Document:

Third Amendment, dated March 14, 2007, to National City Agrmt,

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      to
      Main Document)

     

    THIRD
      AMENDMENT TO CREDIT AGREEMENT

    

    This
      THIRD AMENDMENT TO CREDIT AGREEMENT (the “Third Amendment”) dated March 14,
      2007, is by and among LEAF FINANCIAL CORPORATION, a Delaware corporation (“LEAF
      Financial”), and LEAF FUNDING, INC., a Delaware corporation (“LEAF Funding” and
      together with LEAF Financial, each individually a “Borrower” and individually
      and collectively, jointly and severally, the “Borrowers”), the various financial
      institutions and other Persons parties hereto (the “Lenders”), and National City
      Bank, as administrative agent and collateral agent for the Lenders (in such
      capacity, the “Agent”).

    

    BACKGROUND

    

    A. Pursuant
      to that certain Credit Agreement dated
      July
      31,
      2006,
      by and
      among the Borrowers, the Lenders, and the Agent, as amended by a First Amendment
      dated August 14, 2006 and a Second Amendment dated December 22, 2006 (as the
      same may be modified and amended from time to time, including by this Third
      Amendment, the “Credit Agreement”), the Lenders agreed, inter
      alia,
      to
      extend to the Borrowers a revolving credit facility in the maximum aggregate
      principal amount of $150,000,000.

    

    B. The
      Borrowers have requested an amendment to the Credit Agreement permitting certain
      Investments, to which the Lenders are willing to agree, on the terms and subject
      to the conditions set forth herein.

    

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

    

    1. Definitions.
      

    

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

    

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

    

    “Credit
      Card Business”
      means the
      business of providing merchant advance financing to small businesses (and
      activities reasonably incidental, complementary or substantially similar
      thereto).

    

    “Credit
      Card Subsidiary”
means,
      so long as such entities are engaged solely in the Credit Card Business, Merit
      Capital Advance, LLC, a Delaware limited liability company, Merit Capital
      Manager, LLC, a Delaware limited liability company, and LEAF
      Ventures.

    
      
        
        

      

      
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    “LEAF
      Ventures”
means
      LEAF Ventures, LLC, a Delaware limited liability company.

     

    “Third
      Amendment”
means
      the Third Amendment to this Agreement dated March 14, 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:

    

    “Subsidiary”
means,
      with respect to any Person, any other Person of which more than 50% of the
      Voting Securities of such other Person (irrespective of whether at the time
      Capital Securities of any other class or classes of such other Person shall
      or
      might have voting power upon the occurrence of any contingency) is at the time
      directly or indirectly owned or controlled by such Person, by such Person and
      one or more other Subsidiaries of such Person, or by one or more other
      Subsidiaries of such Person. Notwithstanding the foregoing, the term
“Subsidiary” shall not include any LEAF SPE or any Credit Card Subsidiary
      (provided that any Credit Card Subsidiary shall still be deemed an “Affiliate”
of the Borrowers for purposes of Section 10.9 hereof). Unless the context
      otherwise specifically requires, the term “Subsidiary” shall be a reference to a
      Subsidiary of a Borrower. 

    

    2. Amendment
      to Section 10.4.
      Subsection (a) of Section 10.4 of the Credit Agreement is hereby amended and
      restated in its entirety as follows:

    

    “(a) Investments
      (i) identified on Schedule 6.8 or Schedule 10.4, together with any future
      transfers of Investments described on Schedule 6.8, subject to the additional
      covenants set forth on Schedule 6.8, and (ii) made by LEAF Financial in LEAF
      Ventures out of funds contributed to LEAF Financial (to the extent such
      Investments in LEAF Ventures not to exceed $5,500,000);”

    

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

    

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

    

    (b) Power
      and Authority.
      (i)
      such Borrower has the power and authority under the laws of its jurisdiction
      of
      organization and under its organizational documents to enter into and perform
      this Third Amendment and any other documents which the Lenders require such
      Borrower to deliver hereunder (this Third Amendment and any such additional
      documents delivered in connection with the Third Amendment are herein referred
      to as the “Amendment Documents”); and (ii) all actions, corporate or otherwise,
      necessary or appropriate for the due

    
      
        
        

      

      
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    execution
      and full performance by the Borrower of this Third Amendment have been adopted
      and taken and, upon their execution, the Credit Agreement, as amended by this
      Third 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 this Third Amendment will not violate any provisions
      of any law or regulation, federal, state, local, or foreign, or the
      organizational documents of such Borrower, or result in any breach or violation
      of, or constitute a default or require the obtaining of any consent under,
      any
      agreement or instrument by which such Borrower or its property may be
      bound;

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    

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

    
      
        
        

      

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

    

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

    

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

    

    8. Governing
      Law.
      This
      Third 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.

    

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

    

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

     

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

     

    LEAF
      FINANCIAL CORPORATION

    

    By:
      ________________________________ 

    Name:

    Title:

    

    LEAF
      FUNDING, INC.

    

    By:
      ________________________________ 

    Name:

    Title:

    
      
        
          Borrowers
            Signature Page

          Third
            Amendment to Credit Agreement

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    ACKNOWLEDGEMENT
      OF GUARANTORS

    

    The
      undersigned, each by its elected officer duly authorized as of the date set
      forth below, having previously executed and delivered to the Agent, pursuant
      to
      the Credit Agreement (the “Credit Agreement”) being amended by this Third
      Amendment (the “Third Amendment”), that certain Guaranty and Suretyship
      Agreement, dated July 31, 2006, (the “Guaranty”), securing the Obligations under
      the Credit Agreement, does hereby consent and agree to the above terms and
      conditions of this Third Amendment, together with the First Amendment,
      including, without limitation, specifically as to Section 5 of the Third
      Amendment amending the Guaranty, and confirms that the Guaranty is in full
      force
      and effect, without any setoff, counterclaim, deduction or other claim of
      avoidance of any nature (except as therein expressly provided).

    

    RESOURCE
      AMERICA, INC.

    

    By:
      _________________________   

    Name:       

    Title:
            

    

    RESOURCE
      LEASING, INC.

    

    By:
      _________________________   

    Name:       

    Title:
            

    Dated
      this March 14, 2007

    

    
      
        
          Guarantors
            Signature Page

          Third
            Amendment to Credit Agreement

          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    

    NATIONAL
      CITY BANK, 

    as
      Agent,
      Swingline Lender and as a Lender

    

    By:
      ________________________________ 

    Name:
      

    Title:
      

    

    
      
        
          Agent
            Signature Page

          Third
            Amendment to Credit Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    HSH
      NORDBANK AG, NEW YORK BRANCH

    

    

    By:
      ________________________________ 

    Name:

    Title:

    

    

    By:
      ________________________________ 

    Name:

    Title:

    

    
      
        
          Lender
            Signature Page

          Third
            Amendment to Credit Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    SOVEREIGN
      BANK

    

    

    By:
      ________________________________ 

    Name:

    Title:

    
      
        
          Lender
            Signature Page

          Third
            Amendment to Credit Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    LASALLE
      BANK NATIONAL ASSOCIATION

    

    

    By:
      ________________________________ 

    Name:

    Title:

    
      
        
          Lender
            Signature Page

          Third
            Amendment to Credit Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    COMMERCE
      BANK, N.A.

    

    

    By:
      ________________________________ 

    Name:

    Title:

    
      
        
          Lender
            Signature Page

          Third
            Amendment to Credit Agreement

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    WACHOVIA
      BANK, NATIONAL      

      
                    ASSOCIATION

    

    

    By:
      ________________________________ 

    Name:

    Title:LLC Agrmt of LEAF Ventures 0307

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    LIMITED
      LIABILITY COMPANY AGREEMENT

    OF

    LEAF
      VENTURES, LLC

     

    (a
      Delaware Limited Liability Company)

     

    THIS
      LIMITED LIABILITY COMPANY AGREEMENT
      is made
      as of March ____, 2007, by which LEAF Financial Corporation (the “Class
      A Member”),
      Crit
      DeMent, Miles Herman, Robert Moskovitz, David English, Matthew Goldenberg and
      Nicholas Capparelli (individually each a “Class
      B Member”
and
      collectively the “Class
      B Members”),
      establish and organize a limited liability company (the “Company”)
      to be
      managed by the Class A Member. The Class A Member and the Class B Member are
      sometimes collectively referred to as the “Members”.
      The
      Members, intending to be legally bound, hereby set forth the terms of their
      agreement as to the affairs of the Company and the conduct of its business,
      as
      follows:

     

    DEFINITIONS

     

    As
      used
      in this Agreement, the capitalized terms shall have the following
      meanings:

     

    “Act”
shall
      mean the Delaware Limited Liability Company Act, as amended, and any successor
      act.

     

    “Affiliate”
means
      (i) a Person defined as an affiliate in Section 101 of the United States
      Bankruptcy Code, including all insiders (as defined in Section 101), or
      (ii) any Person controlled by, controlling or under common control with a
      Person.

     

    “Agreement”
shall
      mean this Limited Liability Company Agreement, as amended.

     

    “Capital”
shall
      mean the sum of all of the money and other property contributed to the Company
      by the Members as provided herein.

     

    “Capital
      Account”
shall
      mean the book capital account established and maintained for each
      Member.

     

    “Capital
      Contributions”
shall
      mean all contributions to the Capital of the Company made by the Members under
      the terms of this Agreement.

     

    “Capital
      Contribution”
shall
      mean each initial and any subsequent contribution to the Capital of the Company
      by a Member.

     

    “Capital
      Transaction”
shall
      mean any sale, transfer, financing, refinancing, exchange or other disposition
      of all or substantially all of the assets of the Company, not in the ordinary
      course of business.

     

    “Capital
      Transaction Proceeds”
shall
      mean all cash receipts of the Company arising from a Capital Transaction
      (including principal and interest received on a debt obligation received as
      consideration, in whole or in part, on a sale of assets and the net proceeds
      of

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    refinancing
      of any indebtedness of the Company), less all expenses incurred and reserves
      determined by the Class A Member to be necessary in connection with the Capital
      Transaction; provided,
      however,
      that
      neither distributions which are deemed returns of Capital for Federal income
      tax
      purposes nor the payment of Capital Contributions by the Members shall be
      included within the meaning of the term Capital Transaction
      Proceeds.

     

    “Certificate”
shall
      mean the Certificate of Formation of the Company as filed with the Delaware
      Secretary of State, including any and all amendments thereto.

     

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

     

    “Distributable
      Cash”
shall
      mean, for any Fiscal Year (as defined in Section 4 hereof) or portion thereof,
      Gross Revenues minus the total annual cash expenditures of the Company
      (excluding cash expenditures attributable to a Capital Transaction) and any
      additions to cash reserves of the Company as determined by the Class A Member
      for such period.

     

    “Gross
      Revenues”
shall
      mean, for any Fiscal Year or portion thereof, the total cash gross receipts
      from
      operations of the Company from all sources (but excluding Capital Transaction
      Proceeds), Capital Contributions and the proceeds of any loans made to the
      Company) for such period.

     

    “Interest”
      or “Interest in the Company”
shall
      mean the ownership interest of each Member in the Company as set forth in
      Schedule A, as Schedule A may be amended from time to time.

     

    “Merit
      Capital Advance LLC Agreement”
shall
      mean the limited liability company agreement of Merit Capital Advance, LLC,
      a
      Delaware limited liability company.

     

    “Person”
shall
      mean any individual, corporation, partnership, limited liability company, trust
      or other entity.

     

    “Regulations”
shall
      mean the regulations promulgated from time to time by the U.S. Treasury
      Department under the Code.

     

    “Transfer”
shall
      mean any and all types of transfers including, but not limited to, any sale,
      conveyance, assignment, disposition, distribution, encumbrance, pledge,
      mortgage, hypothecation or gift.

     

    “Units”
shall
      mean a representation of a Member’s respective Interest in the
      Company.

     

    Any
      capitalized terms not defined above shall have the meanings ascribed to them
      in
      the relevant sections of this Agreement. 

     

    1. FORMATION
      AND NAME

     

                The
      parties to this
      Agreement agree to establish and organize a limited liability company pursuant
      to the Act, upon the terms set forth in this Agreement. The
      Members

    
      
        
        

      

      
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    are
      hereby admitted to the Company as members in the Company. The name of the
      Company shall be LEAF Ventures, LLC.

     

    2. PRINCIPAL
      AND REGISTERED OFFICE

     

                The
      principal office
      of the Company shall be 110 S. Poplar Street, Suite 101, Wilmington, Delaware
      19801, and the registered office of the Company shall be 110 S. Poplar Street,
      Suite 101, Wilmington, Delaware 19801. The Class A Member may from time to
      time
      change such principal and registered office upon written notice to the other
      Members. All Members agree to execute and deliver all necessary documents in
      connection with the registration of the Company in all jurisdictions requiring
      such registration.

     

    3. PURPOSE

     

                The
      purpose of the
      Company shall be to acquire membership interests in Merit Capital Advance,
      LLC
      and to engage in any lawful act or activity for which limited liability
      companies may be organized under the Act and engage in any and all activities
      necessary, convenient, desirable or incidental to the foregoing. The Company
      shall have the authority to do all things necessary or advisable in order to
      accomplish such purpose.

     

    4. TERM;
      FISCAL YEAR

     

    The
      existence of the Company shall commence on the date the Certificate is filed
      and
      deemed effective in the office of the Secretary of State of the State of
      Delaware and shall continue until the Company is dissolved in accordance with
      the provisions of this Agreement (the “Term”).
      The
      fiscal year of the Company (the “Fiscal
      Year”)
      shall
      begin on October 1 and end on September 30 unless otherwise determined by the
      Class A Member.

     

    5. MEMBERS
      AND THEIR INTERESTS

     

                5.1. Members.
      There
      shall be two classes of Members, the Class A Member and the Class B Members.
      Unless otherwise set forth in this Agreement, the Company shall be managed
      by
      the Class A Member in accordance with the provisions of Section 8. The Members
      each shall individually have the number of Units and a corresponding Interest
      in
      the Company as set forth on Schedule A hereto. The Class A Member shall modify
      Schedule A from time to time, upon the issuance of additional Units or a
      transfer of Units to reflect the then current Members and their respective
      Interests in the Company and such schedule shall be kept at the principal office
      of the Company. The Company may issue partial or fractional Units.

     

                5.2. Capital
      Contributions.

     

    5.2.1. Members.
      Each
      Member agrees to make on the date of this Agreement the Capital Contribution
      in
      the amount set forth opposite such Member’s name on the attached Schedule A in
      exchange for the number of Units and Interest in the Company set forth opposite
      such Member’s name on the attached Schedule A. The initial Capital Contribution
      of the Class A Member is an amount that is equal to the required initial capital
      contribution of the Company under the terms of the Merit Capital Advance LLC
      Agreement.

    
      
        
        

      

      
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    5.2.2. Additional
      Capital Contributions.
      No
      Class B Member shall be required to make any additional Capital Contributions
      to
      the Company. Any additional Capital Contributions shall be made by, and in
      the
      sole discretion of, the Class A Member. Notwithstanding the foregoing, the
      Class
      A Member shall make additional Capital Contributions to the Company in an amount
      equal to any additional capital contributions required to be made by the Company
      to Merit Capital Advance, LLC. Such additional Capital Contributions shall
      be
      made immediately prior to the time the Company is required to make such
      additional capital contribution to Merit Capital Advance, LLC.

     

    5.3. Vote
      of Members.
      Any
      matter requiring the vote of the Members shall be determined by a vote in
      accordance with their Interests as set forth on the attached Schedule
      A.

     

    5.4. Additional
      Members.
      Additional Members may be admitted to the Company or additional Units issued
      with the prior written consent of the Members holding in the aggregate equal
      to
      or greater than fifty-one percent (51%) of the Member Interests in the Company.
      In the event any additional Members are admitted to the Company, the Unit(s),
      Interest(s) and vote in the Company of the most recently admitted Member(s)
      shall be as specified at the time such new Member(s) shall be admitted, and
      the
      Interest in the Company of each of the Members of the Company shall be
      proportionately reduced, as appropriate. The foregoing shall not apply to any
      substituted Member who is the transferee of one or more Units and Interest
      in
      the Company from another Member. The existing Members shall not have any
      pre-emptive rights to any additional Units issued hereunder.

     

    5.5. Other
      Activities of Members.
      The
      Members may engage in or possess an interest in other business ventures of
      any
      nature, whether or not similar to or competitive with the activities of the
      Company, for their respective accounts and not for the account of the Company
      or
      the other Members.

     

    5.6. Limitation
      of Liability of Members.
      No
      Member shall have any liability or obligation for any debts, liabilities or
      obligations of the Company, or of any agent or employee of the Company, beyond
      the Member’s Capital Contribution.

     

    5.7. Loans.
      Loans
      may be made to the Company by a Member only upon the consent of the Class A
      Member. If a Member makes any loan to the Company, or advances money on its
      behalf, the amount of any such loan or advance shall not be deemed an increase
      in, or contribution to, the Capital Contribution of the Member. Interest shall
      accrue on any such loan at an annual rate agreed to by the Company and the
      Member making such loan (but not in excess of the maximum rate allowable under
      applicable usury laws).

     

    5.8. Certain
      Units Subject to Forfeiture.
      Notwithstanding any other provision of this Agreement, as provided below, Mr.
      Capparelli’s Units are subject to forfeiture if Mr. Capparelli ceases to be
      employed by Merit Capital Manager, LLC or any of its affiliates (“Employer”).

     

    5.8.1. If
      Mr.
      Capparelli is not employed by Employer prior to the first anniversary of the
      date hereof, Mr. Capparelli shall forfeit 100% of his Units.

    
      
        
        

      

      
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    5.8.2. If
      Mr.
      Capparelli is employed by Employer on the first anniversary of the date hereof
      but is not employed by Employer prior to the second anniversary of the date
      hereof, Mr. Capparelli shall forfeit 75% of his Units.

     

    5.8.3. If
      Mr.
      Capparelli is employed by Employer on the second anniversary of the date hereof
      but is not employed by Employer prior to the third anniversary of the date
      hereof, Mr. Capparelli shall forfeit 50% of his Units.

     

    5.8.4. If
      Mr.
      Capparelli is employed by Employer on the third anniversary of the date hereof
      but is not employed by Employer prior to the fourth anniversary of the date
      hereof, Mr. Capparelli shall forfeit 25% of his Units.

     

    5.8.5. If
      Mr.
      Capparelli is employed by Employer on the fourth anniversary of the date hereof,
      his Units shall no longer be subject to forfeiture.

     

    6. CAPITAL
      ACCOUNTS AND ALLOCATIONS

     

                6.1. Capital
      Accounts.
      A
      single Capital Account shall be established, determined and maintained for
      each
      Member in accordance with the “alternate test for economic effect” set forth in
      Regulation §1.704-l(b)(2), which provides, in part, that a Member’s Capital
      Account shall be:

     

    6.1.1. increased
      by (i) the amount of money contributed by the Member to the Company,
      (ii) the fair market value of any property contributed by the Member to the
      Company (net of liabilities secured by such contributed property), and
      (iii) allocations to the Member of Company income and gain (or items
      thereof), including income and gain exempt from tax; and

     

    6.1.2. decreased
      by (i) the amount of money distributed to the Member by the Company, (ii) the
      fair market value of any property distributed to the Member by the Company
      (net
      of liabilities secured by such distributed property), (iii) allocations to
      the
      Member of expenditures of the Company not deductible in computing its taxable
      income and not properly capitalized for federal income tax purposes, and (iv)
      allocations to the Member of Company loss and deduction (or items
      thereof).

     

                6.2. Transferred
      Capital Accounts; Adjustments.
      Upon
      the Transfer of all or any part of a Member’s Unit(s) and Interest in the
      Company, the Capital Account of the transferor Member that is attributable
      to
      the transferred interest shall carry over to the transferee Member, unless
      such
      Transfer causes a termination of the Company for federal income tax purposes,
      in
      which case the Capital Account that carries over to the transferee Member shall
      be adjusted in accordance with Regulation §1.704-l(b)(2)(iv)(e).

     

                6.3. Return
      of Capital.
      Each
      Member is entitled to the return of his Capital Contribution only by way of
      distributions made pursuant to Sections 7 and 12 hereof. No Member shall
      have the right to demand or receive any property other than cash in return
      for
      that Member’s Capital Contribution or to bring an action of partition against
      the Company or its property. 

    
      
        
        

      

      
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                6.4. Profits
      and Losses; Allocations.
      The
      income (including tax exempt income), gains, deductions, losses and credits
      of
      the Company shall be determined in conformity with standard federal tax
      accounting principles consistently applied and shall be allocated among the
      Members in the following order:

     

    6.4.1. First,
      to
      each Member in proportion to the aggregate net losses heretofore allocated
      to
      all the Members to the extent that such net losses have not heretofore been
      offset by allocations of net profits pursuant to this Section 6.4.1. to the
      extent thereof;

     

    6.4.2. Second,
      to each Member in proportion to and up to the amount of Distributable Cash
      distributed under Section 7.1;

     

    6.4.2.1. Profits
      in excess of Distributable Cash shall first be allocated among the Members
      to
      the extent that a Member was allocated less profit than Distributable Cash
      in
      prior years under Section 6.4.2.2. hereof; and

     

    6.4.2.2. Profits
      in excess of Distributable Cash shall next be allocated among the Members in
      proportion to their respective Interests in the Company.

     

    6.4.3. The
      Company’s net profits from a Capital Transaction shall be allocated among the
      Members, to the extent possible, to create positive balances in the Members’
respective Capital Accounts that will result in liquidating distributions
      pursuant to Section 12.2 hereof being made in the manner described in Section
      7.3 hereof.

     

    6.4.4. The
      Company’s net losses for any Fiscal Year shall be allocated among the Members in
      the following order:

     

    6.4.4.1. First,
      to
      each Member in proportion to the aggregate net profits heretofore allocated
      to
      all Members to the extent that such net profits have not heretofore been offset
      by allocations of net losses pursuant to this Section 6.4.4.1. to the
      extent thereof; and

     

    6.4.4.2. Second,
      to the Members in proportion to such Member’s respective Interest in the
      Company; provided,
      however,
      that in
      the event of a contribution to the Company of property to which Section 704
      of
      the Code applies, or a revaluation of Company property pursuant to the
      Regulations, allocations of items of depreciation, amortization and gain or
      loss, as computed for federal income tax purposes, shall be made in a manner
      that takes into account the variations between the adjusted tax basis of such
      property and its adjusted value in accordance with the “Traditional Method” set
      forth in the Regulations.

     

                6.5. Qualified
      Income Offset; Minimum Gain Chargeback.
      Notwithstanding the provisions of Section 6.4 hereof:

     

    6.5.1. A
      Member
      shall not be allocated items of loss, deduction or nondeductible
      noncapitalizable expenditure (“Loss
      Items”)
      to the
      extent such an allocation would cause or increase a negative balance in such
      Member’s Capital Account as of the close of

    
      
        
        

      

      
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    any
      taxable year in excess of the sum of (i) the amount of such balance the Member
      is obligated or deemed obligated to restore pursuant to the Regulations, and
      (ii) to the extent not taken into account under clause (i), the amount of any
      loan with respect to which the Member is treated as bearing the risk of loss
      pursuant to the Regulations. Any Loss Items prohibited to be allocated to a
      Member by reason of this Section 6.5.1. shall be allocated to or among the
      other Members as provided in this Section 6 and the applicable
      Regulations.

     

    6.5.2. If
      there
      is a net decrease in Company minimum gain (as defined in the Regulations) or
      in
      minimum gain attributable to Member nonrecourse debt (as defined in the
      Regulations) during a Company Fiscal Year, the Members shall be allocated items
      of Company income and gain (“Income
      Items”)
      in
      accordance with the Regulations. This Section 6.5.2. is intended to comply
      with the minimum gain chargeback requirement of the Regulations, and shall
      be
      interpreted and applied consistently therewith.

     

    6.5.3. If
      a
      Member unexpectedly receives an adjustment, allocation or distribution described
      in the Regulations which results in a negative balance in such Member’s Capital
      Account in excess of the sum described in Section 6.5.1. above, Income
      Items (consisting of a pro-rata portion of each item of Company income,
      including gross income, and gain) shall be allocated to such Member in an amount
      and a manner sufficient to eliminate such excess deficit balance as quickly
      as
      possible. This Section 6.5.3. is intended to comply with the qualified
      income offset requirement of the Regulations, and shall be interpreted and
      applied consistently therewith.

     

    6.5.4. If
      (i) any Loss Items shall be specifically allocated pursuant to
      Section 6.5.1. hereof, and the Member to whom such Loss Items has been
      allocated does not have a related share of minimum gain (within the meaning
      of
      the Regulations) or minimum gain attributable to Member nonrecourse debt (within
      the meaning of the Regulations), or (ii) any Income Items shall be
      specially allocated pursuant to Section 6.5.2. or 6.5.3. hereof, then as
      quickly as possible thereafter (but not in such a manner as to violate the
      provisions of any part of this Section 6.5) Income Items and Loss Items
      shall be allocated to such Member to reverse such special allocations. The
      intention of this Section 6.5.4. is to cause the ultimate adjustment of all
      Capital Accounts to such balances as they would have had if no special
      allocations had been made pursuant to Sections 6.5.1., 6.5.2. or 6.5.3.
      hereof during the Term but the limitation set forth in Section 6.5.1. above
      had instead been applied immediately prior to the liquidation of the Company
      taking into account all Income Items and Loss Items incurred at any time during
      the Term.

     

    7. CASH
      DISTRIBUTIONS

     

                7.1. Distributable
      Cash.
      Distributions of Distributable Cash to the Members shall be made within five
      business days of the Company’s receipt of a distribution pursuant to Section
      5.1(a) of the Merit Capital Advance LLC Agreement. Distributable Cash shall
      be
      distributed to the Members in accordance with their Interests in the Company;
      provided, however, if the Class A Member reasonably determines that such
      distribution constitutes a capital transaction of Merit Capital Advance, LLC,
      then such distribution shall be deemed Capital Transaction Proceeds and
      distributed pursuant to Section 7.3. All other distributions shall be made
      at
      the sole discretion of the Class A Member.

    
      
        
        

      

      
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                7.2. Tax
      Distributions.
      The
      Company shall, at any time it receives a tax distribution pursuant to the Merit
      Capital Advance LLC Agreement, distribute the pro rata amount of such
      distribution to each Member. Any amount distributed pursuant to this Section
      7.2
      shall be deemed to be an advance distribution of amounts otherwise distributable
      to the Members pursuant to Section 7.1 and shall reduce the amounts that would
      subsequently otherwise be distributed to the Members pursuant to Section
      7.1.

     

                7.3. Capital
      Transaction Proceeds.
      Distributions of Capital Transaction Proceeds to the Members shall be made
      in
      the manner, and at such time, as solely determined by the Class A Member but
      in
      no event later than sixty (60) days following the Capital Transaction giving
      rise to such proceeds. Capital Transaction Proceeds shall be distributed to
      the
      Members with positive Capital Account balances, pro rata, in proportion to
      the
      Members’ respective positive Capital Account balances until each Member’s
      Capital Account balance is zero and any excess Capital Transaction Proceeds
      shall be distributed, pro rata, in proportion to the Member’s respective
      Interest in the Company.

     

    8. MANAGEMENT
      OF THE COMPANY

     

                8.1. Management.
      Except
      as otherwise expressly stated elsewhere in this Agreement, the business and
      affairs of the Company shall be managed solely by the Class A
      Member.

     

                8.2. Powers
      of the Class A Member.
      Subject
      to this Agreement, the Class A Member shall have the exclusive right to manage
      the business of the Company and is hereby authorized to take any action of
      any
      kind and to do anything and everything it deems necessary in accordance with
      the
      provisions of this Agreement. The Class A Member shall take all actions which
      may be necessary or appropriate for the continuation of the Company’s valid
      existence as a limited liability company under the laws of the State of
      Delaware, and to qualify the Company to do business in such other jurisdictions
      as required by law. All decisions concerning the management of the Company
      shall
      be made by the Class A Member. Except as otherwise provided in this Agreement
      or
      by nonwaivable provisions of the Act, the Class B Members shall not be entitled
      to vote on any matters concerning the management of the Company, or have the
      authority to bind the Company. The Class A Member shall have the power to do
      any
      and all acts necessary or convenient to or for the furtherance of the purposes
      described herein, including all powers, statutory or otherwise, possessed by
      the
      Members under the laws of the State of Delaware.

     

    Unless
      authorized in writing to do so by this Agreement or by the Class A Member,
      no
      attorney-in-fact, employee or other agent of the Company shall have any power
      or
      authority to bind the Company in any way, to pledge its credit or to render
      it
      liable pecuniarily for any purpose.

     

                8.3. Meeting
      of Members.

     

    8.3.1. No
      annual
      meetings of the Members shall be held.

     

    8.3.2. Special
      meetings of the Members for any proper purpose or purposes may be called at
      any
      time by the Class A Member. Only business within the purpose or

    
      
        
        

      

      
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    purposes
      described in the notice (or waiver thereof) provided by the Class A Member
      to
      the Members may be conducted at a special meeting of the Members.

     

    8.3.3. Any
      action to be taken at any meeting of Members may be taken without a meeting,
      without prior notice, and without a vote, if a consent or consents in writing,
      setting forth the action so taken, shall be signed by the holder or holders
      of a
      majority of the Interests in the Company. Every written consent shall bear
      the
      date of signature of each Member who signs the consent. 

     

                8.4. Exculpation
      and Indemnification.
      

     

    8.4.1. The
      Class
      A Member shall not be held liable to the Company or to any Member for any loss
      suffered by the Company unless such loss is caused by the Class A Member’s gross
      negligence, willful misconduct or violation of law. The Class A Member shall
      not
      be liable for errors in judgment or for any acts or omissions that do not
      constitute gross negligence, willful and wanton misconduct or violation of
      law.
      The Class A Member may consult with counsel and accountants in respect of
      Company affairs and, provided the Class A Member acts in good faith reliance
      upon the advice or opinion of such counsel or accountants, the Class A Member
      shall not be liable for any loss suffered by the Company in reliance
      thereon.

     

    8.4.2. Subject
      to the limitations and conditions as provided in this Section 8.4, each Person
      who was or is made a party or is threatened to be made a party to or is involved
      in any threatened, pending or completed action, suit or proceeding, whether
      civil, criminal, administrative, arbitrative (hereinafter a “Proceeding”),
      or
      any appeal in such a Proceeding or any inquiry or investigation that could
      lead
      to such a Proceeding, by reason of the fact that he or she, or a Person of
      whom
      he or she is the legal representative, is or was a Class A Member of the Company
      or a director, officer, employee or agent of the Class A Member, or while a
      Class A Member of the Company or a director, officer, employee or agent of
      the
      Class A Member, is or was serving at the request of the Company as a Class
      A
      Member, director, partner, venturer, proprietor, trustee, employee, agent,
      or
      similar functionary of another foreign or domestic limited liability company,
      corporation, partnership, joint venture, sole proprietorship, trust, employee
      benefit plan or other enterprise shall be indemnified by the Company to the
      fullest extent permitted by the Act, as the same exists or may hereafter be
      amended (but, in the case of any such amendment, only to the extent that such
      amendment permits the Company to provide broader indemnification rights than
      such law permitted the Company to provide prior to such amendment) against
      judgments, penalties (including excise and similar taxes and punitive damages),
      fines, settlements and reasonable expenses (including, without limitation,
      attorneys’ fees) actually incurred by such Person in connection with such
      Proceeding, and indemnification under this Section 8.4 shall continue as to
      a
      Person who has ceased to serve in the capacity which initially entitled such
      Person to indemnity hereunder. The rights granted pursuant to this Section
      8.4
      shall be deemed contract rights, and no amendment, modification or repeal of
      this Section 8.4 shall have the effect of limiting or denying any such rights
      with respect to actions taken or Proceedings arising prior to any amendment,
      modification or repeal. It is expressly acknowledged that the indemnification
      provided in this Section 8.4 could involve indemnification for negligence or
      under theories of strict liability.

    
      
        
        

      

      
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    8.4.3. The
      right
      to indemnification conferred in this Section 8.4 shall include the right to
      be
      paid or reimbursed by the Company the expenses incurred by a Person of the
      type
      entitled to be indemnified under Section 8.4.2. who was, is or is threatened
      to
      be made a named defendant or respondent in a Proceeding in advance of the final
      disposition of the Proceeding and without any determination as to the Person’s
      ultimate entitlement to indemnification. Upon request, the Company shall pay
      such expenses incurred and to be incurred by any such Person in advance of
      the
      final disposition of a Proceeding, upon receipt of an undertaking by such Person
      to repay all amounts so advanced if it shall ultimately be determined that
      such
      Person is not entitled to be indemnified under this Section 8.4 or
      otherwise.

     

    8.4.4. The
      right
      to indemnification and the advancement and payment of expenses conferred in
      this
      Section 8.4 shall not be exclusive of any other right which a Person may have
      or
      hereafter acquire under any law (common or statutory), provision of the
      Certificate or this Agreement, vote of Members or disinterested Class A Member
      or otherwise.

     

    8.4.5. The
      Company may purchase and maintain insurance, at its expense, to protect itself
      and any Member (or director, officer, employee or agent of the Class A Member),
      or agent of the Company or is or was serving at the request of the Company
      as a
      director, officer, partner, venturer, proprietor, trustee, employee, agent
      or
      similar functionary of another foreign or domestic limited liability company,
      corporation, partnership, joint venture, sole proprietorship, trust, employee
      benefit plan or other enterprise against any amounts entitled to be indemnified
      whether or not the Company would have the power to indemnify such Person against
      such expense, liability or loss under this Section 8.4.

     

    8.4.6. If
      this
      Section 8.4 or any portion hereof shall be invalidated on any ground by any
      court of competent jurisdiction, then the Company shall nevertheless indemnify
      and hold harmless the Class A Member or any other Person indemnified pursuant
      to
      this Section 8.4 as to any amounts entitled to be indemnified under Section
      8.4.2. to the full extent permitted by any applicable portion of this Section
      8.4 that shall not have been invalidated and to the fullest extent permitted
      by
      applicable law.

     

                8.5. Reliance
      by Third Parties.
      Third
      parties dealing with the Company shall be entitled to rely conclusively upon
      the
      power and authority of the Class A Member. Any corporation, trust, partnership,
      or other business entity called upon to Transfer any property to or from the
      name or account of the Company shall be entitled to rely on instructions or
      assignments signed by the Class A Member without inquiry as to the authority
      of
      the Person signing or purporting to sign such instructions or assignments and
      without inquiry as to the validity of the Transfer.

     

                8.6. Class
      A Member Has No Exclusive Duty to Company.
      The
      Class A Member shall devote to the Company such time and effort as may be
      necessary for the proper performance of its duties hereunder. The Class A Member
      shall not be required to manage the Company as its sole and exclusive function
      and it may have other business interests and may engage in other activities
      in
      addition to those relating to the Company. Neither the Company nor any other
      Member shall have any right, by virtue of this Agreement, to share or
      participate in such other investments or activities of the Class A Member or
      to
      the income or proceeds derived

    
      
        
        

      

      
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    from
      such
      investments or activities. The Class A Member shall incur no liability to the
      Company or any other Member as a result of engaging in any other business or
      venture.

     

                8.7. Tax
      Matters Member.
      The
      Class A Member is designated as the tax matters member under § 6231(a)(7) of the
      Code or under comparable provisions of state or local tax laws and shall have
      the duties and authority of a tax matters member as specified in the Code and
      the Regulations or under comparable provisions of state or local tax
      laws.

     

                8.8. Company
      Expenses.
      All
      reasonable third party expenses incurred by the Class A Member (or any third
      party hired by the Class A Member) for performing the services in performing
      its
      duties and obligations hereunder shall constitute operating expenses of the
      Company. The Class A Member shall not be required to use its own funds in
      carrying out any of its responsibilities under this Agreement. If the Class
      A
      Member uses its own funds to pay for any operating expenses of the Company,
      the
      Company shall reimburse the Class A Member within ten (10) days following
      receipt of evidence of such expenditure made by the Class A Member out of its
      own funds. The Members shall pay their own legal and other expenses in
      connection with the negotiation and execution of this Agreement.

     

                8.9. Tax
      Elections.
      The
      Company shall be treated, and shall file its tax returns, as a partnership
      for
      federal, state and local income and other tax purposes. All elections permitted
      to be made by the Company under the Code shall be made by the Class A Member.
      Notwithstanding the foregoing, no election shall be made by the Company or
      the
      Class A Member for the Company to be excluded from the application of any of
      the
      provisions of Subchapter K, Chapter 1 of Subtitle A of the Code or from any
      similar provisions of any state tax laws.

     

    9. LIABILITY
      AND RIGHTS OF MEMBERS

     

                9.1. No
      Participation in Management.
      Except
      as otherwise provided herein, the Members shall not participate in the
      management or control of Company business, nor shall the Members transact any
      business for the Company, nor shall the Members have the power to act for or
      bind the Company, said powers being vested exclusively in the Class A
      Member.

     

                9.2. No
      Personal Liability.
      No
      Member, employee or agent of the Company shall have any personal liability,
      whether to the Company, to any of the Members or to the creditors of the
      Company, for the debts, obligations or liabilities of the Company or any losses
      beyond the amount committed by the Member to the capital of the Company. No
      Member shall be personally liable for the return of any Capital Contribution
      made to the Company by another Member.

     

                9.3. Death
      of a Member.
      The
      death of a Member shall not cause a dissolution of the Company. Upon the death
      of a Member, the rights of such Member to share in the Company profits and
      losses, to receive distributions of Company funds and to transfer his or her
      Unit(s) and Interest in the Company shall descend to and vest in his or her
      personal representatives
      or successors-in-interest, subject to the terms and conditions of this
      Agreement, and the Company shall continue as a limited liability
      company.

    
      
        
        

      

      
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    10. BANKING;
      BOOKS AND RECORDS

     

                10.1. Banking.
      All
      funds of the Company shall be deposited and kept in its name in such Company
      bank account or accounts as shall be designated by the Class A Member. All
      withdrawals therefrom shall be made upon checks signed by the Class A Member
      or
      its designee(s).

     

                10.2. Books
      and Records.
      Adequate accounting records of all Company business shall be kept and these
      shall be open to inspection by any of the Members at all reasonable times.
      The
      Company shall maintain its accounting records and shall report for income tax
      purposes on the cash or accrual method of accounting, as determined by the
      Class
      A Member.

     

                10.3. Tax
      Returns.
      The
      Class A Member shall cause all tax returns for the Company to be prepared and
      timely filed with the appropriate authorities, and shall provide copies of
      all
      such returns to the Members.

     

    11. TRANSFERABILITY
      OF INTERESTS

     

                11.1. Member’s
      Unit(s) and Interest.
       A
      Member
      may not Transfer all or part of its Unit(s) or Interest in the Company to a
      Person (hereinafter sometimes referred to as an “Assignee”)
      unless
      such Transfer is made in accordance with the provisions of this Section 11.
      Any
      purported Transfer in violation of the provisions of this Section 11 shall
      be
      null and void and any non-transferring Member, in addition to any other remedies
      available under this Agreement and at law, in equity and otherwise, may seek
      to
      enjoin such Transfer and the transferring Member, or its legal representatives,
      agrees to submit to the jurisdiction of any court of the State of Delaware
      and
      to be bound by any order of such court enjoining such purported Transfer. An
      Assignee who receives all or a portion of a Member’s Unit(s) and Interest in the
      Company in a Transfer made in accordance with the provisions of this Section
      11
      shall be entitled to receive all distributions, allocations and economic
      benefits attributable to the interest transferred to such Assignee, but such
      Assignee shall in no event be admitted to the Company as a substitute Member
      unless the additional requirements set forth in Section 11.5.3. below are
      satisfied.

     

                11.2. Permitted
      Transfers.
      A
      Member shall be permitted to Transfer all or a portion of its economic interests
      in the Company in each of the following circumstances:

     

    11.2.1. If
      such
      Transfer is made with the consent of the Class A Member, which consent may
      be
      granted or withheld in the Class A Member’s sole discretion;

     

    11.2.2. Such
      Transfer is made to one or more members of the Member’s Immediate Family (as
      defined below) or to a trust, partnership, corporation or limited liability
      company established for the benefit of the Member or member of the Member’s
      Immediate Family, provided that such transferring Member retains all of the
      voting rights of the Unit(s) and Interest in the Company
      transferred;

    
      11.2.3. In
        the
        case of one or more Units and Interest in the Company held by a trust, such
        Transfer is to the beneficiary or beneficiaries of such trust; or

        
          
            
            

          

          
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    11.2.4. Such
      Transfer is made by the Class A Member to a Lender in connection with and as
      security for a loan; or

     

    11.2.5. Such
      Transfer is made upon the death of the Member, by will or intestate
      succession.

     

    As
      used
      herein, “Immediate
      Family”
means
      with respect to a Person who is an individual, his or her spouse, his or her
      descendants, and his or her parents. In the case of a Transfer permitted under
      this Section 11.2, the Assignee of the transferred interest shall hold such
      transferred interest subject to the terms of this Agreement, including the
      restrictions on Transfers contained in this Section 11.

     

                11.3. Involuntary
      Transfers.
      If any
      Member becomes bankrupt or insolvent, or if all or any portion of a Member’s
      Unit(s) and Interest
      in the Company is Transferred or threatened to be Transferred involuntarily
      or
      by operation of law (other than a Transfer resulting from the death of such
      Member), the Company and the other Members shall have the right, but not the
      obligation, to purchase such Member’s Unit(s) and Interest
      in the Company for its fair market value, based upon such Member’s right to
      share in distributions from the Company. The fair market value shall be
      determined by an independent appraisal performed by a certified public
      accountant or other qualified appraiser selected by the Class A Member. Such
      independent appraisal shall take all relevant facts and circumstances into
      account, including, without limitation, minority discounts, lack of liquidity
      and restrictions on Transfer. At least twenty-five percent (25%) of such
      purchase price shall be paid in cash, with the remainder payable by means of
      a
      promissory note bearing interest at the rate of two (2) percentage points in
      excess of the rate of interest published from time to time in the Wall
      Street Journal
      as the
      prime rate of interest in effect on the date of such purchase, but in no event
      shall the interest rate be greater than the maximum rate permitted by law,
      and
      payable in equal quarterly payments over a period not to exceed five (5)
      years.

    
      
        
        

      

      
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                11.4. Additional
      Requirements for Assignment.

     

    11.4.1. Notwithstanding
      any rule of law to the contrary, no Transfer, however accomplished, whether
      voluntary or involuntary, of a Member’s Unit(s) and Interest in the Company,
      although otherwise permitted under this Section 11, shall be recognized by
      the
      Company unless and until (i) the assigning Member has given written notice
      thereof to the Class A Member; (ii) the Assignee agrees in writing to be bound
      by all of the terms of this Agreement and to assume all obligations hereunder
      with respect to the assigning Member’s Unit(s) and Interest in the Company, and
      executes and delivers such other instrument in form and substance satisfactory
      to the Class A Member as it may reasonably deem necessary and desirable; and
      (iii) the Assignee pays or obligates himself to pay, as the Class A Member
      may
      determine, all reasonable expenses connected with such substitution, including
      but not limited to the cost of preparing and filing any amendment of the
      Certificate. If the Member is deceased or incompetent, certified copies of
      any
      court order or documents may be submitted in lieu of the document which the
      assigning Member is required to submit under clause (i), above.

     

    11.4.2. Unless
      the Class A Member shall otherwise consent, no Transfer shall be permitted
      if
      such Transfer would result in termination or deemed termination of the Company
      pursuant to section 708(b)(1)(B) of the Code.

     

    11.4.3. If
      a
      Transfer of a Member’s Unit(s) and Interest in the Company satisfies the other
      requirements of this Section 11, the Assignee shall be entitled to the
      distributions and allocations to which the assigning Member would have been
      entitled with respect to such interest, but such Assignee shall only become
      a
      substitute Member entitled to exercise the assigning Member’s other rights under
      this Agreement if: (i) the Class A Member consents to such substitution (or,
      in
      the case of an Assignee of the Manger’s Unit(s) and Interest in the Company, the
      Members holding in the aggregate equal to or greater than fifty-one percent
      (51%) of the Member Interests in the Company consent to such substitution),
      which consent may be withheld for any reason which the Class A Member or Members
      deems appropriate or for no reason; and (ii) the assigning Member grants the
      Assignee such right, provided,
      however,
      that
      such grant shall be deemed to have been given in the event of a Transfer which
      occurs by reason of the death, incompetency or bankruptcy of the assigning
      Member.

     

    11.4.4. Upon
      the
      admission of a substitute Member in accordance with this Section 11.5, Schedule
      A to this Agreement shall be amended to reflect the current list of Members
      and
      their respective Unit(s) and Interests in the Company.

     

                11.5. Securities
      Law Representation.
      The
      Members and any assignee of an interest of any Member hereby represent, warrant
      and acknowledge to the Company that:

     

    11.5.1. the
      Member or assignee is acquiring its Member Interest for its own account for
      investment and not with a view to, or for resale in connection with, any
      distribution or public offering thereof within the meaning of the Securities
      Acts, or other applicable securities law or regulations; and

     

    11.5.2. the
      Member’s or assignee’s Member Interest may only be disposed of pursuant to an
      effective registration statement filed under the Securities Acts,
      or

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    pursuant
      to an exemption from the registration requirements of the Securities Acts;
      the
      Company has not filed such a registration statement nor has any obligations
      to
      do so, nor has agreed to do so, nor contemplates doing so in the future; and
      in
      the absence of such a registration statement or such an exemption, the Member
      may have to hold its Member Interest indefinitely and may be unable to liquidate
      it in case of a financial emergency.

     

                11.6. Repurchase
      Option.

     

    11.6.1. In
      the
      event a Class B Member other than Crit DeMent or Miles Herman is no longer
      employed by the Class A Member or any of its Affiliates (the “Separation”),
      such
      Member’s Units will be subject to repurchase at the option of the Company
      pursuant to the terms and conditions set forth in this Section 11.6 (the
“Repurchase
      Option”).

     

    11.6.2. The
      purchase price for each Unit will be the fair market value of such Unit. The
      fair market value shall be determined by the manner described in Section
      11.3.

     

    11.6.3. The
      Company shall have a one time right to exercise such option by giving notice
      to
      such Member to purchase all, but not less than all, of such Member’s Units by
      delivering written notice (the “Repurchase
      Notice”)
      to the
      Member within sixty (60) days after the Separation.

     

    11.6.4. The
      closing of the purchase of the Units pursuant to the Repurchase Option shall
      take place on the date designated by the Company in the Repurchase Notice,
      which
      date shall not be more than thirty (30) days nor less than five (5) days after
      the delivery of such notice or after the receipt by the Company of a binding
      determination of the Units’ fair market value, whichever is later. The Company
      will pay for the Units to be purchased by it pursuant to the Repurchase Option
      by a check or wire transfer of funds. At least twenty-five percent (25%) of
      such
      purchase price shall be paid in cash, with the remainder payable by means of
      a
      promissory note bearing interest at the rate of two (2) percentage points in
      excess of the rate of interest published from time to time in the Wall
      Street Journal
      as the
      prime rate of interest in effect on the date of such purchase, but in no event
      shall the interest rate be greater than the maximum rate permitted by law,
      and
      payable in equal quarterly payments over a period not to exceed five (5)
      years.

     

    12. TERMINATION
      AND LIQUIDATION

     

                12.1. Termination.
      The
      existence of the Company shall terminate upon the occurrence of any of the
      following:

     

    12.1.1. Upon
      the
      written consent of the Members holding in the aggregate equal to or greater
      than
      fifty-one percent (51%) of the Interests in the Company; or

     

    12.1.2. Upon
      entry of a decree of judicial dissolution pursuant to the Act.

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    On
      the
      occurrence of an event described in Section 12.1, the Company shall be
      liquidated, and the affairs of the Company shall be wound up in accordance
      with
      the provisions of Section 12.2.

     

                12.2. Liquidation.
      Upon
      the dissolution of the Company its assets shall be sold and reduced to cash
      and/or distributed in kind to the Members as provided in this Section 12.2.
      After the payment of all expenses and charges and the establishment of any
      reserve deemed by the Class A Member to be necessary or appropriate for the
      payment of any contingent or unsettled claims, all available cash and any
      remaining assets of the Company shall be distributed to the Members in
      proportion to their respective Capital Accounts, to the extent the sums are
      positive, and then in accordance with their respective Interests in the Company,
      subject to the prior discharge of any liabilities of the Company, first to
      outside creditors in order of legal priority and then to the Members (except
      liabilities arising from their respective rights to participate in distributions
      hereunder) and to the payment or setting aside of an amount sufficient to pay
      the costs of dissolution and winding up.

     

    For
      purposes of making such liquidation distributions, the Capital Accounts of
      the
      Members shall be adjusted to reflect all Capital Account adjustments for the
      Company’s taxable year during which such liquidation occurs (other than those
      made pursuant to the preceding portions of this paragraph) and after adjustment
      for all items of unrealized income, gain, loss or deduction inherent in any
      property to be distributed to the Members that have not been previously
      reflected in their Capital Accounts, determined as if there had been a taxable
      disposition of the distributed property for its fair market value on the date
      of
      liquidation.

     

    If
      any
      Member has a deficit balance in his Capital Account (after giving effect to
      all
      contributions, distributions, and allocations for all taxable years, including
      the year during which such liquidation occurs), such Members shall have no
      obligation to make any contribution to the capital of the Company with respect
      to such deficit, and such deficit shall not be considered a debt owed to the
      Company or to any other Person for any purpose whatsoever.

     

    In
      the
      event the Company is “liquidated” within the meaning of Regulations Section
      1.704-1(6)(2)(ii)(g), distributions shall be made pursuant to this Section
      12 to
      the Member’s who have positive Capital Accounts in compliance with Regulations
      Section 1.704-1(b)2)(ii)(b)(2). Notwithstanding anything to the contrary, in
      the
      event the Company is liquidating within the meaning of Regulations Section
      1.704-1(b)(2)(ii)(g), and liquidated under this Section 12, liquidating
      distributions shall be made pursuant to this Section by the end of the taxable
      year in which the Company is liquidated, or if later, within 90 days after
      the
      date of such liquidation. Distributions pursuant to the preceding sentence
      may
      be made to a trust for the purpose of an orderly liquidation of the Company
      by
      the trust in accordance with the Act. Notwithstanding any other provision of
      this Section 12, in the event the Company is liquidated within the meaning
      of
      Regulations Section 1.704-1(b)(2)(ii)(g) but the Company is not liquidated
      under
      this Section 12, the property of the Company shall not be liquidated, the
      Company’s liabilities shall not be paid or discharged, and the Company’s affairs
      shall not be wound up. Instead, the Company shall be deemed to have liquidated
      and reconstituted in the manner provided in the Regulations under Code Section
      704.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    13. MISCELLANEOUS

     

      13.1. Amendments.
      Subject
      to the provisions of Section 13.13, amendments to this Agreement shall become
      effective only upon the execution of a written instrument describing said
      amendment and signed by the Members holding in the aggregate equal to or greater
      than fifty-one percent (51%) of the Interests in the Company. Notwithstanding
      the foregoing, the Class A Member (pursuant to the Class A Member’s power of
      attorney from Member), without the consent of any Member, may amend any
      provision of this Agreement, and execute, swear to, acknowledge, deliver, file,
      and record whatever documents may be required in connection therewith, to
      reflect:

     

    13.1.1. a
      change
      in the name of the Company, in the registered office or registered agent of
      the
      Company, or in the location of the principal place of business of the
      Company;

     

    13.1.2. the
      admission, substitution, or removal of a Member in accordance with this
      Agreement;

     

    13.1.3. a
      change
      that the Class A Member has determined is reasonable and necessary or
      appropriate to qualify or register, or continue the qualification or
      registration of, the Company as a limited liability company (or a partnership
      in
      which the Member has limited liability) under the laws of any state or which
      change is necessary or advisable in the opinion of the Class A Member to ensure
      that the Company will not be treated as an association taxable as a corporation
      for federal income tax purposes;

     

    13.1.4. a
      change
      that (i) the Class A Member has determined does not adversely affect the Members
      in any material respect, or (ii) is necessary or desirable to satisfy any
      requirements, conditions, or guidelines contained in any opinion, directive,
      order, ruling, or regulation of any federal or state agency or judicial
      authority or contained in any federal or state statute; or

     

    13.1.5. an
      amendment that is necessary, in the opinion of counsel to the Company, to
      prevent the Company or the Class A Member or its directors, officers, employees,
      agents, or representatives from in any manner being subjected to the “plan
      asset” regulations adopted under the Employee Retirement Income Security Act of
      1974, as amended.

     

    Notice
      to
      Members of an amendment pursuant to this Section
      13.1
      shall
      not be necessary.

     

    13.2. Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of Delaware, without regard to the conflicts of law rules of such
      jurisdiction.

     

    13.3. Headings.
      The
      headings herein have been included for convenience of reference only and shall
      not be considered in interpreting this Agreement.

     

    13.4. Integration.
      This
      Agreement constitutes the sole agreement among the Members with respect to
      the
      subject matter hereof and shall supersede all oral agreements and prior writings
      with
      respect
      to the subject matter hereof.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    13.5. Successors
      and Assigns.
      This
      Agreement shall inure to the benefit of, and be binding upon, the parties hereto
      and their respective administrators, executors, legal representatives, heirs,
      successors and permitted assigns.

     

    13.6. Severability.
      If any
      provision of this Agreement is held to be invalid, the same shall not affect
      the
      remaining provisions of this Agreement, which shall continue in full force
      and
      effect.

     

    13.7. Counterparts.
      This
      Agreement may be executed in counterparts, and by facsimile signature, each
      of
      which shall be deemed to be an original but all of which together shall
      constitute one and the same Agreement. 

     

    13.8. Dissociation.
      Each
      Member does hereby waive any right to dissociate or the right to take any other
      action which might otherwise be available to such Member for the purpose of
      severing his relationship with the Company, or such Member’s Unit(s) and
      Interest in the Company from the Unit(s) and Interests in the Company of the
      other Members until the end of the Term, except as otherwise provided in Section
      11 hereof.

     

    13.9. Notices.
      All
      notices required to be given pursuant to this Agreement shall be given
      personally or be sent by hand delivery, certified mail, return receipt
      requested, overnight express delivery service, telegram, telex, or telecopy
      to
      the addresses specified on Schedule A or, for a Member who shall become a Member
      after the execution hereof, on the joinder or other agreement executed by such
      Member (or any superseding addresses specified by proper notice) with all
      postage or other charges of conveyance prepaid and shall be effective upon
      the
      earlier of the actual receipt thereof or the second day (excluding weekends
      and
      Federal holidays) after the proper sending thereof.

     

    13.10. Execution
      of Documents.
      The
      Members agree that they shall execute the Certificate or any amendment thereto
      or any other instrument necessary to carry our the terms of this Agreement
      and
      the actions contemplated hereby.

     

    13.10.1. Authority.
      Nothing
      herein shall serve to limit or otherwise diminish the authority of the Class
      A
      Member to take any and all actions as are permitted in the
      Agreement.

     

    13.10.2. Prevailing
      Party.
      The
      prevailing party in any arbitration and/or litigation shall be entitled to
      be
      reimbursed by the non-prevailing party for all attorney’s fees and
      costs.

     

    13.11. Power
      of Attorney.
      The
      Members hereby make, constitute and appoint the Class A Member as their true
      and
      lawful attorney, to make, sign, execute, acknowledge and file with respect
      to
      the Company;

     

    13.11.1. such
      formation documents and such amended formation documents as may be required
      by
      law or pursuant to the provisions of this Agreement;

     

    13.11.2. all
      documents required to qualify the Company to do business in other
      states;

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    13.11.3. documents
      of transfer of Member Interests and all other instruments to effect said
      transfers in the event the provisions of this Agreement have been complied
      with;
      and

     

    13.11.4. all
      documents required to reflect the dissolution and termination of the Company
      after it has been dissolved or terminated in accordance herewith.

     

    The
      foregoing power of attorney is hereby declared to be irrevocable and is a power
      coupled with an interest, and it shall survive and not be affected by the
      subsequent death, incompetency, legal disability, withdrawal, dissolution,
      bankruptcy, insolvency or termination of any Member or the transfer of all or
      any portion of a Member Interest, and shall extend to each Member’s heirs, legal
      representatives, successors and assigns.

     

    [SIGNATURES
      CONTAINED ON FOLLOWING PAGE]

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Members have executed this Agreement as of the day and
      year
      first above written.

     

    Class
      A Member:

    

    LEAF
      Financial Corporation

    

    

    By:
      _______________________________

    Name:

    Title:

    

    

    Class
      B Members:

    

    

    ___________________________________

    Crit
      DeMent

    

    

    ___________________________________

    Miles
      Herman

    

    

    ___________________________________

    Robert
      Moskovitz

    

    

    ___________________________________

    David
      English

    

    

    ___________________________________

    Matthew
      Goldenberg

    

    

    ___________________________________

    Nicholas
      Capparelli

    

    

    
      
        
          =
            1
LW:
            264452.2LW:
            264452.2

        

        
        

      

      
        20

        
          

        

      

      
        
        

        
        

      

    

    SCHEDULE
      A TO

    LIMITED
      LIABILITY COMPANY AGREEMENT

    OF

    LEAF
      VENTURES, LLC

     

    

     

    
      	
              Name
                of Members

            	 	
              Capital

              Contribution

            	 	
              Units

            	 	
              Interests
                in the Company

            	 
	
              LEAF
                Financial Corporation

            	
            	
              $

            	
              2,500,000

            	 	
            	
              920

            	
            	
            	
              92.0

            	
              %

            
	
              Crit
                DeMent

            	 	 	
              0

            	 	 	
              20

            	 	 	
              2.0

            	
              %

            
	
              Nicholas
                Capparelli

            	 	 	
              0

            	 	 	
              20
                

            	 1	 	
              2.0

            	
              %

            
	
              Miles
                Herman

            	 	 	
              0

            	 	 	
              15

            	 	 	
              1.5

            	
              %

            
	
              Robert
                Moskovitz

            	 	 	
              0

            	 	 	
              10

            	 	 	
              1.0

            	
              %

            
	
              David
                English

            	 	 	
              0

            	 	 	
              10

            	 	 	
              1.0

            	
              %

            
	
              Matthew
                Goldenberg

            	 	 	
              0

            	 	 	
              5

            	 	 	
              0.5

            	
              %

            
	
              Totals

            	 	
              $

            	
              2,500,000

            	 	 	
              1,000

            	 	 	
              100

            	
              %

            

    

    1 Mr.
      Capparelli’s Units are subject to the conditions set forth in Section
      5.8.

     

    Unless
      otherwise noted in the books and records of the Company, Members’ addresses are
      as follows: 

     

    Class
      A
      Member:

     

    LEAF
      Financial Corporation

    1818
      Market Street

    9th
      Floor

    Philadelphia,
      PA 19103

    Attn:
      Chief Executive Officer

     

    Each
      Class B Member:

     

    c/o
      LEAF
      Financial Corporation

    1818
      Market Street

    9th
      Floor

    Philadelphia,
      PA 19103

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