) or otherwise
      dispose of, or create or suffer to exist any Lien upon or with respect to,
      any
      Contract, any Receivables related thereto or any other Collateral related
      thereto, or upon or with respect to any account to which any collections of
      any
      Contract are sent, or assign any right to receive income in respect thereof
      or
      (ii) create or suffer to exist any Lien upon or with respect to any of the
      Borrower’s assets.

     

    (aa)  The
      Borrower will not account for or treat (whether in financial statements or
      otherwise) the transactions contemplated by the Acquisition Agreement in any
      manner other than the sale or capital contribution of Contracts and other
      Collateral by LEAF to the Borrower, it being understood that the Advances to
      the
      Borrower under this Loan Agreement will be treated as debt on the consolidated
      financial statements of LEAF.

     

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

    (cc)  The
      Borrower will not amend, modify or otherwise make any change to its certificate
      of formation without the prior written consent of the Lender.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

    (dd)  The
      Borrower shall deliver or cause to be delivered to the Collateral Agent two
      (2)
      Business Days before each Funding Date the Funding Date Documentation with
      respect to the Contracts being pledged hereunder on such Funding
      Date.

     

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

     

    (ff)  The
      Borrower shall be in compliance with the Hedging Strategy with respect to each
      Advance.

     

    (gg)  The
      Borrower will use the proceeds of the Advances solely for the purposes set
      forth
      in Section 2.10 hereof.

     

    (hh)  The
      Borrower shall promptly give notice to the Lender of the occurrence of
      (a) any Facility Termination Event, specifying the event and the action
      which the Borrower proposes to take with respect thereto, (b) any event or
      occurrence which will or could reasonably be expected to adversely affect the
      collectibility of any material portion of the Contracts or the ability of LEAF
      to service such Contracts or the ability of LEAF or the Borrower to perform
      its
      obligations under any Loan Document to which it is a party or any other event
      or
      occurrence which individually or in the aggregate could reasonably be expected
      to materially and adversely affect LEAF’s or the Borrower’s financial condition,
      operations, business or prospects or the interests of the Lender and/or the
      Hedge Counterparty under this Loan Agreement, the Note or any other Loan
      Document.

     

    (ii)  The
      Borrower shall pay and discharge all taxes and governmental charges upon it
      or
      against any of its properties or assets or its income prior to the date after
      which penalties attach for failure to pay, except (a) to the extent that
      the Borrower shall be contesting in good faith in appropriate proceedings its
      obligation to pay such taxes or charges, adequate reserves having been set
      aside
      for the payment thereof, or (b) with respect to such taxes and charges which
      are
      not material in either nature or amount such that any failure to pay or
      discharge them, and any resulting penalties, either in any one instance or
      in
      the aggregate, would not materially and adversely affect the financial
      condition, operations, business or prospects of the Borrower or the interests
      of
      the Lender and/or the Hedge Counterparty under this Loan Agreement, the Note
      or
      any other Loan Document.

     

    (jj)  At
      the request of the Lender, the Borrower shall execute such financing statements
      as Lender determines may be required by law to perfect, maintain and protect
      the
      security interest of Collateral Agent in the Collateral and in the Proceeds
      thereof.

     

    (kk)  [Reserved].

     

    (ll)  The
      Borrower shall pay to the Lender, on demand, any and all fees, costs or expenses
      which the Lender pays to a bank or other similar institution arising out of
      or
      in connection with the return of payments from the Borrower deposited for
      collection by the Lender.

    (mm)  The
      Borrower shall pay and perform, as and when due, all of its obligations of
      whatever nature, except where the amount or validity thereof is currently being
      contested in good faith by appropriate proceedings and reserves in conformity
      with GAAP with respect thereto 

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        
have
        been
        provided on the books of the Borrower, and except to the extent that the
        failure
        to do so could not individually or in the aggregate reasonably be expected
        to
        result in a Material Adverse Change.

    

     

    (nn)  The
      Borrower will provide the Lender with not less than thirty (30) days’ prior
      written notice of any change in the form of organization or jurisdiction of
      formation of the Borrower to permit the Lender to make any additional filings
      necessary to continue the Collateral Agent’s perfected security interest in the
      Collateral, except that UCC financing statements are not required to have been
      filed against the related Customer for any Equipment related to any Contract
      that had an original equipment cost at origination of less than $25,000, or
      if
      such Contract provides for a “fair market value” purchase option, of less than
      $50,000.

     

    (oo)  The
      Borrower shall comply (i) in all material respects with all Requirements of
      Law and any change therein or in the application, administration or
      interpretation thereof (including, without limitation any request, directive,
      guideline or policy, whether or not having the force of law) by any Governmental
      Authority charged with the administration or interpretation thereof; and (ii)
      with all indentures, mortgages, deeds of trust, agreements, or other instruments
      or contractual obligations to which it is a party, including without limitation,
      each Loan Document to which it is a party, or by which it or any of its
      properties may be bound or affected, or which may affect the Contracts, if
      the
      failure to comply therewith could, individually or in the aggregate, result
      in a
      Material Adverse Effect.

     

    (pp)  The
      Borrower shall not enter into any transaction which adversely affects the
      Collateral or the Lender’s rights under this Loan Agreement, the Note or any
      other Loan Document.

     

    (qq)  The
      Borrower shall not Guarantee or otherwise in any way become liable with respect
      to the obligations or liabilities, of any other Person, except (a) for the
      obligations of Affiliates of the Borrower to the Lender and (b) by customary
      endorsement of instruments or items of payment for deposit to the general
      account of the Borrower or for delivery to the Lender.

     

    (rr)  The
      Borrower shall deliver a Borrowing Base Certificate to the Lender (a) on each
      Lender Authorization Date or (b) any other Business Day, from time to time,
      reasonably designated by the Lender.

     

    (ss)  The
      Borrower shall not make any investment in any Person through the direct or
      indirect holding of securities or otherwise, other than in the ordinary course
      of business or in connection with the future securitization of
      Contracts.

     

    (tt)  The
      Borrower shall not declare or pay any dividends, except to the extent otherwise
      expressly permitted under this Loan Agreement.

     

    (uu)  Except
      for routine and customary salary advances or loans to employees in connection
      with relocation expenses consistent with past practice of LEAF and its
      Affiliates, the Borrower
      shall not make any unsecured loans or other advances of money to officers,
      managers, employees, stockholders, or affiliates in excess of $50,000 in the
      aggregate.  Other than the 

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        
Indebtedness
        under this Loan Agreement and the Note, the Borrower shall not incur any
        long
        term or working capital debt.

    

     

    (vv)  The
      Borrower shall not do any of the following if it will adversely affect the
      payment or performance of, or the Borrower’s ability to pay and/or perform, its
      obligations to the Lender or in respect of any other Secured Obligations with
      respect to this Loan Agreement, the Note or any other Loan Document to which
      it
      is a party:  (i) redeem, retire, purchase or otherwise acquire,
      directly or indirectly, any of the Borrower’s membership interests, except in
      connection with employment or similar agreements with officers and managers
      of
      the Borrower consistent with past practice, or (ii) make any change in the
      Borrower’s capital structure, or (iii) make any material change in any of its
      business objectives, purposes or operations which could reasonably be expected
      to adversely affect the payment or performance of, or the Borrower’s ability to
      pay and/or perform, its obligations to the Lender or any other party with
      respect to this Loan Agreement, the Note or any other Loan Document to which
      it
      is a party.

     

    (ww)  With
      respect to each item of Equipment with respect to which a Lien Certificate
      is
      necessary to perfect a security interest in such Equipment, the Borrower shall,
      or shall cause the Servicer on behalf of the Borrower to, use its best efforts
      to collect such Lien Certificate from the applicable Registrar of Titles as
      promptly as practicable. If any such Lien Certificate showing LEAF Originator
      as
      first lienholder is not received by the Collateral Agent within 120 days after
      the Certification Date with respect to the related Contract, such Contract
      shall
      cease to be an Eligible Contract and, if a Borrowing Base Deficiency results,
      the Borrower shall take the action specified in Section
      2.07.

     

    (xx)  The
      Borrower shall not permit the Senior Managers to engage in any business in
      the
      leasing industry (other than the leasing business of the LEAF Parties and its
      Affiliates) so long as such Senior Managers are employees, officers, managers
      or
      directors of the Borrower or any other LEAF Party.

     

    Section
      7.02                                Covenants
      of LEAF.  LEAF covenants and agrees with the Lender and the Hedge
      Counterparty, that, so long as any Advance is outstanding and until the later
      to
      occur of the payment in full of all Secured Obligations and the termination
      of
      this Loan Agreement:

     

    (a)  LEAF
      shall have paid to the Lender all fees and expenses owed to the Lender under
      the
      Engagement Letter on the earlier of (i) June 30, 2007 and (ii) the Closing
      Date.

     

    (b)  All
      transactions and dealings between LEAF and its Affiliates will be conducted
      on
      an arm’s-length basis.

     

    (c)  LEAF
      may amend (w) the Forms of Contract attached to this Loan Agreement as
Exhibit E, (x) the Underwriting Guidelines attached to this Loan
      Agreement as Exhibit G, (y) the Schedule of LEAF Indebtedness attached to
      this Loan Agreement as Exhibit N and/or (z) the Credit and Collection
      Policies of LEAF attached to the Servicing Agreement as Exhibit B thereto
      in accordance with, and only in accordance with, the following
      procedure:

     

                 
      (i)           LEAF shall
      deliver to the Lender written notice of any proposed amendment to the
      Underwriting Guidelines, the Schedule of LEAF Indebtedness or the Credit

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

    and
      Collection Policies of LEAF; provided that such notice shall meet the
      requirements set forth in clause (v) below;

     

    (ii)           the
      Lender shall have ten (10) Business Days following the date of its receipt
      of
      such written notice to reject such proposed amendment;

     

    (iii)           such
      proposed amendment shall not be effective prior to the expiration of the latest
      ten-Business Day period specified in clause (ii) above;

     

    (iv)           such
      proposed amendment shall become effective at the expiration of the latest
      ten-Business Day period specified in clause (ii) above unless the Lender
      shall have delivered to LEAF a written objection to such proposed amendment
      prior to the expiration of such ten-Business Day period; and

     

    (v)           in
      order for the written notice specified in clause (i) above to be valid,
      such notice must contain (A) a covenant to the effect that the amendment
      proposed in such notice will not result in any Material Adverse Effect and
      (B) a
      reference to this Section 7.02(c) and must contain the following
      statement in bold, uppercase type:  “IF YOU WISH TO PREVENT
      THIS PROPOSED AMENDMENT FROM BECOMING EFFECTIVE, YOU MUST DELIVER A WRITTEN
      OBJECTION TO THE AMENDMENT TO LEAF WITHIN TEN BUSINESS DAYS AFTER YOUR RECEIPT
      OF THIS NOTICE.”

     

    (d)  At
      all times during the term of this Loan Agreement, LEAF, together with the
      Servicer, will maintain financing facilities, including repurchase facilities
      and warehouse lines of credit, that satisfy each of the following criteria:
      (A)
      such financing facilities are extended by third party lenders (“Financing
      Facility Lenders”) that are not Affiliates of LEAF, (B) the terms of such
      financing facilities are substantially similar in form and substance to the
      financing facilities available to LEAF as of the Closing Date and (C) the
      aggregate amount of commitments from such Financing Facility Lenders is not
      less
      than $100,000,000.

     

    (e)  Prior
      to the termination of this Loan Agreement and each other Loan Document and
      the
      payment of all outstanding Secured Obligations and any other amounts payable
      pursuant hereto and thereto, LEAF will not sell all or substantially all of
      its
      assets, except to the Borrower, without the prior written consent of the
      Lender.

     

    (f)  LEAF
      shall not amend or otherwise modify the Underwriting Guidelines, except in
      accordance with Section 7.02(c) of this Loan Agreement.

     

    (g)  LEAF
      shall not, prior to the date which is one year and one day after the termination
      of this Loan Agreement, petition or otherwise invoke the process of any court
      or
      government authority for the purpose of commencing or sustaining a case against
      the Borrower under any federal or state bankruptcy, insolvency or similar law
      or
      appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
      or
      other similar official of the Borrower or any substantial part of its property,
      or ordering the winding up or liquidation of the affairs of the
      Borrower.

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    (h)  LEAF
      shall at all times hold itself out to the public under LEAF’s own name as a
      legal entity separate and distinct from its Affiliates.

     

    (i)  To
      the extent that LEAF and the Borrower and any of their respective stockholders
      or Affiliates have offices in the same location, there shall be a fair and
      appropriate allocation of overhead costs among them, and each such entity shall
      bear its fair share of such expenses.

     

    (j)  LEAF
      will preserve and maintain its legal existence as a Delaware limited partnership
      organized solely under the laws of the State of Delaware.

     

    (k)  LEAF
      will preserve and maintain all of its material rights, privileges, licenses
      and
      franchises.

     

    (l)  LEAF
      will comply with the requirements of all applicable Requirements of Law
      (including, without limitation, the Truth in Lending Act and all environmental
      laws).

     

    (m)  LEAF
      will maintain accurate and complete records and books of account with respect
      to
      the Collateral and LEAF’s business, in which complete entries will be made in
      accordance with GAAP.

     

    (n)  LEAF
      shall keep all of its property useful and necessary in its business in good
      working order and condition (ordinary wear and tear excepted).  LEAF
      shall maintain insurance coverage in the form of a fidelity bond which covers,
      among other things, employee dishonesty, forgery or alteration, theft,
      disappearance and destruction, robbery and safe burglary, property (other than
      money and securities) and computer fraud in an aggregate amount of at least
      in
      each case $1,000,000 and shall not reduce such coverage without the written
      consent of the Lender.  LEAF shall also maintain such other insurance
      with financially sound and reputable insurance companies, and with respect
      to
      property and risks of a character usually maintained by entities engaged in
      the
      same or similar business similarly situated, against loss, damage and liability
      of the kinds and in the amounts customarily maintained by such
      entities.  Each insurance policy referred to in the preceding sentence
      shall name the Collateral Agent (by name or as assignee of LEAF), for the
      benefit of the Lender and the Hedge Counterparty, as loss payee to the extent
      of
      its insurable interest (including its interest in the
      Collateral).  All insurance companies issuing insurance pursuant to
      this section shall receive, as of any date of determination, a rating of at
      least “A” by A.M. Best Co.

     

    (o)  LEAF
      shall give notice to the Lender, promptly:  (i) upon LEAF
      becoming aware of, and in any event within one (1) Business Day after, the
      occurrence of any Default or any event of default or default under any other
      Loan Document, any Other Financing Facility, or any other material agreement
      of
      LEAF or the Borrower; (ii) upon, and in any event within three (3) Business
      Days after, service of process on LEAF, or any agent thereof for service of
      process, in respect of any legal or arbitrable proceedings affecting LEAF or
      the
      Borrower (1) that questions or challenges the validity or enforceability of
      any
      of the Loan Documents or (2) in which the amount in controversy exceeds
      $1,000,000; (iii) upon LEAF becoming aware of any event or change in
      circumstances which could reasonably be expected to have a Material Adverse
      Effect or to cause a Default; and (iv) of entry of a judgment or decree in
      respect of LEAF, its assets or the Collateral in an amount in excess of
      $1,000,000.  Each notice pursuant to this clause (o)
      shall

    
      
        
        

      

      
        45

        
          

        

      

      
        
        
be
        accompanied by a statement of a Responsible Officer of LEAF setting forth
        details of the occurrence referred to therein and stating what action LEAF
        has
        taken or proposes to take with respect thereto.

    

     

    (p)  LEAF
      shall furnish to the Lender, as soon as available, copies of any and all proxy
      statements, financial statements and reports which LEAF sends to its
      shareholders, and copies of all (if any) regular, periodic and special reports,
      and all registration statements filed with the Securities and Exchange
      Commission or any Governmental Authority which supervises the issuance of
      securities by any LEAF Party and any press releases concerning any LEAF
      Party.

     

    (q)  LEAF
      will furnish to the Lender, from time to time statements and schedules further
      identifying and describing the Collateral and such other reports in connection
      with the Collateral as the Lender may reasonably request, all in reasonable
      detail.

     

    (r)  LEAF
      shall not permit the Senior Managers to engage in any business in the leasing
      industry (other than the leasing business of the LEAF Parties and its
      Affiliates) so long as such Senior Managers are employees, officers, managers
      or
      directors of LEAF or any other LEAF Party.

     

    (s)  LEAF
      shall at all times act as the managing member of the Borrower in accordance
      with
      the Borrower’s operating agreement, and LEAF shall not remove the Person who is
      acting as independent manager of the Borrower or otherwise appoint a successor
      independent manager of the Borrower unless the Lender shall have consented
      to
      such removal or appointment in writing within five (5) Business Days of
      Borrower’s written request for Lender’s consent (Lender’s failure to provide any
      such written consent within five (5) Business Days shall be deemed a consent
      to
      such removal or appointment).

     

    (t)  LEAF
      shall (i) not enter into any transaction of merger or consolidation or
      amalgamation, or liquidate, wind up or dissolve itself (or suffer any
      liquidation, winding up or dissolution) or sell all or substantially all of
      its
      assets without the prior written consent of the Lender unless otherwise
      expressly permitted under the Loan Documents, and (ii) preserve and maintain
      its
      corporate existence, rights, franchises and privileges in the jurisdiction
      of
      its organization.

     

    (u)  LEAF
      will defend the Collateral against, and will take such other action as is
      necessary to remove, any Lien, security interest or claim on or to the
      Collateral, other than the security interests created under this Loan Agreement,
      and LEAF will defend the right, title and interest of the Collateral Agent,
      for
      the benefit of the Lender and the Hedge Counterparty, in and to any of the
      Collateral against the claims and demands of all Persons
      whomsoever.

     

    (v)  The
      Lender shall not authorize LEAF to, and LEAF shall not (without the prior
      written consent of the Lender), enter into any transaction, including, without
      limitation, any purchase, sale, lease or exchange of property or the rendering
      of any service, with any Person (including, without limitation any Affiliate,
      any shareholder, director, manager, officer or employee (or any relative
      thereof) of LEAF or any such Affiliate) unless such transaction is (a) not
      otherwise prohibited under this Loan Agreement or any other Loan Document,
      (b)
      in the

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        
ordinary
        course of LEAF’s business and (c) upon fair and reasonable terms no less
        favorable to LEAF than it would obtain in a comparable arm’s-length
        transaction.

    

     

    (w)  Without
      the prior written consent of the Lender, LEAF will not, nor will it permit
      or
      allow others to, amend, modify, terminate or waive any provision of any Contract
      Document, except in accordance with the Loan Documents.  LEAF shall
      take such reasonable and lawful actions as the Lender shall request to enforce
      LEAF’s rights under the Contracts, and, following the occurrence of a Default,
      shall take such actions as are necessary to enable the Lender to exercise such
      rights in the  Lender’s own name.

     

    (x)  LEAF
      will observe all corporate procedures required by its certificate of formation,
      its limited partnership agreement and the laws of its jurisdiction of
      formation.  LEAF will maintain its corporate 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
      business entity in any other state in which it does business and in which it
      is
      required to so qualify.

     

    (y)  LEAF
      will pay its operating expenses and liabilities from its own
      assets.

     

    (z)  LEAF
      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 the Borrower and LEAF will not engage
      in
      business transactions with the Borrower, except on an arm’s-length
      basis.  LEAF will not hold the Borrower out to third parties as other
      than an entity with assets and liabilities distinct from LEAF.  LEAF
      will cause any financial statements consolidated with those of the Borrower
      to
      state that the Borrower is a separate corporate entity 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 LEAF’s equity holders.  LEAF will not act in any
      other matter that could foreseeably mislead others with respect to the
      Borrower’s separate identity.

     

    (aa)  LEAF
      shall take all actions necessary to maintain the accuracy of the factual
      assumptions set forth in the legal opinions of Thacher Proffitt & Wood LLP,
      special counsel to the Borrower and LEAF, issued in connection with the
      Acquisition Agreement and relating to the issues of substantive consolidation
      and true sale of the Contracts.

     

    (bb)  Except
      as otherwise provided herein or in any other Loan Document, LEAF shall not
      sell,
      assign (by operation of law or otherwise) or otherwise dispose of, or create
      or
      suffer to exist any Lien upon or with respect to, any Contract, any collections
      related thereto or any other Collateral related thereto, or upon or with respect
      to any account to which any collections of any Contract are sent, or assign
      any
      right to receive income in respect thereof.

     

    (cc)  LEAF
      will not account for or treat (whether in financial statements or otherwise)
      the
      transactions contemplated by the Acquisition Agreement in any manner other
      than
      the sale or contribution of Contracts and other Collateral by LEAF to the
      Borrower, it being understood that the Advances to the Borrower under this
      Loan
      Agreement will be treated as debt on the consolidated financial statements
      of
      LEAF.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    (dd)  LEAF
      will not amend, modify, waive or terminate any terms or conditions of the
      Acquisition Agreement without the prior written consent of the Lender, and
      shall
      perform its obligations thereunder.

     

    (ee)  LEAF
      shall deliver or cause to be delivered to the Collateral Agent two (2) Business
      Days before each Funding Date the Funding Date Documentation with respect to
      the
      Contracts being pledged hereunder on such Funding Date.

     

    (ff)  LEAF
      shall deliver to the Lender on each Purchase Date a copy of the Assignment
      delivered to it on such Purchase Date.

     

    (gg)  LEAF
      shall promptly give notice to the Lender of the occurrence of (a) any
      Facility Termination Event, specifying the event and the action which LEAF
      proposes to take with respect thereto or (b) any event or occurrence which
      will
      or could reasonably be expected to adversely affect the collectibility of any
      material portion of the Contracts or the ability of LEAF or the Borrower to
      perform its obligations under any Loan Document to which it is a party or any
      other event or occurrence which individually or in the aggregate could
      reasonably be expected to materially and adversely affect LEAF’s or the
      Borrower’s financial condition, operations, business or prospects or the
      interests of the Lender and/or the Hedge Counterparty under this Loan Agreement,
      the Note or any other Loan Document.

     

    (hh)  LEAF
      shall pay and discharge all taxes and governmental charges upon it or against
      any of its properties or assets or its income prior to the date after which
      penalties attach for failure to pay, except (a) to the extent that LEAF
      shall be contesting in good faith in appropriate proceedings its obligation
      to
      pay such taxes or charges, adequate reserves having been set aside for the
      payment thereof, or (b) with respect to such taxes and charges which are not
      material in either nature or amount such that any failure to pay or discharge
      them, and any resulting penalties, either in any one instance or in the
      aggregate, would not materially and adversely affect the financial condition,
      operations, business or prospects of LEAF or the interests of the Lender and/or
      the Hedge Counterparty under this Loan Agreement, the Note or any other Loan
      Document.

     

    (ii)  At
      the request of the Lender, LEAF shall prepare (and execute, if required) such
      financing statements as Lender determines may be required by law to perfect,
      maintain and protect the security interest of Collateral Agent, for the benefit
      of the Lender, and the Hedge Counterparty, in the Collateral and in the Proceeds
      thereof.

     

    (jj)  As
      of the last day of each fiscal quarter commencing March 31, 2009, LEAF shall
      maintain “partners equity” (as reflected in its financial statements) plus an
      amount  “Due to General Partner” of no less than 75.00% of “partners
      equity” as of February 7, 2009 (the last day of its offering period pursuant to
      its Prospectus dated February 7, 2007) as reported in its March 31, 2009
      financial statements.

     

    (kk)  LEAF
      shall pay and perform, as and when due, all of its obligations of whatever
      nature, except where the amount or validity thereof is currently being contested
      in good faith by appropriate proceedings and reserves in conformity with GAAP
      with respect thereto have been

     

    
      
        
        

      

      
        48

        
          

        

      

      
        
        
provided
        on the books of LEAF, and except to the extent that the failure to do so
        could
        not individually or in the aggregate reasonably be expected to result in
        a
        Material Adverse Change.

    

     

    (ll)  LEAF
      will provide the Lender with not less than thirty (30) days’ prior written
      notice of any change in the form of organization, or jurisdiction of formation
      of LEAF to permit the Lender to make any additional filings necessary to
      continue the Collateral Agent’s perfected security interest in the Collateral,
      except that UCC financing statements are not required to have been filed against
      the related Customer for any Equipment related to any Contract that had an
      original equipment cost at origination of less than $25,000, or if such Contract
      provides for a “fair market value” purchase option, of less than
      $50,000.

     

    (mm)  LEAF
      shall, and shall cause each of its Subsidiaries to, comply (i) in all
      material respects with all Requirements of Law and any change therein or in
      the
      application, administration or interpretation thereof (including, without
      limitation any request, directive, guideline or policy, whether or not having
      the force of law) by any Governmental Authority charged with the administration
      or interpretation thereof; and (ii) with all indentures, mortgages, deeds of
      trust, agreements, or other instruments or Contractual Obligations to which
      it
      is a party, including without limitation, each Loan Document to which it is
      a
      party, or by which it or any of its properties may be bound or affected, or
      which may affect the Contracts, if the failure to comply therewith could,
      individually or in the aggregate, result in a Material Adverse
      Effect.

     

    (nn)  LEAF
      shall not enter into any transaction which adversely affects the Collateral
      or
      the Lender’s or the Hedge Counterparty’s rights under this Loan Agreement, the
      Note or any other Loan Document.

     

    (oo)  Except
      for routine and customary salary advances or loans to employees in connection
      with relocation expenses consistent with past practice of LEAF and its
      Affiliates, LEAF shall not make any unsecured loans or other advances of money
      to officers, managers, employees, stockholders, or affiliates in excess of
      $50,000 in the aggregate.

     

    (pp)  LEAF
      shall not do any of the following if it will have a material adverse effect
      on
      the payment or performance of, or LEAF’s ability to pay and/or perform, its
      obligations to the Lender or in respect of any other Secured Obligations with
      respect to this Loan Agreement, the Note or any other Loan Document to which
      it
      is a party:  (i) redeem, retire, purchase or otherwise acquire,
      directly or indirectly, any of LEAF’s stock, except in connection with
      employment or similar agreements with officers and managers of LEAF consistent
      with past practice, or (ii) make any change in LEAF’s capital structure, or
      (iii) make any material change in any of its business objectives, purposes
      or
      operations which could reasonably be expected to materially and adversely affect
      the payment or performance of, or LEAF’s ability to pay and/or perform, its
      obligations to the Lender or any other party with respect to this Loan
      Agreement, the Note or any other Loan Document to which it is a
      party.

     

    (qq)  LEAF
      shall not grant or otherwise create any Lien on the beneficial ownership of
      the
      Borrower.

     

    (rr)  LEAF
      shall deliver to the Lender:

     

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

                   
      (i)           as soon as
      available and in any event within forty-five (45) days after the end of each
      of
      the first three (3) quarterly fiscal periods of each fiscal year of LEAF, copies
      of the unaudited balance sheet of LEAF as at the end of such period and the
      related unaudited statements of income and of cash flow for such period and
      for
      the portion of the fiscal year through the end of such period, setting forth
      in
      each case in comparative form the figures for the previous fiscal year,
      accompanied by a certificate of  a Responsible Officer of LEAF, which
      certificate shall state that such financial statements fairly present the
      financial conditions and results of operations of LEAF in accordance with GAAP,
      as at the end of, and for, such period (subject to normal year-end
      adjustments);

     

    (ii)           as
      soon as available and in any event within 120 days after the end of each fiscal
      year of LEAF, copies of the audited financial statements for LEAF for such
      fiscal year, setting forth in each case in comparative form the figures for
      the
      previous fiscal year, accompanied by an opinion thereon of independent certified
      public accountants of recognized national standing, which opinion shall not
      be
      qualified as to scope of audit or going concern and shall state that such
      financial statements fairly present the financial condition and results of
      operations of LEAF as at the end of, and for, such fiscal year in accordance
      with GAAP;

     

    (iii)           concurrently
      with the delivery of the financial statements referred to in clauses (i) and
      (ii) above, a compliance certificate in form and substance satisfactory to
      the
      Lender showing (including calculations thereof) that LEAF is in compliance
      with
      each of the financial covenants contained in Section 7.02(a) and
(d); and

     

    (iv)           from
      time to time such other information regarding the financial condition,
      operations, or business of the LEAF Parties and their Affiliates as the Lender
      may reasonably request.

     

    Section
      7.03                                Covenants
      of the Servicer.  The Servicer covenants and agrees with the Lender and
      the Hedge Counterparty, that, so long as any Advance is outstanding and until
      the later to occur of the payment in full of all Secured Obligations and the
      termination of this Loan Agreement:

     

    (a)  All
      transactions and dealings between the Servicer and the Borrower will be
      conducted on an arm’s-length basis.  The parties acknowledge and agree
      that the Servicer’s duties under the Loan Documents are performed on an arms’
length basis.

     

    (b)  The
      Servicer shall not amend or otherwise modify the Underwriting Guidelines, except
      in accordance with Section 7.03(c) of this Loan Agreement.

     

    (c)  The
      Servicer may amend (w) the Forms of Contract attached to this Loan Agreement
      as
Exhibit E, (x) the Underwriting Guidelines attached to this Loan
      Agreement as Exhibit G, (y) the Schedule of LEAF Indebtedness attached to
      this Loan Agreement as Exhibit N and/or (z) the Credit and Collection
      Policies of LEAF attached to the Servicing Agreement as Exhibit B thereto
      in accordance with, and only in accordance with, the following
      procedure:

     

    
      
        
        

      

      
        50

        
          

        

      

      
        
        
          (i)           The
        Servicer shall deliver to the Lender written notice of any proposed amendment
        to
        the Underwriting Guidelines, the Schedule of LEAF Indebtedness or the
Credit
        and Collection Policies of LEAF; provided that such notice shall meet the
        requirements set forth in clause (v) below;

    

     

    (ii)           the
      Lender shall have ten (10) Business Days following the date of its receipt
      of
      such written notice to reject such proposed amendment;

     

    (iii)           such
      proposed amendment shall not be effective prior to the expiration of the latest
      ten-Business Day period specified in clause (ii) above;

     

                  
      (iv)           such
      proposed amendment shall become effective at the expiration of the latest
      ten-Business Day period specified in clause (ii) above unless the Lender
      shall have
      delivered to the Servicer a written objection to such proposed amendment prior
      to the expiration of such ten-Business Day period; and in
      order
      for the written notice  specified in clause (i) above to be valid,
      such notice must contain (A) a covenant to the effect that the amendment
      proposed in such notice will not result in any Material Adverse Effect and
      (B) a
      reference to this Section 7.03(c) and must contain the following
      statement in bold, uppercase type:  “IF YOU WISH TO PREVENT
      THIS PROPOSED AMENDMENT FROM BECOMING EFFECTIVE, YOU MUST DELIVER A WRITTEN
      OBJECTION TO THE AMENDMENT TO THE SERVICER WITHIN TEN BUSINESS DAYS AFTER YOUR
      RECEIPT OF THIS NOTICE.”

     

    (d)  The
      Servicer shall not, prior to the date which is one year and one day after the
      termination of this Loan Agreement, petition or otherwise invoke the process
      of
      any court or government authority for the purpose of commencing or sustaining
      a
      case against the Borrower under any federal or state bankruptcy, insolvency
      or
      similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
      sequestrator or other similar official of the Borrower or any substantial part
      of its property, or ordering the winding up or liquidation of the affairs of
      the
      Borrower.

     

    (e)  The
      Servicer shall at all times hold itself out to the public under the Servicer’s
      own name as a legal entity separate and distinct from its
      Affiliates.

     

    (f)  To
      the extent that the Servicer and the Borrower and any of their respective
      stockholders or Affiliates have offices in the same location, there shall be
      a
      fair and appropriate allocation of overhead costs among them, and each such
      entity shall bear its fair share of such expenses.

     

    (g)  With
      respect to the initial Servicer only and subject to Section 5.02 of the
      Servicing Agreement, the Servicer will preserve and maintain its legal existence
      as a Delaware corporation organized solely under the laws of the State of
      Delaware.

     

    (h)  The
      Servicer will preserve and maintain all of its material rights, privileges,
      licenses and franchises.

     

    
      
        
        

      

      
        51

        
          

        

      

      
        
        

      

    

    (i)  The
      Servicer will comply with the requirements of all applicable Requirements of
      Law
      (including, without limitation, the Truth in Lending Act and all environmental
      laws).

     

    (j)  The
      Servicer will maintain accurate and complete records and books of account with
      respect to the Collateral and the Servicer’s business, in which complete entries
      will be made in accordance with GAAP.

     

    (k)  With
      respect to the initial Servicer only, the Servicer shall keep all of its
      property useful and necessary in its business in good working order and
      condition (ordinary wear and tear excepted).  The Servicer shall
      maintain insurance coverage in the form of a fidelity bond which covers, among
      other things, employee dishonesty, forgery or alteration, theft, disappearance
      and destruction, robbery and safe burglary, property (other than money and
      securities) and computer fraud in an aggregate amount of at least in each case
      $1,000,000 and shall not reduce such coverage without the written consent of
      the
      Lender.  The Servicer shall also maintain such other insurance with
      financially sound and reputable insurance companies, and with respect to
      property and risks of a character usually maintained by entities engaged in
      the
      same or similar business similarly situated, against loss, damage and liability
      of the kinds and in the amounts customarily maintained by such
      entities.  Each insurance policy referred to in the preceding sentence
      shall name the Collateral Agent (by name or as assignee of the Servicer), for
      the benefit of the Lender and the Hedge Counterparty, as loss payee to the
      extent of its insurable interest (including its interest in the
      Collateral).  All insurance companies issuing insurance pursuant to
      this section shall receive, as of any date of determination, a rating of at
      least “A” by A.M. Best Co.

     

    (l)  The
      Servicer shall give notice to the Lender, promptly:  (i) upon the
      Servicer becoming aware of, and in any event within one (1) Business Day after,
      the occurrence of any Default or any event of default or default under any
      other
      Loan Document or any other material agreement of the Servicer or the Borrower;
      (ii) upon, and in any event within three (3) Business Days after, service
      of process on the Servicer, or any agent thereof for service of process, in
      respect of any legal or arbitrable proceedings affecting the Servicer or the
      Borrower (1) that questions or challenges the validity or enforceability of
      any
      of the Loan Documents or (2) in which the amount in controversy exceeds
      $1,000,000; (iii) upon the Servicer becoming aware of any event or change
      in circumstances which could reasonably be expected to have a Material Adverse
      Effect or to cause a Default; and (iv) of entry of a judgment or decree in
      respect of the Servicer, its assets or the Collateral in an amount in excess
      of
      $1,000,000.  Each notice pursuant to this clause (k) shall be
      accompanied by a statement of a Responsible Officer of the Servicer setting
      forth details of the occurrence referred to therein and stating what action
      the
      Servicer has taken or proposes to take with respect thereto.

     

    (m)  The
      Servicer shall furnish to the Lender, as soon as available, copies of any and
      all proxy statements, financial statements and reports which the Servicer sends
      to its shareholders, and copies of all (if any) regular, periodic and special
      reports, and all registration statements filed with the Securities and Exchange
      Commission or any Governmental Authority which supervises the issuance of
      securities by any LEAF Party and any press releases concerning any LEAF
      Party.

     

    
      
        
        

      

      
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    (n)  The
      Servicer will furnish to the Lender, from time to time statements and schedules
      further identifying and describing the Collateral and such other reports in
      connection with the Collateral as the Lender may reasonably request, all in
      reasonable detail.

     

    (o)  No
      later than 12:00 p.m., New York City time, on each Determination Date, the
      Servicer shall deliver, or cause to be delivered, to the Lender, the Borrower,
      the Collateral Agent and the Backup Servicer, in a computer-readable format
      acceptable to each such Person, a Monthly Servicer’s Report executed by a
      Responsible Officer or agent of the Servicer containing among other things,
      (i)
      all information necessary to enable the Collateral Agent to make any withdrawal
      and deposit required by Section 12.02 of this Loan Agreement, to give any
      notice required by Section 12.02 of this Loan Agreement and to make the
      allocations to required to be made on the next Payment Date pursuant to
Section 3.03(b) of this Loan Agreement, (ii) all information to be
      provided to Lender and the Borrower specified by Exhibit A to the
      Servicing Agreement, (iii) a listing of all Contracts purchased or replaced
      by
      the Borrower, the Servicer or the Seller during the related Collection Period
      or
      on the related Business Day, as applicable, and each Contract which became
      a
      Defaulted Contract or which was paid in full during the related Collection
      Period shall be identified by account number (as set forth in the Contract
      Schedule), and (iv) all additional information that the Borrower shall have
      delivered to the Servicer, for inclusion in such Monthly Servicer’s Report,
      pursuant to Section 11.02(c) of this Loan Agreement.  In
      addition to the information set forth in the preceding sentence, the Monthly
      Servicer’s Report shall also contain the following information: (a) the NPA
      Ratio and Annualized Default Ratio for the last Collection Period, and the
      average of each of the NPA Ratio and Annualized Default Ratio for the three
      (3)
      most recently ended Collection Periods; (b) whether to the knowledge of the
      Servicer any Facility Termination Event has occurred as of such Determination
      Date; (c) whether to the knowledge of the Servicer a Servicer Termination Event
      has occurred; and (d) such other information reasonably requested by the
      Lender.  The Servicer shall deliver to the Lender, the Borrower, the
      Collateral Agent and the Backup Servicer a hard copy of any such Monthly
      Servicer’s Report upon request of such Person.

     

    (p)  [Reserved].

     

    (q)  [Reserved].

     

    (r)  The
      Servicer will defend the Collateral against, and will take such other action
      as
      is necessary to remove, any Lien, security interest or claim on or to the
      Collateral, other than the security interests created under this Loan Agreement
      and Permitted Encumbrances, and the Servicer will defend the right, title and
      interest of the Collateral Agent, for the benefit of the Lender and the Hedge
      Counterparty, in and to any of the Collateral against the claims and demands
      of
      all Persons whomsoever.

     

    (s)  [Reserved].

     

    (t)  Without
      the prior written consent of the Lender, the Servicer will not, nor will it
      permit or allow others to, amend, modify, terminate or waive any provision
      of
      any Contract Document, except in accordance with under the Loan
      Documents.  Notwithstanding the foregoing, the Servicer may, without
      the prior written consent of the Lender, waive any assumption fees, late payment
      charges, charges for checks returned for insufficient funds, or 

     

    
      
        
        

      

      
        53

        
          

        

      

      
        
        
other
        fees which may be collected in the ordinary course of servicing the
        Contracts.  The Servicer shall take such reasonable and lawful actions
        as the Lender shall request to enforce the Servicer’s rights under the
        Contracts, and, following the occurrence of a Default, shall take such actions
        as are necessary to enable the Lender to exercise such rights in
        the  Lender’s own name.

    

     

    (u)  The
      Servicer will observe all corporate procedures required by its certificate
      of
      incorporation, its by-laws and the laws of its jurisdiction of
      formation.  The Servicer will maintain its corporate 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
      corporation in any other state in which it does business and in which it is
      required to so qualify.

     

    (v)  The
      Servicer will pay its operating expenses and liabilities from its own
      assets.

     

    (w)  The
      Servicer 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 the Borrower and the Servicer
      will not engage in business transactions with the Borrower, except on an
      arm’s-length basis.  The Servicer will not hold the Borrower out to
      third parties as other than an entity with assets and liabilities distinct
      from
      the Servicer.  The Servicer will cause any financial statements
      consolidated with those of the Borrower to state that the Borrower is a separate
      corporate entity 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 Servicer’s equity
      holders.  The Servicer will not act in any other matter that could
      foreseeably mislead others with respect to the Borrower’s separate
      identity.

     

    (x)  [Reserved].

     

    (y)  Except
      as otherwise provided herein or in any other Loan Document, the Servicer shall
      not sell, assign (by operation of law or otherwise) or otherwise dispose of,
      or
      create or suffer to exist any Lien upon or with respect to, any Contract, any
      collections related thereto or any other Collateral related thereto, or upon
      or
      with respect to any account to which any collections of any Contract are sent,
      or assign any right to receive income in respect thereof.

     

    (z)  The
      Servicer will not amend, modify, waive or terminate any terms or conditions
      of
      the Servicing Agreement without the prior written consent of the Lender, and
      shall perform its obligations thereunder.

     

    (aa)  The
      Servicer shall deliver or cause to be delivered to the Collateral Agent two
      (2)
      Business Days before each Funding Date the Funding Date Documentation with
      respect to the Contracts being pledged hereunder on such Funding
      Date.

     

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

     

    (cc)  The
      Servicer shall promptly give notice to the Lender of the occurrence, to its
      knowledge, of (a) any Facility Termination Event, specifying the event and
      the action which the Servicer proposes to take with respect thereto, (b) any
      event or occurrence which will or could reasonably be expected to adversely
      affect the collectibility of any material portion of the Contracts or the
      ability of the Servicer to service such Contracts or the ability of the Servicer
      or 

     

    
      
        
        

      

      
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the
        Borrower to perform its obligations under any Loan Document to which it is
        a
        party or any other event or occurrence which individually or in the aggregate
        could reasonably be expected to materially and adversely affect the Servicer’s
        or the Borrower’s financial condition, operations, business or prospects or the
        interests of the Lender and/or the Hedge Counterparty under this Loan Agreement,
        the Note or any other Loan Document.

    

     

    (dd)  The
      Servicer shall pay and discharge all taxes and governmental charges upon it
      or
      against any of its properties or assets or its income prior to the date after
      which penalties attach for failure to pay, except (a) to the extent that
      the Servicer shall be contesting in good faith in appropriate proceedings its
      obligation to pay such taxes or charges, adequate reserves having been set
      aside
      for the payment thereof, or (b) with respect to such taxes and charges which
      are
      not material in either nature or amount such that any failure to pay or
      discharge them, and any resulting penalties, either in any one instance or
      in
      the aggregate, would not materially and adversely affect the financial
      condition, operations, business or prospects of the Servicer or the interests
      of
      the Lender and/or the Hedge Counterparty under this Loan Agreement, the Note
      or
      any other Loan Document.

     

    (ee)  [Reserved].

     

    (ff)  The
      Servicer shall pay and perform, as and when due, all of its obligations of
      whatever nature, except where the amount or validity thereof is currently being
      contested in good faith by appropriate proceedings and reserves in conformity
      with GAAP with respect thereto have been provided on the books of the Servicer,
      and except to the extent that the failure to do so could not individually or
      in
      the aggregate reasonably be expected to result in a Material Adverse
      Change.

     

    (gg)  [Reserved].

     

    (hh)  The
      Servicer shall, and shall cause each of its Subsidiaries to, comply (i) in
      all material respects with all Requirements of Law and any change therein or
      in
      the application, administration or interpretation thereof (including, without
      limitation any request, directive, guideline or policy, whether or not having
      the force of law) by any Governmental Authority charged with the administration
      or interpretation thereof; and (ii) with all indentures, mortgages, deeds of
      trust, agreements, or other instruments or Contractual Obligations to which
      it
      is a party, including without limitation, each Loan Document to which it is
      a
      party, or by which it or any of its properties may be bound or affected, or
      which may affect the Contracts, if the failure to comply therewith could,
      individually or in the aggregate, result in a Material Adverse
      Effect.

     

    (ii)  The
      Servicer shall not enter into any transaction which adversely affects the
      Collateral or the Lender’s or the Hedge Counterparty’s rights under this Loan
      Agreement, the Note or any other Loan Document.

     

    (jj)  [Reserved.]

     

    (kk)  The
      Servicer shall not do any of the following if it will have a material adverse
      effect on the payment or performance of, or the Servicer’s ability to pay and/or
      perform, its obligations to the Lender or in respect of any other Secured
      Obligations with respect to this Loan Agreement, the Note or any other Loan
      Document to which it is a party:  (i) redeem, retire,

     

    
      
        
        

      

      
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    purchase
      or otherwise acquire, directly or indirectly, any of the Servicer’s stock,
      except in connection with employment or similar agreements with officers and
      directors of the Servicer consistent with past practice, (ii) make any change
      in
      the Servicer’s capital structure or (iii) make any material change in any of its
      business objectives, purposes or operations which could reasonably be expected
      to materially and adversely affect the payment or performance of, or the
Servicer’s
      ability to pay and/or perform, its obligations to the Lender or any other party
      with respect to this Loan Agreement, the Note or any other Loan Document to
      which it is a party.

     

    (ll)  The
      Servicer shall not grant or otherwise create any Lien on the beneficial
      ownership of the Borrower.

     

    Article
      VIII

     

    EVENTS
      OF
      DEFAULT

     

    Section
      8.01                                Events
      of Default.   Each of the following events shall constitute
      an event of default (an “Event of Default”) under this Loan
      Agreement:

     

    (a)  Default
      in the Payment of any Advance.  The Borrower shall default in the
      payment of any principal of or interest on any Advance when due (whether at
      stated maturity, upon acceleration or at mandatory or optional prepayment or
      otherwise), and such default shall continue for two (2) Business Days; or the
      Servicer shall fail to deposit (or remit to the Collateral Agent for deposit)
      any amount required to be deposited by it in the Collection Account (or remitted
      by it to the Collateral Agent for deposit in the Collection Account) and such
      failure shall continue for two (2) Business Days; or

     

    (b)  Default
      in the Payment of any Other Amount.  The Borrower shall default in
      the payment of any other amount payable by it under this Loan Agreement or
      under
      any other Loan Document after notification by the Lender of such default or
      the
      discovery of such default by a Responsible Officer of the Borrower or LEAF,
      and
      such default shall have continued unremedied for three (3) Business Days;
      or

     

    (c)  Final
      Payment Date.  All Advances and any other amounts payable to the
      Lender have not been paid to the Lender by the Final Payment Date;
      or

     

    (d)  Voluntary
      Bankruptcy Event.  A LEAF Party shall (i) apply for or consent to
      the appointment of, or the taking of possession by, a receiver, custodian,
      trustee, examiner or liquidator of itself, of the Collateral or of all or a
      substantial part of such LEAF Party’s property, (ii) make a general assignment
      for the benefit of its creditors, (iii) commence a voluntary case under the
      Bankruptcy Code, (iv) file a petition seeking to take advantage of any other
      law
      relating to bankruptcy, insolvency, reorganization, liquidation, dissolution,
      arrangement or winding-up, or composition or readjustment of debts, (v) fail
      to
      controvert in a timely and appropriate manner, or acquiesce in writing to,
      any
      petition filed against it in an involuntary case under the Bankruptcy Code
      or
      any other law referred to in clause (iv) above, (vi) cease to conduct its
      business, (vii) take any corporate or other action for the purpose of effecting
      any of the foregoing, or (viii) admit in writing its inability to pay its debts
      as such debts become due; or

     

    
      
        
        

      

      
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    (e)  Involuntary
      Bankruptcy Event.  A proceeding or case shall be commenced,
      without the application or consent of any LEAF Party, in any court of competent
      jurisdiction, seeking (i) its reorganization, liquidation, dissolution,
      arrangement or winding-up, or the composition or readjustment of its debts,
      (ii)
      the appointment of a receiver, custodian, trustee, examiner, liquidator or
      the
      like of any LEAF Party, the Collateral or any substantial part of any LEAF
      Party’s property, or (iii) similar relief in respect of any LEAF Party under any
      law relating to bankruptcy,
      insolvency, reorganization, winding-up, or composition or adjustment of debts,
      and such proceeding or case shall continue undismissed; the Collateral or any
      other assets of any LEAF Party are attached, seized, levied upon or subjected
      to
      a writ or distress warrant, or come within the possession of any receiver,
      trustee, custodian or assignee for the benefit of such LEAF Party, or an order,
      judgment or decree approving or ordering any of the foregoing shall be entered
      and continue unstayed and in effect, for a period of 60 or more days; or an
      order for relief against any LEAF Party shall be entered in an involuntary
      case
      under the Bankruptcy Code; any LEAF Party shall have concealed, removed or
      permitted to be concealed or removed any part of its property with intent to
      hinder, delay or defraud its creditors or made or suffered a transfer of any
      of
      its property which is fraudulent under any bankruptcy, fraudulent conveyance
      or
      other similar law; or

     

    (f)  Borrowing
      Base Deficiency.  The Borrower shall have failed to cure a
      Borrowing Base Deficiency in the manner, and within two (2) Business Days,
      set
      forth in Section 2.07(a); or

     

    (g)  Failure
      to Maintain a Valid Perfected First Priority Security
      Interest.  The Collateral Agent shall at any time fail to have a
      valid, perfected, first priority security interest in Contracts with an
      Aggregate Implicit Principal Balance, as of any date of determination, equal
      to
      or greater than 1.00% of the Aggregate Implicit Principal Balance of all
      Contracts as of such date of determination, and the Collateral related thereto,
      for the benefit of the Lender and the Hedge Counterparty, free and clear of
      all
      Liens or any purchase by the Borrower of a Contract under the Acquisition
      Agreement shall, for any reason, cease to create in favor of the Borrower a
      perfected ownership interest in such Contract and the other Collateral related
      thereto, except that UCC financing statements are not required to have been
      filed against the related Customer for any Equipment related to any Contract
      that had an original equipment cost at origination of less than $25,000, or
      if
      such Contract provides for a “fair market value” purchase option, of less than
      $50,000; provided, however, that if an event described in this
clause (g) is cured by the repurchase of Contracts pursuant to
Section
      3.03 of the Acquisition Agreement within five (5) Business Days after the
      discovery of such event by any Person, together with the payment of any required
      indemnity, such event shall cease to constitute an Event of Default;
      or

     

    (h)  Cross
      Default.  Any LEAF Party shall be in default under any note,
      indenture, loan agreement, guaranty, swap agreement or any other Contractual
      Obligation to which it is a party, which default involves the failure to pay
      an
      amount in excess of $1,000,000 and which default (i) involves the failure to
      pay
      a matured obligation, or (ii) permits the acceleration of the maturity of
      obligations by any other party to or beneficiary of such note, indenture, loan
      agreement, guaranty, swap agreement or other Contractual Obligation;
      or

     

    (i)  Breach
      of Term, Covenant or Agreement.  Any LEAF Party or the Servicer
      (if the Servicer is a LEAF Party) shall fail to perform or observe any term,
      covenant or agreement under this Loan Agreement, the Note or any other Loan
      Document which failure (i) is curable by 

     

     

    
      
        
        

      

      
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means
        other than payment of money and continues unremedied for a period of thirty
        (30)
        Business Days after the earlier of (a) the Servicer or any LEAF Party received
        written notification from the Lender and (b) the date on which the Servicer
        or
        LEAF Party becomes aware of such matter; or (ii) is not curable and continues
        unremedied for a period of one (1) Business Day; or

    

     

    (j)  Breach
      of Representation or Warranty.  Any representation or warranty
      made or deemed to be made by any LEAF Party or the Servicer (if the Servicer
      is
      a LEAF party) (or any of their respective officers) under or in connection
      with
      this Loan Agreement or any other Loan Document, any remittance report or other
      information or report delivered pursuant hereto or any other Loan Document
      shall
      prove to have been false or incorrect in any material respect when made;
provided, however, that if any breach described above is cured by
      the repurchase of Contracts pursuant to Section 3.03 of the Acquisition
      Agreement, together with the payment of any required indemnity, such breach
      shall cease to constitute an Event of Default; or

     

    (k)  [Reserved];
      or

     

    (l)  3-Month
      Rolling Average of the NPA Ratio.  The average of the NPA Ratios
      for the three most recently ended Collection Periods is greater than
      (i) 3.00% for the Serviced Portfolio, or (ii) 2.50% for the Securitized
      Portfolio; or

     

    (m)  3-Month
      Rolling Average of the Annualized Default Ratio.  The average of
      the Annualized Default Ratios on the Serviced Portfolio for the three most
      recently ended Collection Periods is equal to or greater than 3.50%;
      or

     

    (n)  [Reserved];
      or

     

    (o)  Unsatisfied
      Judgment.  A final, nonappealable judgment by any competent court
      in the United States of America for the payment of money in an amount in excess
      of $1,000,000 shall be rendered against any LEAF Party and the same remains
      undischarged for a period of sixty (60) days after the entry thereof;
      or

     

    (p)  [Reserved];
      or

     

    (q)  Materially
      Adverse Litigation.  There shall be any action, suit or
      proceedings at law or in equity or investigations pending against LEAF or the
      Borrower, before any court, regulatory body, administrative agency or other
      tribunal or Governmental Authority having jurisdiction over LEAF or the Borrower
      or its respective properties (A) asserting the invalidity of this Loan
      Agreement, the Note or any of the other Loan Documents, (B) seeking to
      prevent the consummation of any of the transactions contemplated by this Loan
      Agreement, the Note or any other Loan Documents to which LEAF or the Borrower
      is
      a party; or (C) seeking any determination or ruling that might have a
      material adverse effect on the interests of the Lender or the Hedge Counterparty
      under this Loan Agreement or any other Loan Document, including, without
      limitation, a Material Adverse Effect on the performance by LEAF or the Borrower
      of its respective obligations under, or the validity or enforceability of,
      this
      Loan Agreement, the Note or any of the other Loan Documents or the business,
      operations, condition (financial or otherwise) or prospects of LEAF or the
      Borrower; or

     

    
      
        
        

      

      
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    (r)  Change
      of Control.  Any Change of Control shall occur with respect to
      LEAF or the Borrower, unless the Lender shall have expressly consented to such
      Change of Control in writing; or

    (s)  Reserve
      Account Limitation Event.  The amount of any deposit to the
      Reserve Account required pursuant to clauseeighth of Section
      3.03(b) is limited in accordance with the proviso thereto in order
      to prevent a Reserve Account Limitation Event; or

     

    (t)  Servicer
      Termination Event.  A Servicer Termination Event, (if the Servicer
      is a LEAF Party) other than the Servicer Termination Event set forth in
Section 6.01(a)(ix) of the Servicing Agreement, shall have occurred and
      be continuing; or

     

    (u)  Required
      Audits.  An exception shall exist in the Required Audit Reports
      which, in the reasonable opinion of the Lender, is reasonably likely to have
      a
      material adverse effect on the Lender, the Contracts or the other Collateral,
      and such exception has remained uncured for a period of thirty (30) days after
      the earlier of written notice to the Servicer of the existence of such exception
      or of the date that the Servicer has knowledge that such exception shall be
      included in the related Required Audit Report.

     

    (v)  Material
      Adverse Change.  The Lender shall have reasonable cause to believe
      that (i) there has been a Material Adverse Effect with respect to the Collateral
      or the Lender’s rights under this Loan Agreement, the Note or any other Loan
      Document or (ii) any LEAF Party shall have suffered any Material Adverse Change;
      or

     

    (w)  Static
      Pool Test.  The Cumulative Net Loss exceeds the applicable
      percentages found in the column titled “Event of Default” in the definition of
“Static Pool Test”; or

     

    (x)  [Reserved];
      or

     

    (y)  Termination
      of Loan Documents.  The Custodial Agreement, the Acquisition
      Agreement, the Note, the Servicing Agreement or this Agreement (except in
      accordance with its terms or with the mutual consent of the parties thereto),
      shall for whatever reason be terminated or cease to be in full force and effect,
      or the enforceability of any material portion thereof shall be contested in
      any
      legal or arbitrable proceeding by any LEAF Party thereto; or

     

    (z)  ERISA
      Default.  (i) Any Person shall engage in any “prohibited
      transaction” (as defined in Section 406 of ERISA or Section 4975 of the
      Code) involving any Plan, (ii) any “accumulated funding deficiency” (as defined
      in Section 302 of ERISA), whether or not waived, shall exist with respect to
      any
      Plan, or any Lien in favor of the PBGC or a Plan shall arise on the assets
      of a
      LEAF Party or any Commonly Controlled Entity, (iii) a Reportable Event shall
      occur with respect to, or proceedings shall commence to have a trustee
      appointed, or a trustee shall be appointed, to administer or to terminate,
      any
      Single Employer Plan, which Reportable Event or commencement of proceedings
      or
      appointment of a trustee is, in the reasonable opinion of the Lender, likely
      to
      result in the termination of such Plan for purposes of Title IV of ERISA, (iv)
      any Single Employer Plan shall terminate for purposes of Title IV of ERISA,
      (v) a LEAF Party or any Commonly Controlled Entity shall incur any
      liability in connection with a withdrawal from, or the insolvency or
      reorganization of, a Multiemployer Plan or (vi) any other event or condition
      shall occur or exist with respect to a Plan; and in each case in clauses (i)
      through (vi) 

     

    
      
        
        

      

      
        59

        
          

        

      

      
        
        
above,
        such event or condition, together with all other such events or conditions,
        if
        any, could reasonably be expected to have a Material Adverse Effect;
        or

    

     

    (aa)  [Reserved];
      or

     

    (bb)  Failure
      to Answer.  The Lender shall reasonably request, specifying the
      reasons for such request, information, and/or written responses to such
      requests, regarding the Collateral or the financial well-being of any LEAF
      Party
      and a response reasonably addressing such request or information shall not
      have
      been provided within ten (10) Business Days of such request; or

     

    (cc)  Failure
      to Deliver Monthly Servicer’s Report.  The Servicer shall have
      failed to deliver the Monthly Servicer’s Report in accordance with the Servicing
      Agreement and such condition continues unremedied for a period of two (2)
      Business Days after the earlier to occur of (x) the discovery of such failure
      by
      a Servicing Officer or a Responsible Officer of the Servicer or (y) the date
      on
      which written notice has been received by a Servicing Officer or a Responsible
      Officer of the Servicer; or

     

    (dd)  Failure
      of Servicing Duties.  The Seller shall have failed to deposit the
      Release Price into the Collection Account with respect to any Contract required
      to be repurchased pursuant to Section 3.03 of the Acquisition Agreement;
      or (with respect to any other Contract, including such other Contracts described
      in the definition of Release Price) the Servicer or the Borrower shall have
      failed to deposit the Release Price into the Collection Account and any of
      such
      failures in this clause (dd) continue unremedied for a period of one (1)
      Business Day; or

     

    (ee)  Material
      Delegation of Servicer’s Duties.  The Servicer transfers,
      delegates or assigns a material portion of its servicing duties in violation
      of
      the Servicing Agreement; or

     

    (ff)  Failure
      to Maintain Minimum Capital Requirements.  (i) LEAF shall have
      failed to maintain a Senior Leverage Ratio no greater than 8.0:1.0 or (ii)
      the
      Servicer shall have (a) failed to maintain a “minimum tangible net worth”
(defined as stockholders’ equity plus subordinated debt less intangibles) of
      $7,500,000.00 or (b) defaulted (after giving effect to any and all notice,
      grace
      and cure periods) in respect of any material Indebtedness for borrowed money);
      or

     

    (gg)  Registration
      under Investment Company Act Required.  The Borrower shall be
      required to register as an “investment company” under the Investment Company
      Act.

     

    Article
      IX

     

    REMEDIES
      UPON DEFAULT

     

    Section
      9.01                                Remedies.

     

    (a)  Upon
      the occurrence and continuation of one or more Events of Default, and in
      addition to the remedies provided in Section 4.07 of this Loan
      Agreement and otherwise provided in this Loan Agreement, the Lender may
      immediately declare the principal amount of the Advances then outstanding under
      the Note to be immediately due and payable, together with all interest thereon
      and fees and expenses accruing under this Loan Agreement.  Upon such
      declaration, the balance then outstanding on the Note shall become immediately
      due and 

     

    
      
        
        

      

      
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payable,
        without presentment, demand, protest or other formalities of any kind, all
        of
        which are hereby expressly waived by the Borrower.

    

     

    (b)  Upon
      the occurrence and continuation of one or more Events of Default, and in
      addition to the remedies provided in Section 4.07 of this Loan Agreement
      and otherwise provided
      in this Loan Agreement, the Collateral Agent (at the direction of the Lender)
      shall have the right to obtain physical possession of the Servicing Records
      and
      all other files of the LEAF Parties relating to the Collateral and all documents
      relating to the Collateral which are then or may thereafter come in to the
      possession of the LEAF Parties or any third party acting for the LEAF Parties
      and the LEAF Parties shall deliver (or cause to be delivered) to the Collateral
      Agent and the Backup Servicer such assignments as the Collateral Agent (at
      the
      direction of the Lender) shall request.  The Lender shall have the
      right to demand transfer of all servicing rights and obligations to a new
      servicer (including, without limitation, the Backup Servicer) acceptable to
      the
      Lender, and the Borrower shall pay to such new servicer a servicing fee or
      any
      other amounts necessary to assure the ability of the Lender to find an
      appropriate successor servicer.  The Collateral Agent (at the
      direction of the Lender) may deduct any such fees from the Proceeds of the
      Collateral prior to applying any such Proceeds to the other Secured
      Obligations.  The Servicer shall cooperate fully with the Lender,
      Collateral Agent and the successor Servicer during the transition of servicing
      duties.  The Lender and the Collateral Agent shall be entitled to
      specific performance of all agreements of the LEAF Parties contained in the
      Loan
      Documents.

     

    Article
      X

     

    NO
      DUTY
      OF COLLATERAL AGENT

     

    Section
      10.01                                No
      Duty of Collateral Agent.  b)The powers conferred on the Collateral
      Agent hereunder are solely to protect the interests in the Collateral of the
      Collateral Agent, for the benefit of the Lender and the Hedge
      Counterparty.  The Collateral Agent shall not exercise any powers
      granted hereby except at the written direction of the Lender or as otherwise
      expressly required under the Loan Documents, and no duties or obligations of
      the
      Collateral Agent shall be implied under the Loan Documents.  The
      Collateral Agent shall be accountable only for amounts that it actually receives
      as a result of the exercise of such powers, and none of it or any of its
      officers, directors, employees or agents shall be responsible to the LEAF
      Parties for any act or failure to act hereunder, except for its or their own
      negligence or willful misconduct or breach of the Loan Documents.  In
      no event will the Collateral Agent or any of its officers, directors, employees
      or agents be liable for any consequential, indirect or special
      damages.

     

    (b)  Except
      as expressly set forth in the Loan Documents, the Collateral Agent makes no
      warranty or representation and shall have no responsibility as to the
      completeness, validity, sufficiency, value, genuineness, ownership or
      transferability of the Contracts or any of the documents in the Contract Files
      and will not be required to and will not make any representations as to the
      validity or value of any of the Contracts or any of the documents in the
      Contract Files.

     

    (c)  Except
      as provided in Section 10.01(a) hereof, the Collateral Agent 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 that it may do or refrain from doing in connection
      herewith.  The Collateral Agent may rely on and shall be protected in
      acting upon any certificate, 

     

    
      
        
        

      

      
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instrument,
        opinion, notice, letter, telegram or other document delivered to it by any
        other
        Person and which, reasonably in good faith, it believes to be genuine and
        which
        has been signed by the proper party or parties.  The Collateral Agent
        may rely on and shall be protected in acting upon the written instructions
        of
        the Person authorized to deliver such instructions.

    

     

    (d)  The
      Collateral Agent 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 Collateral Agent
      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.

     

    Article
      XI

     

    PURCHASE
      OF RELEASE AND SUBSTITUTION OF CONTRACTS

     

    Section
      11.01                                Purchase
      of Release and Substitution.

     

    (a)  Subject
      to the limitations set forth in Section 11.01(c) and Section
      11.01(d), the Borrower shall be entitled, pursuant to Section
      11.01(c), or required, pursuant to Section 11.01(d), upon three (3)
      Business Days’ notice to the Servicer, the Collateral Agent and the Lender, to
      purchase the release, in the case of an optional purchase, of a Replaceable
      Contract or, in the case of a purchase with respect to which a purchase or
      replacement is mandatory, of a Defaulted Contract (and in each case the
      Equipment and other Collateral related thereto), from the security interest
      of
      the Collateral Agent by remitting, in accordance with the terms of Section
      2.07, the Release Price for such Contract to the Collateral Agent for
      deposit in the Collection Account; provided, however, that no such
      purchase of the release of such Contracts shall be made if (i) such
      purchase is made with any intent to hinder, delay, or defraud any entity to
      which the Borrower is or will become indebted; (ii) there shall be any
      reason to believe that the Borrower is insolvent or that such purchase will
      render the Borrower insolvent on the date thereof or as a result of such
      purchase; (iii) at the time of such purchase, the Borrower is engaged in
      business, or about to engage in business, for which the assets remaining with
      it
      after the purchase will be an unreasonably small amount of capital; or
      (iv) the Borrower intends or believes that it will incur debts beyond its
      ability to pay as such debts mature.

     

    (b)  Subject
      to the limitations set forth in Section 11.01(c) and Section
      11.01(d), the Borrower shall be further entitled, pursuant to Section
      11.01(c), or required, pursuant to Section 11.01(d), upon three (3)
      Business Days’ notice to the Servicer, the Collateral Agent and the Lender, to
      obtain the release, in the case of an optional replacement, of a Replaceable
      Contract by replacing such Replaceable Contract (and the Equipment and other
      Collateral related thereto) or, in the case of a replacement with respect to
      which a purchase or replacement is mandatory, of a Defaulted Contract by
      replacing such Defaulted Contract (and the Equipment and other Collateral
      related thereto), with one or more Substitute Contracts (and the Equipment
      and
      other Collateral related thereto); provided that each such removal of a
      Replaceable Contract or Defaulted Contract and replacement thereof with one
      or
      more Substitute Contracts shall satisfy the following conditions
      precedent:

     

    
      
        
        

      

      
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    (i)           based
      on the Underwriting Guidelines, each Substitute Contract shall be of equal
      or
      better credit quality to the related Replaceable Contract;

     

    (ii)           each
      Substitute Contract shall meet each eligibility criterion set forth in
Exhibit D to this Loan Agreement and shall thus qualify as an Eligible
      Contract;

    (iii)           the
      Final Due Date of each Substitute Contract shall be on or prior to the Final
      Due
      Date of the related Replaceable Contract or Defaulted Contract; and

     

    (iv)           after
      giving effect to the removal of a Replaceable Contract or Defaulted Contract
      from the pool of Eligible Contracts and the addition of one or more related
      Substitute Contracts to the pool of Eligible Contracts, the Aggregate Implicit
      Principal Balance of such Substitute Contracts, as of the date of such removal
      and addition, shall not be less than the Implicit Principal Balance of such
      Replaceable Contract or Defaulted Contract as of the date of such removal and
      addition.

     

    (c)  Notwithstanding
      anything in this Loan Agreement to the contrary, neither any optional purchase
      of the release of a given Replaceable Contract pursuant to Section
      11.01(a) nor any optional substitution of a given Replaceable Contract with
      a Substitute Contract pursuant to Section 11.01(b) shall be permissible
      unless, after giving effect to the removal of such given Replaceable Contract
      pursuant to Section 11.01(a) or (b), as applicable, the aggregate
      of the Release Prices of all Replaceable Contracts removed from the pool of
      Contracts (in each case, as of the date of removal of such Replaceable Contract,
      but without giving effect to any required purchase of or substitution for
      Defaulted Contracts pursuant to Section 11.01(d)) after the Closing Date
      is less than or equal to 5.00% of the Maximum Advance Amount as of such date
      of
      determination.

     

    (d)  LEAF,
      acting through the Borrower, shall be required to purchase the release of a
      given Defaulted Contract pursuant to Section 11.01(a) or substitute a
      given Defaulted Contract with a Substitute Contract pursuant to Section
      11.01(b) so long as the aggregate of the Release Prices of all Defaulted
      Contracts (in each case, as of the date of removal of such Defaulted Contract)
      so purchased or substituted for after the Closing Date is less than or equal
      to
      5.00% of the Maximum Advance Amount as of such date of
      determination.

     

    Section
      11.02                                Procedure.

     

    (a)  Pursuant
      to the related Monthly Servicer Report, the Borrower shall notify LEAF, the
      Servicer, the Collateral Agent and the Lender of its release of any Replaceable
      Contract or Defaulted Contract pursuant to Section 11.01(a) on such
      Business Day or to substitute one or more Substitute Contracts for a Replaceable
      Contract or Defaulted Contract pursuant to Section 11.01(b) on such
      Business Day.

     

    (b)  The
      Borrower, in accordance with the terms of Section 2.07(d), shall remit to
      the Servicer for deposit into the Collection Account the Release Price for
      each
      Replaceable Contract or Defaulted Contract, the release of which the Borrower
      shall have elected, or shall have been required, to purchase, pursuant to
Section 11.01(a), on such Business Day.

     

    
      
        
        

      

      
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    (c)  Pursuant
      to the related Monthly Servicer Report, the Borrower shall deliver to the
      Servicer, for inclusion in such Monthly Servicer’s Report for the related
      Determination Date: (i) a list of each Replaceable Contract or Defaulted
      Contract to be removed from the pool of Contracts on such Business Day pursuant
      to Section 11.01(a) or (b), which shall be deleted by LEAF from
      Schedule A to the Acquisition Agreement, (ii) a supplement to Schedule A to
      the
      Acquisition Agreement setting forth for each Substitute Contract to be added
      to
      the pool of Eligible
      Contracts on such Business Day pursuant to Section 11.01(b) all
      information required to be listed with respect to a Contract on such Schedule
      A,
      (iii) an irrevocable written notice of the pledge by the Borrower to the
      Collateral Agent of a security interest in each such Substitute Contract, in
      the
      form in which such a pledge is required to be expressed in any Notice of
      Borrowing and Pledge, (iv) an Officers’ Certificate executed by a Responsible
      Officer of the Borrower, (A) certifying that each such Substitute Contract
      is an
      "Eligible Contract", (B) specifying each Replaceable Contract or Defaulted
      Contract for which one or more Substitute Contracts has been substituted, (C)
      certifying that each requirement under Section 11.02(b) has been
      satisfied with respect to the addition of each such Substitute Contract, (D)
      certifying that the removal of each such Replaceable Contract and Defaulted
      Contract is in accordance with the terms of Section 11.01(c) and
Section 11.01(d), respectively, and (E) containing the certifications
      required in any Borrowing Base Certificate as to the satisfaction of all matters
      referred to in Section 5.02(a), (b) and (c) hereof, and
      (iv) such additional information concerning such Substitute Contracts and/or
      Replaceable Contracts or Defaulted Contracts as may be needed for the Servicer
      to prepare such Monthly Servicer’s Report pursuant to Section 4.01 of the
      Servicing Agreement and otherwise to carry out its duties as Servicer under
      the
      Servicing Agreement.

     

    (d)  Subject
      to the provisions of Section 11.03, the delivery of any Officers’
Certificate and supplement to Schedule A to the Acquisition Agreement
      pursuant
      to Section 11.02(a) shall be conclusive evidence, without further act or
      deed, that (i) the Borrower pledged to the Collateral Agent, for the
      benefit of the Lender and the Hedge Counterparty, and pursuant to Section
      11.01 hereof all of the Borrower’s right, title and interest in and to the
      Substitute Contracts identified in such supplement, and the related rights
      associated with such Contract, (ii) the Borrower pledged to the Collateral
      Agent, for the benefit of the Lender and the Hedge Counterparty, all of the
      Borrower’s right, title and interest in and to the Equipment and all other
      Collateral related to each such Substitute Contract, and (iii) the Collateral
      Agent, on behalf of the Lender and the Hedge Counterparty, is directed to
      release to the Borrower, without representation or warranty, all of the Lender’s
      and Collateral Agent’s right, title and interest in and to the Replaceable
      Contracts identified in such Officers’ Certificate and release its security
      interest in the Equipment and all other Collateral relating
      thereto.  The Borrower shall deliver to the Collateral Agent all
      documentation with respect to each Substitute Contract that is required to
      be
      delivered in respect of any Contract pursuant to Sections 2 and 3
      of the Custodial Agreement, within the time specified under the Custodial
      Agreement.  The Borrower shall promptly request the Collateral Agent
      in writing to deliver to or upon the order of the Borrower the original executed
      counterpart of each Replaceable Contract for which substitution has been made
      pursuant to Section 11.01 hereof and the Collateral Agent shall deliver
      to the Borrower the original executed counterpart of each Replaceable Contract
      for which substitution has been made pursuant to Section 11.01 hereof in
      accordance with the provisions of Section 6 of the Custodial
      Agreement.

     

    
      
        
        

      

      
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    Section
      11.03                                Objection
      and Purchase.

     

    If
      the
      Lender objects to any purchase of release or substitution of Contracts within
      ten (10) days of receipt of the Monthly Servicer’s Report providing notice
      thereof pursuant to Section 4.01 of the Servicing Agreement, on the
      grounds either that any Substitute Contract is not an Eligible Contract within
      the meaning of the definition thereof or that such purchase of release or
      substitution is otherwise not permitted under the provisions of Section
      11.01 hereof, the
      Borrower shall be entitled to present such additional information as it deems
      appropriate in an effort to demonstrate that such Contract is an Eligible
      Contract and that such purchase of release or substitution is permitted under
      the provisions of Section 11.01 hereof.  Following such
      presentation, the procurement of release or substitution shall remain effective
      if each Person originally objecting to the substitution withdraws the
      objection.  If the conditions specified in the preceding sentence are
      not satisfied, or if at any time it is established that any Contract was not,
      at
      the time of substitution, an Eligible Contract, then the Borrower shall be
      required to purchase the release of such Substitute Contract in accordance
      with
      the provisions of Section 11.01(a) hereof.

     

    Section
      11.04                                Borrower’s,
      Servicer’s and Collateral Agent’s Subsequent Obligations.

     

    Upon
      any
      removal of a Replaceable Contract from the pool of Contracts pursuant to
Section 11.01(a) or (b), the Borrower’s, the Servicer’s and the
      Collateral Agent’s obligations under the Loan Documents with respect to such
      Replaceable Contract and the Collateral related thereto shall
      cease.  Upon the addition of a Substitute Contract to the pool of
      Eligible Contracts pursuant to Section 11.01(b), the Borrower, the
      Servicer and the Collateral Agent shall each thereafter have the same
      obligations with respect to such Substitute Contract and the Collateral related
      thereto as it has with respect to all other Contracts subject to the terms
      of
      the Loan Documents.

     

    Article
      XII

     

    ACCOUNTS;
      REPORTS

     

    Section
      12.01                                Establishment
      of Collection Account, Reserve Account and Funding Account.

     

    (a)  The
      Borrower, for the benefit of the Lender and the Hedge Counterparty, shall
      establish and maintain in the name of the Collateral Agent an Eligible Account
      (the “Collection Account”), bearing a designation clearly indicating that
      the funds deposited therein are subject to the Lien of the Collateral Agent
      for
      the benefit of the Lender and the Hedge Counterparty. The Collection Account
      shall initially be established with the Collateral Agent.

     

    (b)  The
      Borrower, for the benefit of the Lender and the Hedge Counterparty, shall
      establish and maintain in the name of the Collateral Agent an Eligible Account
      (the “Reserve Account”), bearing a designation clearly indicating that
      the funds deposited therein are subject to the Lien of the Collateral Agent
      for
      the benefit of the Lender and the Hedge Counterparty.  The Reserve
      Account shall initially be established with the Collateral Agent.

     

    
      
        
        

      

      
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    (c)  The
      Borrower shall establish and maintain in the name of the Collateral Agent an
      Eligible Account (the “Funding Account”).  The Funding Account
      shall be initially established with the Collateral Agent.

     

    (d)  Funds
      on deposit in the Collection Account and the Reserve Account shall be invested
      by the Collateral Agent (or any custodian with respect to funds on deposit
      in
      any such account) in Permitted Investments selected in writing by the Lender
      and
      the Borrower (pursuant to standing instructions or otherwise).  In the
      absence of any contrary instruction, the investments that
      shall be deemed to have been selected shall be the investments specified in
      clause (iv) of the definition of “Permitted Investments” set forth in Appendix A
      to this Loan Agreement.  Other than as agreed upon between the Lender
      and the Borrower, funds on deposit in the Collection Account or the Reserve
      Account shall be invested in Permitted Investments that will mature so that
      such
      funds will be available at the close of business on the Business Day immediately
      preceding the following Payment Date.  All Permitted Investments will
      be held to maturity.

     

    (e)  All
      Investment Earnings of monies deposited in the Collection Account shall be
      deposited by the Collateral Agent in the Collection Account no later than the
      close of business on the day they are received, and any loss resulting from
      such
      investments shall be charged to the Collection Account.  All
      Investment Earnings of monies deposited in the Reserve Account shall be
      deposited by the Collateral Agent in the Reserve Account no later than the
      close
      of business on the day they are received, and any loss resulting from such
      investments shall be charged to the Reserve Account.  Neither the
      Servicer nor the Lender will direct the Collateral Agent to make any investment
      of any funds held in the Collection Account or the Reserve Account unless the
      security interest granted and perfected in such account will continue to be
      perfected in such investment, in either case without any further action by any
      Person.

     

    (f)  If
      (i) the Lender shall have failed to give investment directions for any funds
      on
      deposit in the Collection Account or the Reserve Account to the Collateral
      Agent
      by 12:00 p.m., New York City time (or such other time as may be agreed by the
      Lender and the Collateral Agent), on any Business Day; or (ii) a Default or
      Event of Default shall have occurred and be continuing but the Secured
      Obligations shall not have been declared due and payable, or, if such amounts
      shall have been declared due and payable following an Event of Default, amounts
      collected or receivable from the Collateral are being applied as if there had
      not been such a declaration, then the Collateral Agent shall, to the fullest
      extent practicable, invest and reinvest funds in the Collection Account and
      the
      Reserve Account in one or more Permitted Investments pursuant to
      paragraph (d) above.

     

    (g)  The
      Collateral Agent, for the benefit of the Lender and the Hedge Counterparty,
      shall possess all right, title and interest in all funds on deposit from time
      to
      time in the Collection Account and in all Proceeds thereof and all such funds,
      investments, Proceeds and income shall be part of the Collateral.  The
      Collateral Agent, for the benefit of the Lender and the Hedge Counterparty,
      shall possess all right, title and interest in all funds on deposit from time
      to
      time in the Reserve Account and in all Proceeds thereof and all such funds,
      investments, Proceeds and income shall be part of the
      Collateral.  Except as otherwise provided herein, the Collection
      Account and the Reserve Account shall be under the sole dominion and control
      of
      the Collateral Agent for the benefit of the Lender and the Hedge
      Counterparty.  If, at any time, either the Collection Account or the
      Reserve Account ceases to be an Eligible Account, the Servicer (in the

     

    
      
        
        

      

      
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case
        of
        the Collection Account) or the Borrower (in the case of the Reserve Account),
        for the benefit of the Lender and the Hedge Counterparty, shall within five
        (5)
        Business Days (or such longer period as to which the Lender may consent)
        establish a new Collection Account or Reserve Account, as the case may be,
        as an
        Eligible Account and shall transfer any cash and/or any investments to such
        new
        Collection Account or Reserve Account.  In connection with the
        foregoing, the Servicer agrees that, in the event that the Collection Account
        is
        not an account with the Collateral Agent, the Servicer shall notify the Lender
        in writing promptly upon the cessation
        of the Collection Account to be an Eligible Account.  In connection
        with the foregoing, the Borrower agrees that, in the event that the Reserve
        Account is not an account with the Collateral Agent, the Borrower shall notify
        the Lender in writing promptly upon the cessation of the Reserve Account
        to be
        an Eligible Account.

    

     

    (h)  With
      respect to the Facility Account Property:

     

    (A)           any
      Facility Account Property shall be held solely in Eligible Accounts; and, except
      as otherwise provided herein, each such Eligible Account shall be subject to
      the
      exclusive custody and control of the Collateral Agent, and the Collateral Agent
      shall have sole signature authority with respect thereto;

     

    (B)           any
      Facility Account Property that constitutes physical property shall be delivered
      to the Collateral Agent in accordance with paragraphs (1)(a) and (b) of the
      definition of “Delivery” in Appendix A to this Loan Agreement and shall
      be held, pending maturity or disposition, solely by the Collateral Agent or
      a
      securities intermediary (as such term is defined in Section 8-102(a)(14) of
      the
      UCC) acting solely for the Collateral Agent;

     

    (C)           any
      Facility Account Property that is a book-entry security held through the Federal
      Reserve System pursuant to Federal book-entry regulations shall be delivered
      in
      accordance with paragraph (1)(c) of the definition of “Delivery” in
      Appendix A to this Loan Agreement and shall be maintained by the Collateral
      Agent, pending maturity or disposition, through continued book-entry
      registration of such Facility Account Property as described in such paragraph;
      and

     

    (D)           any
      Facility Account Property that is an “uncertificated security” under
      Article 8 of the UCC and that is not governed by clause (c) above shall be
      delivered to the Collateral Agent in accordance with paragraph (1)(d) of
      the definition of “Delivery” in Appendix A to this Loan Agreement and
      shall be maintained by the Collateral Agent, pending maturity or disposition,
      through continued registration of the Collateral Agent’s (or its nominee’s)
      ownership of such security.

     

    Effective
      upon Delivery of any Facility Account Property in the form of physical property,
      book-entry securities or uncertificated securities, the Collateral Agent shall
      be deemed to have purchased such Facility Account Property for value, in good
      faith and without notice of any adverse claim thereto.

     

    
      
        
        

      

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

     

    Section
      12.02                                Deposits
      into and Withdrawals from Accounts.

     

    (a)  If,
      on any day, the Servicer receives any Scheduled Payments, the Servicer shall,
      upon identification thereof, deposit such Scheduled Payments to the Lockbox
      Account no later than the second (2nd) Business
      Day
      immediately following such receipt.  In addition, the Servicer
shall,
      upon identification thereof, deposit or cause to be deposited in the Lockbox
      Account all other Receivables (including, without limitation, any Residual
      Proceeds, Recoveries, Guaranty Amounts and Insurance Proceeds) received or
      collected by the Servicer, in accordance with, and within the time specified
      under, Section 3.03(a) of this Agreement.  Pending such
      deposit, such Scheduled Payments and other Receivables shall be held by the
      Servicer in trust for the benefit of the Lender and the Hedge
      Counterparty.

     

    The
      Servicer or the Borrower, as applicable, shall deposit or cause to be deposited
      in the Collection Account (i) each Swap Payment paid by the Hedge Counterparty
      pursuant to any Interest Rate Hedging Agreement, on the date of receipt of
      such
      payment (it being understood that the Borrower shall instruct the Hedge
      Counterparty, pursuant to each Interest Rate Hedging Agreement and each Interest
      Rate Hedging Transaction thereunder, to deposit each such Swap Payment into
      the
      Collection Account), (ii) the Release Price for any Contract, the Collateral
      Agent’s security interest in which is released pursuant to Section
      2.07(b) of this Loan Agreement, within the time specified under Section
      2.07(b) of this Loan Agreement (it being understood that the Collateral
      Agent shall, on the date of receipt of any such Release Price from LEAF, on
      behalf of the Borrower, pursuant to Section 3.03 of the Acquisition
      Agreement, deposit such amount in the Collection Account), (iii) the Release
      Price for any Contract, the Collateral Agent’s security interest in which is
      released pursuant to Section 2.07(c) of this Loan Agreement, within the
      time specified under Section 2.07(c) of this Loan Agreement, (iv) the
      Release Price for any Contract, the Collateral Agent’s security interest in
      which is released pursuant to Section 2.07(d) of this Loan Agreement,
      within the time specified under Section 2.07(d) of this Loan Agreement
      (it being understood that the Collateral Agent shall, on the date of receipt
      of
      any such Release Price from the Borrower deposit such amount in the Collection
      Account), (v) any Prepayment Amount for any Payment Date, no later than such
      Payment Date and (vi) each Servicer Advance for such Payment Date required
      to be
      made under Section 3.04 of the Servicing Agreement, no later than such
      Payment Date (it being understood that the Collateral Agent shall, on the date
      of receipt of any such Servicer Advance from the Servicer, deposit such amount
      in the Collection Account).  Pending the deposit of such funds in the
      Collection Account (or the delivery of such amounts to the Collateral Agent
      for
      deposit in the Collection Account), such funds shall be held by the Servicer
      or
      the Borrower, as applicable, in trust for the benefit of the Lender and the
      Hedge Counterparty.

     

    (b)  On
      each Payment Date (and, in each case, prior to the making of any required
      payments on such Payment Date pursuant to Sections 3.03(b) and
12.02(c) of this Loan Agreement), the Collateral Agent shall deposit
      in
      the Collection Account the Reserve Account Available Amount for such Payment
      Date, if any, withdrawn from the Reserve Account in accordance with this Loan
      Agreement.

     

    
      
        
        

      

      
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    (c)  On
      each Payment Date, the Collateral Agent shall (based on the Monthly Servicer’s
      Report delivered by the Servicer pursuant to Section 4.01 of the
      Servicing Agreement) withdraw all Available Funds and any Reserve Account
      Available Amount on deposit in the Collection Account, and apply such funds
      in
      the manner set forth in Section 3.03(b) of this Loan
      Agreement.

     

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

     

    (e)  On
      each Funding Date, the Lender shall deliver to the Collateral Agent, for deposit
      into the Reserve Account, the Funding Date Reserve Account Deposit, if any,
      with
      respect to each Advance made on such Funding Date, in accordance with Section
      2.03(b) of this Loan Agreement, subject to such deposit not causing a
      Reserve Account Limitation Event.

     

    (f)  In
      the event that the Monthly Servicer’s Report with respect to any Determination
      Date shall state that the Available Funds on such Determination Date are less
      than the sum of the amounts payable on the related Payment Date pursuant to
      clauses first through sixth of Section 3.03(b) of this Loan
      Agreement (such deficiency being a “Deficiency Claim Amount”), then on
      such Determination Date, the Servicer shall deliver to the Collateral Agent,
      the
      Borrower and the Lender, by hand delivery, telex or facsimile transmission,
      a
      written notice in substantially the form of Exhibit M attached hereto (a
“Deficiency Notice”) specifying the Deficiency Claim Amount and the
      Reserve Account Available Amount for the related Payment Date.  Such
      Deficiency Notice shall direct the Collateral Agent to remit from the Reserve
      Account the Reserve Account Available Amount for deposit in the Collection
      Account on such Payment Date.  Upon the occurrence of the Facility
      Termination Date or during the existence of an Event of Default, all amounts
      on
      deposit in the Reserve Account shall be deposited into the Collection Account
      for distribution on the immediately following Payment Date.

     

    (g)  Any
      Deficiency Notice shall be delivered by 12:00 p.m., New York City time, on
      the
      related Determination Date.  The amounts distributed pursuant to a
      Deficiency Notice shall be deposited by the Collateral Agent into the Collection
      Account.

     

    (h)  To
      the extent that, on any Payment Date after giving effect to the payments
      required to be made on such Payment Date pursuant to clauses first
      through eighth of Section 3.03(b) of this Loan Agreement, the
      Reserve Account Available Amount exceeds the Required Reserve 

    
      
        
        

      

      
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Account
        Amount for all Advances as of such Payment Date, the Collateral Agent shall
        withdraw from the Reserve Account an amount equal to such excess and pay
        such
        amount to the Borrower pursuant to clause tenth of Section 3.03(b)
        of this Loan Agreement on such Payment Date.

    

     

    Section
      12.03                                Reports.

     

    (a)  Upon
      discovery by the Servicer of any Contract ceasing to be an Eligible Contract,
      if
      a Borrowing Base Deficiency exists or will result therefrom, the Servicer shall
      deliver (or shall cause
      the
      Borrower to deliver) to the Lender a Borrowing Base Deficiency Notice no later
      than 12:00 p.m., New York time, on the Business Day immediately succeeding
      such
      discovery.

     

    (b)  The
      Borrower shall deliver to the Lender and/or permit any representative of the
      Lender to inspect any copies of property, books, valuations, records, audits
      or
      other information related to the Collateral as the Lender may request upon
      two
      (2) Business Days’ prior written notice.

     

    (c)  The
      Collateral Agent shall, upon request from the Servicer, provide the Servicer
      with sufficient information regarding the amount of Receivables with respect
      to
      the Contracts received by the Collateral Agent from the Lockbox Account and
      the
      other accounts held in the name of the Collateral Agent to permit the Servicer
      to perform its duties under the Servicing Agreement.

     

    Section
      12.04                                Securities
      Accounts.   The Collateral Agent agrees that the Collection
      Account and the Reserve Account held by it hereunder shall each be maintained
      as
      a “securities account” as defined in the UCC as in effect in New York, and U.S.
      Bank National Association hereby agrees that it is and will act as a “securities
      intermediary” (in such capacity, the “Securities Intermediary”) for the
      Collateral Agent as the sole “entitlement holder” (as defined in Section
      8-102(a)(7) of the UCC) with respect to each such account.  The
      parties hereto agree that the Collection Account and the Reserve Account shall
      be governed by the laws of the State of New York, and regardless of any
      provision in any other agreement, the “securities intermediary’s jurisdiction”
(within the meaning of Section 8-110 of the UCC) shall be the State of New
      York.  The Securities Intermediary acknowledges and agrees that (a)
      each item of property (whether investment property, financial asset, security,
      instrument or cash) credited to the Collection Account and the Reserve Account
      shall be treated as a “financial asset” within the meaning of Section
      8-102(a)(9) of the UCC and (b) notwithstanding anything to the contrary, if
      at
      any time the Securities Intermediary shall receive any order from the Collateral
      Agent directing transfer or redemption of any financial asset relating to the
      Collection Account or the Reserve Account, the Securities Intermediary shall
      comply with such entitlement order without further consent by LEAF, the
      Borrower, the Lender or any other person.  In the event of any
      conflict of any provision of this Section 12.04 with any other provision
      of this Agreement or any other agreement or document, the provisions of this
      Section 12.04 shall prevail.

     

    
      
        
        

      

      
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    Article
      XIII

     

    [INTENTIONALLY
      OMITTED]

     

    Article
      XIV

     

    MISCELLANEOUS

     

    Section
      14.01                                No
      Waiver; Remedies Cumulative.  No failure or delay on the part of the
      Lender in exercising any right, remedy, power or privilege under this Loan
      Agreement, the Note or any other  Loan Document shall operate as a
      waiver thereof, nor shall any single or partial exercise of, or any abandonment
      or discontinuance of steps to enforce any right, remedy, power or
      privilege under this Loan Agreement, the Note or any other Loan Document
      preclude any other or further exercise thereof or the exercise of any other
      rights, remedies or privileges thereunder.  The rights, remedies,
      powers and privileges provided in this Loan Agreement, the Note or any other
      Loan Documents are cumulative and may be exercised singularly or concurrently
      and are not exclusive of any other rights, remedies, powers or privileges
      provided by law.

     

    Section
      14.02                                Notices. 
Except as otherwise expressly permitted by this Loan Agreement, all
      notices,
      requests and other communications provided for under the Loan
      Documents  (including without limitation any modifications of, or
      waivers, requests or consents under, this Loan Agreement) shall be given or
      made
      in writing (including without limitation by telecopy) delivered to the intended
      recipient at the address specified for each party hereto below; or, as to any
      party, at such other address as shall be designated by such party in a written
      notice to each other party:

     

    THE
      BORROWER:                                                                           LEAF
      Fund III, LLC

    110
      South Poplar Street, Suite
      101,

    Wilmington,
      Delaware
      19801

    Attention:
      Robert Moskovitz,
      CFO

    Telecopier
      No.:
      215-640-6371

    Telephone
      No.:
      215-231-7087

     

    THE
      ORIGINATOR:                                                                           LEAF
      Funding, Inc.

    110
      South Poplar Street, Suite
      101,

    Wilmington,
      Delaware
      19801

                                   
      

    
                                             
        Attention: Miles Herman, Senior Vice President and COO

    

                                       
Telecopier
      No.:
      215-640-6363

    Telephone
      No.:
      215-717-3358

     

    
      
        
        

      

      
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    THE
      SELLER:                                                                             
LEAF Equipment Leasing Income Fund III, L.P.

    110
      South Poplar Street, Suite
      101,

    Wilmington,
      Delaware
      19801

    Attention:
      Miles Herman,
      President

    Telecopier
      No.:
      215-640-6363

    Telephone
      No.:
      215-717-3358

     

    THE
      SERVICER:                                                                           LEAF
      Financial Corporation

    110
      South Poplar Street, Suite
      101,

    Wilmington,
      Delaware
      19801

    Attention:
      Miles Herman,
      President

    Telecopier
      No.:
      215-640-6363

    Telephone
      No.:
      215-717-3358

    THE
      LENDER:                                                                               WestLB
      AG, New York Branch

    1211
      Avenue of the Americas

    New
      York,
      New York 10036

    Attention:  Asset
      Securitization Group

    Telecopier
      No.:
      212-597-1423

    Telephone
      No.:
      212-852-6000

     

    THE
      COLLATERAL
      AGENT:                                                      U.S.
      Bank National Association

    EP-MN-WS3D

    60
      Livingston Avenue

    St.
      Paul,
      Minnesota 55107

                                           
      Attention:  Structured Finance/

                                        LEAF
      III
      - WestLB

                                           
      Telecopier No.: 651-495-8090

    Telephone
      No.:
      651-495-3923

     

    Except
      as
      otherwise provided in this Loan Agreement, all notices given shall be effective
      only on receipt, when transmitted by telecopy (evidenced by electronic receipt)
      or personally delivered to any officer of the Person entitled to receive such
      notices and demands at the address of such Person for witness hereunder, or
      by
      registered or certified United States mail, or, otherwise, upon receipt, in
      each
      case given or addressed as aforesaid.

     

    Section
      14.03                                Indemnification
      and Expenses.

     

    (a)  Each
      of LEAF and the Borrower agrees to hold the Lender, the Collateral Agent, the
      Backup Servicer, each successor Servicer and the Hedge Counterparty and each
      of
      their officers, directors, managers, agents and employees (each, an
“Indemnified Party”) harmless from and indemnify each Indemnified Party
      against all liabilities, losses, damages, judgments, costs and expenses of
      any
      kind which may be imposed on, incurred by or asserted against such Indemnified
      Party in any suit, action, claim or proceeding relating to or arising out of
      this Loan Agreement, the Note, any other Loan Document, any Collateral or any
      transaction contemplated hereby or thereby, or any amendment, supplement or
      modification of, or any waiver or consent under or in respect of, this Loan
      Agreement, the Note, any other Loan Document, any Collateral 

     

    
      
        
        

      

      
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or
        any
        transaction contemplated hereby or thereby, as a result of (i) the failure
        by
        such LEAF Party to comply in any material respect with any applicable law,
        rule
        or regulation with respect to any Contract or any item of Equipment, or the
        nonconformity of any Contract or the origination or servicing thereof with
        any
        such applicable law, rule or regulation, (ii) except as permitted by the
        Loan
        Documents, commingling of the Proceeds of the Collateral at any time with
        other
        funds or (iii) the breach by such LEAF Party of any of its respective
        representations, warranties or covenants contained in this Loan Agreement
        or any
        other Loan Document, except, in each case, to the extent arising from such
        Indemnified Party’s gross negligence or willful misconduct or breach of its
        obligations.  In any suit, proceeding or action brought by the Lender
        in connection with any Collateral for any sum owing thereunder, or to enforce
        any provisions of such Collateral, LEAF and the Borrower, as the case may
        be,
        will save, indemnify and hold each Indemnified Party harmless from and against
        all reasonable expense, loss or damage suffered by reason
        of
        any defense, set-off, counterclaim, recoupment or reduction or liability
        whatsoever of the account debtor or obligor thereunder, arising out of a
        breach
        by such LEAF Party of any obligation thereunder or arising out of any other
        agreement, indebtedness or liability at any time owing to or in favor of
        such
        account debtor or obligor or its successors from a LEAF Party.  The
        Lender hereby acknowledges that, notwithstanding the fact that the Secured
        Obligations are secured by the Collateral, each Secured Obligation is otherwise
        a non-recourse obligation of the Borrower.  Notwithstanding anything
        herein to the contrary, (x) neither LEAF nor the Borrower shall have any
        obligation to indemnify any Indemnified Party for any of the
        following:

    

     

    (i)           indemnified
      amounts to the extent a final judgment of a court of competent jurisdiction
      holds that such indemnified amounts resulted from gross negligence or willful
      misconduct on the part of any successor Servicer or the Indemnified Party
      seeking indemnification;

     

    (ii)           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;

     

    (iii)           indemnified
      amounts to the extent that they are or result from lost profits (other than
      principal, yield and fees with respect to the Advances); and

     

    (iv)                 indemnified
      amounts to the extent that they constitute claims against any LEAF Party for
      consequential, special, indirect or punitive damages; and

     

    (y)
      LEAF
      shall not have any obligation to indemnify any Indemnified Party for indemnified
      amounts to the extent the same includes losses in respect of Contracts that
      are
      uncollectible on account of the insolvency, bankruptcy or lack of
      creditworthiness of the related Customer or would constitute recourse to LEAF
      for losses in respect of uncollectible receivables.

     

    (b)  Each
      of LEAF and the Borrower agrees to pay as and when billed by any Indemnified
      Party all reasonable fees, costs and expenses incurred by the Lender in
      connection with the development, preparation and execution of, this Loan
      Agreement, the Note, any other Loan Document, any Collateral or any other
      documents prepared in connection herewith or therewith, and any amendment,
      supplement or modification thereto, the enforcement 

     

    
      
        
        

      

      
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or
        preservation of any Indemnified Party’s rights and remedies hereunder or
        thereunder, any waiver hereunder or thereunder, and the consummation and
        administration of the transactions contemplated hereby and thereby, including
        without limitation (i) the reasonable fees, disbursements and expenses of
        counsel to the Lender including, without limitation, such fees and disbursements
        incurred in advising the Lender from time to time as to its rights and remedies
        under this Loan Agreement, the Note or any other Loan Document and (ii) all
        the
        due diligence, inspection, testing and review costs and expenses incurred
        by the
        Lender with respect to Collateral under this Loan Agreement in accordance
        with
        Section 14.15.

    

     

    (c)  LEAF
      and the Borrower shall be liable jointly and severally under this Section
      14.03, except to the extent of any liability the Borrower may have as a
      result of this non-applicability to it
      of
      Section 14.03(a)(y).  The liability of the Servicer under the
      Loan Documents shall be several and not joint to any other LEAF
      Party.

     

    Section
      14.04                                Amendments;
      Waivers.  Any term or provision of a Loan Document may be amended,
      supplemented or otherwise modified only by an instrument in writing signed
      by
      LEAF, the Servicer, the Borrower, the Lender and (to the extent any such
      modification or supplement would have an adverse effect on the interest of
      the
      Collateral Agent or the Backup Servicer) the Collateral Agent and/or the Backup
      Servicer; provided that any such amendment, supplement or other
      modification that shall affect any right or obligation of the Hedge Counterparty
      under this Loan Agreement shall require the prior written consent of the Hedge
      Counterparty (such consent not to be unreasonably withheld);
providedfurther that (x) any amendment to Appendix A to
      this Loan Agreement that shall result in a change to the definition of any
      term
      used in the Servicing Agreement or (y) an amendment to any other provision
      of
      this Loan Agreement, which amendment shall affect any right or obligation of
      the
      Backup Servicer (as successor to the Servicer), shall also require the prior
      written consent of the Backup Servicer.  Any provision of a Loan
      Document that affects the rights of the Lender may be waived only by the written
      agreement of the Lender.  In the case of any waiver of a Default or
      Event of Default, any Default or Event of Default waived shall be deemed to
      be
      cured and not continuing; but no such waiver shall extend to any subsequent
      or
      other Default or Event of Default, or impair any right consequent
      thereon.

     

    Section
      14.05                                Severability. 
Any provision of this Loan Agreement, the Note or any other Loan Document
      which
      is prohibited, unenforceable or not authorized in any jurisdiction shall, as
      to
      such jurisdiction, be ineffective to the extent of such prohibition,
      unenforceability or non-authorization without invalidating the remaining
      provisions hereof or thereof or affecting the validity, enforceability or
      legality of such provisions in any other jurisdiction.

     

    Section
      14.06                                Survival. 
The obligations set forth in Sections 2.08, 2.09, 2.12,
14.03, 14.10, 14.11 and 14.16 hereof shall
      survive
      the execution and delivery of this Loan Agreement and the repayment of the
      Advances and the termination of this Loan Agreement.  In addition,
      each representation and warranty made or deemed to be made by a request for
      a
      borrowing herein or pursuant hereto shall survive the making of such
      representation and warranty, and the Lender shall not be deemed to have waived,
      by reason of making any Advance, any Default that may arise because any such
      representation or warranty shall have proved to be false or misleading,
      notwithstanding that the Lender may have had notice or knowledge or reason
      to
      believe that such representation or warranty was false or misleading at the
      time
      such Advance was made.

     

    
      
        
        

      

      
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    Section
      14.07                                Captions. 
The table of contents and captions and section headings appearing herein
      are
      included solely for convenience of reference and are not intended to affect
      the
      interpretation of any provision of this Loan Agreement.

     

    Section
      14.08                                Counterparts. 
This Loan Agreement may be executed in any number of counterparts,
      all of which
      taken together shall constitute one and the same instrument, and any of the
      parties hereto may execute this Loan Agreement by signing any such
      counterpart.

     

    Section
      14.09                                GOVERNING
      LAW; ETC.  THIS LOAN AGREEMENT SHALL
      BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REFERENCE TO CHOICE
      OF
      LAW DOCTRINE (BUT WITH REFERENCE TO SECTION 5-1401 AND SECTION 5-1402 OF THE
      NEW
      YORK GENERAL OBLIGATIONS LAW, WHICH BY THEIR RESPECTIVE TERMS APPLY TO THIS
      LOAN
      AGREEMENT), AND SHALL CONSTITUTE A SECURITY AGREEMENT WITHIN THE MEANING OF
      THE
      UNIFORM COMMERCIAL CODE.

     

    Section
      14.10                                SUBMISSION
      TO JURISDICTION;
      WAIVERS.  EACH PARTY
      HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY:

     

    (A)           SUBMITS
      FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
      LOAN AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, OR FOR RECOGNITION AND
      ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL
      JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE FEDERAL COURTS OF
      THE
      UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE
      COURTS FROM ANY THEREOF;

     

    (B)           CONSENTS
      THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE
      EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
      HAVE
      TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH
      ACTION OR PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO
      PLEAD OR CLAIM THE SAME;

     

    (C)           AGREES
      THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY
      MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY
      SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN SECTION
      14.02 OF THIS LOAN AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE ANOTHER
      PARTY HERETO SHALL HAVE BEEN NOTIFIED; AND

     

    (D)           AGREES
      THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN
      ANY
      OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER
      JURISDICTION.

    `

    
      
        
        

      

      
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    (E)           EACH
      PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
      APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
      ARISING OUT OF OR RELATING TO THIS LOAN AGREEMENT, ANY OTHER LOAN DOCUMENT
      OR
      THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

     

    Section
      14.11                                Acknowledgments. 
Each party hereto hereby acknowledges that:

     

    (a)  it
      has been advised by counsel in the negotiation, execution and delivery of this
      Loan Agreement, the Note and the other Loan Documents;

     

    (b)  the
      Lender has no fiduciary relationship to LEAF, the Servicer, the Borrower or
      any
      of their respective Affiliates, and the relationship between the Borrower and
      the Lender is solely that of debtor and creditor; and

     

    (c)  no
      joint venture exists between the Lender and LEAF, the Servicer or the
      Borrower.

     

    Section
      14.12                                No
      Proceedings.  Each party hereto agrees not to institute against,
      or join any other person in instituting against, the Lender any bankruptcy,
      reorganization, arrangement, insolvency, liquidation or similar proceeding
      for
      one year and one day after the amounts owing under this Agreement and all other
      credit agreements executed by the Lender have been paid in full.

     

    Each
      party hereto agrees not to institute against, or join any other person in
      instituting against, the Borrower any bankruptcy, reorganization, arrangement,
      insolvency, liquidation or similar proceeding for one year and a day after
      the
      amounts owing under this Agreement and all other credit agreements executed
      by
      the Borrower have been paid in full.

     

    Section
      14.13                                Assignments;
      Participations.

     

    (a)  This
      Loan Agreement shall be binding upon and inure to the benefit of the parties
      hereto and their respective successors and permitted assigns.  None of
      LEAF, the Servicer or the Borrower may assign any of its rights, without prior
      written notice to the Lender, or obligations, without the prior written consent
      of the Lender, hereunder under the Note or under any other Loan
      Document.  The Lender may assign, participate or otherwise transfer to
      any Affiliate of the Lender or, except during the existence of an Event of
      Default with the prior written consent of the Borrower, to any other Person,
      all
      or any of its rights or obligations under this Loan Agreement.

     

    (b)  Each
      of LEAF, the Servicer and the Borrower agrees to cooperate with the Lender
      in
      connection with any such assignment or transfer, to execute and deliver such
      replacement notes, and to enter into such restatements of, and amendments,
      supplements and other modifications to, this Loan Agreement and the other Loan
      Documents in order to give effect to such assignment or
      transfer.  Except during the existence of an Event of Default, any
      costs or expenses incurred by LEAF, the Servicer and/or the Borrower in
      connection with any such cooperation shall be at the expense of the Lender
      and
      its assignee.

     

    Section
      14.14                                [Reserved].

     

    
      
        
        

      

      
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    Section
      14.15                                Periodic
      Due Diligence Review.  Each of LEAF, the Servicer and the Borrower
      acknowledges that the Lender has the right to perform continuing due diligence
      reviews with respect to the Contracts, for purposes of verifying compliance
      with
      the representations, warranties and covenants made hereunder, or otherwise,
      and
      each of LEAF, the Servicer and the Borrower agrees that upon reasonable (but
      no
      less than two (2) Business Days’) prior notice to LEAF, the Servicer, the
      Borrower and/or the Collateral Agent, as the case may be (which prior notice
      shall not be required after the occurrence and during the continuation of an
      Event of Default), the Lender or its authorized representatives, attorneys
      or
      accountants, subject to applicable Requirements of Law (including any and all
      Securities and Exchange Commission’s rules and regulations), will be permitted
      during normal business hours to examine, inspect,
      and make copies of, the Contracts Files and any and all documents, records,
      agreements, instruments, property, books, valuations, records, audits or other
      information relating to such Contracts and the other Collateral in the
      possession or under the control of LEAF, the Servicer, the Borrower and/or
      the
      Collateral Agent.  Each of LEAF, the Servicer and the Borrower also
      shall, subject to applicable Requirements of Law (including any and all
      Securities and Exchange Commission’s rules and regulations), make available to
      the Lender a knowledgeable financial or accounting officer or its independent
      public accountants for the purpose of answering questions respecting the
      Contracts Files and the Contracts.  The Lender may underwrite such
      Contracts itself or engage a mutually agreed upon third party underwriter to
      perform such underwriting.  Each of LEAF, the Servicer and the
      Borrower agrees to cooperate with the Lender and any third party underwriter
      in
      connection with such underwriting, including, but not limited to, providing
      the
      Lender and any third party underwriter with access to any and all documents,
      records, agreements, instruments or information relating to such Contracts
      in
      the possession, or under the control, of LEAF, the Servicer or the Borrower,
      as
      the case may be. Each of LEAF, the Servicer and the Borrower further agrees
      that
      LEAF, the Servicer or the Borrower, as the case may be, shall reimburse the
      Lender for all out-of-pocket costs and expenses incurred by the Lender in
      connection with the activities of the Lender pursuant to this Section
      14.15; providedthat, except during the existence of a Default
      or an Event of Default, such reimbursement shall be limited to any single
      exercise of the rights granted under this Section 14.15 during any twelve
      month period.

     

    Section
      14.16                                Set-Off. 
In addition to any rights and remedies of the Lender provided by  this
      Loan Agreement, the Note and the other Loan Documents and by law, the Lender
      shall have the right, without prior notice to the Borrower, the Servicer or
      LEAF, any such notice being expressly waived by the Borrower, the Servicer
      and
      LEAF to the extent permitted by applicable law, upon any amount becoming due
      and
      payable by the Borrower, the Servicer or LEAF under this Loan Agreement, the
      Note or any other Loan Documents (whether at the stated maturity, by
      acceleration or otherwise) to, during the existence of an Event of Default,
      set-off and appropriate and apply against such amount any and all deposits
      (general or special, time or demand, provisional or final), in any currency,
      and
      any other credits, indebtedness or claims, in any currency, in each case whether
      direct or indirect, absolute or contingent, matured or unmatured, at any time
      held or owing by the Lender or any Affiliate thereof to or for the credit or
      the
      account of the Borrower, the Servicer or LEAF, as applicable.  The
      Lender agrees promptly to notify the Borrower, the Servicer or LEAF, as
      applicable, after any such set-off and application made by the Lender;
provided that the failure to give such notice shall not affect the
      validity of such set-off and application.

     

    
      
        
        

      

      
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    Section
      14.17                                Confidentiality. 
Each party hereto agrees to keep confidential the terms of this Loan
      Agreement,
      the Note and the other Loan Documents; provided, that each party hereto
      shall have the right to disseminate such information (i) to the Collateral
      Agent, the Servicer, the Backup Servicer or any outside accounting firm
      performing analyses in connection with this Loan Agreement, the Note or any
      other Loan Document or the transactions contemplated hereunder or thereunder
      which agrees to comply with the provisions of this Section 14.17, to any
      proposed assignee or transferee of the Lender which agrees to comply with the
      provisions of this Section 14.17, (ii) to their respective employees,
      directors, managers, agents, attorneys, accountants and other professional
      advisors (other than competitors of the Lender) who agree to comply with the
      provisions of this Section 14.17, (iii) upon the request or demand of any
examiner
      or other Governmental Authority having jurisdiction over such party, (iv) in
      response to any order of any court or other Governmental Authority, (v) as
      may otherwise be required pursuant to any Requirement of Law (including, without
      limitation, any filing of information with the United States Securities and
      Exchange Commission required under the Securities Exchange Act), (vi) in
      connection with the exercise of any remedy hereunder, and (vii) to any other
      Person which agrees to comply with the provisions of this Section 14.17
      if such dissemination is necessary in connection with this Loan Agreement,
      the
      Note or any other Loan Document or the transactions contemplated hereunder
      or
      thereunder, in the good faith determination of the Lender.

     

    Section
      14.18                                Entire
      Agreement. This Loan Agreement, the Note and the other Loan Documents
      constitute the entire agreement among the parties relative to the subject matter
      hereof.  Any previous agreement among the parties with respect to the
      subject matter hereof is superseded by this Loan Agreement, the Note and the
      other Loan Documents.  Subject to Section 14.21, nothing
      in this Loan Agreement, the Note or in the other Loan Documents, expressed
      or
      implied, is intended to confer upon any party other than the parties hereto
      and
      thereto any rights, remedies, obligations or liabilities under or by reason
      of
      this Loan Agreement, the Note or the other Loan Documents.

     

    Section
      14.19                                Future
      Assurances.  LEAF, the Servicer and the Borrower shall do, execute,
      acknowledge and deliver all and every such further acts, deeds, conveyances,
      assignments, notices of assignment, transfers and assurances as the Lender
      shall
      from time to time require for better assuring, conveying, assigning,
      transferring and confirming unto the Collateral Agent the property and rights
      pledged or assigned or intended now or hereafter so to be, or which LEAF, the
      Servicer or the Borrower may be or may hereafter become bound to convey, pledge
      or assign to the Collateral Agent, or for carrying out the intention or
      facilitating the performance of the terms of this Loan Agreement, the Note
      or
      any of the other Loan Documents, or for filing, registering or recording of
      the
      UCC financing statements.

     

    Section
      14.20                                [Reserved].

     

    Section
      14.21                                Third-Party
      Beneficiaries.  Except as may be otherwise provided in this Agreement,
      no other person will have any right or obligation hereunder.  The
      Hedge Counterparty is an express third-party beneficiary of this
      Agreement.  Each of the parties to the Acquisition Agreement hereby
      agrees that the Lender shall be permitted but not obligated to enforce the
      rights of the Borrower directly thereunder in the place and stead of the
      Borrower but the Lender shall not have any obligations under the Acquisition
      Agreement.

     

    
      
        
        

      

      
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    [SIGNATURE
      PAGE FOLLOWS]

     

    
 

    
      
        
        

      

      
        79

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Loan Agreement to be duly
      executed and delivered as of the day and year first above written.

     

    
      	
               

            	
              BORROWER:

            	
              LEAF
                FUND III, LLC

            

    

     

    By:

    Name:

    Title:

     

    
      	
               

            	
              ORIGINATOR:

            	
              LEAF
                FUNDING, INC.

            

    

     

    By:

    Name:

    Title:

     

     

    
      	
               

            	
              SELLER:

            	
              LEAF
                EQUIPMENT LEASING INCOME FUND III,
                L.P.

            

    

     

    
      	
               

            	
              By: LEAF
                ASSET MANAGEMENT
                LLC,

            

    

     

    
      	
               

            	
              as
                General Partner

            

    

     

    By:

    Name:

    Title:

     

    
      	
               

            	
              SERVICER:

            	
              LEAF
                FINANCIAL CORPORATION

            

    

     

    By:

    Name:

    Title:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
               

            	
              LENDER:

            	
              WESTLB
                AG, NEW YORK
BRANCH

            

    

     

    By:

    Name:

      Title:

    

    By:

    Name:

      Title:

    

    COLLATERAL
      AGENT/

    
      	
              SECURITIES
                INTERMEDIARY:

            	
              U.S.
                BANK NATIONAL ASSOCIATION

            

    

     

    By:

    Name:

    Title:

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    APPENDIX
      A

     

    DEFINED
      TERMS

     

    “Accounting
      Date” means, for any date of determination, the last day of the Collection
      Period immediately preceding such date of determination.

     

    “Accrual
      Period” means, with respect to any Advance and any Payment Date, the period
      beginning on the 21st day of
      the month
      preceding such Payment Date and ending on the 20th day of
      the month
      in which the Payment Date occurs; provided that with respect to any
      Advance, the initial Accrual Period therefor shall begin on the related Funding
      Date and end on the 20th day of
      the second
      month following the month in which such Funding Date occurred.

     

    “Acquisition
      Agreement” means the Acquisition Agreement between the Borrower and LEAF,
      dated as of June 19, 2007, pursuant to which the Borrower will acquire from
      time
      to time the Contracts, as such Acquisition Agreement may be amended,
      supplemented or otherwise modified from time to time in accordance with the
      terms thereof.

     

    “Additional
      Principal Payment Amount” means, with respect to any Payment Date on or
      after the Facility Termination Date, the sum of (a) the remaining Available
      Funds on such Payment Date, after all payments referred to in
      clauses first through sixth of the priority of payments set
      forth in Section 3.03(b) of this Loan Agreement, and (b) all amounts on
      deposit in the Reserve Account on such Payment Date.

     

    “Advance”
      shall have the meaning assigned to such term in Section 2.01 of this Loan
      Agreement.

     

    “Advance
      Amount” means, as of any date of determination, the amount equal to the
      least of:

     

    (a)
      the
      Advance Rate multiplied by the Aggregate Implicit Principal Balance of all
      Eligible Contracts on such date of determination, including the Contracts to
      be
      funded on such date;

     

    (b)
      the
      Available Commitment, before taking into account the Advance on such date;
      and

     

    (c)
      the
      Aggregate Implicit Principal Balance of all Eligible Contracts to be funded
      on
      such date.

     

    “Advance
      Rate” means, as of any date of determination, the percentage equal to the
      difference of (a) one hundred percent (100%) and (b) the sum of (i) the Required
      Credit Support Amount as of such date of determination, and (ii) the Required
      Reserve Account Percentage.

     

    “Affected
      Contract” means a Contract as to which a Specified Event has
      occurred.

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    “Affected
      Property” shall have the meaning set forth in Section 6 of the
      Custodial Agreement.

     

    “Affiliate”
      means, with respect to any Person, any other Person which, directly or
      indirectly, controls, is controlled by, or is under common control with, such
      Person.  For purposes of this definition, “control” (together with the
      correlative meanings of “controlled by” and “under common control with”) means
      possession, directly or indirectly, of the power (a) to vote 10.00% or more
      of
      the securities or interests (on a fully diluted basis) having ordinary voting
      power for the directors, managers, or managing partners (or their equivalent)
      of
      such Person, or (b) to direct or cause the direction of the management or
      policies of such Person, whether through the ownership of voting securities
      or
      interests, by contract, or otherwise.

     

    “Aggregate
      Implicit Principal Balance” means, with respect to any date of determination
      and either the Contracts or the Eligible Contracts (as applicable, depending
      on
      the context in which such term is used), the sum of the Implicit Principal
      Balances for all Contracts or all Eligible Contracts, as the case may be, as
      of
      the related Accounting Date.

     

    “Annualized
      Default Ratio” means, with respect to any Collection Period, the fraction,
      expressed as a percentage, equal to twelve (12) times (a) the sum of the
      Implicit Principal Balances (in each case, as of the date on which the Contract
      became a Defaulted Contract) of all Contracts that became Defaulted Contracts
      during such Collection Period (including any Defaulted Contracts that were
      removed from the pool of Contracts pursuant to Section 11.01 during such
      Collection Period), to (b) the Aggregate Implicit Principal Balance of all
      Eligible Contracts as of the close of business on the last day of such
      Collection Period.

     

    “Applicable
      Margin” means, for each Advance and (i) any date prior to the Facility
      Termination Date, 0.95% or (ii) any date that occurs on or after the Facility
      Termination Date, 1.85%.

     

    “Approved
      Originator” means (x) LEAF Funding, Inc. and (y) any third party Originator
      approved by LEAF, in accordance with the Underwriting Guidelines, for the
      origination of Contracts to be purchased by LEAF.

     

    “Assignment”
      means an Assignment executed by the Seller, substantially in the form of
Exhibit A attached to the Acquisition Agreement.

     

    “Authorized
      Representative” shall have the meaning set forth in Section 16
      of the Custodial Agreement.

     

    “Available
      Commitment” means, as of any date of determination, the amount by which the
      Maximum Facility Amount exceeds the Total Outstanding Advances.

     

    “Available
      Funds” means, with respect to any Determination Date, the sum of
      (i) the Receivables received or collected with respect to each Contract
      during the related Collection Period and payable during such Collection Period
      or a prior Collection Period, (ii) all amounts in respect of payments of
      Release Prices deposited in the Collection Account during the related Collection
      Period or the related Business Day, as applicable, (iii) Investment Earnings
      with respect to the Collection Account as of the related Payment Date, (iv)
      following the

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        
acceleration
        of the Total Outstanding Advances pursuant to Section 9.01 of this Loan
        Agreement, the amount of money or property collected pursuant to Section
        9.01 of this Loan Agreement since the preceding Determination Date by the
        Lender or the Collateral Agent for distribution pursuant to Section
        3.03(b) of this Loan Agreement, (v) any Prepayment Amount for the
        related Payment Date, (vi) any Swap Payments for the related Payment Date,
        plus
        (vii) the aggregate of any Servicer Advances made by the Servicer for the
        related Payment Date.

    

     

    “Backup
      Servicer” means Lyon Financial Services Inc., d/b/a U.S. Bank Portfolio
      Services, a Minnesota corporation, or any successor backup servicer appointed
      as
      herein provided.

     

    “Backup
      Servicer Fee” means, with respect to any Payment Date, the fee payable to
      the Backup Servicer, in an amount equal to the greater of (a) the product of
      (i)
      one-twelfth (1/12th), (ii)
      0.0215% and
      (iii) the Aggregate Implicit Principal Balance of Eligible Contracts as of
      the
      first day of the related Collection Period and (b) $1,750 per Collection
      Period.

     

    “Bankruptcy
      Code” means the law codified and enacted as Title 11 of the United States
      Code, entitled “Bankruptcy” and any successor statute thereto, in either case,
      as now or hereafter in effect.

     

    “Base
      Rate” means the prime rate publicly announced by WestLB from time to
      time.

     

    “Borrower”
      means LEAF Fund III, LLC, a Delaware limited liability company.

     

    “Borrowing
      Base” means, as of any date of determination, the product of (i) the
      Aggregate Implicit Principal Balance of Eligible Contracts as of such date,
      multiplied by (ii) the then applicable Advance Rate.

     

    “Borrowing
      Base Certificate” has the meaning assigned to such term in
Section 2.03(a) of this Loan Agreement.

     

    “Borrowing
      Base Deficiency” shall have the meaning provided in Section 2.07
      hereof.

     

    “Borrowing
      Base Deficiency Notice” means a written notice from the Borrower to the
      Lender substantially in the form of Exhibit M to this Loan
      Agreement.

     

    “Business
      Acquisition Loan” means a Contract under which a loan is made by the lender
      under the Contract to the Customer where the Customer uses the proceeds of
      such
      loan to acquire all of the assets of a business (including, without limitation,
      if so specified in the related Contract, any intangible assets of such
      business), the assets of which are collateral for such loan.

     

    “Business
      Day” means any day other than (i) a Saturday or Sunday or (ii) a day on
      which the New York Stock Exchange, the Federal Reserve Bank of New York, the
      Lender, the Servicer or the Collateral Agent is authorized or obligated by
      law
      or executive order to be closed.  Any action required to be taken on a
      day which falls on a day other than a Business Day shall be taken on the next
      Business Day.

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

    “Certification”
      shall have the meaning set forth in Section 3(a) of the Custodial
      Agreement.

     

    “Certification
      Date” means (i) with respect to the initial Funding Date, the date that is
      thirty (30) days after such date, (ii) with respect to the Funding Date for
      a
      Contract (as described in the related Contract Schedule) other than the initial
      Funding Date, such Funding Date, (iii) with respect to a Borrowing Base
      Deficiency Notice, the second (2nd) Business Day immediately succeeding the
      delivery of such Borrowing Base Deficiency Notice by the Borrower pursuant
      to
Section 7.01(m) of this Loan Agreement and (iv) with respect to the
      addition of a Substitute Contract to the pool of Eligible Contracts as a
      replacement for a Replaceable Contract, the Business Day on which such
      Substitute Contract is added to the pool of Eligible Contracts.

     

    “Change
      of Control” means any event or circumstance as a result of which (i) LEAF no
      longer owns 100% of the beneficial ownership of the Borrower, (ii) any Person
      or
“group” (within the meaning of Section 13(d) or 14(d) of the Securities Exchange
      Act) other than a Person or group that owns a majority of the beneficial
      ownership of a LEAF Party on the date of this Loan Agreement: (A) acquires
      beneficial ownership of 50.00% or more of any outstanding class of beneficial
      ownership of such LEAF Party having ordinary voting power in the election of
      directors or managers, as applicable, of such LEAF Party or (B) obtains the
      power (regardless of whether exercised) to elect a majority of such LEAF Party’s
      directors or managers, as applicable, (iii) either LEAF or the Borrower merges
      or consolidates with, or sells all or substantially all of its assets to, any
      other Person, or (iv) any two of the following four Persons shall cease to
      be
      employed by any LEAF Party in either (A) the position in which such Person
      was
      so employed as of the Closing Date or (B) a more senior position: Crit DeMent,
      Miles Herman, David H. English, and Nicholas Capparelli.

     

    “Closing
      Date” means June 19, 2007.

     

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

     

    “Collateral”
      shall have the meaning provided in Section 4.01(b) of this Loan
      Agreement.

     

    “Collateral
      Agent” means U.S. Bank National Association, as collateral agent under this
      Loan Agreement, the Custodial Agreement and the Servicing Agreement, and its
      successors and permitted assigns thereunder consented to by Lender.

     

    “Collection
      Account” means the account designated as such, established and maintained
      pursuant to Section 12.01(a) of this Loan Agreement.

     

    “Collection
      Account Property” means the Collection Account, all amounts and investments
      held from time to time in the Collection Account (whether in the form of deposit
      accounts, physical property, book-entry securities, uncertificated securities
      or
      otherwise) and all Proceeds of the foregoing.

     

    “Collection
      Period” means, with respect to any Contract and the first Payment Date after
      the Funding Date of such Contract, the period beginning on the Cut-Off Date
      with
      respect to such Contract and ending on the close of business on the last day
      of
      the calendar

     

    
      
        
        

      

      
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month
        immediately preceding the month of such first Payment Date.  With
        respect to any such Contract and each subsequent Payment Date, the calendar
        month immediately preceding such Payment Date.  Unless otherwise
        specified, any amount stated “as of the close of business on the last day of
        a Collection Period” shall be determined after giving effect to any
        Receivables received in respect of any Contract during such Collection Period
        and any charge-offs or any other account activity with respect to such Contract
        during such Collection Period (in each case, as of the end of the day on
        such
        last day) and the application of such Receivables to, and the effect of any
        such
        charge-offs or other account activity on, the due and unpaid Scheduled Payments
        on such Contract, the Implicit Principal Balance of such Contract and any
        fees,
        penalties or other amounts owed by the related Customer.

    

     

    “Commonly
      Controlled Entity” means, as to any Person, an entity, whether or not
      incorporated, which is under common control with such Person within the meaning
      of Section 4001 of ERISA or is part of a group which includes such Person and
      which is treated as a single employer under Section 414 of the
      Code.

     

    “Commitment
      Period” means the period commencing on the Effective Date and ending on the
      Business Day immediately preceding the Facility Termination Date.

     

    “Computer
      Tape” shall have the meaning provided in Section 2.01(k) of the
      Servicing Agreement.

     

    “Contract”
      means any contract for the lease or financing of Equipment executed by a
      Customer, and (i) identified on a Contract Schedule delivered to Lender (in
      electronic format substantially in the form of such Contract Schedule delivered
      on the Closing Date), (ii) which is subject to the security interest of the
      Collateral Agent, for the benefit of the Lender and the Hedge Counterparty,
      under this Loan Agreement and (iii) which has not been released from the Lien
      of
      the Collateral Agent as provided in Section 4.11 of this Loan
      Agreement.

     

    “Contract
      Documents” means, with respect to any Contract, (i) each Required Document
      (regardless of whether such document has been delivered to the Collateral Agent
      under the Custodial Agreement), and (ii) the Servicing Documents.

     

    “Contract
      Exception Report” shall have the meaning set forth in Section 3 of
      the Custodial Agreement.

     

    “Contract
      File” means, with respect to any Contract, all Required Documents related to
      such Contract.

     

    “Contract
      Schedule” means, with respect to any Certification Date, the schedule of
      Eligible Contracts (x) in respect of which an Advance is to be made on the
      related Funding Date, (y) which are to be pledged as additional Collateral
      in
      connection with the cure of a Borrowing Base Deficiency in accordance with
      Section 2.07(a)(ii), or (z) which are to be pledged as Substitute
      Contracts in connection with the removal of Replaceable Contracts in accordance
      with Sections 2.07(d) and 11.01(b), in electronic format
      acceptable to the Collateral Agent, to be annexed to the Custodial Agreement
      as
Exhibit 5, setting forth the following information with respect to
      each such Contract: (a) a number identifying the Contract, (b) the type of
      Contract, (c) the number identifying the Customer, (d) the name of the
      Customer, (e) the

     

    
      
        
        

      

      
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vendor’s
        name, (f) the state of the Customer’s billing address, (g) the zip
        code of the Customer’s billing address, (h) the Implicit Principal Balance,
        (i) the Delinquency status, (j) the remaining term, (k) the Scheduled
        Payment, (l) the aggregate amount of remaining Scheduled Payments, (m) the
        Equipment type, including a notation as to whether the Equipment is a titled
        vehicle, (n) the original cost of the Equipment and (o) a notation specifying
        which Contracts are Previously Financed Contracts, as such schedule may be
        amended upon any purchase of Contracts made in accordance with the terms
        of this
        Loan Agreement.

    

     

    “Contractual
      Obligation” means as to any Person, any provision of any agreement,
      instrument or other undertaking to which such Person is a party or by which
      it
      or any of its property is bound or any provision of any security issued by
      such
      Person.

     

    “Credit
      and Collection Policies of LEAF” means the credit and collections policies
      pursuant to which the Servicer services Contracts, a copy of which is annexed
      to
      the Servicing Agreement as Exhibit B thereto, as amended from time to
      time in accordance with Section 7.02(c) of this Loan
      Agreement.

     

    “Cumulative
      Net Loss” means, with respect to the last day of any Collection Period, the
      ratio of (a) the sum of (i) all credit losses or reserves recognized by the
      Borrower in accordance with GAAP and (ii) the Implicit Principal Balances (in
      each case, as of the date on which the Contract became a Defaulted Contract)
      of
      all Contracts that became Defaulted Contracts during the period between the
      Closing Date and the last day of such Collection Period, for which no loss
      or
      reserve has been recognized, to (b) the Aggregate Implicit Principal Balance
      of
      all Eligible Contracts as of their respective Funding Dates.

     

    “Custodial
      Agreement” means the Custodial Agreement, dated as of the date hereof, among
      the Borrower, the Collateral Agent, the Servicer and the Lender, substantially
      in the form of Exhibit B hereto, as the same may be amended, supplemented
      or otherwise modified from time to time in accordance with the terms
      thereof.

     

    “Customer”
      means, with respect to each Contract, the lessee under such Contract, including
      any guarantor of such lessee and its successors and assigns.

     

    “Cut-Off
      Date” means with respect to any Contract, the date specified in the Notice
      of Borrowing and Pledge with respect to the Advance to which such Contract
      relates.

     

    “Damages”
      shall have the meaning provided in Section 5.01(a) of the Servicing
      Agreement.

     

    “Default”
      means an Event of Default or any condition, act or event that with notice or
      lapse of time or both would constitute an Event of Default.

     

    “Defaulted
      Contract” means any Contract as of the earliest of (i) the Accounting
      Date as of which any one Scheduled Payment with respect to such Contract
      (aggregating together, for purposes of determining such amount, all due and
      unpaid Scheduled Payments, or due and unpaid portions of one or more Scheduled
      Payments) has not been received by the Servicer and remains unpaid for a period
      of 181 or more days as of such Accounting Date (determined without giving effect
      to any Servicer Advances) and (ii) the date on which the

     

    
      
        
        

      

      
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Servicer
        determines in accordance with its customary practice that the remaining
        scheduled payments under the related Contract are deemed to be fully or
        partially uncollectible; provided, however, that no
        extension of a Contract in accordance with Section 3.01(c)(v) of the
        Servicing Agreement shall be taken into account in the determination as to
        whether a Contract shall be a Defaulted Contract with respect to any date
        of
        determination during the calendar month in which such extension shall have
        been
        granted.

    

     

    “Deficiency”
      means a failure of a document to correspond to the information on the Contract
      Schedule or the absence of a Required Document from a Contract File pursuant
      to
Section 2 of the Custodial Agreement.

     

    “Deficiency
      Claim Amount” has the meaning assigned to such term in
Section 12.02(f) of this Loan Agreement.

     

    “Deficiency
      Notice” has the meaning assigned to such term in
Section 12.02(f) of this Loan Agreement.

     

    “Delinquent
      Contract” means a Contract which is not a Defaulted Contract and for which
      the related Customer is more than 31 days contractually delinquent with respect
      to more than 10.00% of a Scheduled Payment (without giving effect to any
      applicable grace periods); provided, however, that no
      extension of a Contract in accordance with Section 3.01(c)(v) of the
      Servicing Agreement shall be taken into account in the determination as to
      whether a Contract shall be a Delinquent Contract with respect to any date
      of
      determination during the calendar month in which such extension shall have
      been
      granted.

     

    “Delivery”
      means with respect to assets held in the Collection Account or the Reserve
      Account, as the case may be:

     

    (1)           (a)           with
      respect to bankers’ acceptances, commercial paper, negotiable certificates of
      deposit and other obligations that constitute “instruments” within the meaning
      of Section 9-102(a)(47) of the UCC, transfer thereof:

     

    (i)           by
      physical delivery to the Securities Intermediary, indorsed to, or registered
      in
      the name of, the Securities Intermediary or the Collateral Agent or either
      of
      their nominees or indorsed in blank;

     

    (ii)           by
      the Securities Intermediary continuously maintaining possession of such
      instrument in the State of New York; and

     

    (iii)           by
      the Securities Intermediary continuously indicating by book-entry that such
      instrument is credited to the Collection Account or the Reserve Account, as
      the
      case may be;

     

    (b)           with
      respect to a “certificated security” (as defined in Section 8-102(a)(4) of the
      UCC), transfer thereof:

     

    (i)           by
      physical delivery of such certificated security to the Securities Intermediary,
      provided that if the certificated security is in registered form, it
      shall

     

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        
be
        indorsed to, or registered in the name of, the Securities Intermediary or
        the
        Collateral Agent or indorsed in blank;

    

     

    (ii)           by
      the Securities Intermediary continuously maintaining possession of such
      certificated security in the State of New York; and

     

    (iii)           by
      the Securities Intermediary continuously indicating by book-entry that such
      certificated security is credited to the Collection Account or the Reserve
      Account, as the case may be;

     

    (c)           with
      respect to any security issued by the U.S. Treasury, the Federal Home Loan
      Mortgage Corporation or the Federal National Mortgage Association that is a
      book-entry security held through the Federal Reserve System pursuant to Federal
      book-entry regulations, the following procedures, all in accordance with
      applicable law, including applicable federal regulations and Articles 8 and
      9 of the UCC, transfer thereof:

     

    (i)           by
      (x) book-entry registration of such property to an appropriate book-entry
      account maintained with a Federal Reserve Bank by a security intermediary which
      is also a “depositary” pursuant to applicable federal regulations and issuance
      by such securities intermediary of a deposit advice or other written
      confirmation of such book-entry registration to the Securities Intermediary
      of
      the purchase by the securities intermediary on behalf of the Securities
      Intermediary of such book-entry security; the making by such securities
      intermediary of entries in its books and records identifying such book-entry
      security held through the Federal Reserve System pursuant to Federal book-entry
      regulations as belonging to the Securities Intermediary and continuously
      indicating that such securities intermediary holds such book-entry security
      solely as agent for the Securities Intermediary or (y) continuous
      book-entry registration of such property to a book-entry account maintained
      by
      the Securities Intermediary with a Federal Reserve Bank; and

     

    (ii)           by
      the Securities Intermediary continuously indicating by book-entry that property
      is credited to the Collection Account or the Reserve Account, as the case may
      be;

     

    (d)           with
      respect to any asset in the Collection Account or the Reserve Account, as the
      case may be, that is an “uncertificated security” (as defined in
      Section 8-102(a)(18) of the UCC) and that is not governed by
      clause (c) above or clause (e) below:

     

    (i)           transfer
      thereof:

     

    (A)           by
      registration to the Securities Intermediary or the Collateral Agent as the
      registered owner thereof, on the books and records of the issuer thereof;
      or

     

    (B)           by
      another Person (not a securities intermediary) who either becomes the registered
      owner of the uncertificated security on behalf of the

     

    
      
        
        

      

      
        A-8

        
          

        

      

      
        
        

      

    

    Securities
      Intermediary, or having become the registered owner, acknowledges in writing
      that it holds for the Securities Intermediary; or

     

    (ii)           the
      issuer thereof has agreed that it will comply with instructions originated
      by
      the Securities Intermediary with respect to such uncertificated security without
      further consent of the registered owner thereof; or

     

    (e)           in
      the case of each security in the custody of or maintained on the books of a
      clearing corporation (as defined in Section 8-102(a)(5)) or its nominee, by
      causing:

     

    (i)           the
      relevant clearing corporation to credit such security to a securities account
      of
      the Securities Intermediary at such clearing corporation; and

     

    (ii)           the
      Securities Intermediary to continuously indicate by book-entry that such
      security is credited to the Collection Account or the Reserve Account, as the
      case may be;

     

    (f)           with
      respect to a “security entitlement” (as defined in Section 8-102(a)(17) of
      the UCC) to be transferred to or for the benefit of the Securities Intermediary
      and not governed by clauses (c) or (e) above:  if a securities
      intermediary (A) indicates by book-entry that the underlying “financial
      asset” (as defined in Section 8-102(a)(9) of the UCC) has been credited to
      be the Securities Intermediary’s “securities account” (as defined in
      Section 8-501(a) of the UCC), (B) receives a financial asset from the
      Securities Intermediary or acquires the underlying financial asset for the
      Securities Intermediary, and in either case, accepts it for credit to the
      Securities Intermediary’s securities account or (C) becomes obligated under
      other law, regulation or rule to credit the underlying financial asset to the
      Securities Intermediary’s securities account, the making by the securities
      intermediary of entries on its books and records continuously identifying such
      security entitlement as belonging to the Securities Intermediary and
      continuously indicating by book-entry that such securities entitlement is
      credited to the Securities Intermediary’s securities account; and by the
      Securities Intermediary continuously indicating by book-entry that such security
      entitlement (or all rights and property of the Securities Intermediary
      representing such securities entitlement) is credited to the Collection Account
      or the Reserve Account, as the case may be; and

     

    (g)           with
      respect to cash or money, by:

     

    (i)
      the
      delivery of such cash or money to the Securities Intermediary,

     

    (ii)
      the
      Securities Intermediary treating such cash or money as a financial asset
      maintained by such Securities Intermediary for credit to the Collection Account
      or the Reserve Account, as the case may be, in accordance with the provisions
      of
      Article 8 of the UCC, and

     

    
      
        
        

      

      
        A-9

        
          

        

      

      
        
        

      

    

    (iii)
      the
      Securities Intermediary continuously indicating by book-entry that such cash
      or
      money is credited to the Collection Account or the Reserve Account;
      and

     

    (2)           In
      the case of any such asset, such additional or alternative procedures as are
      now
      or may hereafter become appropriate to effect the complete transfer of ownership
      of, or control over, any such assets in the Collection Account or the Reserve
      Account, as the case may be, to the Securities Intermediary free and clear
      of
      any adverse claims, consistent with changes in applicable law or regulations
      or
      the interpretation thereof.

     

    In
      each
      case of delivery contemplated herein, the Securities Intermediary shall make
      appropriate notations on its records, and shall cause the same to be made on
      the
      records of its nominees, indicating that securities are held in trust pursuant
      to and as provided in this Agreement.

     

    “Determination
      Date” means, with respect to any Collection Period, the fourth Business Day
      preceding the Payment Date in the next calendar month.

     

    “Discount
      Rate” means, with respect to each Contract and any date of determination, a
      rate equal to the sum of (x) as applicable, either (i) the related Fixed Swap
      Rate or (ii) the lowest strike rate price related to any outstanding interest
      rate cap, (y) the Applicable Margin and (z) 1.10%.

     

    “Dollars”
      and “$” means lawful money of the United States of America.

     

    “Effective
      Date” means the date upon which the conditions precedent set forth in
Section 5.01 shall have been satisfied.

     

    “Electronic
      Ledger” means the electronic master record of the Contracts.

     

    “Eligible
      Account” means either (a) a segregated trust account with an Eligible Bank
      or (b) a segregated trust account with the corporate trust department of a
      depository institution with corporate trust powers organized under the laws
      of
      the United States of America or any state thereof or the District of Columbia
      (or any United States branch or agency of a foreign bank), provided that such
      institution also must have a rating of “P-1” or higher from Moody’s and of
“A-1+” or higher from Standard & Poor’s with respect to long-term deposit
      obligations and must be acceptable to the Lender and the
      Borrower.  Such Eligible Bank or depository institution (other than
      the Collateral Agent) shall have been approved in writing by the Lender and
      the
      Borrower.

     

    “Eligible
      Bank” means any depository institution (which shall initially be the
      Collateral Agent) acceptable to the Lender and the Borrower, organized under
      the
      laws of the United States of America or any one of the states thereof or the
      District of Columbia (or any United States branch or agency of a foreign bank),
      which is subject to supervision and examination by federal or state banking
      authorities and which at all times (a) has a net worth in excess of $100,000,000
      and (b) has either (i) a rating of “P-1” or higher from Moody’s and of “A-1+” or
      higher from Standard & Poor’s with respect to short-term deposit
      obligations, or (ii) if such institution has issued long-term unsecured debt
      obligations, a rating of “Aa2” or higher

     

    
      
        
        

      

      
        A-10

        
          

        

      

      
        
        
from
        Moody’s and of “AA” or higher from Standard & Poor’s with respect to
        long-term unsecured debt obligations.  Such depository institution
        (other than the Collateral Agent) shall have been approved in writing by
        the
        Lender.

    

     

    “Eligible
      Contract” means a Contract which satisfies the eligibility characteristics
      set forth on Exhibit D hereto on and as of the applicable Certification
      Date and which continues to satisfy such eligibility characteristics at all
      times thereafter while such Eligible Contract is included in the Borrowing
      Base.

     

    “Engagement
      Letter” means the Engagement Letter dated as of June 5, 2007, between WestLB
      and LEAF.

     

    “Equipment”
      means the equipment financed or leased to Customers pursuant to the Contracts,
      together with any replacement parts, additions and repairs thereof, and any
      accessories incorporated therein and/or affixed thereto.

     

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

     

    “Event
      of Default” shall have the meaning provided in Section 8.01 of this
      Loan Agreement.

     

    “Expected
      Facility Termination Date” means the third anniversary of the Closing Date,
      subject to extension in accordance with Section 2.11.

     

    “Facility
      Account Property” means the Collection Account Property and/or the Reserve
      Account Property, as the case may be.

     

    “Facility
      Termination Date” means the earlier to occur of (a) the Expected Facility
      Termination Date, (b) the date on which an Event of Default occurs and is not
      cured or waived and (c) the date on which a Facility Termination Event
      occurs.

     

    “Facility
      Termination Event” means the occurrence of any of the
      following:  (i) an Event of Default, (ii) the average of the
      Annualized Default Ratios on the Serviced Portfolio for the three most recently
      ended Collection Periods exceeds 2.50%, (iii) the average of the NPA Ratios
      for
      the Serviced Portfolio for the three most recently ended Collection Periods
      equals or exceeds 2.00%, (iv) the average of the NPA Ratios for the Securitized
      Portfolio for the three most recently ended Collection Periods equals or exceeds
      1.50% or (v) the Cumulative Net Loss exceeds the applicable percentages
      found in the column titled “Facility Termination Event” in the definition of
“Static Pool Test”; provided, however, that any such Facility
      Termination Event (other than clause (ii)) may be waived by the
      Lender.

     

    “FDIC”
      means the Federal Deposit Insurance Corporation.

     

    “Final
      Due Date” means, with respect to each Contract, the final date on which
      payment is due thereunder.

     

    “Final
      Payment Date” shall mean August 21, 2017.

     

    
      
        
        

      

      
        A-11

        
          

        

      

      
        
        

      

    

    “Financing
      Facility Lenders” shall have the meaning provided in Section 7.02(d)
      of this Loan Agreement.

     

    “Fixed
      Swap Rate” means, with respect to each Contract and any date of
      determination, the fixed rate payable by the Borrower under the Interest Rate
      Hedging Transaction entered into with respect to the related Funding
      Date.

     

    “Forms
      of Contract” means the forms of Contract attached hereto as Exhibit
      E, as such forms may be amended or supplemented from time to time in
      accordance with Section 7.02(c) of this Loan Agreement; provided that
      Contracts acquired from a Person other than a LEAF Party may not be in the
      form
      of any form attached to Exhibit E.

     

    “Funding
      Date” means the date on which an Advance is made; provided,
however, that, with respect to a Substitute Contract, the representations
      and warranties set forth in Section 3.01(a) of the Acquisition Agreement
      and each of the Eligibility Criteria set forth in Exhibit D to this Loan
      Agreement, “Funding Date” shall mean the Business Day on which such Substitute
      Contract is added to the pool of Eligible Contracts.

     

    “Funding
      Date Documentation” means, with respect to any Contract:

     

    (A)           the
      one and only executed original counterpart of such Contract in LEAF’s
      possession, or a machine copy thereof certified by an officer of LEAF that
      such
      copy is a true and complete copy thereof;

     

    (B)           copies
      of an insurance policy, if any, evidence of insurance, if any, and any other
      copies of documents evidencing or related to any insurance policy with respect
      to such Contract;

     

    (C)           copies
      of all UCC financing statements required to be filed to perfect the security
      interest in the related Equipment and all other Collateral related thereto,
      including (1) file-stamped copies of all UCC-1 financing statements required
      to
      be filed to perfect LEAF’s security interest in such Contract and all other
      Collateral related thereto, or (2) to the extent any such financing statements
      are not available at the time of the related Advance, evidence that the
      originator has, in a timely manner, directed a nationally recognized search
      company to file such financing statements, file stamped copies of which shall
      be
      provided to the Collateral Agent promptly upon receipt from such search
      company;

     

    (D)           copies
      of evidence of a guaranty, if any, and any other copies of documents evidencing
      or relating to any guaranty with respect to such Contract; and

     

    (E)           copies
      of any additional documents—other than Servicing Documents—that LEAF keeps on
      file with respect to such Contract.

     

    “Funding
      Date Reserve Account Deposit” means, with respect to each Advance, an amount
      equal to the lesser of (a) the amount of such Advance or (b) the excess, if
      any,
      of (i) 

    
      
        
        

      

      
        A-12

        
          

        

      

      
        
        
the
        Required Reserve Account Amount (after giving effect to such Advance) over
        (ii)
        the Reserve Account Available Amount on the Funding Date (prior to giving
        effect
        to such Advance).

    

     

    “GAAP”
      means generally accepted accounting principles as in effect from time to time
      in
      the United States of America, applied on a consistent basis.

     

    “Governmental
      Authority” means any nation or government, any state or other political
      subdivision thereof, any entity exercising executive, legislative, judicial,
      regulatory or administrative functions of or pertaining to government and any
      court or arbitrator having jurisdiction over any LEAF Party or any of its
      properties.

     

    “Guarantee”
      means, as to any Person (the “Guaranteeing person”), any obligation of
      the Guaranteeing person guaranteeing or in effect guaranteeing any Indebtedness,
      leases, dividends or other obligations (the “primary obligations”) of any
      other third Person (the “primary obligor”) in any manner, whether
      directly or indirectly, including, without limitation, any obligation of the
      Guaranteeing person, whether or not contingent, (i) to purchase any such primary
      obligation or any property constituting direct or indirect security therefor,
      (ii) to advance or supply funds (1) for the purchase or payment of any such
      primary obligation or (2) to maintain working capital or equity capital of
      the
      primary obligor or otherwise to maintain the net worth or solvency of the
      primary obligor, (iii) to purchase property, securities or services primarily
      for the purpose of assuring the owner of any such primary obligation of the
      ability of the primary obligor to make payment of such primary obligation or
      (iv) otherwise to assure or hold harmless the owner of any such primary
      obligation against loss in respect thereof; provided, however,
      that the term Guarantee shall not include the endorsements of instruments for
      deposit or collection in the ordinary course of business. The amount of any
      guarantee of any Guaranteeing person shall be deemed to be the lower of (a)
      an
      amount equal to the stated or determinable amount of the primary obligation
      in
      respect of which such Guarantee is made and (b) the maximum amount for which
      such Guaranteeing person may be liable pursuant to the terms of the instrument
      embodying such Guarantee, unless such primary obligation and the maximum amount
      for which such Guaranteeing person may be liable are not stated or determinable,
      in which case the amount of such Guarantee shall be such Guaranteeing person’s
      maximum reasonably anticipated liability in respect thereof as determined by
      the
      Guaranteeing person in good faith.

     

    “Guaranty
      Amounts” means, with respect to any Contract, any and all amounts paid by
      any guarantor indicated on such Contract.

     

    “Hedge
      Counterparty” means WestLB AG, New York Branch or any successor to or
      assignee of WestLB AG, New York Branch under the Interest Rate Hedging Agreement
      acceptable to the Borrower.

     

    “Hedging
      Strategy” means an interest rate hedging strategy entered into by the
      Borrower for the purpose of providing protection against fluctuations in
      interest rates, pursuant to which strategy, with respect to each Payment Date
      and all Advances made since the immediately preceding Payment Date, the Borrower
      will enter into an Interest Rate Hedging Transaction with the Hedge Counterparty
      whereby the Borrower will make payments to the Hedge Counterparty based on
      a
      certain fixed rate and will receive from the Hedge Counterparty
      Swap

     

    
      
        
        

      

      
        A-13

        
          

        

      

      
        
        
Payments
        based on the LIBOR Rate, all with respect to a notional amount equal to the
        Total Outstanding Advances as of the date of such Interest Rate Hedging
        Transaction (including, without limitation, the aggregate sum of the Advances
        made since the immediately preceding Payment Date).

    

     

    “Implicit
      Principal Balance” means, with respect to any Contract, as of any date of
      determination, the present value of the remaining stream of Scheduled Payments
      due with respect to such Contract as of the applicable Accounting Date, and
      calculated by discounting such Scheduled Payments (assuming each Scheduled
      Payment is received on the last day of its related Collection Period) to such
      Accounting Date at an annual rate equal to the Discount Rate, compounded
      monthly; provided, however, that immediately after the payment to
      the Lender of the Release Price in respect of any Contract, the Implicit
      Principal Balance of such Contract shall be zero; providedfurther
      that with respect to any Contract that has become a Defaulted Contract, the
      Implicit Principal Balance shall be zero (except when used in the definition
      of
“Release Price”); providedfurther that such deemed reduction to
      zero of the Implicit Principal Balance of such Defaulted Contract (pursuant
      to
      the immediately preceding proviso) shall not constitute a release by the
      Collateral Agent of its security interest in such Defaulted
      Contract.

     

    “Indebtedness”
      means with respect to any Person, without duplication, (a) all obligations
      of
      such Person for borrowed money, (b) all obligations of such Person evidenced
      by
      bonds, debentures, notes or similar instruments, (c) all indebtedness of others
      secured by (or for which the holder of such indebtedness has an existing right,
      contingent or otherwise, to be secured by) any Lien on property owned or
      acquired by such Person, whether or not the obligations secured thereby have
      been assumed (only to the extent of the fair market value of such asset if
      such
      indebtedness has not been assumed by such Person), (d) all Guarantees of such
      Person, (e) all capitalized lease obligations of such Person, and (f) all
      obligations of such Person as an account party in respect of letters of credit
      and similar instruments issued for the account of such Person.

     

    “Indemnified
      Party” has, when used herein, the meaning assigned to such term in
Section 14.03(a) of this Loan Agreement, and, when used in the Servicing
      Agreement, has the meaning assigned to such term in Section 5.01 of the
      Servicing Agreement.

     

    “Independent
      Accountants” means any firm of independent certified public accountants of
      recognized national standing and reasonably acceptable to the
      Lender.

     

    “Insurance
      Proceeds” means, with respect to any Contract, any item of Equipment subject
      to such Contract and any Collection Period, any casualty amount received during
      such Collection Period pursuant to an insurance policy issued with respect
      to
      such Equipment and the related Contract, net of any costs of collecting such
      amounts not otherwise reimbursed.

     

    “Intercreditor
      Agreement” means the Amended and Restated Intercreditor Agreement dated as
      of March 30, 2007 among Sovereign Bank, a national banking association, OFC
      Capital, a division of ALFA Financial Corporation, an Alabama corporation,
      National City Commercial Capital Corporation f/k/a Information Leasing
      Corporation, an Ohio corporation, Commerce Bank, National Association, a
      national banking association, National City Bank, a national banking
      association, Merrill Lynch Equipment Finance LLC, a Delaware
      limited

     

    
      
        
        

      

      
        A-14

        
          

        

      

      
        
        
liability
        company, Merrill Lynch Commercial Finance Corp., a Delaware corporation,
        LEAF
        Institutional Direct Management, LLC, a Delaware limited liability company,
        Lease Equity Appreciation Fund I, L.P., a Delaware limited partnership, Lease
        Equity Appreciation Fund II, L.P., a Delaware limited partnership, LEAF Funding,
        Inc., a Delaware corporation, LEAF Fund I, LLC, a Delaware limited liability
        company, LEAF Fund II, LLC, a Delaware limited liability company, RCC
        Commercial, Inc., a Delaware corporation, Resource Capital Funding, LLC,
        a
        Delaware limited liability company, Black Forest Funding Corporation, Bayerische
        Hypo- Und Vereinsbank AG, New York Branch, the Servicer, the Borrower, the
        Lender and U.S. Bank National Association and such other Persons who may
        be
        parties thereto.

    

     

    “Interest
      Carryover Shortfall” means, with respect to any Advance and any Payment
      Date, the excess of the Interest Payment Amount for such Advance for the
      immediately preceding Payment Date over the amount in respect of interest on
      such Advance that was actually paid to Lender on such preceding Payment Date,
      plus interest (calculated on the basis of the actual number of days elapsed
      in
      the Accrual Period for such Advance and a 360-day year) on the amount of
      interest due but not paid to Lender on the preceding Payment Date, to the extent
      permitted by applicable law, at a per annum rate equal to the sum of the LIBOR
      Rate for such Advance plus the Applicable Margin.

     

    “Interest
      Payment Amount” means, with respect to any Advance and any Payment Date,
      interest (calculated on the basis of the actual number of days elapsed in the
      Accrual Period for such Advance and a 360-day year) accrued on such Advance
      during the applicable Accrual Period for such Advance equal to the sum of the
      LIBOR Rate for a period of one month plus the Applicable Margin.

     

    “Interest
      Rate Hedging Agreement” means an ISDA Master Agreement and Schedule thereto
      entered into between the Borrower and the Hedge Counterparty, substantially
      in
      the form of Exhibit C to this Loan Agreement.

     

    “Interest
      Rate Hedging Transaction” means a transaction that is entered into under an
      Interest Rate Hedging Agreement, the terms of which are reflected on a
      confirmation that is executed by the Borrower and the Hedge
      Counterparty.

     

    “Interim
      Certification” means a lease schedule and exception report in form and
      substance reasonably satisfactory to Lender.

     

    “Investment
      Company Act” means the Investment Company Act of 1940, as
      amended.

     

    “Investment
      Earnings” means, with respect to each of the Collection Account and the
      Reserve Account, the investment earnings on amounts on deposit in the applicable
      account.

     

    “LEAF”
      means LEAF Equipment Leasing Income Fund III, L.P., a Delaware limited
      partnership.

     

    “LEAF
      Originator” means LEAF Funding, Inc.

     

    “LEAF
      Parties” means the Borrower, the Servicer, LEAF Originator and
      LEAF.

     

     

    
      
        
        

      

      
        A-15

        
          

        

      

      
        
        

      

    

                    
      “Lender” means WestLB AG, New York Branch and its successors and assigns
      under the Loan Agreement.

     

    “Lender
      Authorization Date” means the second Business Day immediately preceding each
      Payment Date.

     

    “LIBOR
      Rate” means that the rate for a Reset Date will be the rate for deposits in
      U.S. Dollars for a period of one month which appears on the Telerate Page 3750
      as of 11:00 a.m., London time, on the day that is two (2) London Banking Days
      preceding that Reset Date; provided, however, that, if such rate
      does not appear on the Telerate Page 3750, the LIBOR Rate for that Reset Date
      shall be determined pursuant to the Reference Banks LIBOR Determination Method;
      providedfurther that if such rate cannot be calculated by the
      above methods, the LIBOR Rate will be the Base Rate.

     

    “Lien”
      means any mortgage, pledge, hypothecation, assignment, deposit arrangement,
      encumbrance, lien (statutory or other), charge or other security interest or
      any
      preference, priority or other security agreement or preferential arrangement
      of
      any kind or nature whatsoever (including, without limitation, any conditional
      sale or other title retention agreement and any financing lease having
      substantially the same economic effect as any of the foregoing).

     

    “Lien
      Certificate” means, with respect to any item of Equipment with respect to
      which a Lien Certificate is necessary to perfect a security interest in such
      Equipment, an original certificate of title, certificate of lien or other
      notification issued by the Registrar of Titles of the applicable state to a
      secured party that indicates that the lien of the secured party on such
      Equipment is recorded on the original certificate of title.

     

    “Loan
      Agreement” means the Secured Loan Agreement, as the same may be amended,
      supplemented or otherwise modified from time to time in accordance with the
      terms hereof.

     

    “Loan
      Documents” means, collectively, this Loan Agreement, the Note, the Custodial
      Agreement, the Servicing Agreement, the Acquisition Agreement, the Interest
      Rate
      Hedging Agreement, the Intercreditor Agreement and all other documents and
      instruments executed and delivered in connection herewith or
      therewith.

     

    “Lockbox
      Account” means the account maintained in the name of the Securities
      Intermediary as agent for certain parties to the Intercreditor Agreement,
      including the Collateral Agent on behalf of the Lender and the Hedge
      Counterparty, into which account shall be deposited all Receivables that
      constitute remittances of payments (including, without limitation, Scheduled
      Payments and prepayments) in respect of Contracts by Customers, and as to which
      solely U.S. Bank National Association, as collateral agent, custodian or paying
      agent for the various certain entities with interests in such account, shall
      have the ability to withdraw funds.

     

    “Lockbox
      Agreement” means the Treasury Management Services Terms and Conditions of
      the Lockbox Bank, together with all amendments and supplements
      thereto.

     

    “Lockbox
      Bank” means, initially, U.S. Bank National Association, in its capacity as
      securities intermediary on behalf of the parties to the Intercreditor Agreement,
      and any successor thereto.

     

    
      
        
        

      

      
        A-16

        
          

        

      

      
        
        

      

    

    “London
      Banking Day” means a Business Day on which trading in Dollars is conducted
      by and between banks in the London interbank market.

     

    “Material
      Adverse Change” means a material adverse change in, or the disclosure or
      discovery of any information not previously disclosed to Lender which Lender
      deem material and adverse relating to, the business, operations, properties,
      condition (financial or otherwise) or prospects of any LEAF Party, in each
      case,
      individually, or with its respective Subsidiaries, taken as a
      whole.  Any determination as to whether any change, effect, event,
      occurrence or circumstance constitutes a Material Adverse Change shall be made
      in accordance with a standard of good faith and commercial reasonableness with
      respect to the facts and circumstances then prevailing.

     

    “Material
      Adverse Effect” means a material adverse effect on (a) the Contracts,
      (b) the property, business or financial condition of any LEAF Party (c) the
      ability of any LEAF Party to perform its obligations under any of the Loan
      Documents to which it is a party, (d) the validity or enforceability of any
      of the Loan Documents, (e) the rights and remedies of the Lender under any
      of the Loan Documents, (f) solely with respect to any determination related
      to the obligations of the Borrower, the timely payment of the principal of
      or
      interest on the Advances or other amounts payable in connection therewith,
      (g)
      the enforceability or collectibility of a material portion of the Contracts
      or
      (h) the Collateral.

     

    “Maximum
      Advance Amount” means, as of any date of determination, the largest amount
      of Total Outstanding Advances that have been outstanding at any one time during
      the period from the Closing Date up to and including such date of determination,
      which amount shall not be in excess of Maximum Facility Amount.

     

    “Maximum
      Facility Amount” means $200,000,000.

     

    “Minimum
      Advance Amount” means $1,000,000.

     

    “Monthly
      Interest Payment Amount” means, with respect to any Payment Date, the
      aggregate of the Interest Payment Amounts with respect to each Advance for
      such
      Payment Date, in each case together with any related Interest Carryover
      Shortfall for such Payment Date and such Advance.

     

    “Monthly
      Principal Payment Amount” means, with respect to any Payment Date, the
      amount necessary to reduce the Total Outstanding Advances to an amount equal
      to
      the Borrowing Base, in each case calculated as of the opening of business on
      such Payment Date.

     

    “Monthly
      Servicer’s Report” means an Officers’ Certificate of the Servicer delivered
      pursuant to Section 4.01 of the Servicing Agreement, substantially in the
      form of Exhibit A of the Servicing Agreement.

     

    “Moody’s”
      means Moody’s Investors Service, Inc., or its successor.

     

    
      
        
        

      

      
        A-17

        
          

        

      

      
        
        

      

    

    “Multiemployer
      Plan” means a Plan which is a multiemployer plan as defined in Section
      4001(a)(3) of ERISA.

     

    “Non-Excluded
      Taxes” shall have the meaning provided in Section 2.12 of this Loan
      Agreement.

     

    “Non-Performing
      Asset” means a Contract which is not a Defaulted Contract and for which a
      related Customer is more than 121 days contractually delinquent.

     

    “Non-Use
      Fee” means, with respect to any Payment Date, a fee in an amount equal to
      the product of (a) one-twelfth (1/12th), (b) 0.35%, and (c) the Maximum Facility
      Amount minus the daily average Total Outstanding Advances during the preceding
      calendar month.

     

    “Nonrecoverable
      Advance” means a Servicer Advance that the Servicer determines in good
      faith, and in accordance with its customary servicing practices, is unlikely
      to
      be eventually repaid from Scheduled Payments made by or on behalf of the related
      Customer in accordance with Section 3.04 of the Servicing
      Agreement.

     

    “Note”
      shall have the meaning assigned to such term in Section 2.02(a) of this
      Loan Agreement.

     

    “Notice
      of Borrowing and Pledge” shall have the meaning provided in
Section 2.03(a) of this Loan Agreement.

     

    “NPA
      Ratio” means, with respect to any Collection Period, the fraction, expressed
      as a percentage, equal to (a) the sum of the Implicit Principal Balances
      (in each case, as of the date on which the Contract became a Non-Performing
      Asset) of all Contracts that became Non-Performing Assets during the related
      Collection Period, to (b) the Aggregate Implicit Principal Balance of all
      Eligible Contracts as of the close of business on the last day of such
      Collection Period.

     

    “Officers’
      Certificate” means a certificate signed by the chairman of the board, the
      president, any executive vice president, any vice president, any treasurer
      or
      secretary of the Borrower or the Servicer, as appropriate.

     

    “Opinion
      of Counsel” means an opinion of counsel acceptable to the Lender, in form
      and substance acceptable to the Lender.

     

    “Originator”
      means (a) a leasing company (including, without limitation, LEAF Funding, Inc.)
      that leased an item of Equipment to a Customer and that originated and assigned
      the respective Contract to LEAF Funding, Inc. or (b) a third party (which in
      no
      event shall be an Affiliate of LEAF) who purchased a Contract from the
      originator of such Contract and who sold such Contract to LEAF.

     

    “Other
      Financing Facility” means one or more financing facilities, including
      repurchase facilities and warehouse lines of credit, entered into by LEAF or
      any
      of its Affiliates pursuant to which one or more lenders provide funding to
      LEAF
      or any of its Affiliates (or any

    
      
        
        

      

      
        A-18

        
          

        

      

      
        
        
trust
        or
        similar limited purpose entity formed to facilitate such financing) for the
        purpose of financing the origination or purchase of leases.

    

     

    “Other
      Lenders” means any Person who provides financing to, or is entitled to
      receive payments from, LEAF or any of its Affiliates pursuant to any Other
      Financing Facility.

     

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

     

    “Payment
      Date” means (i) the 21st day
      of each month
      (or if such day is not a Business Day, the next succeeding Business Day)
      beginning on August 21, 2007, (ii) each other Business Day on which a
      prepayment of the Advances is required under Section 2.07 of this Loan
      Agreement, (iii) each Prepayment Date, (iv) the Facility Termination Date,
      (v)
      each day on which the Borrower is required to make a payment to the Hedge
      Counterparty under an Interest Rate Hedging Agreement and (vi) each Business
      Day
      after the occurrence of an Event of Default and following the acceleration
      of
      the Total Outstanding Advances pursuant to Section 9.01 of this Loan
      Agreement that is designated by the Lender as a Payment Date.

     

    “Payoff
      Letter” means a letter that (i) is addressed to the Borrower or LEAF, (ii)
      is signed by a Prior Lender, (iii) identifies particular Previously Financed
      Contracts, (iv) specifies that, upon receipt of a specified dollar amount by
      such Prior Lender, all Liens and other interests of such Prior Lender in such
      Contracts shall automatically be released and, if applicable, transferred to
      the
      LEAF or Borrower, without any further action by any Person and (v) delivers
      to
      the Lender (or its agent) and the Collateral Agent executed original partial
      or
      full releases, as applicable, with respect to such Contracts for filing in
      appropriate UCC recording offices, and authorizes the Lender (or the Collateral
      Agent at the direction of the Lender) to file such releases upon the receipt
      of
      such specified dollar amount.

     

    “PBGC”
      means the Pension Benefit Guaranty Corporation or any entity succeeding to
      any
      or all of its functions under ERISA.

     

    “Permitted
      Advance Date” means, during the Commitment Period, but in no event more
      often than once per week, the date that is three (3) Business Days following
      the
      Borrower’s delivery of a Notice of Borrowing and Pledge to the
      Lender.

     

    “Permitted
      Encumbrances” means (i) the interests of the Customer under the Contract;
      (ii) any Liens for taxes, assessments, levies, fees and other governmental
      and similar charges not due and payable; (iii) any Liens with respect to
      any mechanics, suppliers, material, men, 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; (iv) the Lien and security interest granted to the
      Collateral Agent under and pursuant to the Loan Agreement, and the respective
      rights of the Lender, the Collateral Agent, Custodian, the Backup Servicer
      and
      the Servicer under the Loan Documents; (v) salvage rights of insurers with
      respect to the equipment subject to a Contract under insurance policies
      maintained pursuant to the Loan Documents or a Contract; and (vi) the Lien
      and security interest

     

    
      
        
        

      

      
        A-19

        
          

        

      

      
        
        
in
        the
        rights of a Customer under the Contract granted by the Customer to the
        lessor/lender under the Contract.

    

     

    “Permitted
      Investments” means:

     

    (i)           Direct
      obligations of, and obligations fully guaranteed as to timely payment by, the
      United States of America;

     

    (ii)           
      Demand deposits, time deposits or certificates of deposit of any depository
      institution or trust company incorporated under the laws of the United States
      of
      America or any state thereof (or any domestic branch of a foreign bank) and
      subject to supervision and examination by federal or state banking or depository
      institution authorities; provided, however, that at the time of
      the investment or contractual commitment to invest therein, the commercial
      paper
      or other short-term unsecured debt obligations (other than such obligations
      the
      rating of which is based on the credit of a Person other than such depository
      institution or trust company) thereof shall have a short-term credit rating
      of
“A-1+” or better by S&P and “P-1” or better from Moody’s;

     

    (iii)           Commercial
      paper having, at the time of the investment or contractual commitment to invest
      therein, a rating from Moody’s of “P-1” or better and a rating of “A-1+” or
      better from S&P;

     

    (iv)           Investments
      in money market funds having a rating from Moody’s of “P-1” or better and a
      rating of “A-1+” or better from S&P (which may be managed by the Collateral
      Agent or its Affiliates);

     

    (v)           Demand
      deposits, time deposits and certificates of deposit that are fully insured
      by
      the FDIC;

     

    (vi)           Bankers’
      acceptances issued by any depository institution or trust company referred
      to in
      clause (ii) above;

     

    (vii)           Repurchase
      obligations with respect to any security that is a direct obligation of, or
      fully guaranteed by, the United States of America or any agency or
      instrumentality thereof the obligations of which are backed by the full faith
      and credit of the United States of America, in either case entered into with
      a
      depository institution or trust company (acting as principal) described in
      clause (ii) above; and

     

    (viii)                      Any
      other investments approved in writing by Lender;

     

    provided
      that Permitted Investments may be purchased by or through the Collateral Agent
      or any of its Affiliates.

     

    “Person”
      means any individual, corporation, company, association, partnership, joint
      venture, limited liability company, trust, unincorporated association,
      government (or any agency, instrumentality or political subdivision thereof)
      or
      any other entity of whatever nature.

     

    
      
        
        

      

      
        A-20

        
          

        

      

      
        
        

      

    

    “Plan”
      means any Person that is (i) an “employee benefit plan” (as defined in Section
      3(3) of ERISA) that is subject to the provisions of Title I of ERISA, (ii)
      a
“plan” (as defined in Section 4975(e)(1) of the Code) that is subject to Section
      4975 of the Code or (iii) any entity whose underlying assets include assets
      of a
      plan described in (i) or (ii) above by reason of such plan’s investment in the
      entity or otherwise.

     

    “Prepaid
      Contract” means any Contract with respect to which the Customer shall have
      (a) exercised its contractual right, or has otherwise arranged, to prepay or
      otherwise terminate the Contract prior to the Final Due Date thereunder and
      (b)
      paid to the Servicer the full amount of the termination payment required by
      such
      Contract.

     

    “Prepayment
      Amount” means the amount deposited by the Borrower in the Collection Account
      in connection with any optional prepayment of the Total Outstanding Advances
      and
      other Secured Obligations pursuant to Section 2.08 of this Loan
      Agreement.

     

    “Prepayment
      Date” means any date on which an optional prepayment of Advances is made by
      the Borrower pursuant to Section 2.08(a) hereof.

     

    “Previously
      Financed Contract” means any Contract that at any time was subject to a Lien
      in favor of a Prior Lender (other than the Lien arising hereunder).

     

    “Prior
      Lender” means any Person (other than the Lender) that has held a Lien on a
      Contract to be included in the Borrowing Base.

     

    “Proceeds”
      means whatever is receivable or received from or upon the sale, lease, license,
      collection, use, exchange or other disposition, whether voluntary or
      involuntary, of any Collateral, including “proceeds” as defined in the UCC, any
      and all proceeds of any insurance, indemnity, warranty or guaranty payable
      under
      or in connection with any of the Collateral, any and all payments (in any form
      whatsoever) made or due and payable from time to time in connection with any
      requisition, confiscation, condemnation, seizure or forfeiture of all or any
      part of the Collateral by any Governmental Authority (or any Person acting
      under
      color of Governmental Authority), any and all other amounts from time to time
      paid or payable under or in connection with any of the Collateral or for or
      on
      account of any damage or injury to or conversion of any Collateral by any
      Person, any and all other tangible or intangible property received upon the
      sale
      or disposition of Collateral, and all proceeds of proceeds.

     

    “Purchase
      Date” has the meaning assigned to such term in Section 2.01(c) of the
      Acquisition Agreement.

     

    “Purchase
      Price” means the price paid by the Borrower to LEAF under the Acquisition
      Agreement for sold Contracts and other Collateral related thereto.

     

    “PUT
      Payment” means, with respect to any Contract, the payment made pursuant to a
      provision in such Contract obligating the Customer to purchase the related
      Equipment upon termination.

     

    “Receivables”
      means, with respect to any Contract and any Determination Date, all of, and
      the
      right to receive all of (a) the Scheduled Payments, (b) any
      prepayments made with

     

    
      
        
        

      

      
        A-21

        
          

        

      

      
        
        

      

    

    respect
      of such Contract, (c) any Guaranty Amounts, (d) any Insurance
      Proceeds, (e) any Residual Proceeds, (f) any Recoveries, and
      (g) any other collections on or amounts payable under such Contract
      (excluding any amounts in respect of payments of Release Prices deposited in
      the
      Collection Account); provided, however, that Scheduled Payments on
      Contracts deposited to the Collection Account during such Collection Period
      (or
      any earlier Collection Period) that are remitted by the related Customer as
      a
      partial prepayment and that are required to be deposited to the Collection
      Account during the next succeeding Collection Period or any other subsequent
      Collection Period shall be treated hereunder as “Collections” with respect to
      such next succeeding Collection Period or any other subsequent Collection Period
      and not as “Collections” for the Collection Period relating to such
      Determination Date.

     

    “Recoveries”
      means, with respect to any Collection Period occurring during or after the
      date
      on which any Contract becomes a Defaulted Contract and with respect to such
      Defaulted Contract, all payments that the Servicer received from or on behalf
      of
      a Customer during such Collection Period in respect of such Defaulted Contract
      or from liquidation or re-leasing of the related Equipment, including but not
      limited to Scheduled Payments, Overdue Payments, Guaranty Amounts and Insurance
      Proceeds, as reduced by any reasonably incurred out-of-pocket expenses incurred
      by the Servicer in enforcing such Defaulted Contract.

     

    “Reference
      Banks” means three major banks that are engaged in transactions in the
      London interbank market, selected by the Hedge Counterparty.

     

    “Reference
      Banks LIBOR Determination Method” means that the LIBOR Rate for a Reset Date
      will be determined on the basis of the rates at which deposits in U.S. Dollars
      are offered by the Reference Banks at approximately 11:00 a.m., London time
      on
      the day that is two (2) London Banking Days preceding that Reset Date to prime
      banks in the London interbank market for a period of one month commencing on
      that Reset Date.  The Hedge Counterparty will request the principal
      London office of each of the Reference Banks to provide a quotation of its
      rate.  If at least two (2) such quotations are provided, the rate for
      that Reset Date will be the arithmetic mean of the quotations.  If
      fewer than two (2) quotations are provided as requested, the rate for that
      Reset
      Date will be the arithmetic mean of the rates quoted by major banks in New
      York
      City, selected by the Hedge Counterparty, at approximately 11:00 a.m., New
      York
      City time, on that Reset Date for loans in U.S. Dollars to leading European
      banks for a period of one month commencing on that Reset Date.

     

    “Registrar
      of Titles” means, with respect to any state and any item of Equipment with
      respect to which a Lien Certificate is necessary to perfect a security interest
      in such Equipment, the Governmental Authority responsible for the registration
      of, and the issuance of certificates of title relating to, such Equipment and
      liens thereon.

     

    “Regulations
      T, U and X” means Regulations T, U and X of the Board of Governors of the
      Federal Reserve System (or any successor), as the same may be amended, modified
      or supplemented and in effect from time to time.

     

    “Release
      Price” means, with respect to any Contract that (x) is repurchased from the
      Borrower pursuant to Section 3.03 of the Acquisition Agreement and the
      Collateral Agent’s security interest in which is released pursuant to Section
      2.07(b) of this Loan Agreement, (y) is

    
      
        
        

      

      
        A-22

        
          

        

      

      
        
        
purchased
        from the Borrower pursuant to Section 3.09 of the Servicing Agreement and
        the Collateral Agent’s security interest in which is released pursuant to
Section 2.07(c) of this Loan Agreement, or (z) is repurchased from the
        Borrower pursuant to Section 3.04 of the Acquisition Agreement and the
        Collateral Agent’s security interest in which is released pursuant to Section
        2.07(d) of this Loan Agreement, an amount equal to (i) the Implicit
        Principal Balance of such Contract as of the date of such purchase or
        repurchase, as applicable, plus (ii) all Scheduled Payments with respect
        to such
        Contract due on or prior to such date of purchase or repurchase, as applicable,
        but not received through such date, minus (iii) any Servicer Advances made
        in
        respect thereof which have not been reimbursed.

    

     

    “Release
      Schedule” means a schedule of Contracts to be released to the Borrower in
      accordance with Section 5(c) or (6) of the Custodial Agreement, in
      electronic format acceptable to the Collateral Agent, which schedule shall
      set
      forth the following information with respect to each
      Contract:  (i) the name and address of each Customer under such
      Contract, and (ii) the contract number of such Contract.

     

    “Replaceable
      Contract” means a Non-Performing Asset, a Defaulted Contract or a Prepaid
      Contract that is removed from the pool of Contracts by the Borrower in
      accordance with Section 11.01 of this Loan Agreement.

     

    “Reportable
      Event” means any of the events set forth in Section 4043(c) of ERISA,
      other than those events as to which the notice period is waived under
      Sections .21, .22, .23, .26, .27 or .28 of PBGC Reg.
§ 4043.

     

    “Reported
      Companies” means LEAF, if the Servicer is LEAF, the Backup Servicer, if the
      Backup Servicer is appointed as successor Servicer under the Servicing Agreement
      and, if applicable, any other successor Servicer appointed under the Servicing
      Agreement; together, in each case, with the Affiliates of such Person on a
      consolidated basis.

     

    “Reported
      Companies’ Financial Statements” means the Reported Companies’ audited,
      consolidated financial statements including all notes to the audited financial
      statements and auditors opinion regarding the audited financial
      statements.

     

    “Request
      for Release and Receipt of Document” shall have the meaning set forth in
Section 6(b) of the Custodial Agreement.

     

    “Request
      Notice” has the meaning assigned to such term in Section 2.02(c) of
      the Acquisition Agreement.

     

    “Required
      Audit Report” means any report required to be delivered pursuant to
Section 4.04 of the Servicing Agreement.

     

    “Required
      Credit Support Amount” means, as of any date of determination, the greater
      of (a) the product of (i) the Weighted Average Life of the Eligible Contracts
      as
      of such date of determination multiplied by (ii) 2.5 multiplied by (iii) the
      Annualized Default Ratio for the Securitized Portfolio as of the most recent
      Determination Date, and (b) 9.00%.

     

    
      
        
        

      

      
        A-23

        
          

        

      

      
        
        

      

    

     

    “Required
      Documents” shall mean, with respect to a Contract, each instrument,
      agreement, document, certificate or other writing, now or hereafter executed
      or
      delivered in respect of such Contract which is required to be included in the
      Contract File pursuant to Section 2 of the Custodial Agreement, which
      shall include (i) any document with respect to such Contract delivered pursuant
      to Section 2.03(a) of the Loan Agreement or Sections 2 and
3 of the Custodial Agreement, (ii) the Contract Schedule
      for such
      Contract (which shall be annexed to Exhibit 5 to the Custodial
      Agreement), and (iii) the Funding Date Documentation for such
      Contract.  For clarity, the Required Documents with respect to any
      Contract shall not include the Servicing Documents with respect to such
      Contract.

     

    “Required
      Reserve Account Amount” means as of any date of determination, the greater
      of (i) the product of the Required Reserve Account Percentage and the Aggregate
      Implicit Principal Balance of Eligible Contracts (including without limitation
      the Aggregate Implicit Principal Balance of Eligible Contracts to be funded
      on
      such date of determination, if any) and (ii) the Required Reserve Account Floor
      Amount as of such date of determination.

     

    “Required
      Reserve Account Floor Amount” means (a) on the first day on which the
      Aggregate Implicit Principal Balance of all Eligible Contracts is less than
      or
      equal to $10,000,000, the Required Reserve Account Floor Amount will equal
      $100,000 and will not thereafter decrease below that amount, (b) on the first
      day on which the Aggregate Implicit Principal Balance of all Eligible Contracts
      is greater than $10,000,000 but less than or equal to $20,000,000, the Required
      Reserve Account Floor Amount will increase to $200,000 and will not thereafter
      decrease below that amount and (c) on the first day on which the Aggregate
      Implicit Principal Balance of all Eligible Contracts is greater than
      $20,000,000, the Required Reserve Account Floor Amount will increase to $250,000
      and will not thereafter decrease below that amount.

     

    “Required
      Reserve Account Percentage” means 1.00%.

     

    “Requirement
      of Law” means as to any Person, the certificate of incorporation and by-laws
      or other organizational or governing documents of such Person, and any law,
      treaty, rule or regulation or determination of an arbitrator or a court or
      other
      Governmental Authority, in each case applicable to or binding upon such Person
      or any of its property or to which such Person or any of its property is
      subject.

     

    “Reserve
      Account” means the account designated as such, established and maintained
      pursuant to Section 12.01(b) of this Loan Agreement.

     

    “Reserve
      Account Available Amount” means, as of any date, all amounts then on deposit
      in the Reserve Account (including, without limitation, all Investment Earnings
      with respect to the Reserve Account).

     

    “Reserve
      Account Limitation Event” means any deposit into the Reserve Account which
      would, if made, cause the cumulative amount of all Funding Date Reserve Account
      Deposits and deposits to the Reserve Account pursuant to
clauseeighth of Section 3.03(b) made since the Closing Date
      to exceed 5.00% of the Maximum Advance Amount as of the date of such
      deposit.

     

    
      
        
        

      

      
        A-24

        
          

        

      

      
        
        

      

    

    “Reserve
      Account Property” means the Reserve Account, all amounts and investments
      held from time to time in the Reserve Account (whether in the form of deposit
      accounts, physical property, book-entry securities, uncertificated securities
      or
      otherwise) and all the Proceeds of the foregoing.

     

    “Reset
      Date” means, with respect to each Advance, the first day of the Accrual
      Period for such Advance.

     

    “Residual
      Proceeds” means, with respect to any Contract that is not a Defaulted
      Contract and the related Equipment, the net proceeds (including Insurance
      Proceeds) of any sale, present value of rent streams to be received for a
      release (including any lease renewal) or other disposition of such
      Equipment.

     

    “Responsible
      Officer” means, as to any Person other than the Collateral Agent, the
      managing member, chief executive officer, president, chief operating officer,
      chief investment officer or the chief financial officer of such Person;
provided, that in the event any such officer is unavailable at any time
      he or she is required to take any action hereunder, Responsible Officer shall
      mean any officer authorized to act on such officer’s behalf as demonstrated to
      the Lender to its satisfaction; with respect to the Collateral Agent,
“Responsible Officer” means any officer of the Corporate Trust Department of the
      Collateral Agent, including any Senior Vice President, any Vice President,
      any
      Assistant Vice President, any Assistant Secretary, any Trust Officer or
      Assistant Trust Officer, or any other officer of the Collateral Agent, in each
      case, with direct responsibility for the administration of this
      Agreement.

     

    “Resulting
      Entity Eligibility Criteria” means, with respect to any Person described in
Section 5.02(b) of the Servicing Agreement, the following criteria: that
      such Person shall be acceptable to the Lender or the Borrower.

     

    “Scheduled
      Payment” means, with respect to each Contract and any Payment Date, the
      periodic payment (exclusive of any amounts in respect of taxes) and any PUT
      Payments or other balloon payments originally set forth in such Contract due
      from the related Customer in the related Collection Period.

     

    “Secured
      Obligations” means the unpaid principal amount of, and interest on the
      Advances, any Swap Obligations and all other obligations and liabilities of
      the
      Borrower to the Lender or the Hedge Counterparty (for whose benefit the
      Collateral Agent holds its security interest in the Collateral pursuant to
      Section 4.01(c)) or any Indemnified Party (including, but not limited to,
      fees, expenses and indemnification payments owed to the Collateral Agent under
      Sections 7 and 13 of the Custodial Agreement or to the Backup
      Servicer under the Servicing Agreement) whether direct or indirect, absolute
      or
      contingent, due or to become due, or now existing or hereafter incurred, which
      may arise under, out of or in connection with this Loan Agreement, the Note,
      any
      other Loan Document and any other document made, delivered or given in
      connection herewith or therewith, whether on account of principal, interest,
      reimbursement obligations, fees, indemnities, costs, expenses (including,
      without limitation, all fees and disbursements of counsel to the Lender, the
      Hedge Counterparty or otherwise).  For purposes hereof, “interest”
shall include, without limitation, interest accruing after the maturity of
      the
      Advances and interest accruing after the filing of any petition in bankruptcy,
      or the

     

    
      
        
        

      

      
        A-25

        
          

        

      

      
        
        
commencement
        of any insolvency, reorganization or like proceeding, relating to the Borrower,
        whether or not a claim for post-filing or post-petition interest is allowed
        in
        such proceeding.

    

     

    “Securities
      Exchange Act” means the Securities Exchange Act of 1934, as
      amended.

     

    “Securities
      Intermediary” has the meaning assigned to such term in Section 12.04
      of this Loan Agreement.

     

    “Securitized
      Portfolio” means the Contracts sold by the Seller to the Borrower pursuant
      to the Acquisition Agreement.

     

    “Seller”
      means LEAF Equipment Leasing Income Fund III, L.P., a Delaware limited
      partnership.

     

    “Senior
      Leverage Ratio” means, with respect to LEAF, the result obtained by dividing
      LEAF’s Combined Recourse Debt by LEAF’s Adjusted Partner’s
      Capital.  For such determination, “Combined Recourse Debt” means all
      of LEAF’s debts and liabilities, but excluding third party accounts payable,
      accrued expenses, non-recourse debt and intercompany obligations, and “Adjusted
      Partner’s Capital” means partner’s capital plus “Due to General Partner” plus
      subordinated debt, if any.  For such determination (including Section
      7.02(jj)), “Due to General Partner” means amounts, as set forth in the financial
      statements of LEAF, that are due to LEAF Financial Corporation and its
      affiliates, as general partner of LEAF, for management fees and expenses due
      for
      servicing the Securitized Portfolio in addition to amounts LEAF Financial
      Corporation has paid for property taxes due on the Securitized Portfolio that
      have been billed to Customers.

     

    “Senior
      Managers” means, with respect to each LEAF Party, its Chairman, President,
      Chief Executive Officer, Chief Financial Officer, Chief Operating Officer,
      Chief
      Investment Officer and Senior Vice President of Sales and
      Marketing.

     

    “Serviced
      Portfolio” means the aggregate amount of Contracts serviced by the
      Servicer.

     

    “Servicer”
      means LEAF Financial Corporation or any successor servicer appointed as provided
      in this Loan Agreement and the Servicing Agreement.

     

    “Servicer
      Advance” means, with respect to any Determination Date, an amount equal to
      the Scheduled Payments or portion thereof for each Contract, other than a
      Defaulted Contract or a Non-Performing Asset or any other Contract for which
      an
      advance would otherwise constitute a Nonrecoverable Advance, which were due
      in
      the immediately preceding Collection Period but not received prior to the last
      day of such Collection Period.

     

    “Servicer
      Advance Reimbursement Amount” means, with respect to any Contract and any
      Payment Date, an amount equal to the amount, if any, of the Servicer Advance
      made by the Servicer with respect to such Contract on the immediately preceding
      Payment Date.

     

    
      
        
        

      

      
        A-26

        
          

        

      

      
        
        

      

    

    “Servicer
      Termination Event” has the meaning assigned to such term in
Section 6.01 of the Servicing Agreement.

     

    “Servicing
      Agreement” means the Servicing Agreement, dated as of June 19, 2007, among
      the Borrower, the Lender, the Backup Servicer, the Collateral Agent and the
      Servicer for the servicing of Contracts, as the same may be amended, modified
      or
      supplemented from time to time in accordance with the terms
      thereof.

     

    “Servicing
      Charges” means, with respect to any given Collection Period, the sum of
      (a) all late payment charges paid by Customers on Delinquent Contracts
      after payment in full of any Scheduled Payments due at the time of receipt
      of
      such payments relating to such Delinquent Contracts and (b) any other
      incidental charges or fees received from a Customer, including but not limited
      to, late fees, collection fees and bounced check charges.

     

    “Servicing
      Documents” means all Servicing Records, servicing agreements (including,
      without limitation, the Servicing Agreement), servicing rights, pledge
      agreements (including, without limitation, the Custodial Agreement), and any
      other collateral pledged or otherwise relating to the Contracts, together with
      all files, documents, instruments, certificates, correspondence, accounting
      books and records relating thereto or to the Contract Documents.

     

    “Servicing
      Fee” means, with respect to any Payment Date, the fee payable to the
      Servicer in accordance with Section 3.03(b) in an amount equal to the
      product of (i) one-twelfth of 1.00% and (ii) the Implicit Principal Balance
      of
      all Contracts as of the related Determination Date; provided, that, if the
      Backup Servicer is acting as Servicer, the Servicing Fee shall in no event
      be
      less than $6,000 per Collection Period.

     

    “Servicing
      Officer” means any officer or employee of the Servicer involved in, or
      responsible for, the administration and servicing of the Contracts, whose name
      appears on a list of servicing officers contained in an Officers’ Certificate
      delivered by the Servicer to the Lender, the Collateral Agent and the Backup
      Servicer, as such list may be amended from time to time.

     

    “Servicing
      Records” shall have the meaning provided in Section 14.15(b) of this
      Loan Agreement.

     

    “Single
      Employer Plan” means any Plan which is covered by Title IV of ERISA, but
      which is not a Multiemployer Plan.

     

    “Specified
      Event” means, with respect to any Contract, the occurrence of any of the
      following:

     

    (a)           the
      payment and performance in full of all obligations of the Customer under such
      Contract;

     

    (b)           such
      Contract becoming a Defaulted Contract and the acquisition and sale of the
      related Equipment or other related Collateral in connection with the enforcement
      of such Contract pursuant to Section 3.01(c)(vii) of the Servicing
      Agreement, or the receipt or collection of any other Recoveries in respect
      of
      such Contract;

     

    
      
        
        

      

      
        A-27

        
          

        

      

      
        
        

      

    

    (c)           such
      Contract becoming a Delinquent Contract;

     

    (d)           such
      Contract becoming a Non-Performing Asset;

     

    (e)           the
      collection of Insurance Proceeds payable against the Customer’s balance in
      respect of the related Equipment; or

     

    (f)           such
      Contract becoming a Replaceable Contract that is removed from the pool of
      Contracts pursuant to Article XI of this Loan Agreement.

     

    “Standard
      & Poor’s” means Standard & Poor’s Ratings Services, or its
      successor.

     

    “Static
      Pool Test” means, for all Contracts purchased by the Borrower, with respect
      to whether there is a Facility Termination Event or an Event of Default, the
      applicable percentage specified below.

     

    
      	
              Cumulative
                Net Losses

            
	
              Time
                since Contract

              origination

            	
              Facility
                Termination Event

            	
              Event
                of Default

            
	
              0
–
                12 months

            	
              2.25%

            	
              2.50%

            
	
              13
                – 18 months

            	
              3.25%

            	
              3.50%

            
	
              19
                – 24 months

            	
              3.75%

            	
              4.00%

            
	
              25
                – 30 months

            	
              4.00%

            	
              4.25%

            
	
              31
                – 36 months

            	
              4.25%

            	
              4.50%

            
	
              37
                – 42 months

            	
              4.50%

            	
              4.75%

            
	
              43
                – 48 months

            	
              5.00%

            	
              5.25%

            
	
              49
                – 60 months

            	
              5.25%

            	
              5.50%

            
	
              61
                + months

            	
              5.50%

            	
              5.75%

            
	 	 	 

    

    “Subsidiary”
      means, as to any Person, a corporation, partnership or other entity of which
      shares of stock or other ownership interests having ordinary voting power (other
      than stock or such other ownership interests having such power only by reason
      of
      the happening of a contingency) to elect a majority of the board of directors
      or
      other managers of such corporation, partnership or other entity are at the
      time
      owned, or the management of which is otherwise controlled, directly or
      indirectly through one or more intermediaries, or both, by such
      Person.

     

    “Substitute
      Contract” means an Eligible Contract that is added to the pool of Eligible
      Contracts by the Borrower as a substitute for a Replaceable Contract, in
      accordance with Sections 11.01(b) and (c) of this Loan
      Agreement.

     

    “Swap
      Obligations” means any amounts due and payable to the Hedge Counterparty
      pursuant to the terms of any Interest Rate Hedging Agreement, including, without
      limitation, any amounts set forth in the confirmation of any Interest Rate
      Hedging Agreement.

     

    “Swap
      Payment” means any payment by the Hedge Counterparty to the Borrower
      pursuant to an Interest Rate Hedging Agreement.

     

    “Termination
      Value” means, with respect to any Contract, the “Termination Value” (if any)
      payable by a Customer pursuant to such Contract.

     

    
      
        
        

      

      
        A-28

        
          

        

      

      
        
        

      

    

    “Total
      Outstanding Advances” means, as of any date of determination, the unpaid
      principal amount of all Advances outstanding hereunder.

     

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

     

    “Underwriting
      Guidelines” means the credit approval guidelines used by LEAF in the
      purchase of Contracts, a copy of which is annexed to this Loan Agreement as
      Exhibit G, as amended from time to time in accordance with Section
      7.02(c).

     

    “Weighted
      Average Life” means, with respect to any date of determination, the weighted
      average life of the Eligible Contracts as of such date of determination (after
      giving effect to the Eligible Contracts to be financed on such date of
      determination, if any).  The Weighted Average Life shall be expressed
      as a number of years (with any portion of a year being expressed as a
      decimal).

     

    “WestLB”
      means WestLB AG, New York Branch.

     

     

    
      
        
        

      

      
        A-29

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    [INTENTIONALLY
      OMITTED]

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

    FORM
      OF CUSTODIAL AGREEMENT

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

    FORM
      OF INTEREST RATE HEDGING AGREEMENT

    
       

      
        
          
          

        

        
          C-1

          
            

          

        

        
          
          

        

      

     EXHIBIT
      D

    ELIGIBILITY
      CRITERIA

    

     

    To
      be an
      Eligible Contract, a Contract (and the related Contract Documents, Equipment
      and
      other Collateral) must satisfy, and maintain at all times, the following
      eligibility characteristics, subject to any exceptions thereto approved in
      writing by the Lender in its sole discretion:

     

    (i)           The
      information set forth in the Contract Schedule was produced from the Electronic
      Ledger and was true and correct in all material respects, with respect to such
      Contract, as of the close of business on the Cut-Off Date of such
      Contract.

     

    (ii)           The
      Contract is, pursuant to its terms, an absolute and unconditional obligation
      of
      the Customer, non-cancelable prior to the expiration of the initial term of
      such
      Contract (without regard to any event affecting the Equipment, the obsolescence
      of any Equipment, any claim of such Customer against the Originator, any the
      LEAF Party, the Servicer or any other Person, any change in circumstance of
      such
      Customer or any other circumstance whatsoever).  Such Contract, if
      prepayable, provides that any prepayment shall be in an amount sufficient to
      pay
      the Release Price of such Contract.  Such Contract does not provide
      for the substitution, exchange or addition of any other items of Equipment
      pursuant to such Contract; and the rights with respect to such Contract are
      assignable by the lessor thereunder without the consent of any
      Person.  Such Contract is net to the lessor of any maintenance, taxes,
      insurance or other expenses and contains provisions requiring the Customer
      to
      assume all risk of loss or malfunction of the related Equipment.

     

    (iii)           The
      Seller has delivered (or caused to be delivered) to the Collateral Agent, no
      later than 12:00 p.m., New York City time, two (2) Business Days prior to the
      applicable Funding Date, the Funding Date Documentation pertaining to such
      Contract, including, without limitation, the sole original counterpart of the
      Contract, as amended.

     

    (iv)           As
      of the applicable Funding Date, the Contract has not been amended, waived,
      altered or modified in any material respect except in writing, and copies of
      all
      such writings are attached to such Contract.  On or after the
      applicable Funding Date, such Contract will not be amended, waived, altered
      or
      modified in any respect except in accordance with the Loan
      Documents.

     

    (v)           The
      Contract constitutes tangible chattel paper within the meaning of the UCC as
      in
      effect in the States of New York and Delaware.

     

    (vi)           There
      is only one executed counterpart of the Contract in LEAF’s possession which
      constitutes “tangible chattel paper” under the UCC as in effect in the State of
      New York.

     

    (vii)           By
      the Funding Date with respect to such Contract, the Seller will have caused
      the
      portions of the Electronic Ledger relating to such Contract to be clearly and
      unambiguously identified to show that such Contract has been sold or contributed
      to the

     

    
      
        
        

      

      
        D-1

        
          

        

      

      
        
        

      

    

    Borrower
      by the Seller pursuant to the Acquisition Agreement and pledged by the Borrower
      to the Collateral Agent in accordance with the terms of the Loan
      Agreement.

     

    (viii)                      The
      Contract was not originated in, nor is it subject to the laws of, any
      jurisdiction the laws of which would make unlawful, void or voidable any sale,
      transfer and assignment of such Contract under the Acquisition Agreement
      (including, without limitation, any repurchase thereunder) or the pledge thereof
      pursuant to the Loan Agreement or pursuant to transfers of the
      Note.  Neither the Seller nor the Borrower has entered into any
      agreement with any account debtor that prohibits, restricts or conditions the
      assignment of such Contract.

     

    (ix)           The
      Contract is in full force and effect in accordance with its respective terms
      and
      none of the Seller, the Borrower, the Servicer or any Customer has or will
      have
      suspended or reduced any payments or obligations due or to become due thereunder
      by reason of a default by the other party to such Contract.

     

    (x)           As
      of the applicable Cut-Off Date, no Scheduled Payment with respect to such
      Contract has not been received and remained unpaid for a period of 30 or
      more days (without regard to advances, if any, made by the
      Servicer).

     

    (xi)           With
      respect to each Contract, as of the applicable Cut-Off Date, (a) the related
      Customer was not the subject of any insolvency or bankruptcy proceeding, (b)
      there has been no default, breach or violation and no event permitting
      acceleration under such Contract, (c) there are no proceedings pending or
      threatened in connection with which such Customer and (d) no Governmental
      Authority has alleged that such Contract is illegal or unenforceable, and none
      of the related Scheduled Payments are subject to any set-off, rescission,
      reduction or credit of any kind.

     

    (xii)           As
      of the applicable Funding Date, the Contract is not a Defaulted
      Contract.

     

    (xiii)                      The
      Contract is the valid, binding and legally enforceable obligation of the parties
      thereto, enforceable in accordance with its terms, subject, as to enforcement,
      to applicable bankruptcy, insolvency, reorganization and other similar laws
      of
      general applicability relating to or affecting creditors’ rights generally and
      to general principles of equity regardless of whether enforcement is sought
      in a
      court of law or equity.

     

    (xiv)                      All
      parties to the Contract had authority and capacity to execute such
      Contract.

     

    (xv)                       
      [Reserved].

     

    (xvi)                      [Reserved].

     

    (xvii)                      The
      Contract is not a consumer lease.

     

    (xviii)                      The
      Contract is not subject to any Guarantee by the Seller or any of its
      Affiliates.

     

    
      
        
        

      

      
        D-2

        
          

        

      

      
        
        

      

    

    (xix)                      All
      actions, filings (including UCC filings) and recordings as are required by
      any
      Loan Document or that may be necessary to perfect a first priority security
      interest of the Borrower or the Collateral Agent, for the benefit of the Lender
      and the Hedge Counterparty, in, or the contribution or sale by the Seller to
      the
      Borrower of, the Contract and the related Collateral being acquired hereunder
      have been accomplished and are in full force and effect.  All such
      filings and recordings required to assign the security interest of the Seller
      to
      the Borrower and the interest of the Borrower in such security interest to
      the
      Collateral Agent, for the benefit of the Lender and the Hedge Counterparty,
      in
      the Equipment underlying such Contract have been filed in accordance with the
      Loan Documents and are in full force and effect.

     

    (xx)           The
      Contract is substantially in the form of the Forms of Contract attached to
      the
      Loan Agreement as Exhibit E, except for any Contract acquired from a
      Person other than a LEAF party or any immaterial modifications or deviations
      from such Form of Contract that do not and will not adversely affect the
      interests of the Lender or the Hedge Counterparty.

     

    (xxi)                      The
      Contract was originated by the LEAF Originator or was purchased from a third
      party Approved Originator in the LEAF Originator’s ordinary course of
      business.  The Contract meets the Seller’s Underwriting Guidelines,
      which are attached to the Loan Agreement as Exhibit G and which shall not
      be amended except in accordance with Section 7.02(c) of the Loan
      Agreement.  The origination and collection practices used by the
      Seller and any third party Originator with respect to such Contract are in
      all
      respects legal, proper, prudent and customary in the equipment financing and
      servicing business.  If the Contract was originated by a third party
      Originator, such Person originated such Contract in the ordinary course of
      its
      business.

     

    (xxii)                      No
      selection procedures adverse to the Lender or the Hedge Counterparty were
      utilized in selecting the Contract from those lease contracts owned by the
      Seller or the Borrower.

     

    (xxiii)                      The
      Equipment subject to the Contract was properly delivered to the Customer in
      good
      repair, without defects and in satisfactory order and is in proper working
      order.  The related Customer has accepted the Equipment leased to
      it.  Such Equipment has not suffered any loss or damage that has not
      been repaired.  No the Lease Party has any notice or other knowledge
      of any defects in such Equipment.

     

    (xxiv)                      The
      Contract obligates the related Customer to make all Scheduled Payments
      thereunder in full, notwithstanding the collection by the lessor of a security
      deposit with respect thereto.  The calculation of the Implicit
      Principal Balance of the related Receivable does not include any security
      deposits or advance payments collected by or on behalf of the lessor which
      are
      applied to Scheduled Payments.

     

    (xxv)                      With
      respect to each Contract, the related Customer has not been released, in whole
      or in part, from any of its obligations in respect of such Contract; such
      Contract has not been satisfied, cancelled or subordinated, in whole, or in
      part, or rescinded, and no Equipment subject to such Contract has been released
      from such Contract, in whole or

     

    
      
        
        

      

      
        D-3

        
          

        

      

      
        
        

      

    

    in
      part,
      nor has any instrument been executed that would effect any such satisfaction,
      release, cancellation, subordination or rescission.

     

    (xxvi)                      The
      Customer is not a merchant with respect to the Equipment leased under the
      Contract unless such Customer utilizes the related Equipment in its operations
      and does not lease such Equipment to a third party.

     

    (xxvii)                      
      All requirements of applicable federal, state and local laws, and regulations
      thereunder, including, without limitation, usury laws, truth-in-lending laws
      and
      equal credit opportunity laws, in respect of the Contract have been complied
      with in all material respects, and such Contract complied in all material
      respects from and after the time it was originated or with all legal
      requirements of the jurisdiction in which it was originated, the jurisdiction
      in
      which the related Equipment is located, and each other jurisdiction, if any,
      applicable to such Contract and/or the other Collateral related
      thereto.

     

    (xxviii)                        The
      Contract is not and will not be subject to any right of rescission, set-off,
      counterclaim or defense, including the defense of usury, whether arising out
      of
      transactions concerning such Contract or otherwise, and the operation of any
      of
      the terms of such Contract or the exercise by the Seller or the Customer of
      any
      right under such Contract will not render such Contract unenforceable in whole
      or in part, and no such right of rescission, set-off, counterclaim or defense,
      including a defense arising out of a breach of the Customer’s right of quiet
      enjoyment of the related Equipment, has been asserted with respect
      thereto.

     

    (xxix)                      Each
      of the Seller, the LEAF Originator and any third party Originator has duly
      fulfilled all obligations on the lessor’s part to be fulfilled under or in
      connection with the Contract, including, without limitation, giving any notices
      or consents necessary to effect the acquisition of the Collateral by the
      Borrower and the pledge of the Collateral by the Borrower to the Collateral
      Agent, for the benefit of the Lender and the Hedge Counterparty, and has done
      nothing to impair the rights of the Borrower, the Lender, the Hedge
      Counterparty, or the Collateral Agent in such Contract or payments with respect
      thereto.

     

    (xxx)                      The
      Contract and the Seller’s interest in the related Equipment and the other
      related Collateral have not been sold, transferred, assigned or pledged by
      the
      Seller to any Person other than the Borrower (except for such interests in
      the
      Collateral which shall be terminated on or prior to the Closing Date or the
      related Funding Date).  Immediately prior to the conveyance of the
      Contract to the Borrower pursuant to the Acquisition Agreement, the Seller
      was
      the sole owner thereof and had good and indefeasible title thereto, free of
      any
      Lien.  Upon execution and delivery of the applicable Assignment by the
      Seller, the Borrower will have good and indefeasible title to and will be sole
      owner of the Contract, the related Receivables and the Seller’s interest in the
      related Equipment and other Collateral free of any Lien (other than the Lien
      of
      the Collateral Agent for the benefit of the Lender and the Hedge
      Counterparty).

     

    (xxxi)                      The
      Contract requires that the Customer maintain the related Equipment in working
      condition, reasonable wear and tear excepted, in accordance with
      the

     

    
      
        
        

      

      
        D-4

        
          

        

      

      
        
        

      

    

    manufacturers’
      specifications and that the Customer obtain and maintain physical damage
      insurance covering such Equipment in an amount sufficient to insure completely
      such Equipment.  If the Contract had an initial book value in excess
      of $100,000, such Contract requires that the Customer provide written proof
      of
      insurance coverage and maintain such insurance coverage under such Contract
      that
      is of a type customary for the equipment covered thereby and consistent with
      industry practice for monitoring compliance thereof. Such insurance coverage
      is
      in full force and effect; provided, however, that the Servicer may
      provide insurance coverage through its errors and omissions insurance policy,
      which covers failure of the Customer to maintain physical damage insurance
      to
      the Equipment in an amount sufficient to insure completely the Equipment and
      which is in full force and effect.

     

    (xxxii)                      
      The Seller has no knowledge that the Contract will not be fully performed in
      accordance with its terms.

     

    (xxxiii)                        No
      Customer under the Contract is the United States of America, any state or local
      government thereof, any agency, department or instrumentality of the United
      States of America, any state or local government thereof or any other government
      or governmental body.  No Customer or vendor under the Contract is an
      Affiliate of any LEAF Party or is affiliated with any Senior
      Manager.  For these purposes a Customer or vendor is “affiliated” with
      a Senior Manager, if such Senior Manager or any member of such Senior Manager’s
      family is a material investor, director, manager, consultant or employee of,
      or
      performs any analogous role with respect to, such Customer or
      vendor.

     

    (xxxiv)                        The
      Contract does not include an unsecured lease for the payment of franchise fees
      by the Customer.

     

    (xxxv)                      
      If the Equipment or other Collateral relating to the Contract is the subject
      of
      any cross collateralization or other security arrangement, (a) the Seller
      has obtained a waiver from all third parties with any right or claim against
      any
      Contract, Equipment or other Collateral of such party’s rights to the Contract
      conveyed to the Borrower and the Equipment subject to such Contract and
      (b) the Seller waives any rights it has or may have with respect to the
      Contract or other Collateral due to the cross-collateralization.

     

    (xxxvi)                        The
      Contract was originated in the United States of America.  The related
      Equipment and the related Customer are located in the United States of America,
      and the related Scheduled Payments are payable in U.S. dollars.  The
      references in this clause (xxxvi) to the “United States of America” include each
      state thereof and the District of Columbia but exclude all of its territories,
      possessions or other dependent areas other than the Commonwealth of Puerto
      Rico
      and the Territory of Guam.

     

    (xxxvii)                      The
      Contract provides for Scheduled Payments thereunder.  Such Scheduled
      Payments were established at the time such Contract was
      originated.  Unless the Contract provides for a deferred first
      Scheduled Payment, the Customer has made at least one payment with respect
      to
      such Contract, which may be a security deposit or advance payment, on or before
      the related Funding Date.

     

    
      
        
        

      

      
        D-5

        
          

        

      

      
        
        

      

    

    (xxxviii)                If
      the Contract does not provide for level Scheduled Payments, such Contract
      nevertheless (x) requires at least one Scheduled Payment during the first 90
      days after its origination and (y) the Scheduled Payments due on such Contract
      during the first half of the original term of the Contract discounted in the
      manner set forth under the definition of “Implied Principal Balance” equal at
      least 33.00% of the Implied Principal Balance of such Contract calculated in
      each case as of its date of origination.

     

    (xxxix)                  No
      Customer is an individual person; provided, however, that a
      Customer may be a sole proprietorship.

     

    (xl)                      The
      Equipment subject to the Contract is not located at any location different
      from
      the location of such Equipment specified in such Contract.

     

    (xli)                      The
      Customer has not subleased any of the related Equipment.

     

    (xlii)                      There
      are no unpaid brokerage or other fees owed to third parties relating to the
      origination of the Contract.

     

    (xliii)                      With
      respect to each Contract, the LEAF Originator had valid title to, or a first
      priority perfected security interest in, each related item of Equipment in
      accordance with the Seller’s Underwriting Guidelines, all right title and
      interest in which has been transferred to the Seller; provided that the
      Seller shall not be required to file UCC financing statements to perfect the
      security interest in the Equipment relating to any Contract that had an original
      equipment cost at origination of less than $25,000, or if such Contract provides
      for a “fair market value” purchase option, of less than
      $50,000.  Neither the sale to the Borrower of the Collateral nor the
      pledge of a security interest in such Collateral by the Borrower to the
      Collateral Agent, for the benefit of the Lender and the Hedge Counterparty
      violates the terms of or provisions of such Contract or of any lease or any
      other agreement to which either the Lease Party is a party or by which it is
      bound.

     

    (xliv)                      The
      transfer, assignment and conveyance of the Contracts and other related
      Collateral by the Seller pursuant to the Acquisition Agreement is not subject
      to
      and will not result in any tax, fee or governmental charge payable by the Seller
      to any federal, state or local government (“Transfer Taxes”) other than
      Transfer Taxes which have or will be paid by the Seller as due.  In
      the event that the Borrower receives actual notice of any Transfer Taxes arising
      out of the transfer, assignment and conveyance of the Contracts and other
      related Collateral, on written demand by the Borrower, or upon the Seller
      otherwise being given notice thereof, the Seller shall pay, and otherwise
      indemnify and hold the Borrower, the Lender, the Hedge Counterparty and the
      Collateral Agent harmless, on an after-tax basis, from and against any and
      all
      such Transfer Taxes. None of the Lender, the Hedge Counterparty or the
      Collateral Agent shall have any obligation to pay any such Transfer
      Taxes.

     

    (xlv)                      Each
      Contract that is in the form of a “master agreement” with one or more equipment
      schedules attached thereto provides that each such schedule constitutes a
      separate contract from any other schedule.

     

    
      
        
        

      

      
        D-6

        
          

        

      

      
        
        

      

    

    (xlvi)                      [Reserved].

     

    (xlvii)                      [Reserved].

     

    (xlviii)                      As
      of the applicable Funding Date, the Implicit Principal Balance of the Contract
      is not greater than $1,500,000.

     

    (xlix)                      As
      of the Cut-off Date, the remaining term of the Contract is not more than 85
      months.

     

    (l)           The
      Contract (A) was (1) originated by the LEAF Originator or (2) originated by
      a
      third party Approved Originator and sold by such Originator to the LEAF
      Originator and in each case, the origination or purchase of such Contract by
      the
      Originator was funded by the Seller pursuant to the agreement between the Seller
      and the Originator and all right, title and interest of the Originator in such
      Contract was, upon such funding, acquired by the Seller, (B) was sold or
      contributed by the Seller to the Borrower and (C) was pledged by the Borrower
      to
      the Collateral Agent (for the benefit of the Lender and the Hedge Counterparty)
      without any fraud or misrepresentation in any case.

     

    (li)           There
      exists a Contract File pertaining to the Contract and such Contract File
      contains the related Contract Documents including, without limitation, a fully
      executed original of the Contract.  Each of such documents which is
      required to be signed by the lessee has been signed by the lessee in the
      appropriate spaces.  All blanks on any form described above have been
      properly filled in and each form has otherwise been correctly
      prepared.  Notwithstanding the above, a copy of the complete Contract
      File for each Contract, which fulfils in all material respects the documentation
      requirements of the Seller’s Underwriting Guidelines as in effect at the time of
      purchase has been delivered to the Collateral Agent by the Seller, on behalf
      of
      the Borrower by the related Funding Date.

     

    (lii)           If
      the Contract is a Contract with respect to which a Lien Certificate is necessary
      to perfect a security interest in the related Equipment, the Lien Certificate
      for such item of Equipment shows, or if a new or replacement Lien Certificate
      is
      being applied for with respect to such Equipment the Lien Certificate shall
      have
      been received within 90 days of the applicable Funding Date, and will show
      (a)
      the LEAF Originator, (b) the Collateral Agent or (c) a nominee of the existing
      lienholder, pursuant to an agreement in the form attached hereto as Exhibit
      P,
      named as the secured party under the related Contract as the holder of a first
      priority security interest in such Equipment.  In the case of each
      such Contract with respect to which the Lien Certificate for the related item
      of
      Equipment has not yet been returned from the Registrar of Titles, the Seller
      will, within 30 days of the origination or acquisition thereof by the LEAF
      Originator initiate all necessary state registration or recording procedures
      to
      reflect the LEAF Originator’s, the Collateral Agent’s or such nominee’s interest
      (as applicable) on the Lien Certificate in the manner set forth
      above.  In the case of each such Contract (x) that provides for a
“fair market value” purchase option for titled vehicle Equipment with an
      original equipment cost at origination of $50,000 or more or (y) for which
      the
      originator of such

     

    
      
        
        

      

      
        D-7

        
          

        

      

      
        
        

      

    

    Contract
      is the party listed on the Lien Certificate as the owner, the Seller will,
      in
      either case, within 30 days of the acquisition of the Contract by the Borrower,
      initiate all necessary state registration or recording procedures to reflect
      the
      Borrower’s ownership interest on the certificate of title as the sole secured
      party with respect to the related Equipment.

     

    (liii)           Each
      of the following criteria shall be satisfied with respect to each Contract
      as of
      any date of determination:

     

    (A)           [reserved];

     

    (B)           after
      giving effect to the addition of the Contract to the pool of Eligible Contracts,
      the percentage of Eligible Contracts (by Aggregate Implicit Principal Balance,
      as of any date of determination) that do not provide for level Scheduled
      Payments thereunder will not exceed 10.00% of the Aggregate Implicit Principal
      Balance of all Eligible Contracts;

     

    (C)           after
      giving effect to the addition of the Contract to the pool of Eligible Contracts,
      the weighted average remaining term of all of the Eligible Contracts does not
      exceed 48 months;

     

    (D)           after
      giving effect to the addition of the Contract to the pool of Eligible Contracts,
      the percentage of the Equipment (by Aggregate Implicit Principal Balance, as
      of
      any date of determination) with Customers located in any one state does not
      exceed 30.00% of the Aggregate Implicit Principal Balance of the Eligible
      Contracts;

     

    (E)           after
      giving effect to the addition of the Contract to the pool of Eligible Contracts,
      the percentage of the Eligible Contracts (by Aggregate Implicit Principal
      Balance, as of any date of determination) with related Equipment that is of
      the
      one type of Equipment most commonly related to the Eligible Contracts does
      not
      exceed 30.00%.

     

    (F)           after
      giving effect to the addition of the Contract to the pool of Eligible Contracts,
      the percentage of the Eligible Contracts (by Aggregate Implicit Principal
      Balance, as of any date of determination) with respect to which (1) a Lien
      Certificate is necessary to perfect a security interest in the related Equipment
      does not exceed 30.00% of the Aggregate Implicit Principal Balance of all of
      the
      Eligible Contracts, (2) the Contract was originated in, or the related Customer
      and Equipment are located in, the Commonwealth of Puerto Rico or the Territory
      of Guam does not exceed 6.00% of the Aggregate Implicit Principal Balance of
      all
      of the Eligible Contracts or (3) the Equipment constitutes a fixture under
      applicable law in effect in the jurisdiction in which such Equipment is located,
      does not exceed 30.00% of the Aggregate Implicit Principal Balance of all of
      the
      Eligible Contracts; provided that, for any Contract for which the related
      Equipment constitutes a fixture under applicable law, the encumbrancer of the
      related real property shall have executed a waiver and consent in the form
      of
      the

     

    
      
        
        

      

      
        D-8

        
          

        

      

      
        
        

      

    

    Waiver
      & Consent – Landlord/Mortgagee attached hereto as Exhibit A, or in
      such other commercially reasonable form containing the following key elements:
      name of property owner, landlord or mortgagee; the list of Equipment in or
      subject to the related Contract; acknowledgement that this Equipment belongs
      to
      the owner thereof under the related Contract; the ability of the LEAF
      Originator, the Borrower or the Servicer to remove the Equipment in a reasonable
      fashion and consistent with the Servicer’s or LEAF’s current requirements as
      indicated in its policy and procedures; and, in substance, either or both of
      (x)
      a waiver by the encumbrancer of the real property of any claim on the Equipment
      that is prior to the LEAF Originator or its assigns or (y) an statement by
      the
      encumbrancer that the Equipment shall not constitute a fixture;

     

    (G)           after
      giving effect to the addition of the Contract to the pool of Eligible Contracts,
      the percentage of the Eligible Contracts (by Aggregate Implicit Principal
      Balance, as of any date of determination) having the same related vendor or
      any
      one or more related vendors each of whom are Affiliates of each other (1) does
      not exceed 15.00% of the Aggregate Implicit Principal Balance of all Eligible
      Contracts or (2) if the unsecured senior indebtedness of such vendor or of
      each
      such affiliated vendor rated investment grade by either Moody’s or Standard
& Poor’s, does not exceed 20.00% of the Aggregate Implicit Principal Balance
      of all Eligible Contracts;

     

    (H)           after
      giving effect to the addition of the Contract to the pool of Eligible Contracts,
      the Aggregate Implicit Principal Balance of Eligible Contracts (as of any date
      of determination) with respect to which any one Person or any Affiliate of
      such
      Person is the related Customer does not exceed (1) if the Aggregate Implicit
      Principal Balance of the Eligible Contracts is less than $25,000,000, 4.00%
      of
      the Aggregate Implicit Principal Balance of all Eligible Contracts, (2) if
      the
      Aggregate Implicit Principal Balance of the Eligible Contracts is less than
      $50,000,000 but is greater than $25,000,000, the greater of (x) $1,000,000
      and
      (y) 3.00% of the Aggregate Implicit Principal Balance of all Eligible Contracts
      and (3) if the Aggregate Implicit Principal Balance of the Eligible Contracts
      is
      greater than $50,000,000, 3.00% of the Aggregate Implicit Principal Balance
      of
      all Eligible Contracts;

     

    (I)           after
      giving effect to the addition of the Contract to the pool of Eligible Contracts,
      the Aggregate Implicit Principal Balance of Eligible Contracts (as of any date
      of determination) with respect to which any three Persons who are not Affiliates
      of each other (but including any Affiliates of each such Person) is the related
      Customer does not exceed (1) if the Aggregate Implicit Principal Balance of
      the
      Eligible Contracts is less than $25,000,000, 9.00% of the Aggregate Implicit
      Principal Balance of all Eligible Contracts and (2) if the Aggregate Implicit
      Principal Balance of the Eligible Contracts is greater than $25,000,000, the
      greater of (x) $2,250,000 and (y) 7.00% of the Aggregate Implicit Principal
      Balance of all Eligible Contracts;

     

    
      
        
        

      

      
        D-9

        
          

        

      

      
        
        

      

    

    (J)           after
      giving effect to the addition of the Contract to the pool of Eligible Contracts,
      the Aggregate Implicit Principal Balance of Eligible Contracts (as of any date
      of determination) having a deferred first Scheduled Payment does not exceed
      10.00% of the Aggregate Implicit Principal Balance of all Eligible Contracts;
      and

     

    (K)           after
      giving effect to the addition of the Contract to the pool of Eligible Contracts,
      the percentage of the Eligible Contracts (by Aggregate Implicit Principal
      Balance, as of any date of determination) that are Business Acquisition Loans
      is
      not greater than 15.00% of the Aggregate Implicit Principal Balance of the
      Eligible Contracts; provided, however, that the percentage of the
      Eligible Contracts (by Aggregate Implicit Principal Balance, as of any date
      of
      determination) that are Business Acquisition Loans that are not assigned to
      specific tangible assets is not greater than 7.50% of the Aggregate Implicit
      Principal Balance of the Eligible Contracts.

     

    
      
        
        

      

      
        D-10

        
          

        

      

      
        
        

      

    

    EXHIBIT
      E

    FORM
      OF CONTRACT

    

    (on
      file
      with Sidley Austin LLP)

    
      	
               

            	
              1.

            

    

     

     

    
      
        
        

      

      
        E-1

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      F

    FINANCIAL
      STATEMENTS OF THE SERVICER AS OF MARCH 31, 2007

    

    (on
      file
      with Sidley Austin LLP)

    
      
        
        

      

      
        F-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      G

    UNDERWRITING
      GUIDELINES

    

    (on
      file
      with Sidley Austin LLP)

    
      
        
        

      

      
        G-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      H

    WESTLB
      AG, NEW YORK BRANCH

     

    PROMISSORY
      NOTE

     

    June
      19,
      2007

     

    Amount:
      U.S. $200,000,000.00

     

    FOR
      VALUE
      RECEIVED, LEAF FUND III, LLC (the “Borrower”) unconditionally promises to pay on
      the Final Payment Date (as defined in the Loan Agreement referred to below)
      to
      the order of WESTLB AG, NEW YORK BRANCH (the “Lender”) in Federal or other
      immediately available funds in lawful money of the United States the principal
      sum of TWO HUNDRED MILLION DOLLARS (U.S. $200,000,000.00) or, if less, the
      aggregate unpaid principal amount of the Advances made by Lender to Borrower
      pursuant to the Loan Agreement, and to pay interest thereon from the date hereof
      until this Note is repaid in like money at the rates per annum and in the manner
      set forth in the Loan Agreement.

     

    The
      principal of and interest on this Note shall be payable in immediately available
      funds without set-off or counterclaim, in the manner set forth in the Loan
      Agreement.

     

    This
      Note
      is issued pursuant to the terms of the Secured Loan Agreement dated as of June
      19, 2007, among Lender, Borrower, LEAF Funding, Inc., LEAF Equipment Leasing
      Income Fund III, L.P., LEAF Financial Corporation and U.S. Bank National
      Association (as amended, supplemented or otherwise modified from time to time
      in
      accordance with the terms thereof, the “Loan Agreement”), and is subject to the
      terms thereof and is entitled to the benefits therein provided.

     

    Upon
      the
      occurrence of an Event of Default (as defined in the Loan Agreement), the
      principal of and accrued interest on this Note may be declared due and payable
      in the manner and with the effect provided in the Loan Agreement, without
      presentment, demand, protest or notice of any kind, each of which is hereby
      expressly waived by Borrower.

     

    THIS
      NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE
      OF NEW YORK.

     

    LEAF
      FUND
      III, LLC

    

    

    

    

    By:           __________________________________

    Name:

    Title:

    
      
        
        

      

      
        H-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      I

     

    NOTICE
      OF BORROWING AND PLEDGE

    

    (on
      file
      with the Borrower and Sidley Austin LLP)

    

    
      
        
        

      

      
        I-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      J

     

    FORMS
      OF OPINIONS OF COUNSEL TO LEAF PARTIES

    

    (on
      file
      with Sidley Austin LLP)

    
      
        
        

      

      
        J-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      K-1

     

    FILING
      JURISDICTIONS AND OFFICES

    

     

    LEAF

     

    Secretary
      of State of the State of Delaware.

     

    

    Borrower

    Secretary
      of State of the State of Delaware.

    
      
        
        

      

      
        K-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      K-2

     

    FILING
      JURISDICTIONS AND OFFICES

     

    LEAF

     

    Secretary
      of State of the State of Delaware.

     

    

    Borrower

     

    Secretary
      of State of the State of Delaware.

     

    
      
        
        

      

      
        K-2

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      L

     

    TRADE
      NAMES, ETC.

     

    Borrower:  None

     

    LEAF:    (on
      file with Sidley Austin LLP)

    

    Servicer:
      (on file with Sidley Austin LLP)

    

    
      
        
        

      

      
        L-1

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      M

     

    FORM
      OF BORROWING BASE DEFICIENCY NOTICE

     

    [DATE]

    

    

    WestLB
      AG,New York
      Branch                                                                         U.S.
      Bank National Association,

    1211
      Avenue of the
      Americas                                                                          EP-MN-WS3D

    New
      York,
      New
      York  10036                                                                              60
      Livingston Avenue

    Attention:
      Asset Securitization
      Group                                                           St.
      Paul, Minnesota 55107

    Telecopier
      No.:
      212-597-1423                                                                           Attention:
      Eve Kaplan

    Telephone
      No.:
      212-852-6000                                                                           Telecopier
      No.: 651-495-8090

                 
      Telephone No.: 651-495-3851

     

    Ladies/Gentlemen:

     

    Reference
      is made to the Secured Loan Agreement, dated as of June 19, 2007 (the “Loan
      Agreement”; capitalized terms used but not otherwise defined herein shall have
      the meaning given them in the Loan Agreement), among LEAF Fund III, LLC, a
      Delaware limited liability company (the “Borrower”), LEAF Funding, Inc., a
      Delaware corporation (“LEAF Originator”), LEAF Equipment Leasing Income Fund
      III, L.P., a Delaware limited partnership (the “Seller” or “LEAF”), LEAF
      Financial Corporation, a Delaware corporation (the “Servicer”), WestLB AG, New
      York Branch (the “Lender”) and U.S. Bank National Association, a national
      banking association (the “Collateral Agent” and the “Securities
      Intermediary”).

     

    In
      accordance with Section 7.01(m) of the Loan Agreement, the undersigned Borrower
      hereby notifies you that the certain equipment leases listed below (the
“Contracts”) no longer satisfy each of the eligibility criteria listed on
Exhibit D of the Loan Agreement.  A description of each such
      violation is as follows:

     

    (1)           Contract
      #:                                                                                                .

    (2)           Date
      originally pledged to the Collateral Agent:
                                                    .

    (3)           Outstanding
      Implicit Principal Balance of such Contract: $
                                  .

    (4)           Paragraph
      number(s) of violated eligibility
      criteria:                                 .

    (5)           Description
      of the violation of eligibility
      criteria:                                    

                                                                                                                                              

     

                                                                                                                                              

     

    
      
        
        

      

      
        M-1

        
          

        

      

      
        
        

      

    

    The
      undersigned Borrower hereby
      notifies you that it shall no later than [on the date hereof prepay the
      outstanding principal amount of Advances in part or in whole, together with
      accrued and unpaid interest on, and other costs relating to such prepayment
      under the Loan Agreement payable by the Borrower with respect to, the principal
      amount prepaid] [the second (2nd) Business Day after the date hereof pledge
      additional Eligible Contracts to the Collateral Agent, for the benefit of the
      Lender and the Hedge Counterparty (which shall be in all respects acceptable
      to
      the Lender)], such that after giving effect to such [prepayment] [pledge] the
      Total Outstanding Advances will not exceed the Borrowing Base.

     

    Very
      truly yours,

     

    LEAF
      FUND
      III, LLC

     

    By:           __________________________________

     

    Name:

    Title:

     

    
      
        
        

      

      
        M-2

        
          

        

      

      
        
        

      

    

    EXHIBIT
      N

     

    SCHEDULE
      OF LEAF INDEBTEDNESS

     

    (on
      file
      with Sidley Austin LLP)

    
      
        
        

      

      
        N-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      O

     

    SCHEDULE
      OF LEAF INSURANCE

     

    (on
      file
      with Sidley Austin LLP)

     

    
      
        
        

      

      
        O-1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      P

     

    FORM
      OF VEHICLE LIENHOLDER NOMINEE AGREEMENT

     

    P-1

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