Document:

Exhibit 10.20

Non-employee Directors Compensation

 

	
            Annual Retainer:
 	
            •   $65,000, paid in the form of deferred stock units of common stock

•   $40,000 ($135,000 for the chairman of the board), paid in deferred stock units of common stock or in cash, at the option of the director 
 
	
            Attendance fees — Board meetings:
 	
            $2,000 in cash, per meeting
 
	
            Attendance fees — Committee meetings:
 	
            $1,500 in cash, per meeting
 
	
            Chairperson fees:
 	
            $10,000 in cash, for audit committee

$5,000 in cash, for compensation committee and nominating/corporate governance committee
 
	
            Options:
 	
            options to purchase 5,000 shares of common stock per yearleafnetbankagrm.htm

     

    
      

      

    

    
      	
               

            	
              EXECUTION
                VERSION

            

    

     

    RECEIVABLES
      LOAN AND SECURITY AGREEMENT

     

    Dated
      as
      of November 1, 2007

     

    Among

     

    LEAF
      CAPITAL FUNDING III, LLC,

     

    as
      the
      Borrower

     

    and

     

    LEAF
      FINANCIAL CORPORATION,

     

    as
      the
      Servicer

     

    and

     

    MORGAN
      STANLEY BANK

     

    as
      Class A Lender and Collateral Agent

     

    and

     

    MORGAN
      STANLEY ASSET FUNDING INC.

     

    as
      Class B Lender

     

    and

     

    U.S.
      BANK
      NATIONAL ASSOCIATION,

     

    as
      the
      Custodian and the Lenders’ Bank

     

    and

     

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

     

    as
      the
      Backup Servicer

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    This
      RECEIVABLES LOAN AND SECURITY AGREEMENT is made as of November 1, 2007,
      among:

     

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

     

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

     

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

     

    (4)           MORGAN
      STANLEY ASSET FUNDING INC., as Class B Lender (a “Lender” hereunder and,
      together with Morgan Stanley, the “Lenders”);

     

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

     

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

     

    IT
      IS
      AGREED as follows:

     

    ARTICLE
      I

     

    DEFINITIONS

     

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

     

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

     

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

     

    “Active
      Backup Servicer’s Fee” means, for any Fee Period or portion thereof after
      the occurrence of a Servicer Default and the appointment of the Backup Servicer
      as Servicer hereunder, an amount, payable out of Collections on the Pledged
      Receivables and amounts applied to the payment of, or treated as payments on,
      the Pledged Receivables, equal to the greater of (i) the Active Backup Servicing
      Fee Rate, multiplied by the Eligible Receivables Balance as of the first day
      of
      such Fee Period, multiplied by a fraction, the numerator of which shall be
      the
      actual number of days in such Fee Period and the denominator of which shall
      be
      360, and (ii) $7,000.  The Active Backup Servicer’s Fees shall also
      include reasonable out-of-pocket expenses incurred by the Backup Servicer in
      performing its duties as Servicer.

     

    “Active
      Backup Servicing Fee Rate” means 1.50%.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

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

     

    “Adjusted
      Eurodollar Rate” means, with respect to any Interest Period for any Loan (or
      portion thereof) allocated to such Interest Period, an interest rate per annum
      equal to the sum of (i) the Adjusted Eurodollar Rate Margin and
      (ii) an interest rate per annum equal to the average of the interest rates
      per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) reported
      during such Interest Period on Reuters LIBOR01 Page (British Bankers Association
      Settlement Rate) as the London Interbank Offered Rate for United States dollar
      deposits having a term of thirty (30) days and in a principal amount of
      $1,000,000 or more (or, if such page shall cease to be publicly available or,
      if
      the information contained on such page, in  each applicable Lender’s
      sole judgment, shall cease to accurately reflect such London Interbank Offered
      Rate, such rate as reported by any publicly available recognized source of
      similar market data selected by such Lender that, in such Lender’s reasonable
      judgment, accurately reflects such London Interbank Offered Rate).

     

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

     

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

     

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

     

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

     

    “Aggregate
      Advance Amount” means the Class A Advance Amount plus the Class B Advance
      Amount.

     

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

     

    “Amortized
      Equipment Cost” means, (i) with respect to all Eligible Receivables (a) as
      of the Borrowing Date, the present value of the remaining Scheduled Payments
      under all Eligible Receivables (including any Balloon Payment or Put Payment),
      discounted monthly at the rate at which the present value of all Scheduled
      Payments under all Eligible Receivables (including any Balloon Payment or Put
      Payment) equals the Purchase Price and, (b) as of any subsequent date of
      determination, shall mean the present value of the then remaining Scheduled
      Payments under all Eligible Receivables (including any Balloon
      Payment or Put Payment) discounted monthly at the aforementioned discount rate,
      and (ii) with respect to an Eligible Receivable (a) as of the Borrowing Date,
      the present value of the remaining

    
      
         

      

      
        2

        
          

        

      

      
         
 Scheduled
        Payments under such Eligible Receivable (including any Balloon Payment or
        Put
        Payment), discounted monthly at the rate at which the present value of all
        Scheduled Payments under all Eligible Receivables (including any Balloon
        Payment
        or Put Payment) equals the Purchase Price and, (b) as of any subsequent date of
        determination, shall mean the present value of the then remaining Scheduled
        Payments under such Eligible Receivable (including any Balloon Payment or
        Put
        Payment) discounted monthly at the aforementioned discount
        rate.

    

     

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

     

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

     

    “Approved
      Lienholder” means any Person that (i) has entered into a Nominee Lienholder
      Agreement, a copy of which has been delivered by the Collateral Agent to the
      Custodian and (ii) appears on the list of approved lienholders provided by
      LEAF
      Financial Corporation to the Custodian from time to
      time.  

     

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

     

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

     

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

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

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

     

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

     

    “Borrowing”
      means the borrowing of the Class A Loan and the Class B Loan under this
      Agreement.

     

    “Borrowing
      Date” means, with respect to the Borrowing, the date on which the Borrowing
      is funded.

     

    “Borrowing
      Limit” means on the Borrowing Date, the lesser of (i) the Facility Limit and
      (ii) the Maximum Advance Amount, and at any time the Aggregate Advance Amount,
      as such amount may be increased pursuant to Section 2.16;
provided, however, that at all times, on or after the Program
      Termination Date, the Borrowing Limit shall mean the aggregate outstanding
      principal balance of the Loans.

     

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

     

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

     

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

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

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

     

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

     

    “Change
      of Control” means that at any time (i) Owner shall own directly or
      indirectly less than 100% of all membership interests of the Borrower,
      (ii) Resource America shall own directly or indirectly less than 50.1% of
      all Capital Stock or voting power of the initial Servicer, (iii) the
      initial Servicer shall own directly or indirectly less than 80% of all Capital
      Stock or voting power of Originator and Owner, (iv) Resource America, Owner
      or the Borrower merges or consolidates with any other Person without the prior
      written consent of the Lenders, (v) the initial Servicer or the Originator
      merges or consolidates with any other Person and the initial Servicer or the
      Originator, as applicable, is not the surviving entity or (vi) either of
      Crit DeMent or Miles Herman is not employed in a senior management position
      at
      the initial Servicer, is not involved in the day-to-day operations of the
      initial Servicer or is not able to perform substantially all of his duties
      as an
      employee of the initial Servicer during any three month period and, in each
      case, has not been replaced by a person approved by the Lenders in writing
      within 90 days of any such event.

     

    “Check-in
      Repurchase Event” has the meaning set forth in Section
      5.02(e).

     

    “Check-in
      Requirements” means the procedures set forth in Section 5.02 of this
      Agreement.

     

    “Class
      A Advance Amount” means $333,380,316.91.

     

    “Class
      A Facility Limit” means, at any time, with respect to the Class A Notes, the
      product of (x) 97.10%, (y) 89%, and (z) the Amortized Equipment Cost with
      respect to all Pledged Receivables that are Eligible Receivables.

     

     “Class
      A Interest Rate” means (i) from the Closing Date through August 7, 2008, the
      Adjusted Eurodollar Rate plus 2.00%; (ii) from August 8, 2008 through the
      Facility Maturity Date, the Adjusted Eurodollar Rate plus 2.50%; and (iii)
      from
      and after the Facility Maturity Date or at any time upon the occurrence and
      continuation of any Event of Default or any Termination Event, the Adjusted
      Eurodollar Rate plus 3.00%.

     

    “Class
      A Lender” means the Lender in respect of the Class A Loan.

     

    “Class
      A Loan” has the meaning set forth in Section 2.01(a).

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    “Class
      A Note” has the meaning set forth in Section 2.01(b).

     

    “Class
      B Advance Amount” means $33,712,616.32.

     

    “Class
      B Interest Rate” means (i) from the Closing Date through August 7, 2008, the
      Adjusted Eurodollar Rate plus 10.00%; (ii) from August 8, 2008 through the
      Facility Maturity Date, the Adjusted Eurodollar Rate plus 12.50%; and (iii)
      from
      and after the Facility Maturity Date or at any time upon the occurrence and
      continuation of any Event of Default or any Termination Event, the Adjusted
      Eurodollar Rate plus 15.00%.

     

    “Class
      B Lender” means the Lender in respect of the Class B Loan.

     

    “Class
      B Loan” means the sum of the Class B Advance Amount plus
      $1,000,000.

     

    “Class
      B Note” has the meaning set forth in Section 2.01(b).

     

    “Closing
      Date” means November 7, 2007.

     

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

     

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

     

    “Collateral
      Agent’s Fee” means, for any Fee Period, an amount, payable out of
      Collections on the Pledged Receivables and amounts applied to the payment of,
      or
      treated as payments on, the Pledged Receivables, equal to the amount listed
      in
      the Fee Letter.

     

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

     

    “Collection
      Account” means a special trust account (account number 119320000 at the
      Lenders’ Bank) in the name of the Borrower and under the control of the Lender;
provided, that the funds deposited therein (including any interest and
      earnings thereon) from time to time shall constitute the property and assets
      of
      the Borrower and the Borrower shall be solely liable for any taxes payable
      with
      respect to the Collection Account.

     

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

     

    “Collection
      Date” means the date on which the aggregate outstanding principal amount of
      the Loans have been repaid in full and all interest and Fees and all other
      Obligations have been paid in full.

     

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

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    “Collections”
      means, without duplication, with respect to any Pledged Receivable, all
      Scheduled Payments related to such Receivable, all prepayments and related
      penalty payments with respect to the Contract related to such Receivable, all
      overdue payments and related interest and penalty payments with respect to
      the
      Contract related to such Receivable, all Guaranty Amounts, all Insurance
      Proceeds, all Servicing Charges, all proceeds under “buyout letters” or other
      prepayment/termination agreements and all Recoveries related to such Receivable,
      all amounts paid to the Borrower related to such Receivable pursuant to the
      terms of the Purchase and Sale Agreement, all amounts paid by the Servicer
      related to such Receivable in connection with its obligations under
Section 6.20 hereof, and all other payments received with respect to
      the Contract related to such Receivable, all cash receipts and proceeds in
      respect of the Other Conveyed Property or Related Security (including, without
      limitation, the Obligor Collateral) related to such Receivable, any Servicer
      Advances related to such Receivable, and any amounts paid to the Borrower under
      or in connection with any Qualifying Interest Rate Swap or the hedging
      arrangements contemplated thereunder.

     

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

     

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

     

    “Contract”
      means a Lease Contract or a Loan Contract.

     

    “Controlling
      Holders” means, so long as any amounts payable hereunder to the holders of
      the Class A Notes remain outstanding, the holders of a majority of the aggregate
      outstanding principal amount of the Class A Notes, and thereafter, so long
      as
      any amounts payable hereunder to the holders of the Class B Notes remain
      outstanding, the holders of the aggregate outstanding principal amount of the
      Class B Notes.

     

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

     

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

     

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

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    “Custodian’s
      Fee” means, for any Fee Period, an amount, payable out of Collections on the
      Pledged Receivables and amounts applied to the payment of, or treated as
      payments on, the Pledged Receivables, equal to the aggregate fees listed in
      that
      certain “Schedule of Fees” letter dated October 23, 2007 between U.S. Bank
      National Association and LEAF Financial Corporation which relate to such Fee
      Period.

     

    “Debt”
      of any Person means (i) indebtedness of such Person for borrowed money,
      (ii) obligations of such Person evidenced by bonds, debentures, notes or
      other similar instruments related to transactions that are classified as
      financings under GAAP, (iii) obligations of such Person to pay the deferred
      purchase price of property or services, (iv) obligations of such Person as
      lessee under leases which shall have been or should be, in accordance with
      GAAP,
      recorded as capital leases, (v) obligations secured by an Adverse Claim
      upon property or assets owned (under GAAP) by such Person, even though such
      Person has not assumed or become liable for the payment of such obligations
      and
      (vi) obligations of such Person under direct or indirect guaranties in
      respect of, and obligations (contingent or otherwise) to purchase or otherwise
      acquire, or otherwise to assure a creditor, against loss in respect of,
      indebtedness or obligations of others of the kinds referred to in
      clauses (i) through (v) above.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

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

     

    “Discount
      Rate” means, as of any date of determination, a percentage equal to the sum
      of (i) 7.20% per annum, (ii) at any time prior to the occurrence of a Servicer
      Default and the appointment of the Backup Servicer as Servicer hereunder, the
      Servicing Fee Rate and the Standby Backup Servicing Fee Rate, (iii) at any
      time after the occurrence of a Servicer Default and the appointment of the
      Backup Servicer as Servicer hereunder, the Active Backup Servicing Fee Rate
      and
      (iv) a rate per annum equal to 0.05%.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    “Equity
      Investment” means $10,210,637.42.

     

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

     

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

     

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

     

    “Eurodollar
      Index” means an index based upon an interest rate reported on Reuters
      LIBOR01 Page (British Bankers Association Settlement Rate) as the London
      Interbank Offered Rate for United States dollar deposits.

     

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

     

    “Exception
      Report” has the meaning set forth in the Custodial Agreement.

     

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

     

    “Excluded
      Assets” means all Receivables and other assets acquired by the Originator
      pursuant to the FDIC Purchase Agreement which are not Pledged
      Assets.

     

    “Exit
      Fee” has the meaning set forth in the Fee Letter.

     

    “Facility
      Amount” means, at any time, the difference between the aggregate Loans
      Outstanding hereunder minus $1,000,000 (the deferred, capitalized portion of
      the
      Class B Arrangement Fee (as defined in the Fee Letter) payable by the Borrower
      to the Class B Lender).

     

    “Facility
      Deficiency” means, at any time, that either: (i) the Class A Facility Limit
      is less than the aggregate outstanding principal balance of the Class A Notes,
      or (ii) the Facility Limit is less than the Facility Amount; an amount equal
      to
      the amount of such deficiency, respectively.

     

    “Facility
      Limit” means, at any time, with respect to the Class A Notes and the Class B
      Notes, collectively, the product of (x) 97.10%, (y) 98%, and (z) the Amortized
      Equipment Cost with respect to all Pledged Receivables that are Eligible
      Receivables.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

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

     

    “Facility
      Maturity Date” means November 1, 2008, unless extended by the Lenders in
      their sole discretion, at the written request of the Borrower, by written notice
      to the other parties hereto.

     

    “FDIC
      Documents” has the meaning specified in the Purchase and Sale
      Agreement.

     

    “FDIC
      Purchase Agreement” means the Loan Sale Agreement between Federal Deposit
      Insurance Corporation, as Receiver of Netbank and the Originator with respect
      to
      the Pledged Receivables and other assets.

     

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

     

    “Fee
      Period” means a period commencing on (and including) a Remittance Date and
      ending on (and including) the day prior to the next Remittance Date;
provided, that, the initial Fee Period hereunder shall commence on (and
      include) the date hereof and end on (and include) December 7, 2007.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    “Lease
      Contract” means (i) the standard form equipment lease contract of NBBF in
      the form delivered to the Servicer and the Lenders and which shall be deemed
      incorporated herein as Exhibit D-1 attached hereto or (ii) a lease
      agreement otherwise approved by the Servicer in compliance with the Credit
      and
      Collection Policy, pursuant to which Equipment is leased to an Obligor by NBBF
      or Originator, together with all schedules, supplements and amendments thereto
      and each other document and instrument related to such lease.

     

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

     

    “Lender”
      means, any one of and “Lenders” means all of, the Class A Lender and the Class B
      Lender, and each such Person’s successors and assigns.

     

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

     

    “Lenders’
      Bank Fee” means an annual fee paid in advance, payable out of Collections on
      the Pledged Receivables and amounts applied to the payment of, or treated as
      payments on, the Pledged Receivables, equal to $6,000.  The “Lenders’
Bank Fee” shall also include (i) a one-time acceptance fee of $4,500 payable on
      the Closing Date and (ii) reasonable out-of-pocket expenses incurred by the
      Lenders’ Bank in the performance of its duties.

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

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

     

    “Loan”
      means either of the Class A Loan or the Class B Loan and “Loans” means
      the Class A Loan and the Class B Loan.

     

    “Loan
      Contract” means, (i) the standard form equipment loan/security contract of
      NBBF delivered to the Servicer and the Lenders and which shall be deemed
      incorporated herein as Exhibit D-2 and Exhibit D-3 or (ii) a
      loan/security agreement and promissory note otherwise approved by the Servicer
      in compliance with the Credit and Collection Policy, in each case, pursuant
      to
      which NBBF or the Originator makes a loan to an Obligor secured by Equipment
      purchased by such Obligor, together with all schedules, supplements and
      amendments thereto and each other document and instrument related
      thereto.

     

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

     

     “Loans
      Outstanding” means the sum of the principal amounts of all Loans, as reduced
      from time to time by Collections with respect to any Pledged Receivable received
      and distributed as repayment of principal amounts of Loans outstanding pursuant
      to Section 2.04 and any other amounts received by the Lenders to
      repay the principal amounts of Loans outstanding pursuant to
Section 2.15 or otherwise; provided, however, that the
      principal amounts of Loans outstanding shall

     

    not
      be
      reduced by any Collections with respect to any Pledged Receivable or other
      amounts if at any time such Collections or other amounts are rescinded or must
      be returned for any reason.

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    “Maximum
      Advance Amount” means, on the Borrowing Date, $367,092,933.23.

     

    “Minimum
      Equity Requirement” means $10,000,000.

     

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

     

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

     

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

     

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

     

    “NetBank”
      means NetBank, FSB, Alpharetta, Georgia, a federally chartered savings
      bank.

     

    “NBBF”
      means NetBank Business Finance, a division of NetBank.  All references
      to NBBF shall also mean NetBank or any other applicable division
      thereof.

     

    “Nominee
      Lienholder Agreement” means either (i) a “Vehicle Lienholder Nominee
      Agreement” in the form attached hereto as Exhibit E (with such modifications as
      the Collateral Agent may approve) or (ii) any other nominee lienholder agreement
      or collateral agency agreement approved in writing by the Collateral
      Agent.

     

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

     

    “Notes”
      has the meaning assigned to that term in Section 2.01(b)
      hereof.

     

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

     

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

     

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

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

    “Originator”
      means LEAF Funding, LLC, a Delaware limited liability company and/or the
      Partnership.

     

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

     

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

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    “Other
      Swap Breakage Cost” has the meaning assigned to that term in Section
      2.15 hereof.

     

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

     

    “Owner”
      means (i) the Originator or (ii) subject to the prior written consent of the
      Lenders (such consent not to be unreasonably withheld), the Partnership or
      any
      subsidiary thereof or of the initial Servicer (each, a “Permitted Transferee”)
      which acquires all of the membership interests of the Borrower.

     

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

     

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

     

    (i)           direct
      obligations of, or obligations fully guaranteed as to principal and interest
      by,
      the United States or any agency or instrumentality thereof, provided such
      obligations are backed by the full faith and credit of the United
      States;

     

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

     

    (iii)           certificates
      of deposit, time deposits, demand deposits and bankers’ acceptances of any bank
      or trust company incorporated under the laws of the United States

     

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

     

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

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

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

     

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

     

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

     

    “Permitted
      Liens” means with respect to Obligor Collateral, (A) liens and security
      interests in favor of the Collateral Agent, granted pursuant to the Transaction
      Documents, (B) the interests of an Obligor arising under the Contract to
      which it is a party in the Obligor Collateral related to such Contract,
      (C) liens for taxes, assessments, levies, fees and other governmental and
      similar charges either not yet due or being contested in good faith and by
      appropriate proceedings, provided, that appropriate reserves shall have been
      established with respect to any such taxes either not yet due or being contested
      in good faith and by appropriate proceedings, (D) any liens with respect to
      any mechanics, suppliers, materialmen, laborers, employees, repairmen and other
      like liens arising in the ordinary course of a servicer’s, lessor’s/lender’s or
      lessee’s/borrower’s business securing obligations which are not due and payable,
      and (E) salvage rights of insurers with respect to the equipment subject to
      a Contract under insurance policies maintained pursuant to the Transaction
      Documents or a Contract.

     

    “Permitted
      Transferee” has the meaning given to such term in the definition of “Owner”
herein.

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    “Priority
      Documents” means, (i) with respect to a Lease Contract, the related
      original, executed Lease Contract (or, in the case of a Lease Contract under
      a
      master lease, a machine or facsimile copy of the related master lease certified
      by an authorized officer of the Borrower and stamped “I hereby certify that this
      is a true and exact copy of the original” and an original, executed schedule
      thereto describing the related Equipment) and the item listed in clause (4)
      of
      subsection (a)(i) of the definition of Receivable File, and (ii) with respect
      to
      a Loan Contract, the items listed in clauses (1), (2) and (4) of subsection
      (b)(i) of the definition of Receivable File.  The term “Priority
      Documents” shall also include a machine copy of the existing Certificate of
      Title with respect to any Vehicle subject to a Contract.

     

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

     

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

     

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

     

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

     

    (iii)           Reserved;

     

    (iv)           the
      Annualized Default Rate exceeds 3.5%;

     

    (v)           the
      rolling weighted average of the Delinquency Rates in respect of any three
      consecutive Collection Periods exceeds 4.0%;

     

    (vi)           the
      Annualized Net Loss Rate exceeds 3.5%;

     

    (vii)           Reserved;

     

    (viii)          Reserved;

     

    (ix)           Reserved;

     

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

     

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

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    (xii)           the
      occurrence of three or more Termination Events.

     

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

     

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

     

    “Purchase
      Price” means $385,772,014.15.

     

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

     

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

     

    “Qualifying
      Swap Counterparty” means Morgan Stanley Capital Services Inc. (or any
      successors or permitted assigns), any Lender or any Affiliate of a
      Lender.

     

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

     

    “Receivable”
      means the rights to all payments from an Obligor under a Contract, including,
      without limitation, any right to the payment with respect to (i) Scheduled
      Payments, (ii) any prepayments or overdue payments made with respect to
      such Scheduled Payments, (iii) any

     

    Guaranty
      Amounts, (iv) any Insurance Proceeds, (v) any Servicing Charges and
      (vi) any Recoveries.

     

     “Receivable
      File” means with respect to each Receivable:

     

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

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

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

     

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

     

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

     

    (i)           (1) the
      original, executed payment schedule or promissory note (if any), (2) a
      true, executed copy of the related “Master Agreement” or “Finance Agreement”,
      (3) a true copy of the related Insurance Certificate if such Receivable is
      related to Equipment with an Amortized Equipment Cost in excess of $100,000
      and
      (4) other than with respect to a Receivable related to Equipment which has
      an Amortized Equipment Cost of less than $25,000, a “transmittal order” from the
      Servicer to a filing service company and an “in process report” from such filing
      service company to the Servicer (or other evidence of the submission of the
      related UCC financing statement for filing in the appropriate filing office)
      and, within 45 days of the related Contract being executed, a file-stamped
      copy of the related UCC financing statement; and

     

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

     

    In
      addition, if the Obligor Collateral related to such Receivable is a Vehicle,
      the
      related Receivable File shall include the original copy of the Certificate
      of
      Title with respect to such Vehicle, which such Certificate of Title satisfies
      the Titling Requirements or (prior to the 90th day after such Receivable
      was first included in the calculation of the Eligible Receivables Balance,
      if
      such Certificate of Title has not yet been received by the Servicer or the
      Borrower) a copy of the application for such Certificate of Title.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

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

     

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

     

    “Recoveries”
      means, for any Collection Period during which, or any Collection Period after
      the date on which, any Receivable becomes a Defaulted Receivable and with
      respect to such Defaulted Receivable, all payments that the Servicer received
      from or on behalf of the related Obligor during such Collection Period in
      respect of such Defaulted Receivable or from the repossession, liquidation
      or
      re-leasing of the related Obligor Collateral, including but not limited to
      Scheduled Payments, Overdue Payments, Guaranty Amounts and Insurance
      Proceeds.

     

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

     

    “Related
      Security” means with respect to any Receivable:

     

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

     

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

     

    (iii)           all
      proceeds of the foregoing.

     

    “Release
      Price” means, with respect to a Pledged Receivable to be released hereunder,
      an amount equal to the present value of the then remaining Scheduled Payments
      under such Pledged Receivables (including any Balloon Payment or Put Payment)
      discounted monthly at the discount rate used in calculating the Amortized
      Equipment Cost, plus interest accrued thereon from and including the
      Remittance Date immediately preceding the date such Pledged Receivable is to
      be
      released through (but not including) the next succeeding Remittance
      Date.

     

    “Remittance
      Date” means the (7th) day
      of each month
      beginning December, 2007, or, if such date is not a Business Day, the next
      succeeding Business Day; provided, that the final Remittance Date shall occur
      on
      the Collection Date.

     

    “Reuters
      LIBOR01 Page” means the display page so designated on the Reuters Monitor
      Money Rates Service or any other page that may replace that page on that service
      for the purpose of displaying comparable rates or prices.

     

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

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    “Rollover
      Interest Period” means any Interest Period other than any Interest Period
      applicable to the Loan arising as a result of the Borrowing on the Borrowing
      Date.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (iv)           the
      occurrence of an Event of Default;

     

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

     

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

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

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

     

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

     

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

     

    “Servicing
      Fee Rate” means 1.00%.

     

    “Standby
      Backup Servicer’s Fee” means, for any Fee Period or portion thereof prior to
      the occurrence of a Servicer Default and the appointment of the Backup Servicer
      as Servicer hereunder, an amount, payable out of Collections on the Pledged
      Receivables and amounts applied to the payment of, or treated as payments on,
      the Pledged Receivables, equal to the greater of (i) the Standby Backup
      Servicing Fee Rate, multiplied by the Eligible Receivables Balance as of the
      first day of such Fee Period, multiplied by a fraction, the numerator of which
      shall be the actual number of days in such Fee Period and the denominator of
      which shall be 360, or (ii) $2,000.  The “Standby Backup Servicer’s
      Fee” shall also include (i) a one-time acceptance fee of $5,000 payable on the
      Closing Date and (ii) reasonable out-of-pocket expenses incurred by the Standby
      Backup Servicer in the performance of its duties.

     

    “Standby
      Backup Servicing Fee Rate” means .0150%.

     

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

     

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

     

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

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    “Termination
      Event” means the occurrence, on or after 60 days after the Borrowing Date,
      of any of the following events:

     

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

     

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

     

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

     

    “Titling
      Requirements” means, (i) in the case of any Vehicle leased or sold to an
      Obligor pursuant to a Contract, the Certificate of Title for such Vehicle
      indicates the Obligor, as owner, and the Borrower or an Approved Lienholder,
      as
      lienholder, or (ii) in the event that any Vehicle leased or sold to an Obligor
      pursuant to a Contract indicates NBBF, as owner, on the related Certificate
      of
      Title, then within 90 days after the Closing Date the Certificate of Title
      for
      such Vehicle shall indicate the Borrower, as owner, and an Approved Lienholder,
      as lienholder.

     

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

     

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

     

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

     

    “Underlying
      Originator” means Netbank or other originator of a Contract, other than the
      Originator, engaged, in the ordinary course of business in providing financing
      to Obligors for the purposes of acquiring or leasing the related
      Equipment.

     

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

     

    “United
      States” means the United States of America.

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

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

     

    “Vehicle”
      means a new or a used automobile, minivan, sports utility vehicle, light duty
      truck or heavy duty truck, or any other equipment, ownership of which is subject
      to a motor vehicle certificate of title statute.

     

    “Warehouse
      Facility” means the facility in the aggregate amount of up to $250,000,000,
      as evidenced by the Receivables Loan and Security Agreement, dated as of October
      31, 2006, among Resource Capital Funding II, LLC as borrower, LEAF Financial,
      Morgan Stanley Bank, as lender and U.S. Bank National Association, as same
      may
      be modified, amended, or supplemented from time to time.

     

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

     

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

     

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

     

    ARTICLE
      II

     

    THE
      RECEIVABLES FACILITY

     

    SECTION
      2.01                                Borrowings.  b)  On
      the Borrowing Date, subject to the terms and conditions hereinafter set forth,
      the Class A Lender and the Class B Lender shall make the term loan in principal
      amounts equal to (i) in the case of the Class A Lender, the Class A Advance
      Amount (the “Class A Loan” and a “Loan”), and (ii) in the case of
      the Class B Lender, the Class B Advance Amount, respectively, to the Borrower
      secured by Pledged Assets. On the Borrowing Date, no Loan shall be made if
      (i)
      the Aggregate Advance Amount shall exceed the Maximum Advance Amount, (ii)
      any
      Program Termination Event or an event that but for notice or lapse of time
      or
      both would constitute a Program Termination Event shall have occurred and be
      continuing or (iii) the Facility Amount, after giving effect to such
      Borrowing, would exceed the Borrowing Limit.

     

    (b)           The
      Class A Loan shall be evidenced by a promissory note substantially in the form
      of Exhibit H-1 (a “Class A Note” and collectively the “Class A
      Notes”) and the Class B Loan shall be evidenced by a promissory note
      substantially in the form of Exhibit H-2 (a “Class B Note” and
      collectively the “Class B Notes” and, together with the Class A Notes,
      collectively, the “Notes”).

     

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    SECTION
      2.02                                The
      Borrowing.

     

    (a)           [Reserved]

     

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

     

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

     

    (iii)           The
      Class A Loan shall bear interest at the Class A Interest Rate and the Class
      B
      Loan shall bear interest at the Class B Interest Rate.

     

    (iv)           The
      Borrower may not reborrow any amounts that are repaid with respect to the
      Loans.

     

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

     

    SECTION
      2.03                                Determination
      of Interest Periods and Interest Rates.

     

    (a)           The
      initial Interest Period applicable to the Borrowing shall commence on, and
      include, the date of the Borrowing and shall terminate on, and include, the
      day
      immediately prior to the next occurring Remittance Date or such earlier date
      as
      the Lenders may determine (an “Early Interest Period Termination
      Date”).  All outstanding Loans allocated to one or more initial
      Interest Periods or Rollover 

     

    
      
         

      

      
        27

        
          

        

      

      
         
Interest
        Periods maturing on the same date shall be combined and allocated to a single
        Rollover Interest Period at the end of such initial Interest Periods or Rollover
        Interest Periods.  Each Rollover Interest Period shall commence on,
        and include, the Remittance Date following the last day of the immediately
        preceding Interest Period (or, if applicable, on an Early Interest
        Period Termination Date) and shall terminate on, and include, the day
        immediately prior to the next occurring Remittance Date.

    

     

    (b)           The
      interest rate per annum (the “Interest Rate”) applicable to any Loan for
      any Interest Period shall be equal to the applicable Class A Interest Rate
      (for
      the Class A Notes) or the applicable Class B Interest Rate (for the Class B
      Notes); provided, however, that if a Lender shall have notified
      the Borrower that a Eurodollar Disruption Event has occurred, the Interest
      Rate
      for all Loans shall be equal to the Base Rate until such Eurodollar Disruption
      Event has ceased, at which time the Interest Rate shall again be equal to the
      applicable Class A Interest Rate and applicable Class B Interest
      Rate.

     

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

     

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

     

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

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    (c)           Remittance
      Date Transfers From Collection Account.  The Servicer shall, and
      if the Servicer fails to do so the Collateral Agent shall, by 10:00 a.m. (St.
      Paul, Minnesota time) on each Remittance Date, direct the Lenders’ Bank to
      transfer collected funds held by the Lenders’ Bank in

     

    the
      Collection Account which were remitted to the Collection Account during the
      Collection Period with respect to such Remittance Date (“Available
      Funds”), in the following amounts and priority:

     

    (i)           to
      the Borrower, in an amount equal to such funds which were paid by Obligors
      with
      respect to their obligation under the related Contracts to pay any taxes (it
      being agreed by the Borrower that such amount shall be promptly paid to the
      taxing authorities entitled thereto), together with (provided the current
      Scheduled Payment has been paid in full) late fees, interest on overdue amounts
      and other amounts not in respect of Scheduled Payments;

     

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

     

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

     

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

     

    (v)           on
      a prorata basis, (x) to the Collateral Agent, any indemnification
      amounts then due and payable to the Collateral Agent and (y) to the Custodian,
      any indemnification amounts then due and payable to the Custodian;

     

    (vi)           [Reserved];

     

    (vii)           (A)
      first, to the Class A Lender in an amount equal to (and for the
prorata payment of) the Fees which are due and payable to it on
      such Remittance Date pursuant to the terms of the Fee Letter, including (without
      duplication) interest on the Class A Loan which is accrued and unpaid as of
      the
      last day of the immediately preceding Fee Period; and then (B) to the Class
      B
      Lender, in 

    
           an
        amount equal to (and for the prorata payment of) the Fees which
        are due and payable to it on such Remittance Date pursuant to the term of
        the
        Fee Letter, including (without duplication)
        interest      

                  
        on the Class B Loan which is accrued and unpaid as of the last day of the
        immediately preceding Fee Period.

    

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

    (viii)        to
      the Servicer in an amount equal to any Servicer Advances (and amounts to be
      reimbursed as Servicer Advances pursuant to Section 6.19) not
      previously reimbursed to the Servicer;

     

    (ix)           to
      the Owner (if the Owner is a Permitted Transferee), so long as no Termination
      Event or Event of Default has occurred and is continuing, the amount then
      required to be paid by the Partnership (pursuant to its partnership agreement)
      to its limited partners, provided that the aggregate amount payable to the
      Owner
      in any twelve-month period shall not exceed the product of 8.5% times the
      arithmetic average monthly Equity Investment for such period;

     

    (x)           so
      long as no Termination Event or Event of Default has occurred and is continuing,
      and prior to the Facility Maturity Date, to the holders of the Class A Notes
      and
      Class B Notes, prorata and paripassu, all remaining
      amounts to pay principal on the Notes until the principal amount of all Notes
      shall have been paid in full;

     

    (xi)           if
      an Event of Default or Termination Event has occurred and is continuing, or
      if
      the Facility Maturity Date has occurred, then (A) to the holders of the Class
      A
      Notes, all remaining amounts to pay principal on the Class A Notes until the
      principal amount of all Class A Notes shall have been paid in full, and (B)
      thereafter, to the holders of the Class B Notes until the principal amount
      of
      all Class B Notes shall have been paid in full;

     

    (xii)           (A)
      first, to the Class A Lender in an amount equal to the aggregate amount of
      all
      other Obligations then due from the Borrower to the Class A Lender or any
      Affected Party hereunder related to the Class A Lender for the account of such
      parties as applicable; and then (B) second, to the Class B Lender in an amount
      equal to the aggregate amount of all other Obligations then due from the
      Borrower to the Class B Lender or any Affected Party hereunder related to the
      Class B Lender for the account of such parties as applicable; and

     

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

     

    (d)           Subordination.  Except
      as otherwise provided in this Agreement or as otherwise agreed in a writing
      signed by the Class A Lender and the Class B Lender, the payment of all
      principal, interest or other amounts due under or in connection with the Class
      B
      Notes (collectively, the “Junior Obligations”) is hereby postponed and
      subordinated to the payment in full in cash of all principal and interest due
      in
      respect of the Class A Notes, and, notwithstanding anything herein to the
      contrary, all payments or other distributions whatsoever in respect of any
      Junior Obligations owed to a holder of a Class B Note shall be made in
      accordance with the priority of payments set forth in Section
      2.04(c).  Without limiting the generality of the foregoing, the
      holders of the Class B Notes agree that all liens and security interests which
      secure the payment or performance of the Junior Obligations are hereby
      subordinated to any lien or security interest now or hereafter securing the
      payment or performance of any liability or other obligation owed to the holders
      of the Class A Notes (regardless of the order or manner of perfection thereof
      or
      any non-perfection thereof).

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    (e)           Deficiency
      Payments.  Notwithstanding anything to the contrary contained in
      this Section 2.04 or in any other provision in this Agreement, if,
      on any day prior to the Collection Date, a Facility Deficiency shall have
      occurred, then the Borrower shall remit to the respective Lenders,

     

    no
      later
      than the close of business of such Lender on such day (or if such day is not
      a
      Business Day, no later than the close of business of such Lender on the next
      succeeding Business Day), (i) so long as no Termination Event or Event of
      Default shall have occurred and be continuing, the amount required to eliminate
      any Facility Deficiency or (ii) if any Termination Event or Event of Default
      shall have occurred and is continuing, the entire outstanding Facility Amount,
      first to the Class A Notes until paid in full, and then to the Class B Notes
      until paid in full.

     

    (f)           Remittance
      Reports.  On each Remittance Date, the Servicer shall deliver to
      the Lenders an electronic file, in a form acceptable to the Lenders, setting
      forth all of the information set forth on Schedule VII.

     

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

     

    SECTION
      2.05                                Reserved.

     

    SECTION
      2.06                                Reserved.

     

    SECTION
      2.07                                Payments
      and Computations, Etc.  c) All amounts to be deposited or paid by
      the Borrower or the Servicer to any Lender hereunder shall be paid or deposited
      in accordance with the terms hereof no later than 12:00 noon (New York City
      time) on the day when due in lawful money of the United States in immediately
      available funds to the Collection Account or such other account as is designated
      by such Lender.  The Borrower shall, to the extent permitted by law,
      pay to each applicable Lender interest on all amounts not paid or deposited
      when
      due hereunder (whether owing by the Borrower or the Servicer) at the Base Rate,
      plus 2%, payable on demand; provided, however, that such interest
      rate shall not at any time exceed the maximum rate permitted by applicable
      law.  Such interest shall be for the account of such Lender in respect
      of each of the Class A Note and the Class B Note and shall be paid in accordance
      with Section 2.04(c).  Any Obligation hereunder shall not be
      reduced by any distribution of any portion of Collections with respect to any
      Pledged Receivable if at any time such distribution is rescinded or returned
      by
      a Lender to the Borrower or any other Person for any reason.  All
      computations of interest and all computations of Breakage Fee and other fees
      hereunder (including, without limitation, the Fees, the Active Backup Servicer’s
      Fee, the Standby Backup Servicer’s Fee, the Custodian’s Fee and the Servicing
      Fee) shall be made on the basis of a year of 360 days (or 365 or 366 days
      for interest calculated at the Base Rate) for the actual number of days
      (including the first but excluding the last day) elapsed.

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    (b)           Whenever
      any payment hereunder shall be stated to be due on a day other than a Business
      Day, such payment shall be made on the next succeeding Business Day, and such
      extension of time shall in such case be included in the computation of payment
      of interest or any fee

     

    payable
      hereunder, as the case may be; provided, however, that with
      respect to the calculation of interest, such extension of time shall not be
      included in more than one Interest Period.

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

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

     

    (c)           In
      determining any amount provided for in this Section 2.09, the
      Affected Party may use any reasonable averaging and attribution
      methods.  Each Lender, on behalf of any Affected Party making a claim
      under this Section 2.09, shall submit to the Borrower a certificate
      setting forth in reasonable detail the basis for and the computations of such
      additional or increased costs, which certificate shall be conclusive absent
      demonstrable error.

     

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

     

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

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

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

     

    (a)           all
      Receivables purchased by, or otherwise transferred or pledged to (pursuant
      to
      the terms of the Purchase and Sale Agreement) the Borrower under the Purchase
      and Sale Agreement from time to time (such Receivables, the “Pledged
      Receivables”, all Other Conveyed Property related to the Pledged Receivables
      purchased by (or otherwise transferred or pledged pursuant to the terms of
      the
      Purchase and Sale Agreement) to the Borrower under the Purchase and Sale
      Agreement, all Related Security related to the Pledged Receivables, all interest
      of the Borrower in all Obligor Collateral related to the Pledged Receivables
      (together with all security interests in and Insurance Proceeds related to
      such
      Obligor Collateral and all proceeds from the disposition of such Obligor
      Collateral, whether by sale to the related Obligors or otherwise), all
      Collections and other monies due and to become due under the Contracts related
      to the Pledged Receivables received on or after the date such Pledged
      Receivables were purchased by (or purportedly purchased by) the Borrower under
      the Purchase and Sale Agreement;

     

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

     

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

     

    (d)           the
      Records relating to any Pledged Receivables;

     

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

     

    (f)           [Reserved];

     

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

                  
      SECTION
      2.12                                Evidence
      of Debt.  Each Lender shall maintain an account or accounts
      evidencing the indebtedness of the Borrower to such Lender resulting from the
      related Loan (and related Class A Note and Class B Note) owing to such Lender
      from time to time, including the amounts of principal and interest payable
      and
      paid to such Lender from time to time hereunder.  The entries made in
      such account(s) of such Lender shall be conclusive and binding for all purposes,
      absent manifest error.

     

    SECTION
      2.13                                Release
      of Pledged Receivables.  f) Subject to Section 2.15
      hereof, upon the repayment of the Loans and all other amounts payable to each
      Lender under this Agreement and any other Transaction Document, the security
      interest of the Collateral Agent in each Pledged Receivable and the related
      Other Conveyed Property and Related Security shall be released and the Borrower
      hereby authorized to file, on behalf of the Collateral Agent, UCC termination
      statements in respect thereof.

     

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

     

    (c)           Promptly
      after the Collection Date has occurred, the Collateral Agent shall re-assign
      and
      transfer to the Borrower, for no consideration but at the sole expense of the
      Borrower, their respective remaining interests in the Pledged Assets, free
      and
      clear of any Adverse Claim resulting solely from an act by the Collateral Agent
      but without any other representation or warranty, express or implied, by or
      recourse against the Collateral Agent.

     

    SECTION
      2.14                                Treatment
      of Amounts Paid by the Borrower.  Amounts paid by the Borrower
      pursuant to Section 2.13 on account of Pledged Receivables shall be
      treated as payments on Pledged Receivables hereunder.

    
       

      
        
           

        

        
          35

          
            

          

        

        
           

        

      

    

    SECTION
      2.15                                Prepayment;
      Certain Indemnification Rights; Termination.  g) The Borrower may
      prepay, in whole or in part, the outstanding principal amount of any Class
      A
      Notes and/or Class B Notes.  Any amounts so prepaid shall be applied
      to repay the outstanding principal amount of Loans allocated to an Interest
      Period or Interest Periods selected by the related Lender.  If the
      Borrower intends to make an optional prepayment pursuant to this Section
      2.15(a), the Borrower shall give five (5) Business Days' prior written
      notice thereof to the Lenders, specifying the intended Prepayment Date, the
      intended Prepayment Amount, a calculation of any applicable Breakage Fee and
      any
      other breakage costs in connection with a Qualified Interest Rate Swap (such
      cost, an “Other Swap Breakage Cost”).  Any such optional prepayment
      shall be accompanied by all interest accrued with respect thereto and the
      Breakage Fee and Other Swap Breakage Cost with respect to the applicable
      Prepayment Amount and Prepayment Date.  If such notice is given, the
      principal amount specified in such notice (together with all interest accrued
      with respect thereto and the Breakage Fee and Other Swap Breakage Cost related
      thereto) shall be due and payable on the Prepayment Date specified
      therein.  Notwithstanding the foregoing, any payment by the Borrower
      required pursuant to Section 2.04(e) or (f) or, in connection with
      the occurrence of an Event of Default, pursuant to Section 7.01 hereof
      shall not be considered an optional prepayment and no Breakage Fee or Other
      Swap
      Breakage Cost shall be required to be paid in respect thereof.

     

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

     

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

     

    (d)           At
      any time prior to the occurrence of a Termination Event or an Event of Default,
      the Borrower shall have the right to deliver written notice, which notice shall
      be sent to the  Lenders and the holders of the Class B Notes (the
“Class B Buyout Notice”) designating a purchaser for (without recourse, warranty
      or representation (other than the holders of such Class B Notes own such Class
      B
      Notes free and clear of any liens created or granted by the holders of such
      Class B Notes)) the entire (but not less than the entire) outstanding principal
      amount of Class B Notes (and all associated rights, titles, claims and
      privileges associated therewith, including rights under this Agreement) for
      an
      amount (the “Class B Buyout Price”) equal to the outstanding principal amount
      of, and accrued but unpaid interest on, the Class B Notes (including any
      make-whole premium payable) and all other amounts then payable to the holder(s)
      of the Class B Notes under this Agreement.  The purchase of the Class
      B Notes pursuant to this Section shall close no later than the date specified
      in
      such Class B Buyout Notice, which date shall be subject to the prior written
      approval of the holder of the Class B Notes.  The Class B Buyout Price
      shall be remitted by wire transfer in immediately available federal funds to
      the
      holder(s) of the Class B Notes to account(s) specified by such
      holder(s).  Interest shall be calculated to but excluding the Business
      Day on which such purchase shall occur if the Class B Buyout Price is wired
      to
      the holder(s) of the Class B Notes prior to 1:00 pm New York time and interest
      shall be calculated to and including such Business Day if the Class B Notes
      Buyout Price is wired to the holder(s) of the Class B Notes later than 1:00
      pm
      New York time.

     

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

    SECTION
      2.16                                Increase
      of Borrowing Limit.  The Borrower may, upon 30 days’ prior
      written notice to the Lenders (with a simultaneous copy to the Initial
      Qualifying Swap Counterparty), request that the Borrowing Limit be increased,
      which request may be granted in the sole discretion, and with the written
      consent, of the Lenders, it being agreed that the Borrower shall pay to each
      Lender the fee related to such increase that is required pursuant to the terms
      of the Fee Letter and any other costs, fees and expenses pursuant to Section
      9.07.

     

    ARTICLE
      III

     

    CONDITIONS
      OF LOANS

     

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

     

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

     

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

     

    SECTION
      3.02                                Conditions
      Precedent to All Borrowings.  The Borrowing by the Borrower from
      the Lenders shall be subject to the further conditions precedent
      that:

     

    (a)           Reserved;

     

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

     

    (i)           the
      Facility Amount will not exceed the Borrowing Limit; and

     

    (ii)           the
      Facility Amount will not exceed the Facility Limit.

     

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

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

     

    (i)           the
      representations and warranties contained in Section 4.01 are true
      and correct in all material respects, before and after giving effect to the
      Borrowing to take place on the Borrowing Date and to the application of proceeds
      therefrom, on and as of such day as though made on and as of such
      date;

     

    (ii)           no
      event has occurred and is continuing, or would result from the Borrowing, which
      constitutes a Program Termination Event hereunder or an event that but for
      notice or lapse of time or both would constitute a Program Termination
      Event;

     

    (iii)           no
      event has occurred and is continuing, or would result from the Borrowing, which
      constitutes a Termination Event hereunder or an event that but for notice or
      lapse of time or both would constitute a Termination Event;

     

    (iv)           Reserved;

     

    (v)           1.2.the
      requirements set forth in Section 2.01(a) hereof shall have been complied
      with;

     

    (vi)           3.(a)
      the Borrower has delivered to each Lender a copy of the applicable Notice of
      Borrowing and the related Notice of Pledge (together with the attached
      Receivables Schedule) pursuant to Section 2.02, each appropriately
      completed and executed by the Borrower, (b) the Borrower has delivered or
      caused to have been delivered to the Custodian the Notice of Pledge with respect
      to the Receivables being Pledged hereunder three (3) Business Days prior to
      the
      Borrowing Date, and (c) the Contract related to each Receivable being
      Pledged hereunder on the Borrowing Date has been duly assigned by the Originator
      to the Borrower and duly assigned by the Borrower to the Collateral
      Agent;

     

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

     

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

    (viii)                     (A)                      the
      initial Servicer shall have taken or caused to be taken all steps necessary
      under all applicable law (including the filing of an Obligor Financing
      Statement) in order to cause a valid, subsisting and enforceable perfected,
      first priority security interest to exist in Originator’s favor in the Obligor
      Collateral securing each Receivable being Pledged hereunder on the Borrowing
      Date (other than with respect to Equipment which has an Amortized Equipment
      Cost
      of less than $25,000 and is leased under Dollar Purchase Option Contracts or
      $50,000 and is leased under FMV Contracts), (B) the Originator shall have
      assigned the perfected, first priority security interest in the Obligor
      Collateral to the Borrower pursuant to the Purchase and Sale Agreement and
      (C)
      the Borrower shall have assigned the perfected, first priority security interest
      in the Obligor Collateral (and the proceeds thereof) referred to in
      clause (A) above to the Collateral Agent, pursuant to
Section 2.11 hereof;

     

    (ix)           [Reserved];
      and

     

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

     

    (d)           No
      law or regulation shall prohibit, and no order, judgment or decree of any
      Government Entity shall prohibit or enjoin, the making of such Loans by any
      Lender in accordance with the provisions hereof; and

     

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

     

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

     

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

     

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

     

    ARTICLE
      IV

     

    REPRESENTATIONS
      AND WARRANTIES

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

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

     

    (o)           The
      Borrower has no subsidiaries.

     

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

     

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

     

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

     

    (s)           There
      are no agreements in effect adversely affecting the rights of the Borrower
      to
      make, or cause to be made, the grant of the security interest in the Pledged
      Assets contemplated by Section 2.11.

     

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

     

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

     

    (v)           Reserved.

     

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

     

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

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

     

    (y)           Notwithstanding
      anything to the contrary in the Warehouse Facility, no Pledged Receivable will
      constitute (for purposes of the Warehouse Facility) either an “Eligible Pool A
      Receivable” or an “Eligible Pool B Receivable”, in each case as defined under
      the Warehouse Facility.

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

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

     

    (k)           As
      of the date hereof and as of the date of delivery of any Monthly Remittance
      Report or Facility Limit Certificate, no Monthly Remittance Report or Facility
      Limit Certificate (each if prepared by the Servicer or to the extent that
      information contained therein is supplied by the Servicer), information,
      exhibit, financial statement, document, book, record or report furnished or
      to
      be furnished by the Servicer to the Lenders in connection with this Agreement
      is
      or will be inaccurate in any material respect, and no such document contains
      or
      will contain any material misstatement of fact or omits or shall omit to state
      a
      material fact or any fact necessary to make the statements contained therein
      not
      misleading.

     

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

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

     

    (r)           Notwithstanding
      anything to the contrary in the Warehouse Facility, no Pledged Receivable will
      constitute (for purposes of the Warehouse Facility) either an “Eligible Pool A
Receivable”
      or an “Eligible Pool B Receivable”, in each case as defined under the Warehouse
      Facility.

     

    SECTION
      4.03                                Resale
      of Receivables Upon Breach of Covenant or Representation and Warranty by
      Borrower.  The Borrower or the Servicer, as the case may be, shall
      inform the other parties to this Agreement and the Qualifying Swap Counterparty
      promptly, in writing, upon the discovery of any breach of the representations,
      warranties and/or covenants contained in Section 4.01,
Section 4.02 or Section 5.01; provided,
however, that the failure to provide any such
      notice shall not diminish,
      in any manner whatsoever, any obligation of the Borrower under this
Section 4.03 to sell any Pledged Receivable.  Upon the
      discovery by or notice to the Borrower of any such breach that also constitutes
      a LEAF Purchase Event under and as defined in the Purchase and Sale Agreement,
      the Borrower

     

    
      
         

      

      
        45

        
          

        

      

      
         
 shall
        have an obligation to, and the Borrower shall, resell to the Originator pursuant
        to the Purchase and Sale Agreement (and the Collateral Agent may enforce
        such
        obligation of the Borrower to sell) any Pledged Receivable adversely affected
        by
        any such breach.  The Servicer shall notify the Collateral Agent
        promptly, in writing, of any failure by the Borrower to so resell any such
        Pledged Receivable.  In connection with the resale of such Pledged
        Receivable, the Borrower shall remit funds in an amount equal to the Release
        Price for such Pledged Receivable to the Collection Account on the date of
        such
        resale and the Collateral Agent, in consideration for payment (and automatically
        upon deposit in the Collection Account), of the Release Price shall be deemed
        to
        have released its security interest in such Pledged Receivables. It is
        understood and agreed that the obligation of the Borrower to resell to the
        Originator, and the obligation of the Originator to purchase, any Receivables
        which are adversely affected by a LEAF Purchase Event is not intended to,
        and
        shall not, constitute a guaranty of the collectibility or payment of any
        Receivable which is not collected, not paid or uncollectible on account of
        the
        insolvency, bankruptcy, or financial inability to pay of the related
        Obligor.

    

     

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

     

    ARTICLE
      V

     

    GENERAL
      COVENANTS OF THE BORROWER AND THE SERVICER

     

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

     

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

     

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

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

     

    (d)           The
      Borrower will not have any of its indebtedness guaranteed by Originator or
      any
      Affiliate thereof.  Furthermore, the Borrower will not hold itself
      out, or permit itself to be held out, as having agreed to pay or as being liable
      for the debts of Originator, and the Borrower will not engage in business
      transactions with Originator, except on an arm’s-length basis.  The
      Borrower will not hold Originator out to third parties as other than an entity
      with assets and liabilities distinct from the Borrower.  The Borrower
      will cause any of its financial statements consolidated with those of Originator
      to state that the Borrower is a separate corporate entity with its own separate
      creditors who, in any liquidation of the Borrower, will be entitled to be
      satisfied out of the Borrower’s assets prior to any value in the Borrower
      becoming available to the Borrower’s equity holders.  The Borrower
      will not act in any other matter that could foreseeably mislead others with
      respect to the Borrower’s separate identity.

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

    (i)           The
      Borrower will not merge or consolidate with, or convey, transfer, lease or
      otherwise dispose of (whether in one transaction or in a series of
      transactions), all or substantially all of its assets (whether now owned or
      hereafter acquired) other than with respect to asset dispositions in connection
      with an optional prepayment pursuant to Section 2.15(a) hereof, or
      acquire all or substantially all of the assets or capital stock or other
      ownership interest of any Person without the prior written consent of the
      Lenders.

     

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

     

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

     

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

     

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

     

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

     

    (o)           The
      Servicer shall cause:

     

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

    (i)           the
      Obligor under each Contract to remit all payments owed or otherwise payable
      by
      such Obligor under such Contract (or any servicer on its behalf) to the Lockbox
      or by wire transfer to the Lockbox Account;

     

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

     

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

     

    (p)           Reserved.

     

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

     

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

     

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

     

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

     

    (u)           The
      Pledged Receivables are ineligible to be refinanced with any proceeds of the
      Warehouse Facility.

     

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

     

    (w)           If
      the Obligor Collateral related to any Receivable securing the Borrowing is
      a
      Vehicle, the Borrower shall, within 40 days after the Closing Date, deliver
      to
      the applicable Registrar
      of Titles an application for a Certificate of Title for such Vehicle satisfying
      the Titling Requirements.

     

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

    SECTION
      5.02                                Check-in
      Requirements.

     

    (a)           The
      Borrower hereby covenants and agrees that, (i) not later than 20 days after
      the
      Borrowing Date, it shall cause to be delivered to the Custodian the Priority
      Documents related to Contracts whose aggregate Amortized Equipment Cost
      constitutes not less than 50% of the aggregate Amortized Equipment Cost of
      all
      Contracts, and (ii) not later than 40 days after the Borrowing Date, it shall
      cause to be delivered to the Custodian the Priority Documents for each Pledged
      Receivable; provided, however, that the Borrower shall be permitted to
      deliver to the Custodian a machine copy of any original, executed Contract
      (certified as a true copy (a “Certified True Copy”) by an officer of either the
      Obligor or the Borrower or its predecessor as lessor or lender thereunder)
      for
      Contracts whose aggregate Amortized Equipment Cost constitutes not more than
      5%
      of the aggregate Amortized Equipment Cost of all Contracts.

     

    (b)           The
      Borrower hereby covenants and agrees that if the aggregate Discounted Balance
      of
      all Contracts for which the Custodian has received only a Certified True Copy
      exceeds the aforesaid 5% limit for any period exceeding fifteen days, then
      on
      the first Business Day after such fifteenth day it shall resell the Pledged
      Receivables related to all such Contracts to the Originator, deposit the Release
      Price for each such Pledged Receivable to the Collection Account and remit
      to
      the respective Lenders (no later than the close of business of such Lender
      on
      such Business Day), protanto, as a partial prepayment of the
      outstanding principal amount of the Notes (together with interest accrued and
      unpaid on such prepayment through such date of prepayment),
prorata according to their respective Commitment Percentage, and
      otherwise comply with the requirements of Section 4.03 hereof with respect
      to
      all such Pledged Receivables.

     

    (c)           The
      Custodian hereby agrees that, within one Business Day (to the extent the number
      of Receivable Files received on any Business Day is no greater than 1,000 and
      that such Receivable Files are delivered to the Custodian in the same order
      as
      the Receivable Schedule) or within such greater number of Business Days as
      the
      parties hereto mutually agree (to the extent the number of Receivable Files
      received on any Business Day exceeds 1,000), it shall deliver to the Borrower,
      each Lender and the Servicer (i) a Collateral Receipt for all Receivable Files
      received on that date and (ii) an Exception Report) covering any Deficiencies
      noted in such Collateral Receipt. Additionally, on each Business Day, the
      Custodian hereby agrees to deliver to Borrower, each Lender and the Servicer
      a
      cumulative report of any uncured Deficiencies identified in all prior Collateral
      Receipts.

     

    (d)           The
      Borrower hereby covenants and agrees that, (i) subject to the proviso in
Section 5.02(a) hereof, not later than 60 days after the Borrowing
      Date,  it shall cause to be delivered to the Custodian every item
      constituting the Receivable File for each Pledged Receivable, including every
      item identified in each Exception Report delivered by the Custodian pursuant
      to
Section 5.02(c) hereof and (ii) for each Pledged Receivable with respect
      to which it shall not have complied with the immediately preceding clause (i),
      it shall, to the extent it has not complied therewith within fifteen
      noncomplying days after receipt of an Exception Report with respect to any
      such
      Deficiency pursuant to this Section 5.02(d), on the first Business Day
      after, resell the Pledged Receivables related to all such Contracts to the
      Originator, deposit the Release Price for each such Pledged Receivable to the
      Collection Account and remit to the respective Lenders (no later than the close
      of business
      of such Lender on such Business Day), protanto, as a partial
      prepayment of the outstanding principal amount of the Notes (together with
      interest accrued and unpaid on such prepayment through such date of prepayment),
      prorata according to their respective Commitment Percentage, and
      otherwise comply with the requirements of Section 4.03 hereof with
      respect to all such Pledged Receivables.

     

    
      
         

      

      
        50

        
          

        

      

      
         

      

    

    (e)           The
      events described in subsections (b) and (d)(ii) hereof shall constitute a
      Check-in Repurchase Event.

     

    ARTICLE
      VI

     

    ADMINISTRATION
      AND SERVICING; CERTAIN COVENANTS

     

    SECTION
      6.01                                Appointment
      and Designation of the Servicer.  i) The Borrower and the Lenders
      hereby appoint the Person designated by the Lenders from time to time, pursuant
      to this Section 6.01 (the “Servicer”), as their agent to
      service, administer and collect the Pledged Receivables and otherwise to enforce
      their respective rights and interests in and under the Pledged Receivables
      and
      the other Pledged Assets.  The Servicer shall collect such Pledged
      Receivables under the conditions referred to above by means of the collection
      procedures as set forth in the Credit and Collection Policy, to the extent
      consistent with the provisions of this Article VI.  Unless
      otherwise specified by the Borrower, the Servicer’s authorization under this
      Agreement shall terminate on the Collection Date.  Until the Lenders
      give notice to the Borrower of a designation of a new Servicer upon the
      occurrence and during the continuance of any Servicer Default, or consents
      in
      writing to the appointment by the Borrower of a new Servicer, LEAF Financial
      is
      hereby designated as, and hereby agrees to perform the duties and obligations
      of, the Servicer, pursuant to the terms hereof at all times until the earlier
      of
      the Lenders’ designation of the Backup Servicer or any other Person as the new
      Servicer (upon the occurrence and during the continuance of any Servicer
      Default), the delivery by the Lenders of its written consent to the appointment
      by the Borrower of a new Servicer or the Collection Date.  Upon the
      occurrence and during the continuance of any Servicer Default, the Lenders
      may
      at any time designate as Servicer the Backup Servicer, or any other Person
      with
      demonstrated experience in servicing equipment leases and loans, to succeed
      LEAF
      Financial or any successor Servicer, on the condition in each case that any
      such
      Person so designated shall agree to perform the duties and obligations of the
      Servicer pursuant to the terms hereof.  Each of the Borrower and LEAF
      Financial hereby grants to any successor Servicer an irrevocable power of
      attorney to take any and all steps in the Borrower’s, LEAF Financial’s or the
      Servicer’s name, as applicable, and on behalf of the Borrower or LEAF Financial,
      necessary or desirable, in the determination of such successor Servicer, to
      service, administer or collect any and all Pledged Receivables.

     

    (b)           The
      Servicer is hereby authorized to act for the Borrower and the Lenders and,
      in
      such capacity, shall manage, service, administer and arrange collections on
      the
      Pledged Receivables and perform the other actions required by the Servicer
      under
      this Agreement for the benefit of the Lenders.  The Servicer agrees
      that its servicing of the Pledged Receivables shall be carried out in accordance
      with customary and usual procedures of institutions which service equipment
      lease and loan contracts and receivables and, to the extent more exacting,
      the
      degree of skill and attention that the Servicer exercises from time to time,
      with respect to all comparable equipment lease and loan contracts and
      receivables that it services for itself or others in accordance with the Credit
      and Collection Policy (or if the Backup

     

    
      
         

      

      
        51

        
          

        

      

      
         
 Servicer
        has been appointed as Servicer, the Backup Servicer’s customary
        collection policies) and, to the extent more exacting, the requirements of
        this
Article VI.  The Servicer’s duties shall include, without
        limitation, collecting and posting of all Collections with respect to any
        Pledged Receivable, responding to inquiries of Obligors on the Pledged
        Receivables, investigating delinquencies, sending invoices, payment statements
        or payment books to Obligors, reporting any required tax information to
        Obligors, policing the collateral, enforcing the terms of the Contracts (and
        any
        documents related thereto) related to any Pledged Receivables, complying
        with
        the terms of the Lockbox Agreement, accounting for Collections with respect
        to
        any Pledged Receivable, furnishing monthly and annual statements to the Lenders
        with respect to distributions and performing the other duties specified
        herein.

    

     

    (c)           Reserved.

     

    (d)           To
      the extent consistent with the standards, policies and procedures otherwise
      required hereby, the Servicer shall have full power and authority, acting alone,
      to do any and all things in connection with such managing, servicing,
      administration and collection that it may deem necessary or
      desirable.  The Servicer is authorized to release liens on Obligor
      Collateral in order to collect Insurance Proceeds with respect thereto and
      to
      liquidate such Obligor Collateral in accordance with its customary standards,
      policies and procedures; provided, however, that, notwithstanding
      the foregoing, the Servicer shall not, (i) except pursuant to an order from
      a court of competent jurisdiction, release an Obligor from payment of any unpaid
      amount under any Pledged Receivable or (ii) waive the right to collect the
      unpaid balance of any Pledged Receivable from such Obligor, except that, subject
      to Section 6.02(a), the Servicer may forego collection efforts if
      the amount which the Servicer, in its reasonable judgment, expects to realize
      in
      connection with such collection efforts is determined by the Servicer, in its
      reasonable judgment, to be less than the reasonably expected costs of pursuing
      such collection efforts and if the Servicer would forego such collection efforts
      in accordance with its customary procedures.  The Servicer is hereby
      authorized to commence, in its own name (in its capacity as Servicer), if
      possible, or in the name of the Borrower or the Lenders (provided that if
      the Servicer is acting in the name of the Borrower or the Lenders, the Servicer
      shall have obtained the Borrower’s or the Lenders’ consent, as the case may be,
      which consent shall not be unreasonably withheld), a legal proceeding to enforce
      any Pledged Receivable (or any terms or provisions of the related Contract)
      or
      to commence or participate in any other legal proceeding (including, without
      limitation, a bankruptcy proceeding) relating to or involving a Pledged
      Receivable or any related Contract, Obligor or Obligor Collateral.  If
      the Servicer commences or participates in such a legal proceeding in its own
      name, the Borrower or the Lenders, as the case may be, shall thereupon be deemed
      to have automatically assigned such Pledged Receivable to the Servicer solely
      for purposes of commencing or participating in any such proceeding as a party
      or
      claimant, and the Servicer is authorized and empowered by the Borrower or the
      Lender, as the case may be, to execute and deliver in the Servicer’s name any
      notices, demands, claims, complaints, responses, affidavits or other documents
      or instruments in connection with any such proceeding.  The Borrower
      or the Lender, as the case may be, shall furnish the Servicer with any powers
      of
      attorney and other documents which the Servicer may reasonably request in
      writing and which the Servicer deems necessary or appropriate and take any
      other
      steps which the Servicer may deem necessary or appropriate to enable the
      Servicer to carry out its servicing and administrative duties under this
      Agreement.  If, however, in any suit or legal proceeding it is held
      that the Servicer may not prosecute such suit or legal proceeding on the grounds
      that it is not an actual party in interest or a holder entitled to enforce
      such
      suit or legal proceeding, the Borrower shall take such steps as the Servicer
      deems necessary to prosecute such suit or legal proceeding, including bringing
      suit in its name.

     

    
      
         

      

      
        52

        
          

        

      

      
         

      

    

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

     

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

     

    SECTION
      6.03                                Realization
      Upon Receivables.  Consistent with the standards, policies and
      procedures required by this Agreement, the Servicer shall use its best efforts
      to repossess (or otherwise comparably convert the ownership of) and liquidate
      any Obligor Collateral securing a Pledged Receivable within a number of days
      consistent with the Credit and Collection Policy of an uncured failure of
      the related Obligor to make any payment which it is obligated to make under
      the
      related Contract or an earlier date that would be customary under the
      circumstances involved (as determined in accordance with the Credit and
      Collection Policy) and, in any case, in a manner as will, in the reasonable
      judgment of the Servicer, maximize the amount to be received by the Borrower
      and
      the Lenders with respect thereto; provided, however, that the
      Servicer need not repossess (or otherwise comparably convert the ownership
      of)
      and liquidate the Obligor Collateral securing such a Pledged Receivable if,
      in
      the reasonable opinion of the Servicer, the value of such Obligor Collateral
      does not exceed by more than an insignificant amount the cost to repossess
      (or
      otherwise comparably convert the ownership of) and liquidate such Obligor
      Collateral.  The Servicer is authorized to follow such customary
      practices and procedures as it shall deem necessary or advisable, consistent
      with the standard of care required by Section 6.01, which practices
      and procedures may include reasonable efforts to realize upon any guaranties,
      selling the related Obligor Collateral at public or private sale, the submission
      of claims under an Insurance Policy and other actions by the Servicer in order
      to realize upon such Pledged Receivable.  The foregoing is subject to
      the provision that, in any case in which the Obligor Collateral shall have
      suffered damage, the Servicer shall not expend funds in connection with any
      repair or towards the repossession of such Obligor Collateral, unless it shall
      determine in its discretion that such repair and/or repossession shall increase
      the proceeds of liquidation of the related Pledged Receivable by an amount
      greater than the amount of such expenses.  All Liquidation Proceeds
      shall be remitted directly by the Servicer to the Collection Account without
      deposit into any intervening account as soon as practicable, but in no event
      later than one (1) Business Day after identification thereof as Liquidation
      Proceeds.  The Servicer shall pay on behalf of the Borrower any
      personal property taxes assessed on repossessed Obligor Collateral, and the
      Servicer shall be entitled to reimbursement of any such tax as a Servicer
      Advance.

     

    
      
         

      

      
        53

        
          

        

      

      
         

      

    

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

     

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

     

    SECTION
      6.05                                Maintenance
      of Security Interests in Obligor Collateral.  k) The initial
      Servicer and the Borrower shall take all steps necessary, under all applicable
      law, in order to (i) cause a valid, subsisting and enforceable first
      priority perfected security interest to exist in favor of the Collateral Agent
      in the Borrower’s interests in the Obligor Collateral, all Other Conveyed
      Property and all Related Security related to each Receivable (and the proceeds
      thereof) being Pledged hereunder, to secure a Loan on the Borrowing Date thereof
      including (A) the filing of a UCC financing statement in the applicable
      jurisdiction adequately describing the Obligor Collateral, Other Conveyed
      Property and all Related Security and naming the Borrower as debtor and the
      Collateral Agent as the secured party, (B) filing Obligor Financing
      Statements against all Obligors purchasing or leasing Obligor Collateral, and
      (C) other than with respect to a Lease Contract related to Equipment which
      has an Amortized Equipment Cost of less than $25,000 if such Lease Contract
      is a
      Dollar Purchase Option Contract or $50,000 if such Lease Contract is a FMV
      Contract, causing the filing of UCC-3 assignment statements in the applicable
      jurisdictions adequately describing the Equipment and other collateral being
      transferred by the Underlying Originator to the Originator and naming the
      applicable Underlying Originator as the assignor and Originator as the assignee,
      (ii) ensure that such security interest is and shall be prior to all other
      liens upon and security interests in the Borrower’s interests in such Obligor
      Collateral, Other Conveyed Property and Related Security (and the proceeds
      thereof) that now exist, or may hereafter arise or be created other than
      Permitted Liens, and (iii) ensure that immediately prior to the Pledge of
      such Receivable by the Borrower to the Collateral Agent, such Obligor
      Collateral, Other Conveyed Property and Related Security is free and clear
      of
      all Adverse Claims other than Permitted Liens; and

     

    
      
         

      

      
        54

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

    SECTION
      6.09                                Servicing
      Compensation.  As compensation for its activities hereunder, the
      Servicer shall be entitled to be paid the Servicing Fee from the Collection
      Account as provided in Section 2.04(c).  The Servicer
      shall be required to pay all expenses incurred by it in connection with its
      servicing activities hereunder and shall not be entitled to reimbursement
      therefor, except with respect to reasonable expenses of the Servicer incurred
      in
      connection with the repossession and disposition of any Obligor Collateral
      (which the Servicer may retain from the proceeds of the disposition of such
      Obligor Collateral) and any Servicer Advances made by the Servicer pursuant
      hereto.  The Servicing Fee may not be transferred in whole, or in
      part, except in connection with the transfer of all the Servicer’s
      responsibilities and obligations under this Agreement.  At any time
      after the occurrence of a Servicer Default and the appointment of the Backup
      Servicer as the Servicer hereunder, the Backup Servicer shall be entitled to
      receive an amount, payable out of Collections on the Pledged Receivables and
      amounts applied to the payment of, or treated as payments on, the Pledged
      Receivables, equal to expenses incurred by the Backup Servicer,
      acting in its capacity as the Servicer, in connection with its obligations
      under
      Sections 6.05(a) and (b) hereof (such expenses, the “Active
      Backup Servicer’s Indemnified Amounts”).

     

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

     

    (b)           At
      least four (4) Business Days prior to each Remittance Date, the Servicer shall
      prepare and deliver, or have delivered to the Lenders and each Qualifying Swap
      Counterparty, (i) a Monthly Remittance Report and any other information
      reasonably requested by a Lender, relating to all Pledged Receivables
      (including, if requested, a Computer Tape or Listing), all information in the
      Monthly Remittance Report and all other such information to be accurate as
      of
      the last day of the immediately preceding Collection Period, and (ii) in an
      electronic format mutually acceptable to the Servicer and the Lenders, all
      information reasonably requested by the Lenders relating to all Pledged
      Receivables.  If any Monthly Remittance Report indicates the existence
      of a Facility Deficiency, the Borrower shall, on the date of delivery of such
      Monthly Remittance Report, prepay to the Lenders, for the account of the
      Lenders, a portion of the Loans as is necessary to cure such Facility
      Deficiency, in accordance with Section 2.04(e) hereof.

     

    (c)           By
      no later than the Borrowing Date, the Borrower (or the initial Servicer on
      its
      behalf) shall also prepare and deliver to the Lenders a Facility Limit
      Certificate containing information accurate as of the date of delivery of such
      Facility Limit Certificate.  If any Facility Limit Certificate
      indicates the existence of a Facility Deficiency, the Borrower shall on the
      date
      of delivery of such Facility Limit Certificate prepay to the Lenders, for the
      account of the Lenders, a portion of the Loans, to the extent necessary to
      cure
      such Facility Deficiency, in accordance with Section 2.04(e)
      hereof.

     

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

     

    
      
         

      

      
        56

        
          

        

      

      
         

      

    

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

     

    SECTION
      6.11                                Statements
      as to Compliance; Financial Statements.  m) The Servicer shall
      deliver to the Backup Servicer, the Borrower and the Lenders on or before March
      31st of each year, beginning with 2008, an Officer’s Certificate stating, as to
      each signatory thereof, that (x) a review of the activities of the Servicer
      during the preceding calendar year (or the portion of the preceding calendar
      year commencing on the date of this Agreement and ending December 31, 2007
in
      the
      case of the first such review) and of its performance under this Agreement
      has
      been made under such officer’s supervision, and (y) to the best of such
      officer’s knowledge, based on such review, the Servicer has fulfilled all of its
      obligations under this Agreement throughout such calendar year (or portion
      thereof, as the case may be) or, if there has been a default in the fulfillment
      of any such obligation, specifying each such default known to such officer
      and
      the nature and status thereof and the action being taken to cure such
      default.

     

    (b)           The
      Servicer (if LEAF Financial or an Affiliate thereof) shall, at its expense,
      cause a firm of nationally recognized independent certified public accountants
      acceptable to the Lenders (the “Independent Accountants”), who may also
      render other services to the Servicer, the Backup Servicer or to the Borrower,
      to deliver to the Borrower and the Lenders, on or before March 31st of each
      year, beginning 2008, with respect to the twelve (12) months ended the
      immediately preceding December 31, a statement (the “Accountant’s
      Report”) addressed to the Board of Directors of the Servicer and to the
      Lenders, to the effect that such firm has examined such Facility Limit
      Certificates and Monthly Remittance Reports prepared by the Servicer during
      the
      twelve (12) months ended the immediately preceding December 31 as it deemed
      necessary in order to issue the Accountants’ Report and issued its report
      thereon, and that such examination was made in accordance with generally
      accepted auditing standards and, accordingly, included such tests of the
      accounting records and such other auditing procedures as such firm considered
      necessary in the circumstances.  The Accountants’ Report shall further
      state that (i) a review in accordance with agreed upon procedures was made;
      and (ii) except as disclosed in the Accountant’s Report, no exceptions or
      errors in the Facility Limit Certificates and Monthly Remittance Reports
      examined were found except for (A) such exceptions as the Independent
      Accountants believe to be immaterial and (B) such other exceptions as shall
      be set forth in the Accountants’ Report.  The Accountants’ Report
      shall also indicate that the firm is independent of the Borrower and the
      Servicer within the meaning of the Code of Professional Ethics of the American
      Institute of Certified Public Accountants.

     

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

     

    
      
         

      

      
        57

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        58

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

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

     

    SECTION
      6.12                                Access
      to Certain Documentation; Obligors; Background Check.  n) The
      Collateral Agent (and its agents or professional advisors) shall at the expense
      of the Borrower, have the right under this Agreement, once during each calendar
      quarter, to examine and audit, during business hours or at such other times
      as
      might be reasonable under applicable circumstances, any and all of

     

    
      
         

      

      
        59

        
          

        

      

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

    

     

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

     

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

     

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

     

    
      
         

      

      
        60

        
          

        

      

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

    

     

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

     

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

     

    On
      and
      after the time the Servicer receives a notice of termination pursuant to this
      Section 6.13, the Backup Servicer shall be (and the Backup Servicer
      hereby agrees to be) the successor in all respects to the Servicer in its
      capacity as Servicer under this Agreement and the transactions set forth or
      provided for herein and shall have all the rights and powers and be subject
      thereafter to all the responsibilities, duties and liabilities relating thereto
      placed on the Servicer by the terms and provisions hereof; provided,
however, that any failure to perform such duties or responsibilities
      caused by the Servicer’s failure to

     

    
      
         

      

      
        61

        
          

        

      

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

    

     

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

     

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

     

    
      
         

      

      
        62

        
          

        

      

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

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        63

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

    SECTION
      6.16                                Maintenance
      of Certain Insurance.  On the date hereof the Servicer shall
      obtain, and at all times thereafter during the term of its service as Servicer
      the Servicer shall maintain, in force a directors and officers liability
      insurance policy in an amount not less than $1,000,000 naming the Collateral
      Agent as loss payee and with an insurance company reasonably acceptable to
      the
      Lenders.

     

    
      
         

      

      
        64

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

    
      
         

      

      
        65

        
          

        

      

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

    

     

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

     

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

     

    
      
         

      

      
        66

        
          

        

      

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

    

     

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

     

    SECTION
      6.22                                Receipt
      of Certificates of Title.  Any Receivable with respect to which
      the Obligor Collateral includes a Vehicle and for which the Servicer shall
      not
      have (i) received a Certificate of Title satisfying the Titling
      Requirements and (ii) delivered such Certificate of Title to the Custodian
      within 90 days of the first day of inclusion of such Pledged Receivable in
      the calculation of the Facility Limit, shall no longer be deemed to be an
      Eligible Receivable and, therefore, shall no longer be included in the
      calculation of the Facility Limit.  In the case of any Receivable
      excluded from the calculation of the Facility Limit pursuant to the previous
      sentence, the Receivable so excluded from the calculation of the Facility Limit
      may at a later time be included in the calculation of the Facility Limit,
provided, that (i) the Custodian shall have received the Certificate
      of Title described above with respect to such Receivable from the applicable
      Registrar of Titles and delivered such Certificate of Title to the Custodian
      and
      (ii) such Receivable is otherwise an Eligible Receivable at such
      time.

     

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

     

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

     

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

     

    
      
         

      

      
        67

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

    ARTICLE
      VII

     

    EVENTS
      OF DEFAULT

     

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

     

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

     

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

     

    (c)           (i) the
      Borrower or the Servicer shall fail to perform or observe any term, covenant
      or
      agreement hereunder or under any other Transaction Document (other than
      described in (x) clause (ii)
      below) in any material respect and such failure remains unremedied for fifteen
      (15) Business Days or (ii) either the Servicer or the Borrower shall fail
      to make any payment or deposit to be made by it when due hereunder or under
      any
      other Transaction Document and such failure remains unremedied for two (2)
      Business Days; or

     

    
      
         

      

      
        68

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    (k)           the
      occurrence of a Servicer Default; or

     

    (l)           either
      (1) the Facility Amount exceeds the Facility Limit or (2) the aggregate
      outstanding principal amount of the Class A Notes exceeds the Class A Facility
      Limit; and, in each case, such event shall remain unremedied for two Business
      Days; or

     

    
      
         

      

      
        69

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

    (q)           the
      occurrence of three or more Termination Events;

     

    then
      the
      Lenders may, by notice to the Borrower and each Qualifying Swap Counterparty,
      declare the Program Termination Date to have occurred; provided, that, in
      the case of any event described in Section 7.01(a) above, the
      Program Termination Date shall be deemed to have occurred automatically upon
      the
      occurrence of such event.  Upon any such declaration or automatic
      occurrence, (i) the Borrower shall cease purchasing Receivables from
      Originator under the Purchase and Sale Agreement, (ii) at the option of
      each Lender in its sole discretion, such Lender may declare such Lender’s
      related Loans made to the Borrower hereunder and all interest and all Fees
      accrued on such Loans and any other Obligations to be immediately due and
      payable (and the Borrower shall pay such Loans and all such amounts and
      Obligations immediately), (iii) the Lenders, jointly and in their sole
      discretion, may direct the Obligors to make all payments under the Pledged
      Receivables directly to the Backup Servicer, the Collateral Agent or any lockbox
      or account established by any of such parties.  Any Collections
      received in any such account (or received directly by any Lender or the
      Collateral Agent) shall be applied to the Obligations in accordance with the
      priority of payments set forth in Section 2.04(c).  In
      addition, upon any such declaration or upon any such automatic occurrence,
      the
      Lenders and the Collateral Agent shall have, in addition to all other rights
      and
      remedies under this Agreement or otherwise, all other rights and remedies
provided
      under the UCC of the applicable jurisdiction and other applicable laws, which
      rights shall be cumulative.

     

    
      
         

      

      
        70

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

    ARTICLE
      VIII

     

    INDEMNIFICATION

     

    SECTION
      8.01                                Indemnities
      by the Borrower.  Without limiting any other rights which the
      Class A Lender, the Class B Lender, the Collateral Agent, the Backup Servicer
      (whether in its capacity as Backup Servicer or successor Servicer), the Lenders’
Bank, the Custodian, the Initial Qualifying Swap Counterparty or any of their
      respective Affiliates may have hereunder or under applicable
      law, 

     

    
      
         

      

      
        71

        
          

        

      

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

    

     

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

     

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

     

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

     

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

     

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

     

    (vi)           the
      failure to maintain, as of the close of business on each Business Day prior
      to
      the Collection Date, a Facility Amount, which is less than or equal to the
      Facility Limit;

     

    
      
         

      

      
        72

        
          

        

      

      
         

      

    

    (vii)           Reserved;

     

    (viii)                      the
      failure to file, or any delay in filing, financing statements or other similar
      instruments or documents under the UCC of any applicable jurisdiction or other
      applicable laws with respect to any Receivables which are, or are purported
      to
      be, Pledged Receivables

     

    or
      the
      other Pledged Assets related thereto, whether at the time of the Borrowing
      or at
      any subsequent time;

     

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

     

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

     

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

     

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

     

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

     

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

     

    (xv)           any
      failure by the Borrower to give reasonably equivalent value to Originator in
      consideration for the transfer by Originator to the Borrower of any Receivable
      or any attempt by any Person to void or otherwise avoid any such transfer under
      any statutory provision or common law or equitable action, including, without
      limitation, any provision of the Bankruptcy Code;

     

    (xvi)                      [Reserved];

     

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

     

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

     

    
      
         

      

      
        73

        
          

        

      

      
         

      

    

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

     

    Any
      amounts subject to the indemnification provisions of this
Section 8.01 shall be paid by the Borrower to the applicable Lender
      on behalf of the applicable Indemnified Party within two (2) Business Days
      following such Lender’s written demand therefor on behalf of the applicable
      Indemnified Party (and such Lender shall pay such amounts to the applicable
      Indemnified Party promptly after the receipt by such Lender of such
      amounts).  Each Lender, on behalf of any related

     

    Indemnified
      Party making a request for indemnification under this Section 8.01,
      shall submit to the Borrower a certificate setting forth in reasonable detail
      the basis for and the computations of the Indemnified Amounts with respect
      to
      which such indemnification is requested, which certificate shall be conclusive
      absent demonstrable error.

     

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

     

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

     

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

     

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

     

    
      
         

      

      
        74

        
          

        

      

      
         

      

    

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

     

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

     

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

     

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

     

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

     

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

     

    (b)           Any
      Servicer Indemnified Amounts shall be paid by the Servicer (if LEAF Financial
      or
      one of its Affiliates) to each related Lender, for the benefit of the applicable
      Indemnified Party, within two (2) Business Days following receipt by the
      Servicer of such Lender’s written demand therefor (and such Lender shall pay
      such amounts to the applicable Indemnified Party promptly after the receipt
      by
      such Lender of such amounts).

     

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

     

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

     

    
      
         

      

      
        75

        
          

        

      

      
         

      

    

    ARTICLE
      IX

     

    MISCELLANEOUS

     

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

     

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

     

    SECTION
      9.03                                No
      Waiver; Remedies.  No failure on the part of any Lender to
      exercise, and no delay in exercising, any right hereunder shall operate as
      a
      waiver thereof; nor shall any single or partial exercise of any right hereunder
      preclude any other or further exercise thereof or the exercise of any other
      right.  The remedies herein provided are cumulative and not exclusive
      of any remedies provided by law.

     

    SECTION
      9.04                                Binding
      Effect; Assignability; Multiple Lenders.  r) This Agreement shall
      be binding upon and inure to the benefit of the Borrower, the Servicer, the
      Lenders, the Backup Servicer, the Custodian, the Lenders’ Bank and their
      respective successors and permitted assigns.  This Agreement and each
      Lender’s rights and obligations hereunder (and under its related Note) and
      interest herein shall be assignable in whole or in part (including by way of
      the
      sale of participation interests therein) by such Lender and its successors
      and
      assigns.  None of the Borrower, the Servicer or the Backup Servicer
      may assign any of its rights and obligations hereunder or any interest herein
      without the prior written consent of the Lenders; provided that the Borrower
      shall be permitted, on not less than 10 Business Days’ prior written notice to
      the other parties hereto and with the prior written consent of the Lenders,
      to
      be provided in the sole discretion of the Lenders, to assign all of its rights
      and obligations hereunder to, and simultaneously with the transfer of all
      Pledged Assets to, a Permitted Transferee which shall have assumed in a writing
      satisfactory to the Lenders all such rights and obligations and acquired all
      such Pledged Assets.  The parties to each assignment or participation
      made pursuant to this Section 9.04 shall execute and deliver to the
      applicable Lender, for its acceptance and recording in its books and records,
      an
      assignment and acceptance agreement (an “Assignment and Acceptance”) or a
      participation agreement or other transfer instrument reasonably satisfactory
      in
      form and substance to (i) the parties to

     

    
      
         

      

      
        76

        
          

        

      

      
         
 such
        Assignment and Acceptance, (ii) in the case of an assignment of the Class
        B
        Loan, the Class A Lender and (iii) prior to an Event of Default, the
        Borrower.  Each such assignment or participation shall be effective as
        of the date specified in the applicable Assignment and Acceptance or other
        agreement or instrument only after the execution, delivery, acceptance and
        recording thereof as described in the preceding sentence.  Each Lender
        shall notify the Borrower of any assignment or participation thereof made
        pursuant to this Section 9.04.  Each Lender may, in
        connection with any assignment or participation or any proposed assignment
        or
        participation pursuant to this Section 9.04, disclose to the
        assignee or participant or proposed assignee or participant any information
        relating to the Borrower and the Pledged Assets furnished to such Lender
        by or
        on behalf of the Borrower or the Servicer; provided, however, that
        such Lender shall not disclose any such information until it has obtained
        an
        agreement from such assignee or participant or proposed assignee or participant
        that it shall treat as confidential (under terms mutually satisfactory to
        such
        Lender, the Borrower, the Servicer and such assignee or participant or proposed
        assignee or participant) any information obtained which is not already publicly
        known or available, and may disclose information relevant to the tax treatment
        and tax structure of the transactions contemplated by this
        Agreement.

    

     

    (b)         Whenever
      the term “Lender” is used herein, it shall mean the Class A Lender, the Class B
      Lender and/or any other Person which shall have executed an Assignment and
      Acceptance, in each case with respect to either the Class A Loan or the Class
      B
      Loan; provided, however, that the holders of the Class A Notes
      collectively, and the holders of the Class B Notes collectively, shall have
      a
prorata share (subject to any provisions of this Agreement which
      shall subordinate the rights of the holders of the Class B Notes to the holders
      of the Class A Notes) of the rights and obligations of the Lender(s) hereunder
      with respect to the Pledged Assets and otherwise in the relative proportions
      that the outstanding principal amount of the Class A Notes or the Class B Notes,
      respectively, bears to the sum of the outstanding principal amount of the Class
      A Notes and the Class B Notes on such date of calculation (its respective
“Commitment Percentage”). Unless otherwise specified herein, any right at
      any time of any Lender to enforce any remedy under this Agreement or any
      Transaction Document shall be exercised by the Controlling Holders.

     

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

     

    SECTION
      9.05                                Term
      of This Agreement.  This Agreement including, without limitation,
      the Borrower’s obligation to observe its covenants set forth in
Articles V and VI and the Servicer’s obligation to observe
      its covenants set forth in Articles V and VI, shall remain in
      full force and effect until the Collection Date; provided,
however, that the rights and remedies with respect to any breach of
      any
      representation and warranty made or deemed made by the Borrower or the Servicer
      pursuant to Articles III and IV and the indemnification and
      payment provisions of Article VIII and Article IX and
      the provisions of Section 9.08 and Section 9.09 shall be
      continuing and shall survive any termination of this Agreement.

     

    
      
         

      

      
        77

        
          

        

      

      
         

      

    

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

     

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

     

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

     

    SECTION
      9.07                                Costs,
      Expenses and Taxes.  t) In addition to the rights of
      indemnification granted to the Backup Servicer (whether in its capacity as
      Backup Servicer or successor Servicer), the Custodian, the Lenders’ Bank, each
      Lender and its respective Affiliates under Section 8.01 hereof, the
      Borrower agrees to pay on demand all reasonable (and reasonably documented)
      costs and expenses of the Backup Servicer, the Custodian, the Lenders’ Bank and
      each Lender incurred in connection with the preparation, execution or delivery
      of, or any waiver or consent issued or amendment prepared in connection with,
      this Agreement, the other Transaction Documents and the other documents to
      be
      delivered hereunder or in connection herewith or therewith or incurred in
      connection with any amendment, waiver or modification of this Agreement, any
      other Transaction Document, and any other documents to be delivered hereunder
      or
      thereunder or in connection herewith or therewith that is necessary or requested
      (and, with respect to such Lender, actually entered into) by any of the
      Borrower, the Servicer, such Lender or made necessary or desirable as a result
      of the actions of any regulatory, tax or accounting body affecting such Lender
      and its Affiliates, or which is related to an Event of Default, including,
      without limitation, the reasonable fees and out-of-pocket expenses of counsel
      for the Backup

     

    
      
         

      

      
        78

        
          

        

      

      
         
 Servicer,
        the Custodian, the Lenders’ Bank and each Lender with respect thereto and with
        respect to advising the Backup Servicer, the Custodian, the Lenders’ Bank and
        each Lender as to their respective rights and remedies under this Agreement
        and
        the other documents to be delivered hereunder or in connection herewith,
        and all
        costs and expenses, if any (including reasonable counsel fees and expenses),
        incurred by the Backup Servicer, the Custodian, the Lenders’ Bank or any Lender
        in connection with the enforcement of this Agreement and the other documents
        to
        be delivered hereunder or in connection herewith.

    

     

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

     

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

     

    to
      pay
      the fees and out-of-pocket expenses of counsel to the Initial Qualifying Swap
      Counterparty related to the initial negotiation, execution and delivery of
      any
      Qualifying Interest Rate Swap.

     

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

     

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

     

    SECTION
      9.08                                No
      Proceedings.  The Servicer, the Backup Servicer, the Custodian,
      the Collateral Agent, the Class A Lender, the Class B Lender and the Lenders’
Bank each hereby agree that it will not institute against, or join any other
      Person in instituting against, the Borrower any proceedings of the type referred
      to in the definition of Bankruptcy Event prior to two years and one day after
      the Collection Date.

     

    SECTION
      9.09                                Recourse
      Against Certain Parties.  No recourse under or with respect to any
      obligation, covenant or agreement (including, without limitation, the payment
      of
      any fees or any other obligations) of any Lender as contained in this Agreement
      or any other agreement, instrument or document entered into by the Borrower
      or
      such Lender pursuant hereto or in connection herewith

     

    
      
         

      

      
        79

        
          

        

      

      
         
 shall
        be had against any administrator of the Borrower or such Lender or any
        incorporator, affiliate, stockholder, officer, employee or director of the
        Borrower or such Lender or of any such administrator, as such, by the
        enforcement of any assessment or by any legal or equitable proceeding, by
        virtue
        of any statute or otherwise;
itbeingexpresslyagreedandunderstood
        that the agreements of each party hereto contained in this Agreement and
        all of
        the other agreements, instruments and documents entered into by the Borrower
        or
        any Lender pursuant hereto or in connection herewith are, in each case, solely
        the corporate obligations of such party (and nothing in this
Section 9.09 shall be construed to diminish in any way such
        corporate obligations of such party), and that no personal liability whatsoever
        shall attach to or be incurred by any administrator of the Borrower or any
        Lender or any incorporator, stockholder, affiliate, officer, employee or
        director of the Borrower or such Lender or of any such administrator, as
        such,
        or any of them, under or by reason of any of the obligations, covenants or
        agreements of the Borrower or such Lender contained in this Agreement or
        in any
        other such instruments, documents or agreements, or which are implied therefrom,
        and that any and all personal liability of every such administrator of the
        Borrower or any Lender and each incorporator, stockholder, affiliate, officer,
        employee or director of the Borrower or such Lender or of any such
        administrator, or any of them, for breaches by the Borrower or such Lender
        of
        any such obligations, covenants or agreements, which liability may arise
        either
        at common law or in equity, by statute or constitution, or otherwise, is
        hereby
        expressly waived as a condition of and in consideration for the execution
        of
        this Agreement.  The provisions of this Section 9.09 shall
        survive the termination of this Agreement.

    

     

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

     

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

     

    SECTION
      9.12                                Calculation
      of Performance Triggers.  Notwithstanding anything to the contrary
      herein, Included Repurchased Receivables shall be treated as Pool Receivables
      for purposes of each calculation of the Annualized Default Rate, Annualized
      Net
      Loss Rate, and Delinquency Rate required to be made hereunder (but for no other
      purpose).

     

    
      
         

      

      
        80

        
          

        

      

      
         

      

    

    ARTICLE
      X

     

    THE
      COLLATERAL AGENT

     

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

     

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

     

    SECTION
      10.03                                           Acknowledgement.  Each
      Lender hereby acknowledges and agrees that its rights and obligations as a
      “Lender” under the Collection Account Agreement are being held by Morgan Stanley
      in its capacity as Collateral Agent for the benefit of the Secured
      Parties.

     

    
      [Signature
        page to follow.]

    

    
      
         

      

      
        81

        
          

        

      

      
         

      

    

     

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

     

    
      	
              THE
                BORROWER:

            	
              LEAF
                CAPITAL FUNDING III, LLC

               

              By:_______________________________________

              Name:

              Title:

            
	
              THE
                SERVICER:

            	
              LEAF
                FINANCIAL CORPORATION

               

              By:_______________________________________

              Name:

              Title:

            
	 	 
	
              THE
                CLASS A LENDER AND 

              THE
                COLLATERAL AGENT

            	
              MORGAN
                STANLEY BANK

               

              By:_______________________________________

              Name:

              Title:

               

            
	
              THE
                CLASS B LENDER

            	
              MORGAN
                STANLEY ASSET FUNDING INC.

               

              By:_______________________________________

              Name:

              Title:

               

            

    

    

    
      	
              THE
                CUSTODIAN AND

              THE
                LENDERS’ BANK:

            	
              U.S.
                BANK NATIONAL ASSOCIATION

              By:_______________________________________

              Name:

              Title:

               

            
	
              THE
                BACKUP SERVICER

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

              U.S.
                BANK PORTFOLIO SERVICES)

              By:_______________________________________

              Name:

              Title:

            

    

     

    
      
         

      

      
        S-1

        
          

        

      

      
         

      

    

    SCHEDULE
      I

     

    CONDITION
      PRECEDENT DOCUMENTS

     

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

     

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

     

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

     

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

     

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

     

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

     

    (f)           Certified
      copies of requests for information or copies (or a similar UCC search report
      certified by a party acceptable to the Lenders), dated a date reasonably near
      to
      the date of the initial Borrowing, listing all effective financing statements
      (including the Facility Financing Statements), which name any of the Borrower
      or
      the Originator (under such party’s present name and any previous name) as debtor
      and which are filed in the jurisdictions in which the Facility Financing
      Statements were filed, together with copies of such financing statements (none
      of which, other than the Facility Financing Statements, shall cover any Pledged
      Assets);

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (g)           One
      or more favorable Opinions of Counsel, of counsel to the Originator and the
      Borrower, with respect to such matters as any Lender may reasonably request
      (including an opinion, with respect to the creation, perfection and first
      priority of the security interest of the Borrower and the Collateral Agent
      in
      the property described in such Opinion of Counsel);

     

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

     

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

     

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

     

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

     

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

     

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

     

    (n)           Copies
      of all other documents referred to in the Closing Checklist attached as Exhibit
      I hereto, satisfactory in all respect to the Lenders.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    SCHEDULE
      II

     

    PRIOR
      NAMES, TRADENAMES, FICTITIOUS NAMES

     

    AND
      “DOING BUSINESS AS” NAMES

     

    1.           Borrower:  None

     

    2.           Servicer:  LEAF
      Financial Corporation

     

    LEAF
      Financial Corporation was previously named Fidelity Leasing
      Corporation.  Effective February 28, 1996, Fidelity Leasing
      Corporation changed its name to F.L. Partnership Management,
      Inc.  Effective May 1, 2000, F.L. Partnership Management, Inc. and FL
      Financial Services, Inc. merged, with F.L. Partnership Management, Inc. as
      the
      surviving entity.  Effective December 13, 2001, F.L. Partnership
      Management, Inc. changed its name to LEAF Financial
      Corporation.  Effective June 29, 2004, LEAF Asset Management, Inc. and
      LEAF Financial Corp. merged, with LEAF Financial Corp. as the surviving
      entity.  LEAF Financial Corporation has no trade names, fictitious
      names or “doing business as” names.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
      III

     

    REPRESENTATIONS
      AND WARRANTIES WITH

     

    RESPECT
      TO ELIGIBLE RECEIVABLES

     

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

     

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

     

    2.           [Intentionally
      omitted.]

     

    3.           To
      the extent that such Contract consists of a payment schedule or promissory
      note
      (if any), together with the “Master Agreement”, “Finance Agreement” or similar
      agreement related thereto and incorporated by reference therein, each other
      payment schedule or promissory note (if any) related to the same “Master
      Agreement”, “Finance Agreement” or similar agreement is also a Contract related
      to a Pledged Receivable.  To the extent that such Contract consists of
      a “Master Lease Schedule” or similar agreement together with a “Master Lease
      Agreement” or similar agreement which is related to, and incorporated by
      reference therein, each other “Master Lease Schedule” or similar agreement
      related to the same “Master Lease Agreement” or similar agreement is also a
      Contract related to a Pledged Receivable.

     

    4.           Reserved.

     

    5.           Each
      such Contract (i) was (a) originated by Originator in the ordinary course
      of Originator’s business and Originator had all necessary licenses and permits
      to originate Contracts in the State where the related Obligor and the related
      Obligor Collateral were located or (b) purchased by Originator, in a transaction
      that would constitute a “true sale” for bankruptcy purposes, from a Person (a
“Seller”) (other than Northern Leasing Systems, Inc. or any Affiliate
      thereof) who originated such Contract in the ordinary course of Seller’s
      business and who had all necessary licenses and permits to originate Contracts
      in the State where the related Obligor and the related Obligor Collateral were
      located, (ii) was sold by Originator to the Borrower under the Purchase and
      Sale Agreement and the Borrower has all necessary licenses and permits to own
      Receivables and enter into Contracts in the state where the related Obligor
      and
      the related Obligor Collateral are located, (iii) contains customary and
      enforceable provisions, such as to render the rights and remedies of the
      Borrower (and any assignee thereof) adequate for realization against the
      collateral security related thereto and (iv) provides for level Scheduled
      Payments during the term of such Contract or such Contract is a Non-Level
      Payment Contract.

     

    
      
         

      

      
        Sch.
          III-1

        
          

        

      

      
         

      

    

    6.           Each
      such Contract was originated by Originator or the Seller without any fraud
      or
      material misrepresentation on the part of the related Obligor or Originator
      or
      the Seller.  Each such

     

    Contract
      was sold by Originator to the Borrower without any fraud or material
      misrepresentation on the part of Originator.

     

    7.           No
      such Contract is the subject of any litigation (other than as set forth in
      any
      of the FDIC Documents or any Schedule thereto), nor is it subject to any right
      of rescission, setoff, counterclaim or defense on the part of the Obligor
      thereunder.

     

    8.           Each
      such Contract has had no provision thereof waived, amended, altered or modified
      in any respect since its acquisition or origination by LEAF except in conformity
      with the Credit and Collection Policy.

     

    9.           The
      Obligor, with respect to each such Contract, has a billing address in the United
      States and, except as otherwise permitted in writing by the Lenders from time
      to
      time, the Equipment which is the subject of each such Contract and all other
      Obligor Collateral with respect thereto is located in the United
      States.

     

    10.           Each
      such Contract (i) is calculated at a fixed yield, (ii) is fully
      amortizing in periodic installments over its remaining term (which may include
      a
      Balloon Payment or Put Payment), (iii) has a remaining term of 180 months
      or less and does not permit renewal or extension, (iv) provides for
      acceleration of the Scheduled Payments thereunder if the related Obligor is
      in
      default under or has otherwise violated or breached any material provision
      of
      such Contract, (v) neither the Originator, the Servicer, the Borrower or
      any other Person has applied any part of any cash collateral paid under such
      Contract to any of the Scheduled Payments due under such Contract, and
      (vi) has not been assigned by the related Obligor nor has there been any
      sub-lease of the Obligor Collateral.

     

    11.           [Intentionally
      omitted.]

     

    12.           Each
      such Contract (i) is payable by a single Obligor, that is a corporate
      Person, or, if the collateral is Equipment used in a business, an individual
      and
      (ii) provides for the financing or lease of Obligor Collateral to be used
      in the business of the related Obligor.

     

    13.           Each
      such Contract was originated in the United States and is denominated and payable
      solely in United States Dollars.

     

    14.           Each
      such Contract (i) if a Lease Contract, contains “hell or high water”
provisions; (ii) requires the related Obligor to assume all risk of loss or
      malfunction of the related Obligor Collateral; (iii) requires the related
      Obligor to pay all maintenance, repair, insurance and taxes, together with
      all
      other ancillary costs and expenses, with respect to the related Obligor
      Collateral; and (iv) requires the related Obligor to pay, in full, when
      due, all Scheduled Payments notwithstanding any casualty, loss or other damage
      to the related Obligor Collateral.

     

    15.           Each
      such Contract is by its terms an absolute and unconditional obligation of the
      related Obligor and is non-cancelable (in the case of a Lease Contract) and
      non-cancelable and non-prepayable without the payment in full of principal
      and
      accrued interest and finance charges prior to the expiration of the term of
      such
      Contract; such Contract does not provide for the substitution, exchange or
      addition of any other items of Obligor Collateral related to such Contract
      if
      the effect thereof would be to reduce or extend the Scheduled Payments related
      thereto; and the rights with respect
      to such Contract are assignable by Originator (and its successors and assigns,
      including the Borrower) without the consent of or notice to any
      Person.

     

    
      
         

      

      
        Sch.
          III-2

        
          

        

      

      
         

      

    

    16.           Each
      such Contract is in the form of one of the form contracts attached hereto as
      Exhibit D-1, Exhibit D-2 or Exhibit D-3 or in a form
      otherwise approved by the Servicer in compliance with the Credit and Collection
      Policy.

     

    17.           [Intentionally
      omitted.]

     

    18.           All
      material requirements of applicable federal, state and local laws, and
      regulations thereunder in respect of each such Contract, the origination
      thereof, and the Obligor Collateral related thereto, have been complied with
      in
      all respects.

     

    19.           The
      applicable Obligor (other than a lessee under a Lease Contract that is a “true
      lease”) has good and marketable title to the Equipment which is the subject of
      each such Contract and such Equipment is free and clear of all Adverse
      Claims.

     

    20.           Each
      such Contract constitutes either an “Instrument” or “Chattel Paper” or a
“Payment Intangible” within the meaning of the UCC.

     

    21.           Each
      such Contract contains language by which the related Obligor grants a security
      interest to Originator in the Obligor Collateral which is the subject of each
      such Contract.

     

    22.           (A) The
      Originator shall have taken or caused to be taken all steps necessary under
      all
      applicable law (including the filing of an Obligor Financing Statement with
      respect to each such Contract) in order to cause a valid, subsisting and
      enforceable perfected, first priority security interest to exist in Originator’s
      favor in the Obligor Collateral securing each such Contract (other than with
      respect to Equipment which has a value of less than $25,000 if such Equipment
      is
      leased under Dollar Purchase Option Contracts or $50,000 if such Equipment
      is
      leased under FMV Contracts), (B) Originator shall have assigned the
      perfected, first priority security interest in the Obligor Collateral referred
      to in clause (A) above to the Borrower pursuant to the Purchase and Sale
      Agreement and (C) the Borrower shall have assigned the perfected, first
      priority security interest in the Obligor Collateral referred to in clause
      (A)
      above to the Collateral Agent pursuant to Section 2.11
      hereof.

     

    23.           The
      Borrower has taken all steps necessary under all applicable law in order to
      perfect the security interest of the Collateral Agent in (i) the Borrower’s
      interest in the Obligor Collateral related to each such Contract (other than
      Equipment which has a value of less than $25,000 if such Equipment is leased
      under Dollar Purchase Option Contracts or $50,000 if such Equipment is leased
      under FMV Contracts) and (ii) each such Contract and the Receivable,
      Related Security and Other Conveyed Property related thereto (and the proceeds
      thereof), and there exists in favor of the Collateral Agent as secured party,
      a
      valid, subsisting and enforceable first priority perfected security interest
      in
      (i) the Borrower’s interest in such Obligor Collateral and (ii) such
      Contract and the Receivable, Related Security and Other Conveyed Property
      related thereto (and the proceeds thereof) and such security interest is and
      shall be prior to all other liens upon and security interests in (i) the
      Borrower’s interest in such Obligor Collateral and (ii) such Contract and
      the Receivable, Related Security and Other Conveyed Property related thereto
      (and the proceeds thereof) that now exist or may hereafter arise or be created
      (other than Permitted Liens).

     

    
      
         

      

      
        Sch.
          III-3

        
          

        

      

      
         

      

    

    24.           If
      the Obligor Collateral related to such Contract includes a Vehicle, such
      Contract shall be a Loan Contract or a Dollar Purchase Option Contract, and
      the
      Borrower or the Servicer shall have delivered to the applicable Registrar of
      Titles an application for a Certificate of Title for such Vehicle satisfying
      the
      Titling Requirements.

     

    25.           No
      such Contract is a Defaulted Receivable or, at the time of its Pledge hereunder,
      a Delinquent Receivable.

     

    26.           Each
      such Contract is payable by an Obligor which is not subject to any bankruptcy,
      insolvency, reorganization or similar proceeding.

     

    27.           The
      information pertaining to each such Contract set forth in the Schedule of
      Contracts (as defined in the Purchase and Sale Agreement), the related
      Assignment and each Facility Limit Certificate and Monthly Remittance Report
      is
      true and correct in all respects.

     

    28.           With
      respect to each such Contract, by the Borrowing Date on which such Contract
      is
      Pledged hereunder and on each relevant date thereafter, Originator will have
      caused its master computer records relating to such Contract to be clearly
      and
      unambiguously marked to show that such Contract has been Pledged under this
      Agreement.

     

    29.           With
      respect to each such Contract there exists a Receivable File and such Receivable
      File contains each item listed in the definition of Receivable File with respect
      to such Contract and such Receivable File has been delivered to the Custodian
      or
      will have been delivered to the Custodian in accordance with Section 5.02 of
      the
      RLSA.

     

    30.           No
      such Contract has been repaid, prepaid, satisfied, subordinated or rescinded,
      and the Obligor Collateral securing such Contract has not been released from
      the
      lien of the Lenders in whole or in part (except for releases of Equipment from
      a
      Contract prior to the date of the Pledge thereof and which releases have been
      noted in the Collateral Receipt related to such document).

     

    31.           No
      such Contract was originated in, or is subject to the laws of, any jurisdiction
      the laws of which would make unlawful, void or voidable the sale, transfer,
      pledge and/or assignment of such Contract under this Agreement or the Purchase
      and Sale Agreement, and Originator has not entered into any agreement with
      any
      Obligor that prohibits, restricts or conditions the sale, transfer, pledge
      and/or assignment of such Contract.

     

    32.           [Intentionally
      Omitted].

     

    33.           No
      such Contract has been sold, transferred, assigned or pledged by Originator
      to
      any Person other than the Borrower.  Borrower has not taken any action
      to convey any right to any Person that would result in such Person having a
      right to payments due under any such Contract or payments received under the
      related Insurance Policy or otherwise to impair the rights of the Borrower
      or
      the Lenders in such Contract, the related Insurance Policy or any proceeds
      thereof.  There is an Insurance Policy in full force and effect with
      respect to the Equipment related to such Contract if such Equipment had an
      Amortized Equipment Cost over $100,000.

     

    
      
         

      

      
        Sch.
          III-4

        
          

        

      

      
         

      

    

    34.           No
      such Contract is assumable by another Person in a manner which would release
      the
      Obligor thereof from such Obligor’s obligations to Originator or the
      Borrower.

     

    35.           There
      has been no default, breach, violation or event permitting acceleration under
      the terms of any such Contract, and no condition exists or event has occurred
      and is continuing that with notice, the lapse of time or both would constitute
      a
      default, breach, violation or event permitting acceleration under the terms
      of
      any such Contract, and there has been no waiver of any of the
      foregoing.

     

    36.           No
      selection procedures adverse to the Borrower or any Lender have been utilized
      in
      selecting any such Contract from all other similar Contracts originated or
      purchased by Originator.

     

    37.           The
      Obligor Collateral related to any such Contract is not subject to any tax or
      mechanic’s lien or any other Adverse Claim.

     

    38.           [Intentionally
      omitted.]

     

    39.           The
      Borrower has delivered to the Custodian, in accordance with Section 5.02 of
      the
      RLSA, the sole original counterpart of each such Contract (or a true and correct
      copy thereof) and such document constitutes the entire agreement between the
      parties thereto in respect of the related Obligor Collateral.

     

    40.           Each
      such Contract is in full force and effect in accordance with its terms and
      neither the Borrower nor the Obligor has or will have suspended or reduced
      any
      payments or obligations due or to become due thereunder by reason of a default
      by any other party to such Contract; there are no proceedings pending or
      threatened asserting insolvency of such Obligor; there are no proceedings
      pending or threatened wherein such Obligor, any other obligated party or any
      Government Entity has alleged that such Contract is illegal or
      unenforceable.

     

    41.           The
      acquisition practices used by the Originator and the origination and collection
      practices used by the Servicer with respect to each such Contract have been
      in
      all respects customary in the equipment financing and servicing
      business.

     

    42.           The
      Obligor Collateral related to each such Contract was properly delivered to
      the
      Obligor in good repair and is in proper working order. Each Obligor has accepted
      the related Equipment.  The related Obligor is the end user of the
      Equipment that is the subject of any such Contract and no Obligor has sublet
      the
      Equipment to any other party.

     

    43.           The
      Obligor with respect to any such Contract is not a merchant with respect to
      the
      Equipment related to such Contract.

     

    
      
         

      

      
        Sch.
          III-5

        
          

        

      

      
         

      

    

    44.           Except
      with respect to a breach of an Obligor’s right of quiet enjoyment of the related
      Equipment, neither the operation of any of the terms of any such Contract nor
      the exercise by the Borrower, the Servicer or the Obligor of any right under
      any
      such Contract will render such Contract unenforceable in whole or in part nor
      subject to any right of rescission, setoff, claim, counterclaim or defense,
      and
      no such right of rescission, set-off, claim, counterclaim or defense, including
      a defense arising out of a breach of the Obligor’s right of quiet enjoyment of
      the Equipment, has been asserted with respect thereto.

     

    45.           The
      Borrower and the Servicer have duly fulfilled all obligations on their part
      to
      be fulfilled under or in connection with the origination, acquisition and
      assignment of such Contract, including, without limitation, giving any notices
      and obtaining any consents necessary to effect the

     

    acquisition
      of such Contract by the Borrower, and have done nothing to impair the rights
      of
      the Borrower or any Lender in the Contract or payments with respect
      thereto.

     

    46.           Originator
      and the Servicer have duly fulfilled all obligations on their part to be
      fulfilled under or in connection with the origination, acquisition and
      assignment of such Contract, and have done nothing to impair the rights of
      the
      Borrower in such Contract or payments with respect
      thereto.  Originator, the Servicer and Borrower have duly fulfilled
      all continuing obligations on their part to be fulfilled under or in connection
      with such Contract.

     

    47.           [Intentionally
      Omitted].

     

    48.           The
      sale from the Originator to the Borrower of each such Contract and the Other
      Conveyed Property and Related Security related thereto does not violate the
      terms or provisions of any agreement to which the Borrower is a party or by
      which it is bound.

     

    49.           The
      transfer, assignment and conveyance of the Contract and the Other Conveyed
      Property and Related Security related thereto from the Originator to the
      Borrower pursuant to the Purchase and Sale Agreement is not subject to nor
      will
      result in any tax, fee or governmental charge payable by the Borrower or any
      other Person to any federal, state or local government.

     

    50.           No
      such Contract (other than a “true lease”) may be (i) an executory contract
      or (ii) in any event, deemed to be an executory contract or unexpired lease
      subject to rejection by an Obligor under Section 365 of the Bankruptcy Code
      in the event that a Bankruptcy Event has occurred with respect to such
      Obligor.

     

    51.           Each
      such Contract contains enforceability provisions (i) permitting the
      acceleration of the payments thereunder if the Obligor is in default under
      such
      Contract and (ii) sufficient to enable the Borrower to repossess or
      foreclose upon the Obligor Collateral related thereto.

     

    52.           Each
      such Contract generally contains provisions requiring the payment of both
      interest and principal (or, in the case of a Lease Contract, lease payments)
      in
      each calendar month or quarter during the term of such Contract.

     

    53.           The
      promissory note, if any, related to each such Contract (i) was payable to
      the Originator immediately prior to its transfer to the Borrower under the
      Purchase and Sale Agreement, and (ii) was payable to the Borrower
      immediately prior to its Pledge hereunder and has not been endorsed by
      Originator to any Person other than the Borrower.

     

    
      
         

      

      
        Sch.
          III-6

        
          

        

      

      
         

      

    

    54.           [Intentionally
      Omitted].

     

    55.           [Intentionally
      Omitted].

     

    56.           [Intentionally
      Omitted].

     

    57.           The
      vendor of the Equipment relating to such Receivable has received payment in
      full
      from the Obligor prior to the Pledge of such Receivable hereunder and has no
      remaining obligations with respect to such Equipment except for any applicable
      warranty.

     

    58.           No
      such Contract provides for delivery and/or financing of any Equipment after
      the
      Closing Date and there are no unperformed purchase or financing commitments
      thereunder as of the Closing Date, and no such Contract contains any unperformed
      purchase or financing commitments as of the Closing Date.

     

    59.           No
      Scheduled Payment under any Contract is delinquent for more than 30
      days.

     

    
      
         

      

      
        Sch.
          III-7

        
          

        

      

      
         

      

    

    SCHEDULE
      IV

     

    CREDIT
      AND COLLECTION POLICY

     

    Attached.

     

    
      
         

      

      
        Sch.
          IV-1

        
          

        

      

      
         

      

    

    SCHEDULE
      V

     

    EQUIPMENT
      CATEGORIES

     

    
      	
              AUTOMOTIVE

            
	
              AWNINGS

            
	
              BEAUTY
                SALON

            
	
              BOOK
                OF BUSINESS

            
	
              CLEANING
                EQUIPMENT

            
	
              COMPUTERS

            
	
              CONSTRUCTION

            
	
              CONTAINERS

            
	
              COPIERS

            
	
              CREMATORIUMS

            
	
              ELECTRONIC
                EQUIPMENT

            
	
              ENGINEERING
                EQUIPMENT

            
	
              FARMING
                EQUIPMENT

            
	
              FEES

            
	
              FITNESS
                & RECREATIONAL EQUIP

            
	
              FIXTURES

            
	
              FURNITURE
                & FURNISHINGS

            
	
              GAS
                PUMPS

            
	
              GOLF
                CARS

            
	
              HEATING
                & AIR EQUIPMENT

            
	
              INDUSTRIAL
                CYLINDERS

            
	
              LANDSCAPE
                & GARDENING EQUIP

            
	
              LAUNDRY
                & DRYCLEANING EQUIP

            
	
              LEASEHOLD
                IMPROVEMENTS

            
	
              LOCK
                BOXES

            
	
              MACHINE
                TOOL EQUIPMENT

            
	
              MAILING
                EQUIPMENT

            
	
              MANUFACTURING
                EQUIPMENT

            
	
              MEDICAL
                EQUIPMENT

            
	
              MOBILE
                COMMUNICATIONS

            
	
              MOBILE/PORTABLE
                EQUIPMENT

            
	
              NEW
                CONSTRUCTION

            
	
              OFFICE
                EQUIPMENT

            
	
              PLUMBING

            
	
              PORTABLE
                TOILETS

            
	
              POS
                SYSTEMS

            
	
              PRINTING
                EQUIPMENT

            
	
              REFUSE
                CONTAINERS

            
	
              RENTAL
                EQUIPMENT

            
	
              RENTAL
                PROPANE TANKS

            
	
              RENTAL
                WATER BOTTLES/COOLERS

            
	
              RESTAURANT
                EQUIPMENT

            
	
              RETAIL
                EQUIPMENT

            

    

     

    
      
         

      

      
        Sch.
          V-1

        
          

        

      

      
         

      

    

     

    
      	 SECURITY
              SYSTEMS
	 SIGNS
	 SOFTWARE    
	 TANNING
              EQUIPMENT
	 TELEPHONE
              SYSTEMS
	 TITLE
              EQUIPMENT
	 VENDING
	 VIDEO
              EQUIPMENT
	 WATER
              SYSTEMS
	 WORKING
              CAPITAL LOAN

    

    

    *
      The
      above categories are subject to change based upon LEAF operations.

     

    
      
         

      

      
        Sch.
          V-2

        
          

        

      

      
         

      

    

    SCHEDULE
      VI

     

    ADDRESSES
      FOR NOTICE

     

    LEAF
      Capital Funding III, LLC

    c/o
      LEAF
      Funding Inc.

    1818
      Market Street, 9th Floor

    Philadelphia,
      PA 19103

    Attention:  Matthew
      Goldenberg

    Facsimile
      No.:  (215) 640-6370

    Confirmation
      No.:  (215) 231-7070

    

    LEAF
      Financial Corporation

    1818
      Market Street, 9th
      Floor,

    Philadelphia,
      PA 19103

    Attention:  Miles
      Herman

    Facsimile
      No.:  (215) 640-6363

    Confirmation
      No.:  (215) 717-3358

    

    Morgan
      Stanley Capital Services Inc.

    Transaction
      Management Group

    1585
      Broadway

    New
      York,
      NY 10036-8293

    Attention:  Chief
      Legal Officer

    Facsimile
      No.: 001-212-507-4022

    

    Morgan
      Stanley Credit

    750
      Seventh Avenue

    New
      York,
      NY 10019

    Facsimile
      No.: (212) 507-5890

    E-mail:
      spvmonthlyreport@morganstanley.com

    

    Morgan
      Stanley Bank

    1221
      Avenue of the Americas

    New
      York,
      NY 10020

    Attention:  Peter
      Woroniecki

    Facsimile
      No.:  (212) 762-6943

    Confirmation
      No.:  (212) 762-6942

    

    Morgan
      Stanley Asset Funding Inc.

    1221
      Avenue of the Americas

    New
      York,
      NY 10020

    Attention:  Peter
      Woroniecki

    Facsimile
      No.:  (212) 762-6943

    Confirmation
      No.:  (212) 762-6942

    

    
      
         

      

      
        Sch.
          VI-1

        
          

        

      

      
         

      

    

    U.S.
      Bank
      National Association

    EP-MN-WS3D

    60
      Livingston Ave.

    St.
      Paul,
      MN 55107

    Attention:  Diane
      Reynolds

    Facsimile
      No.:  (651) 495-8090

    Confirmation
      No.:  (651) 495-3923

    

    Lyon
      Financial Services, Inc. (d/b/a U.S. Bank Portfolio Services)

    U.S.
      Bank
      Portfolio Services

    1310
      Madrid Street

    Marshall,
      MN 56258

    Attention:  Joe
      Andries

    Facsimile
      No.:  (866) 806-0775

    Confirmation
      No.:  (507) 532-7129

    

    
      
         

      

      
        Sch.
          VI-2

        
          

        

      

      
         

      

    

    SCHEDULE
      VII

     

    REMITTANCE
      REPORT INFORMATION

     

    [TO
      BE
      AGREED UPON BY COLLATERAL AGENT AND SERVICER]

     

    
      
         

      

      
        Sch.
          VII-1

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

     

    FORM
      OF
      FACILITY LIMIT CERTIFICATE

     

    FACILITY
      LIMIT CERTIFICATE

     

    __________,
      200__

     

    To:           Morgan
      Stanley Bank/Morgan Stanley Asset Funding Inc.

               1221
      Avenue of the Americas

               New
      York, NY 10020

               Attn:
      Peter Woroniecki

     

    Ladies
      and Gentlemen:

     

    Reference
      is made to the Receivables Loan and Security Agreement dated as of November
      1,
      2007 (the “Loan Agreement”), among LEAF Capital Funding III, LLC, (the
“Borrower”), Leaf Financial Corporation, as the Servicer, Morgan Stanley Bank,
      as Class A Lender, Morgan Stanley Asset Funding Inc., as Class B Lender, U.S.
      Bank National Association, as the Custodian and the Lenders’ Bank and Lyon
      Financial Services, Inc. (d/b/a U.S. Bank Portfolio Services) as the Backup
      Servicer.  Capitalized terms used herein but not defined herein shall
      have the meanings assigned to such terms in the Loan Agreement.

     

    In
      accordance with Section 6.10(c) of the Loan Agreement, the Borrower
      hereby certifies that, after giving effect to the Borrowing requested to occur
      on __________, 200__:

     

    
      	
               

            	
              (1)

            	
              (a)
                the Facility Amount under the Loan Agreement does not exceed the
                Facility
                Limit, and (b) the outstanding principal amount of the Class A Notes
                does
                not exceed the Class A Facility
                Limit;

            

    

     

    
      	
               

            	
              (2)

            	
              no
                Program Termination Event or Event of Default exists;
                and

            

    

     

    
      	
               

            	
              (3)

            	
              if
                the Borrowing is to be secured by Receivables, no Termination Event
                exists;

            

    

     

    
      
         

      

      
        Exh.A1

        
          

        

      

      
         

      

    

    The
      Borrower hereby further certifies that attached hereto as Schedule A are
      true and correct calculations evidencing the accuracy of the statements set
      forth in paragraphs (1) and, as applicable, (2) above.

     

    Very
      truly yours,

     

    LEAF
      CAPITAL FUNDING III, LLC

     

    By:                                                                           

    Name: Miles
      Herman

    Title:   Vice
      President

     

    
      
         

      

      
        Exh.A2

        
          

        

      

      
         

      

    

     

    EXHIBIT
      B

     

    FORM
      OF
      REQUIRED DATA FIELDS

     

    (a)           Obligor
      lease number;

     

    (b)           Obligor
      name;

     

    (c)           Reserved;

     

    (d)           Obligor
      Credit risk rating (if available);

     

    (e)           Collateral
      location (city and state);

     

    (f)           Reserved;

     

    (g)           Equipment
      category/type;

     

    (h)           Non
      Level Payment Contract flag;

     

    (i)           Balloon
      flag and put payment flag;

     

    (j)           Stand
      Alone Working Capital Loan Flag;

     

    (k)           New/used
      flag (if available);

     

    (l)           Lease
      type (true/installment);

     

    (m)           Serial
      Number (if available);

     

    (n)           SIC
      Code (if available);

     

    (o)           Vendor;

     

    (p)           Commencement
      Date

     

    (q)           Maturity
      Date;

     

    (r)           Date
      Next Due;

     

    (s)           Original
      Term;

     

    (t)           Remaining
      Term;

     

    (u)           Payment
      Frequency;

     

    (v)           Original
      Receivable Balance;

     

    (w)           Current
      Receivable Balance;

     

    
      
         

      

      
        Exh.
          B-1

        
          

        

      

      
         

      

    

    (x)           Original
      Equipment Cost;

     

    (y)           Amortized
      Equipment Cost;

     

    (z)           Scheduled
      Payment; and

     

    (aa)           Discounted
      Balance.

     

    
      
         

      

      
        Exh.
          B-2

        
          

        

      

      
         

      

    

    

     

    EXHIBIT
      C

     

    FORM
      OF
      MONTHLY REMITTANCE REPORT

     

    (See
      attached.)

     

    
      
         

      

      
        Exh.C-1

        
          

        

      

      
         

      

    

    

     

    EXHIBIT
      D-1

     

    FORM
      OF
      LEASE CONTRACT

     

    (See
      attached.)

     

    
      
         

      

      
        Exh.
          D-1-1

        
          

        

      

      
         

      

    

    

     

    EXHIBIT
      D-2

     

    FORM
      OF
      LOAN CONTRACT

     

    (See
      attached.)

     

    

    
      
         

      

      
        Exh.
          D-2-1

        
          

        

      

      
         

      

    

     

    EXHIBIT
      D-3

     

    FORM
      OF
      LOAN CONTRACT

     

    (See
      attached.)

     

    
      
         

      

      
        Exh.
          D-3-1

        
          

        

      

      
         

      

    

     

    EXHIBIT
      E

     

    VEHICLE
      LIENHOLDER NOMINEE AGREEMENT

     

    This
      Vehicle Lienholder Nominee Agreement (this “Agreement”) is made as of
      __________, 2007, among __________ (the “Lienholder”), as Lienholder,
      LEAF Capital Funding III, LLC (the “Borrower”), Morgan Stanley Bank, as
      Class A Lender and Morgan Stanley Asset Funding Inc., as Class B Lender
      (collectively, the “Lenders”).

     

    Whereas,
      from time to time LEAF Funding, LLC (“Funding”) may acquire an
      ownership or security interest in certain Contracts;

     

    Whereas,
      Lienholder appears as the lienholder of record on the Titles for the Vehicles
      sold or leased under such Contracts;

     

    Whereas,
      from time to time Funding may sell to the Borrower certain of such Contracts
      and
      all of its right, title and interest in the related Vehicles, and

     

    Whereas,
      the Borrower shall pledge, inter alia, such Contracts and the
      Borrower’s security interest in each such Vehicle, to the Lenders in order to
      secure loans being advanced to the Borrower by, and the other obligations of
      the
      Borrower to, the Lenders (the “Loan Transactions”); and

     

    Whereas,
      due to the administrative difficulty and costs of amending the Titles of the
      Vehicles to note thereon (i) the security interest of the Borrower in such
      Vehicles and (ii) the security interest of the Lenders in the security interest
      of the Borrower in such Vehicles, the Titles to the Vehicles will not be amended
      to note such security interests of the Borrower and the Lenders but instead,
      from and after the date hereof, the Lienholder will act as the Borrower’s and
      the Lenders’ respective nominee lienholder with respect to the Vehicles pursuant
      to the terms hereof;

     

    Now,
      Therefore, in consideration of the mutual promises herein contained and for
      other good and valuable consideration, the receipt and sufficiency of which
      are
      hereby acknowledged, the parties hereto, intending to be legally bound, hereby
      agree as follows:

     

    1.           Term.  This
      Agreement will commence on the date hereof and will remain in full force and
      effect until the Collection Date.

     

    2.           Appointment
      of Nominee Lienholder.  The Borrower and the Lenders hereby
      appoint the Lienholder as their nominee lienholder, in a representative
      capacity, with respect to the Vehicles, and the Lienholder hereby agrees to
      serve in such capacity as described herein.  The Lienholder hereby
      agrees that all of its right, title, interest (which is solely as stated
      lienholder on the Titles) in and to the

     

    
      
         

      

      
        Exh.
          E-1

        
          

        

      

      
         
 Vehicles
        shall be solely for the respective benefit of the Borrower and the
        Lenders.  As stated lienholder on the Titles to all of such Vehicles,
        the Lienholder agrees to take any and all reasonable actions as the Borrower
        (with the consent of the Lenders) or the Lenders may request
        in writing with respect to the Titles including, without limitation, all
        actions
        for which the Lienholder’s consent, waiver, release, vote or signature (or other
        action of similar nature) is necessary or advisable in the judgment of the
        Borrower or the Lenders in order to maintain, preserve and protect the
        Borrower’s security interest in such Vehicles and the Lenders’ security interest
        in the Borrower’s security interest in such Vehicles and if the Lienholder fails
        to take any or all such actions, the Lenders or any designee of the Lenders
        may
        take such actions at the sole expense of the Borrower, and the Lienholder
        hereby
        grants to the Lenders and any such designee an irrevocable power of attorney
        and
        license to take any and all such actions in the Lienholder’s name and on behalf
        of the Lienholder. 

    

     

    3.           Interests
      in the Vehicles.  Notwithstanding the fact that the Lienholder
      will be and remain noted as first lienholder (which is solely as stated
      lienholder) on the Titles to the Vehicles from time to time pledged to the
      Borrower and repledged to the Lenders, each party hereto hereby agrees that,
      on
      and after the date hereof:

     

    (i)           except
      as set forth in subsection (ii) below and subject to the terms of any agreement
      between the Borrower and the Lenders, the Borrower is entitled to all incidents,
      benefits and risks of a holder of a first priority perfected security interest
      or ownership in and lien on the Vehicles;

     

    (ii)           subject
      to the terms of any agreement between the Borrower and the Lenders, the Lenders
      is entitled to all incidents, benefits and risks of a holder of a first priority
      perfected security interest in and lien on the Borrower’s first priority
      perfected security interest in and lien on the Vehicles and the right to
      exercise or cause the exercise of all remedies with respect to the Vehicles,
      including the right to repossess, sell and otherwise transfer and dispose of
      the
      Vehicles at the times and subject to the terms of the Contract with the Obligor
      relating to such Vehicle;

     

    (iii)           the
      Lienholder has no direct (or indirect) ownership or other rights or interest
      (including any security interest) in any of the Vehicles;

     

    (iv)           the
      Lienholder will not take any action with respect to the Vehicles unless such
      action is consented to by the Lenders; and

     

    (v)           the
      Lienholder shall not represent to any lender, financing source or other Person,
      that it has, or in any other manner hold itself out as having, any direct or
      indirect ownership interest or any other rights or interests (including any
      security interest) in any of the Vehicles, except for any rights it may have
      as
      nominee lienholder hereunder with respect to the Vehicles.

     

    On
      the
      Collection Date, the Lienholder shall, at the expense of the Borrower, return
      the Titles to the Borrower along with a power of attorney, if necessary to
      substitute Borrower or Lenders as stated lienholder on all Titles, and the
      Lienholder shall have no further responsibility for removing the Lienholder
      as
      stated lienholder on the Titles.

     

    
      
         

      

      
        Exh.
          E-2

        
          

        

      

      
         

      

    

    4.           Entire
      Agreement.  This Agreement constitutes the entire agreement among
      the parties hereto with respect to the subject matter of this Agreement and
      supersedes any prior understandings, agreements, or representations by or among
      the parties hereto, written or oral, to the extent they relate in any way to
      the
      subject matter hereof.

     

    5.           Remittance
      of Proceeds.  In the event that Lienholder receives any insurance
      proceeds or other payments or proceeds in respect of the Vehicles, it shall
      hold
      the same in trust and notify the Borrower and the Lenders of the receipt
      thereof, and shall remit promptly such payments or proceeds to the account
      specified by the Lenders as set forth herein, or as otherwise identified by
      the
      Lenders from time to time by written notice, but in no event later than the
      fifth day following receipt of such payments or proceeds.

     

    6.           Documentation.  From
      and after the date hereof, to the extent that Lienholder from time to time
      receives any certificate of title or notifications of lienholder status relating
      to any Vehicle, Lienholder shall promptly forward the same to U.S. Bank (or,
      following the delivery of written notice from Lenders to such effect, the
      Lenders).

     

    7.           Nonpetition.  Lienholder
      hereby agrees that it will not institute against, or join any other person
      or
      entity in instituting against Borrower any proceeding under any bankruptcy,
      reorganization, liquidation or insolvency law or statute now or hereafter in
      effect in any jurisdiction until two years and one day shall have elapsed since
      the payment in full of all indebtedness and other obligations owed by Borrower
      to the Lenders, Lenders’ Bank and Collateral Agent with respect to the Loan
      Transactions.

     

    8.           Succession
      and Assignment.  This Agreement shall be binding upon and inure
      to the benefit of the parties hereto and their respective successors and
      permitted assigns.  Neither the Lienholder nor the Borrower may assign
      either this Agreement or any of its respective rights, interests, or obligations
      hereunder without the prior written approval of the Lenders.

     

    9.           Counterparts.  This
      Agreement may be executed in separate counterparts, each of which will be deemed
      an original but all of which together will constitute one and the same
      instrument.  Delivery of an executed counterpart of a signature page
      to this Agreement by facsimile shall be effective as delivery of a manually
      executed counterpart of this Agreement.

     

    10.           Headings.  The
      section headings contained in this Agreement are inserted for convenience only
      and will not affect in any way the meaning or interpretation of this
      Agreement.

     

    11.           Notices.  All
      notices, requests, demands, claims and other communications hereunder will
      be in
      writing.  Any notice, request, demand, claim, or other communication
      hereunder will be deemed duly given if (and then two business days after) it
      is
      sent by registered or certified mail, return receipt requested, postage prepaid,
      and addressed to the intended recipient as set forth below:

     

    

     

    If
      to
      the Lienholder:

     

    
      
         

      

      
        Exh.
          E-3

        
          

        

      

      
         
    If
        to the
        Borrower:

    

     

    LEAF
      Capital Funding III, LLC

    1818
      Market Street, 9th Floor

    Philadelphia,
      Pa  19103

    Attention:
      Miles Herman

    Facsimile
      No.: (215) 640-6363

    Confirmation
      No.: (215) 717-3358

     

    If
      to
      the Lenders:

     

    Morgan
      Stanley Bank

    1221
      Avenue of the Americas

    New
      York,
      NY  10020

    Attention:
      Peter Woroniecki

    Facsimile
      No.: (212) 762-6943

    Confirmation
      No.: (212) 762-6942

     

    Morgan
      Stanley Asset Funding Inc.

    1221
      Avenue of the Americas

    New
      York,
      NY  10020

    Attention:
      Peter Woroniecki

    Facsimile
      No.: (212) 762-6943

    Confirmation
      No.: (212) 762-6942

     

    Any
      party
      hereto may give written notice, request, demand, claim, or other communication
      hereunder using any other means (including personal delivery, expedited courier,
      messenger service, telecopy, telex, ordinary mail, or electronic mail), but
      no
      such notice, request, demand, claim, or other communication will be deemed
      to
      have been duly given unless and until it is actually received by the intended
      recipient.  Any party hereto may change the address to which notices,
      requests, demands, claims and other communications hereunder are to be delivered
      by giving the other parties notice in the manner herein set forth.

     

    12.           Governing
      Law.  This agreement shall, in accordance with
      section 5-1401 and 5-1402 of the General Obligations Law of the State of
      New York, be governed by the laws of the State of New York, without regard
      to
      any conflicts of law principles thereof that would call for the application
      of
      the laws of any other jurisdiction.

     

    13.           Consent
      to Jurisdiction; Waiver of Jury Trial; Etc.  Any legal action or
      proceeding with respect to this agreement may be brought in the courts of the
      State of New York or of the United States of America for the Southern District
      of New York, and, by execution and delivery of this agreement, each party hereto
      hereby accepts for itself and in respect of its property, generally and
      unconditionally, the nonexclusive jurisdiction of the aforesaid
      courts.  The guarantor hereby irrevocably waives, in connection with
      any such action or proceeding, (i) trial by jury, (ii) to the extent it may
      effectively do so under applicable law, any objection, including any objection
      to the laying of venue or based on the grounds of forum non conveniens, which
      it
      may now or hereafter have to the bringing of any such action or proceeding
      in
      such respective jurisdictions and (iii) the right to interpose any set-off,
      counterclaim or cross-claim (unless such set-off, counterclaim or cross-claim
      could not, by reason of any applicable federal or state procedural laws, be
      interposed, pleaded or alleged in any other action).

     

    
      
         

      

      
        Exh.
          E-4

        
          

        

      

      
         

      

    

    14.           Amendments
      and Waivers.  No amendment of any provision of this Agreement
      will be valid unless the same will be in writing and signed by each of the
      parties hereto.  No waiver by the Lenders of any default,
      misrepresentation, or breach of warranty or covenant hereunder, whether
      intentional or not, will be deemed to extend to any prior or subsequent default,
      misrepresentation, or breach of warranty or covenant hereunder or affect in
      any
      way any rights arising by virtue of any such prior or subsequent
      occurrence.

     

    15.           Severability.  Any
      term or provision of this Agreement that is invalid or unenforceable in any
      situation in any jurisdiction will not affect the validity or enforceability
      of
      the remaining terms and provisions hereof or the validity or enforceability
      of
      the offending term or provision in any other situation or in any other
      jurisdiction.

     

    16.           Definitions.  Capitalized
      terms used herein but not previously defined herein have the following
      meanings:

     

    (i)           “Collection
      Date” means the date on which (a) the aggregate outstanding principal amount of
      the loans under the Loan Transactions have been repaid in full and all interest
      and fees and all other obligations of the Borrower thereunder have been paid
      in
      full, and (b) the Lenders shall have no further obligation to make additional
      loans.

     

    (ii)           “Contract”
      means a finance lease contract or a secured loan contract with respect to one
      or
      more Vehicles and includes the rights to all payments from the Obligor
      thereunder.

     

    (iii)           “Obligor”
      means each person obligated to make payments under a Contract and which is
      the
      owner or co-owner of the related Vehicle(s).

     

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

     

    (v)           “Servicer”
      means LEAF Financial Corporation.

     

    (vi)           “Title”
      means with respect to a Vehicle, an original certificate of title issued by
      the
      Registrar of Titles of the applicable state.

     

    (vii)           “Vehicle”
      means a new or a used automobile, minivan, sports utility vehicle, light duty
      truck or heavy duty truck in which Borrower or Funding has acquired an ownership
      or security interest.

     

    [Signature
      page to follow.]

     

    
      
         

      

      
        Exh.
          E-5

        
          

        

      

      
         

      

    

    In
      Witness Whereof, the parties hereto have duly executed this Agreement as of
      the
      date first above written.  

     

    [LIENHOLDER]

     

    By:_______________________________

    Name:_________________________

    Title:__________________________

     

    
      	
               

            	
              LEAF
                CAPITAL FUNDING III, LLC,

            

    

    
      	
               

            	
              as
                Borrower

            

    

     

    By:______________________________

    Name:________________________

    Title:_________________________

     

    
      	
               

            	
              MORGAN
                STANLEY BANK, as Class A Lender

            

    

     

    By:_____________________________

    Name:________________________

    Title:_________________________

     

    
      	
               

            	
              MORGAN
                STANLEY ASSET FUNDING INC., as Class B
                Lender

            

    

     

    By:_____________________________

    Name:________________________

    Title:_________________________

     

    

    
      
         

      

      
        Exh.
          E-6

        
          

        

      

      
         

      

    

     

    EXHIBIT
      F

     

    FORM
      OF
      NOTICE OF BORROWING

     

    NOTICE
      OF BORROWING

     

                                                                                                               November
      __, 2007

     

    To:           Morgan
      Stanley Bank/Morgan Stanley Asset Funding Inc.

               1221
      Avenue of the Americas

               New
      York, NY 10020

               Attn:
      Peter Woroniecki

     

    Notice
      of
      Borrowing No.:  [1]

     

    Gentlemen:

     

    Reference
      is made to the Receivables Loan and Security Agreement dated as of November
      1,
      2007 (the “Loan Agreement”), among LEAF Capital Funding III, LLC, (the
“Borrower”), Leaf Financial Corporation, as the Servicer, Morgan Stanley Bank,
      as Class A Lender and Morgan Stanley Asset Funding Inc., as Class B Lender,
      U.S.
      Bank National Association, as the Custodian and the Lenders’ Bank and Lyon
      Financial Services, Inc. (d/b/a U.S. Bank Portfolio Services) as the Backup
      Servicer.  Capitalized terms used herein but not defined herein shall
      have the meanings assigned to such terms in the Loan Agreement.

     

    In
      accordance with Sections 2.02(b) and 6.10(c) of the Loan Agreement, the
      Borrower hereby certifies that, after giving effect to the Borrowing requested
      to occur on November 7, 2007:

     

    
      	
               

            	
              1.

            	
              Requested
                aggregate amount of Borrowing:

            

    

     

    Class
      A
      Loan: $__________

     

    Class
      B
      Loan: $__________

     

    
      	
               

            	
              2.

            	
              Requested
                date of Borrowing: November 7, 2007

            

    

     

    
      	
               

            	
              3.

            	
              In
                connection with this Borrowing we Pledge to you the Eligible Receivables
                set forth on the Schedule of Receivables attached
                hereto.

            

    

     

    
      
         

      

      
        Exh.
          F-1

        
          

        

      

      
         

      

    

    Payments
      in connection with this Borrowing should be deposited to the following
      account:  _________________________.

     

     

    (Signature
      page to follow)

     

    
      
         

      

      
        Exh.
          F-2

        
          

        

      

      
         

      

    

     

    Very
      truly yours,

     

    LEAF
      CAPITAL FUNDING III, LLC

     

    By:                                                                           

    Name:   Miles
      Herman

    Title:     Vice
      President

     

    
      
         

      

      
        Exh.
          F-3

        
          

        

      

      
         

      

    

     

    EXHIBIT
      G

     

    Reserved.

     

    
      
         

      

      
        Exh.
          G-1

        
          

        

      

      
         

      

    

    EXHIBIT
      H-1

     

    FORM
      OF
      CLASS A NOTE

     

    CLASS
      A
      NOTE

     

    
      	 	 
	
              US
                $333,380,316.91

            	
              New
                York, New York

            
	 	
              November
                7, 2007

            
	 	 

    

    FOR
      VALUE
      RECEIVED, LEAF Capital Funding III, LLC, a Delaware limited liability company
      (the “Borrower”), promises to pay to the order of MORGAN STANLEY BANK
      (the “Lender”) the principal amount of the Class A Loan made by Lender to
      Borrower pursuant to the Receivables Loan and Security Agreement, dated as
      of
      November 1, 2007, as amended or modified (the “RLSA”), among the
      undersigned, LEAF Financial Corporation, as Servicer, the Lender, in its
      capacity as Class A Lender, Class B Lender and Collateral Agent, U.S. Bank
      National Association, as the Custodian and the Lenders’ Bank, and Lyon Financial
      Services, Inc. (d/b/a U.S. Bank Portfolio Services).  Such principal
      payments shall be made in the amounts and on the dates provided for in the
      RLSA;
provided, however, that the entire unpaid principal amount of this
      Class A Note shall be due and payable on November 1, 2008.  Borrower
      also promises to pay interest on the unpaid principal amount of the Class A
      Loan
      on the dates and at the rate or rates provided for in the RLSA.  All
      such payments of principal and interest shall be made in the currencies and
      at
      the offices required under the RLSA.

     

    This
      Class A Note is one of the promissory notes referred to in Section 2.01(b)
      of
      the RLSA and is subject to all terms of the RLSA.  Terms defined in
      the RLSA are used herein with the same meanings.

     

    The
      Borrower hereby expressly waives presentment, demand, notice of protest and
      all
      other further demands and further notices in connection with the delivery,
      acceptance, performance, default or enforcement of this Class A Note and RLSA,
      and an action for amounts due hereunder or thereunder shall immediately
      accrue.

     

    The
      Class
      A Loan by Lender, the respective dates on which the principal is due and all
      repayments of the principal thereof shall be recorded by Lender pursuant to
      its
      normal business practice; provided that the failure of Lender to make any
      such recordation or endorsement shall not affect the obligations of the Borrower
      under the first paragraph of this Class A Note or under the RLSA.

     

     

    [Remainder
      of page intentionally left blank]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Reference
      is made to the RLSA for provisions for the prepayment hereof and the
      acceleration of the maturity hereof.

     

    
      	 	
              LEAF
                CAPITAL FUNDING III, LLC

            
	 	 
	 	 
	 	
              By:
                _________________________

            
	 	
              Name:

            
	 	
              Title:

            
	 	 

    

    

    
      
         

      

      
        Exh.
          H.1-3

        
          

        

      

      
         

      

    

    EXHIBIT
      H-2

     

    FORM
      OF
      CLASS B NOTE

     

    CLASS
      B
      NOTE

     

    
      	 	 
	
              US$34,712,616.32

            	
              New
                York, New York

            
	 	
              November
                7, 2007

            
	 	 

    

    FOR
      VALUE
      RECEIVED, LEAF Capital Funding III, LLC, a Delaware limited liability company
      (the “Borrower”), promises to pay to the order of MORGAN STANLEY ASSET
      FUNDING INC. (the “Lender”) the principal amount of $34,712,616.32 in
      accordance with the Receivables Loan and Security Agreement, dated as of
      November 1, 2007, as amended or modified (the “RLSA”), among the
      undersigned, LEAF Financial Corporation, as Servicer, Morgan Stanley Bank in
      its
      capacity as Class A Lender and Collateral Agent, the Lender as Class B Lender,
      U.S. Bank National Association, as the Custodian and the Lenders’ Bank, and Lyon
      Financial Services, Inc. (d/b/a U.S. Bank Portfolio Services).  Such
      principal payments shall be made in the amounts and on the dates provided for
      in
      the RLSA; provided, however, that the entire unpaid principal
      amount of this Class B Note shall be due and payable on November 1,
      2008.  Borrower also promises to pay interest on the unpaid principal
      amount of this Class B Note on the dates and at the rate or rates provided
      for
      in the RLSA.  All such payments of principal and interest shall be
      made in the currencies and at the offices required under the RLSA.

     

     

    This
      Class B Note is one of the promissory notes referred to in Section 2.01(b)
      of
      the RLSA and is subject to all terms of the RLSA.  Terms defined in
      the RLSA are used herein with the same meanings.

     

    The
      Borrower hereby expressly waives presentment, demand, notice of protest and
      all
      other further demands and further notices in connection with the delivery,
      acceptance, performance, default or enforcement of this Class B Note and RLSA,
      and an action for amounts due hereunder or thereunder shall immediately
      accrue.

     

     

    The
      original principal amount of this Class B Note, the respective dates on which
      the principal is due and all repayments of the principal thereof shall be
      recorded by Lender pursuant to its normal business practice; provided
      that the failure of Lender to make any such recordation or endorsement shall
      not
      affect the obligations of the Borrower under the first paragraph of this Class
      B
      Note or under the RLSA.

     

     

    [Remainder
      of page intentionally left blank]

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Reference
      is made to the RLSA for provisions for the prepayment hereof and the
      acceleration of the maturity hereof.

     

    
      	 	
              LEAF
                CAPITAL FUNDING III, LLC

            
	 	 
	 	 
	 	
              By:
                _________________________

            
	 	
              Name:

            
	 	
              Title:

            
	 	 

    

    

    

    
      
         

      

      
        Exh.
          H-2-2

        
          

        

      

      
         

      

    

     

    EXHIBIT
      I

     

    CLOSING
      CHECKLIST

     

    

    
      
         

      

      
        Exh.
          I-1

        
          

        

      

      
         

      

    

    TABLE
      OF CONTENTS

     

    
      
        
          	 	 	
                  PAGE

                
	
                  ARTICLE
                    I

                	
                  DEFINITIONS

                	
                  1

                
	
                  Section
                    1.01

                	
                  Certain
                    Defined Terms

                	
                  1

                
	
                  Section
                    1.02

                	
                  Other
                    Terms

                	
                  26

                
	
                  Section
                    1.03

                	
                  Computation
                    of Time Periods

                	
                  26

                
	 	 	 
	
                  ARTICLE
                    II

                	
                  THE
                    RECEIVABLES FACILITY

                	
                  26

                
	
                  Section
                    2.01

                	
                  Borrowings

                	
                  26

                
	
                  Section
                    2.02

                	
                  The
                    Borrowing.

                	
                  27

                
	
                  Section
                    2.03

                	
                  Determination
                    of Interest Periods and Interest Rates.

                	
                  27

                
	
                  Section
                    2.04

                	
                  Remittance
                    Procedures

                	
                  28

                
	
                  Section
                    2.05

                	
                  Reserved.

                	
                  31

                
	
                  Section
                    2.06

                	
                  Reserved.

                	
                  31

                
	
                  Section
                    2.07

                	
                  Payments
                    and Computations, Etc

                	
                  31

                
	
                  Section
                    2.08

                	
                  Fees

                	
                  32

                
	
                  Section
                    2.09

                	
                  Increased
                    Costs; Capital Adequacy

                	
                  32

                
	
                  Section
                    2.10

                	
                  Collateral
                    Assignment of Agreements

                	
                  33

                
	
                  Section
                    2.11

                	
                  Grant
                    of a Security Interest

                	
                  34

                
	
                  Section
                    2.12

                	
                  Evidence
                    of Debt

                	
                  35

                
	
                  Section
                    2.13

                	
                  Release
                    of Pledged Receivables

                	
                  35

                
	
                  Section
                    2.14

                	
                  Treatment
                    of Amounts Paid by the Borrower

                	
                  35

                
	
                  Section
                    2.15

                	
                  Prepayment;
                    Certain Indemnification Rights; Termination

                	
                  35

                
	
                  Section
                    2.16

                	
                  Increase
                    of Borrowing Limit

                	
                  37

                
	 	 	 
	
                  ARTICLE
                    III

                	
                  CONDITIONS
                    OF LOANS

                	
                  37

                
	
                  Section
                    3.01

                	
                  Conditions
                    Precedent to Borrowing

                	
                  37

                
	
                  Section
                    3.02

                	
                  Conditions
                    Precedent to All Borrowings

                	
                  37

                
	
                  Section
                    3.03

                	
                  Advances
                    Do Not Constitute a Waiver

                	
                  39

                
	 	 	 
	
                  ARTICLE
                    IV

                	
                  REPRESENTATIONS
                    AND WARRANTIES

                	
                  40

                
	
                  Section
                    4.01

                	
                  Representations
                    and Warranties of the Borrower

                	
                  40

                
	
                  Section
                    4.02

                	
                  Representations
                    and Warranties of the Servicer

                	
                  43

                
	
                  Section
                    4.03

                	
                  Resale
                    of Receivables Upon Breach of Covenant or Representation and
                    Warranty by
                    Borrower

                	
                  45

                
	
                  Section
                    4.04

                	
                  Representations
                    and Warranties of the Lenders

                	
                  46

                
	 	 	 
	
                  ARTICLE
                    V

                	
                  GENERAL
                    COVENANTS OF THE BORROWER AND THE SERVICER

                	
                  46

                
	
                  Section
                    5.01

                	
                  General
                    Covenants

                	
                  46

                
	
                  Section
                    5.02

                	
                  Check-in
                    Requirements.

                	
                  50

                
	 	 	 
	
                  ARTICLE
                    VI

                	
                  ADMINISTRATION
                    AND SERVICING; CERTAIN COVENANTS

                	
                  51

                
	
                  Section
                    6.01

                	
                  Appointment
                    and Designation of the Servicer

                	
                  51

                
	
                  Section
                    6.02

                	
                  Collection
                    of Receivable Payments; Modification and Amendment of Receivables;
                    Lockbox
                    Agreements

                	
                  53

                

        

         

         

        
          
             

          

          
            -
              i
              -

            
              

            

          

          
             

          

        

         

        
          
            	 	 	
                    PAGE 

                  
	
                    Section
                      6.03

                  	
                    Realization
                      Upon Receivables

                  	
                    53

                  
	
                    Section
                      6.04

                  	
                    Insurance
                      Regarding Equipment

                  	
                    54

                  
	
                    Section
                      6.05

                  	
                    Maintenance
                      of Security Interests in Obligor Collateral

                  	
                    54

                  
	
                    Section
                      6.06

                  	
                    Pledged
                      Receivable Receipts

                  	
                    55

                  
	
                    Section
                      6.07

                  	
                    No
                      Rights of Withdrawal

                  	
                    55

                  
	
                    Section
                      6.08

                  	
                    Permitted
                      Investments

                  	
                    55

                  
	
                    Section
                      6.09

                  	
                    Servicing
                      Compensation

                  	
                    56

                  
	
                    Section
                      6.10

                  	
                    Reports
                      to the Lenders; Account Statements; Servicing Information

                  	
                    56

                  
	
                    Section
                      6.11

                  	
                    Statements
                      as to Compliance; Financial Statements

                  	
                    57

                  
	
                    Section
                      6.12

                  	
                    Access
                      to Certain Documentation; Obligors; Background Check

                  	
                    59

                  
	
                    Section
                      6.13

                  	
                    Backup
                      Servicer

                  	
                    60

                  
	
                    Section
                      6.14

                  	
                    Additional
                      Remedies of Lenders Upon Event of Default

                  	
                    64

                  
	
                    Section
                      6.15

                  	
                    Waiver
                      of Defaults

                  	
                    64

                  
	
                    Section
                      6.16

                  	
                    Maintenance
                      of Certain Insurance

                  	
                    65

                  
	
                    Section
                      6.17

                  	
                    Segregation
                      of Collections

                  	
                    65

                  
	
                    Section
                      6.18

                  	
                    UCC
                      Matters; Protection and Perfection of Pledged Assets

                  	
                    66

                  
	
                    Section
                      6.19

                  	
                    Servicer
                      Advances

                  	
                    66

                  
	
                    Section
                      6.20

                  	
                    Repurchase
                      of Receivables Upon Breach of Covenant or Representation and
                      Warranty by
                      Servicer

                  	
                    66

                  
	
                    Section
                      6.21

                  	
                    Compliance
                      with Applicable Law

                  	
                    67

                  
	
                    Section
                      6.22

                  	
                    Receipt
                      of Certificates of Title

                  	
                    67

                  
	
                    Section
                      6.23

                  	
                    Lenders’
                      Bank Limitation of Liability

                  	
                    67

                  
	 	 	 
	
                    ARTICLE
                      VII

                  	
                    EVENTS
                      OF DEFAULT

                  	
                    68

                  
	
                    Section
                      7.01

                  	
                    Events
                      of Default

                  	
                    68

                  
	
                    Section
                      7.02

                  	
                    Additional
                      Remedies of the Lenders

                  	
                    71

                  
	 	 	 
	
                    ARTICLE
                      VIII

                  	
                    INDEMNIFICATION

                  	
                    71

                  
	
                    Section
                      8.01

                  	
                    Indemnities
                      by the Borrower

                  	
                    71

                  
	
                    Section
                      8.02

                  	
                    Indemnities
                      by Servicer

                  	
                    74

                  
	 	 	 
	
                    ARTICLE
                      IX

                  	
                    MISCELLANEOUS

                  	
                    76

                  
	
                    Section
                      9.01

                  	
                    Amendments
                      and Waivers

                  	
                    76

                  
	
                    Section
                      9.02

                  	
                    Notices,
                      Etc

                  	
                    76

                  
	
                    Section
                      9.03

                  	
                    No
                      Waiver; Remedies

                  	
                    76

                  
	
                    Section
                      9.04

                  	
                    Binding
                      Effect; Assignability; Multiple Lenders

                  	
                    76

                  
	
                    Section
                      9.05

                  	
                    Term
                      of This Agreement

                  	
                    77

                  
	
                    Section
                      9.06

                  	
                    GOVERNING
                      LAW; JURY WAIVER; CONSENT TO JURISDICTION

                  	
                    78

                  
	
                    Section
                      9.07

                  	
                    Costs,
                      Expenses and Taxes

                  	
                    78

                  
	
                    Section
                      9.08

                  	
                    No
                      Proceedings

                  	
                    79

                  
	
                    Section
                      9.09

                  	
                    Recourse
                      Against Certain Parties

                  	
                    79

                  
	
                    Section
                      9.10

                  	
                    Execution
                      in Counterparts; Severability; Integration

                  	
                    80

                  
	
                    Section
                      9.11

                  	
                    Tax
                      Characterization

                  	
                    80

                  

          

           

        

        
          
             

          

          
            -
              ii
              -

            
              

            

          

          
             

          

           

        

        
          	 	 	
                  PAGE 

                
	
                  Section
                    9.12

                	
                  Calculation
                    of Performance Triggers

                	
                  80

                
	 	 	 
	
                  ARTICLE
                    X

                	
                  THE
                    COLLATERAL AGENT

                	
                  81

                
	
                  Section
                    10.01

                	
                  No
                    Implied Duties

                	
                  81

                
	
                  Section
                    10.02

                	
                  Limits
                    on Liability

                	
                  81

                
	
                  Section
                    10.03

                	
                  Acknowledgement

                	
                  81

                

        

      

       

       

    

    
      
         

      

      
        -
          iii
          -

        
          

        

      

      
         

      

    

    LIST
      OF SCHEDULES AND EXHIBITS

     

    SCHEDULES

    
      	
              SCHEDULE
                I

            	
              Condition
                Precedent Documents

            

    

    
      	
              SCHEDULE
                II

            	
              Prior
                Names, Tradenames, Fictitious Names and “Doing Business As”
                Names

            

    

    
      	
              SCHEDULE
                III

            	
              Representations
                and Warranties with Respect to Eligible Receivables, Eligible Contracts
                and Eligible Underlying Originators

            

    

    
      	
              SCHEDULE
                IV

            	
              Credit
                and Collection Policy

            

    

    
      	
              SCHEDULE
                V

            	
              Equipment
                Categories

            

    

    
      	
              SCHEDULE
                VI

            	
              Addresses
                for Notice

            

    

    
      	
              SCHEDULE
                VII

            	
              Remittance
                Report Information

            

    

    

     

    EXHIBITS

    
      	
              EXHIBIT
                A

            	
              Form
                of Facility Limit Certificate

            

    

    
      	
              EXHIBIT
                B

            	
              Form
                of Required Data Fields

            

    

    
      	
              EXHIBIT
                C

            	
              Form
                of Monthly Remittance Report

            

    

    
      	
              EXHIBIT
                D-1

            	
              Form
                of Lease Contract

            

    

    
      	
              EXHIBIT
                D-2

            	
              Form
                of Loan Contract

            

    

    
      	
              EXHIBIT
                D-3

            	
              Form
                of Loan Contract

            

    

    
      	
              EXHIBIT
                E

            	
              Form
                of Vehicle Lienholder Nominee
                Agreement

            

    

    
      	
              EXHIBIT
                F

            	
              Form
                of Notice of Borrowing

            

    

    
      	
              EXHIBIT
                G

            	
              Reserved

            

    

    
      	
              EXHIBIT
                H-1

            	
              Form
                of Class A Note

            

    

    
      	
              EXHIBIT
                H-2

            	
              Form
                of Class B Note

            

    

    
      	
              EXHIBIT
                I

            	
              Closing
                Checklist

            

    

     

    iv

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00136-of-00352.parquet"}]]