Document:

exh10_7.htm

     

     

     

    
      

      

    

    EXHIBIT 10.7

     

    EXECUTION
COPY

    

     

    

     

    SIXTH
AMENDMENT TO RECEIVABLES LOAN AND SECURITY AGREEMENT

     

    THIS
SIXTH AMENDMENT TO THE RECEIVABLES LOAN AND SECURITY AGREEMENT, dated as of
November 13, 2008 (this "Amendment"), is
entered into by RESOURCE CAPITAL FUNDING II, LLC (the "Borrower"), LEAF
FINANCIAL CORPORATION (the "Servicer"), U.S. BANK
NATIONAL ASSOCIATION, as the Custodian (the "Custodian"), and as
the Lenders' Bank (the "Lenders' Bank"), LYON
FINANCIAL SERVICES, INC. (d/b/a U.S. Bank Portfolio Services), as the Backup
Servicer (the "Backup
Servicer") and MORGAN
STANLEY BANK ("Morgan
Stanley"), as a Lender (the "Lender").

    

    RECITALS

     

    A      The
Borrower, the Servicer, Morgan Stanley, the Custodian, the Lenders'
Bank and the Backup Servicer are parties to the Receivables Loan and
Security Agreement, dated as of October 31, 2006 (as amended,
supplemented or otherwise modified from time to time, the "Agreement");

     

    B.      The
parties hereto desire to amend the Agreement on the terms and conditions set
forth
herein.

     

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

     

    
      	
               
      

            	
              1.

            	
              Certain Defined
      Terms. Capitalized terms used but not defined herein shall have the
      meanings set forth for such terms in Section 1.01
      of the Agreement.

            

    

     

    
      	
               
      

            	
              2.

            	
              Amendments to the
      Agreement. The Agreement is hereby amended to incorporate the
      changes reflected on Exhibit A
      hereto.

            

    

     

    
      	
               
      

            	
              3.

            	
              Conditions
      Precedent. The effectiveness of this Amendment is expressly
      conditioned upon the receipt by Morgan Stanley of (i) executed signature
      pages to this Amendment from each of the parties hereto and (ii) such
      other documents, instruments and opinions as Morgan Stanley may
      request.

            

    

     

    
      	
               
      

            	
              4.

            	
              Representations and
      Warranties. Each of the Borrower and the Servicer represents
      and warrants to Morgan Stanley
that:

            

    

     

    
      	
               
      

            	
              (a)

            	
              this
      Amendment has been duly authorized, executed and delivered on its behalf,
      and the Agreement, as so amended, constitutes its legal, valid and binding
      obligation enforceable against it in accordance with the terms hereof or
      thereof;

            

    

     

    
      	
               
      

            	
              (b)

            	
              the
      representations and warranties made by it in the Agreement (as amended by
      this Amendment) are true and correct as of the date hereof (except to the
      extent such representations and warranties speak as a prior date or have
      been the subject of any prior notice or waiver);
  and

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
               
      

            	
              (c)

            	
              after
      giving effect to this Amendment, no Program Termination Event, Event
      of Default, or Unmatured Event of Default shall exist on the date
      hereof.

            

    

     

    
      	
               
      

            	
              5.

            	
              Effect of
      Amendment. Except as expressly amended and modified by this
      Amendment, all provisions of the Agreement shall remain in full force and
      effect. After the date hereof, all references in the Agreement to "this
      Agreement", "hereof', or words of similar effect referring to the
      Agreement shall be deemed to be references to the Agreement as amended by
      this Amendment. This Amendment shall not be deemed to expressly or
      impliedly waive, amend or supplement any provision of the Agreement other
      than as set forth herein.

            

    

     

    
      	
               
      

            	
              6.

            	
              Counterparts.
      This Amendment may be executed in any number of counterparts and by
      different parties on separate counterparts (including by facsimile or
      electronic transmission), each of which shall be deemed to be an original
      and all of which when taken together shall constitute but one and the same
      instrument.

            

    

     

    
      	
               
      

            	
              7.

            	
              Governing Law;
      Severability. THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER AND
      GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS
      CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW YORK
      GENERAL OBLIGATIONS LAW). Wherever possible each provision of this
      Amendment shall be interpreted in such manner as to be effective and
      valid under
      applicable laws, such provision shall be ineffective to the extent of such
      prohibition or invalidity, without invalidating the remainder of such
      provision or the remaining provisions of this
      Amendment.

            

    

     

    
      	
               
      

            	
              8.

            	
              Section
      Headings. The various headings of this Amendment are included for
      convenience only and shall not affect the meaning or interpretation of
      this Amendment, the Agreement or any provision hereof or
      thereof.

            

    

     

    
      	
               
      

            	
              9.

            	
              Continued
      Effectiveness. Except as specifically provided herein, the
      Agreement shall remain unmodified and is specifically confirmed to be in
      full force and effect. Upon the effectiveness of this Amendment, all
      references in the Agreement and in the other Transaction Documents to the
      Agreement or the like shall refer to the Agreement as hereby
      amended.

            

    

     

    [Signature
pages follow]

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

     

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

    
 

    
 

    
      	
              THE
      BORROWER:

            	 
      	
              RESOURCE
      CAPITAL FUNDING II, LLC

            
	 
      	 
      	 
      
	 
      	 
      	
              By:            /s/ Miles Herman

            
	 
      	 
      	
              Name:       Miles
      Herman

            
	 
      	 
      	
              Title:         VP,
      Equipment Leasing

            

    

    
 

    
 

    
      	
              THE
      SERVICER:

            	 
      	
              LEAF
      FINANCIAL CORPORATION

            
	 
      	 
      	 
      
	 
      	 
      	
              By:            /s/ Miles Herman

            
	 
      	 
      	
              Name:       Miles
      Herman

            
	 
      	 
      	
              Title:         President,
      COO

            

    

    
 

    
 

    
      
        
          
          

          Sixth
Amendment to RLSA

           

        

        
          S-1

          
            

          

        

        
           

        

      

    

    
 

    
 

    
      	
              THE
      LENDER:

            	 
      	
              MORGAN
      STANLEY BANK

            
	 
      	 
      	 
      
	 
      	 
      	
              By:            /s/ Andrew J.
      Coon

            
	 
      	 
      	
              Name:      Andrew
      J. Coon

            
	 
      	 
      	
              Title:        Authorized
      Signatory

            

    

    
 

    
 

    
      
        
          
          

          Sixth
Amendment to RLSA

           

        

        
          S-2

          
            

          

        

        
           

        

      

    

    
 

    
 

    
      	
              THE
      BACKUP SERVICER:

            	 
      	
              LYON
      FINANCIAL SERVICES, INC. (d/b/a U.S. Bank Portfolio
    Services),

            
	 
      	 
      	
              as
      Backup Servicer

            
	 
      	 
      	 
      
	 
      	 
      	
              By:            /s/ Jane
      Fox

            
	 
      	 
      	
              Name:      Jane
      Fox

            
	 
      	 
      	
              Title:        Vice
      President

            

    

    
 

    
 

    
      
        
          
          

          Sixth
Amendment to RLSA

           

        

        
          S-3

          
            

          

        

        
           

        

      

    

    
 

    
 

    
      	
              THE
      CUSTODIAN AND THE LENDERS’ BANK:

            	 
      	
              U.S.
      BANK NATIONAL ASSOCIATION,

              as
      Custodian and as Lenders’ Bank

            
	 
      	 
      	 
      
	 
      	 
      	
              By:            /s/ Diane L.
      Reynolds

            
	 
      	 
      	
              Name:       Diane
      L. Reynolds

            
	 
      	 
      	
              Title:         Vice
      President

            

    

    
 

    
 

    
      
        
          
          

          Sixth
Amendment to RLSA

           

        

        
          S-4

          
            

          

        

        
           

        

      

    

    

    Exhibit
A

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
       

      
         

        [incorporates
First Amendment, dated as

        of
December 21, 2006, Second Amendment,

        dated as
of February 28, 2007, Third

        Amendment,
dated as of September 28, 2007,

        Fourth
Amendment, dated as of December 27, 2007,

        Consent
to Receivables Loan and Security Agreement

        and
Custodial Agreement, dated May 9, 2008,

        and
Fifth Amendment, dated as
of May 23, 2008
and

        Sixth Amendment,
dated as of November 13, 2008]

        

        
          

           

          

           

           

          

           

           

          U.S. $250,000,000

           

          

        

        RECEIVABLES LOAN AND SECURITY
AGREEMENT

         

        Dated as of October 31,
2006

         

        Among

         

        RESOURCE CAPITAL FUNDING II,
LLC,

         

        as the
Borrower

         

        and

         

        LEAF FINANCIAL
CORPORATION,

         

        as the
Servicer

         

        and

         

        MORGAN STANLEY BANK,

         

        as a Lender
and Collateral Agent

         

        and

         

        U.S. BANK NATIONAL
ASSOCIATION,

         

        as the
Custodian and the Lender’s Bank

         

        and

         

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

         

        
          as the
Backup Servicer

           

          

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

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

         

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

         

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

         

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

         

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

         

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

         

        IT IS AGREED as
follows:

         

        
          
            	
                    ARTICLE
      I.

                  

          

        

         

        
          
            	
                    DEFINITIONS

                  

          

        

         

        SECTION
1.01 Certain
Defined Terms.  (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 Net Eligible Receivables Balance as of the first day of such Fee Period,
multiplied by a fraction, the numerator of which shall be the actual number of
days in such Fee Period and the denominator of which shall be 360, and (ii)
$5,000.  The Active Backup Servicer’s Fees shall also include
reasonable out-of-pocket expenses incurred by the Backup Servicer in performing
its duties as Servicer.

         

        “Active
Backup Servicing Fee Rate”
means 1.00%.

         

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

         

        “Adjusted
Eurodollar Rate” means,
(i) on
and prior to November 23, 2008, with respect to any Interest Period for
any Loan allocated to such Interest Period, an interest rate per annum equal to
the sum of (i)  the
Adjusted Eurodollar Rate Margin and (ii)  an interest rate per annum equal to the
average of the interest rates per annum (rounded upwards, if necessary, to the
nearest 1/16100 of 1%) reported during such Interest
Period on Telerate Access Service Page 3750 (British Bankers Association
Settlement Rate) as the London Interbank Offered Rate for United States dollar
deposits having a term of thirty (30) days and in a principal amount of
$1,000,000 or more (or, if such page shall cease to be publicly available or, if
the information contained on such page, in the Lender’s sole judgment, shall
cease to accurately reflect such London Interbank Offered Rate, such rate as
reported by any publicly available recognized source of similar market data
selected by thesuch Lender that, in
the Lender’s reasonable judgment, accurately reflects such London Interbank
Offered Rate), and (ii) thereafter, with

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            
respect to each other
Interest Period for any Loan allocated to such Interest Period, an interest rate
per annum equal to the sum of (i) the Adjusted Eurodollar Rate Margin and (ii)
an interest rate per annum equal to the interest rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) reported on the date that is
two (2) Business Days prior to the end of the immediately preceding Interest
Period on Telerate Access Service Page 3750 (British Bankers Association
Settlement Rate) as the London Interbank Offered Rate for United States dollar
deposits having a term of thirty (30) days and in a principal amount of
$1,000,000 or more (or, if such page shall cease to be publicly available or, if
the information contained on such page, in the Lender’s sole judgment, shall
cease to accurately reflect such London Interbank Offered Rate, such rate as
reported by any publicly available recognized source of similar market data
selected by such Lender
that, in the Lender’s reasonable judgment, accurately reflects such London
Interbank Offered Rate).

        

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

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

         

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

         

        “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.

         

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

         

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

         

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

         

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

         

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

         

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

         

        (a)  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

         

        (b)  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

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            
they become due, or, if a corporation or
similar entity, its board of directors or members shall vote to implement any of
the foregoing.

        

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        “Borrowing
Limit” means $250,000,000,
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 the Lender in
respect of such Loans for such Interest Period and, if applicable, (B) the
income, if any, received by the Lender from the Lender’s investing the proceeds
of such payments on such Loans.

         

        “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

        
          
            
            

          

          
            4

            
              

            

          

          
            
            
any determination of a Business Day
shall relate to a Loan bearing interest at the Adjusted Eurodollar Rate, the
term “Business Day” shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank
market.

        

         

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

         

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

         

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

         

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

         

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

         

        “Certificate
of Title” means with
respect to a Vehicle, (i) if such Vehicle is registered in Florida, (x) to the
extent the related Receivable has been originated by an Originator, an original
certificate of title or (y) to the extent the related Receivable has been
Originated by a Person other than an Originator, (A) an original certificate of
title or (B) if the original certificate of title has been sent to the
registered owner of such Vehicle, an original computer confirmation of lien,
(ii) if such Vehicle is registered in Kansas, a true copy of the application for
certificate of  title and registration, (iii) if such Vehicle is
registered in Kentucky, an original notice of lien, (iv) if such Vehicle is
registered in Maryland, an original notice of security interest filing, (v) if
such Vehicle is registered in Minnesota, an original lien card, (vi) if such
Vehicle is registered in Missouri, an original notice of recorded lien, (vii) if
such Vehicle is registered in Montana, a true copy of the application for
certificate of title, (viii) if such Vehicle is registered in New York, an
original notice of lien, (ix) if such Vehicle is registered in Oklahoma, an
original, file-stamped lien entry form, (x) if such Vehicle is registered in
Wisconsin, an original lien confirmation card or (xi) if such Vehicle is
registered in any other State, an original certificate of title, in each case
issued by the Registrar of Titles of the applicable State listing the lienholder
of record with respect to such Vehicle (it being understood and agreed that
solely for purposes of clauses
(i) through (x) above (other than clauses
(i)(x) and (i)(y)(A)), the “original” of any document
required thereby shall consist of whatever documentation has been issued by the
Registrar of Titles of the related State to the lienholder).

         

        “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, the Originator or the Borrower merges or
consolidates with any other Person without the prior written consent of the
Lender, (v) the initial Servicer, the Owner or the Originator merges or
consolidates with any other Person and the initial Servicer, the Owner 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

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            
during any three month period and, in
each case, has not been replaced by a person approved by the Lender in writing
within 90 days of any such event.

        

         

         “Closing
Date” means October 31,
2006.

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

        
          	
                   
      

                	
                  (iv)

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

                

        

         

        
          	
                   
      

                	
                  (v)

                	
                      with respect to
      which the Servicer has repossessed the related
      Equipment.

                

        

         

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

         

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

         

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

         

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

         

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

         

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

         

        “Discrepancy Procedure” has the meaning
assigned to that term in the eighth paragraph of Section
6.13.

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

        
          	
                   
      

                	
                  (iv)

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

                

        

         

        
          	
                   
      

                	
                  (v)

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

                

        

         

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  (vi)

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

                

        

         

        
          	
                   
      

                	
                  (vii)

                	
                      the amount by
      which the sum of the Discounted Balances of all Eligible Receivables
      related to Equipment within any one Equipment Category exceeds the sum of
      the Discounted Balances of all Eligible Receivables at such time
      multiplied by 50%;

                

        

         

        
          	
                   
      

                	
                  (viii)

                	
                      the amount by
      which the sum of the Discounted Balances of all Eligible Receivables, with
      respect to which the related Obligor Collateral is a Vehicle or other type
      of equipment which requires a security interest therein to be noted on the
      Certificate of Title with respect thereto in order to be perfected,
      exceeds 50% of the sum of the Discounted Balances of all Eligible
      Receivables at such time;

                

        

         

        
          	
                   
      

                	
                  (ix)

                	
                      [reserved];

                

        

         

        
          	
                   
      

                	
                  (x)

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

                

        

         

        
          	
                   
      

                	
                  (xi)

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

                

        

         

        
          	
                   
      

                	
                  (xii)

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

                

        

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

        “LEAF Credit Facility Document” has the
meaning assigned to such term in Section 5.01(y).

         

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

         

        “LEAF Managed Entity” means any Person
for which LEAF Financial has contractually agreed (pursuant to any agreement,
including, without limitation, a partnership agreement or other organizational
document, management agreement or servicing agreement) to act as a manager or a
servicer with respect to the equipment leases and loans owned by such Person and
which is (i) contractually obligated to purchase all such leases and loans only
from LEAF Financial and its affiliates and only at such seller's cost basis
and (ii) not contractually limited in when it can purchase such leases and
loans.

        

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

        

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

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

         

        “Loan
Contract” means,
collectively, (i) a “Term Note (Level Payments)” together with the “Master Loan
and Security Agreement” related thereto and incorporated by reference therein,
each in the form attached hereto as Exhibit D-2(a) (as such exhibit may be updated from
time to time by the Borrower with the consent of the Lender), (ii) a “Term Note
(Level Payments)” or “Term Note (Step Payments)” together with the “Master Loan
and Security Agreement” related thereto and incorporated by reference therein,
each in the form attached hereto as Exhibit D-2(b) (as such exhibit may be updated from
time to time by the Borrower with the consent of the Lender), (iii) a “Finance
Agreement” in one of the forms attached as Exhibit
D-2(c) or similar agreement
approved in writing by the Lender (in its reasonable discretion), or (iv) a loan
agreement and promissory note otherwise approved by the Servicer in compliance
with the Credit and Collection Policy as to which the Servicer has notified the
Collateral Agent in writing, in each case, pursuant to which the Originator
makes a loan to an Obligor secured by Equipment purchased by such Obligor,
together with all schedules, supplements and amendments thereto and each other
document and instrument related thereto.

         

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

         

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

         

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

         

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

         

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

         

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

         

        “Minimum
Tangible Net Worth means,
(i) with respect to Resource America, a Tangible Net Worth (measured as of each
fiscal quarter end) of not less than $125,000,000 and (ii) with respect to the
Owner, a Tangible Net Worth (measured as of each fiscal quarter end) of not less
than (x) $2,500,000 plus, (y) only if the Owner Issuance
Condition has been satisfied, the product of 50.00%, times the aggregate outstanding principal
balance of the Owner Secured Recourse Promissory Notes held by Persons that are
not Affiliates of the Owner.

         

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

         

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

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

         

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

         

        “Netbank
Facility” means the
facility evidenced by the Receivables Loan and Security Agreement, dated as of
November 1, 2007, among Leaf Capital Funding III, LLC, as borrower, LEAF
Financial, Morgan Stanley, Morgan Stanley Asset Funding Inc., The Royal Bank of
Scotland, U.S. Bank National Association and Lyon Financial Services, Inc.
(d/b/a U.S. Bank Portfolio Services), as the same may be modified, amended, or
supplemented from time to time.

         

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

         

        “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.

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

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

         

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

         

        “Other Default” has the meaning set
forth in Section 5.01(y).

         

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

         

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

         

        “Owner” means LEAF Commercial Finance Fund,
LLC.

         

        “Owner
Issuance Condition” shall
be deemed to be satisfied if, on or prior to October 1, 2008 or such other date,
not later than June 1, 2009, as the Owner shall have provided by prior written
notice to the Lender, (i) the Owner has received offering proceeds of at
least $1,000,000 from the issuance of the Owner Secured Recourse Promissory
Notes and (ii) such proceeds have been released to the Owner (and not returned
to the subscribers of the Owner Secured Recourse Promissory Notes) from the
escrow account described in the Owner Private Placement
Memorandum.

         

        “Owner
Private Placement Memorandum” means that certain Private Placement
Memorandum, dated October 1, 2007, as supplemented or restated from time to
time, and titled “Leaf Commercial Finance Fund, LLC Secured Recourse Promissory
Notes”, a copy of which has been provided to the Collateral Agent by the
Owner.

         

        “Owner
Secured Promissory Notes”
means the Secured Recourse Promissory Notes issued by the Owner pursuant to the
Indenture described in Owner Private Placement Memorandum.

         

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

         

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

         

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

        
           

          
            	
                     
      

                  	
                    (i)

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

                  

          

           

        

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

        
          	
                   
      

                	
                  (iv)

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

                

        

         

        
          	
                   
      

                	
                  (v)

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

                

        

         

        
          	
                   
      

                	
                  (vi)

                	
                      any other
      investments approved in writing by the
  Lender.

                

        

         

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

         

        “Permitted
Liens”
means:

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

        

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

        
          	
                   
      

                	
                  (iv)

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

                

        

         

        
          	
                   
      

                	
                  (v)

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

                

        

         

        
          	
                   
      

                	
                  (vi)

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

                

        

         

        
          	
                   
      

                	
                  (vii)

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

                

        

         

        
          	
                   
      

                	
                  (viii)

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

                

        

         

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

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          
            
            

          

          
            18

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  (iii)

                	
                      the Pool A
      Annualized Net Loss Rate exceeds
3.5%.

                

        

         

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

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

                	
                      the Discounted
      Balance of such Eligible Pool B
  Receivable

                

        

         

        minus (y) the Pool B Overconcentration
Amount.

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          	
                   
      

                	
                  (i)

                	
                      an amount equal
      to the Global Overconcentration Amount at such time multiplied by a
      fraction the numerator of which is the aggregate Discounted Balances of
      all Eligible Pool B 

                

        

         

        
          
            
            

          

          
            19

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  Receivables at such time and the
      denominator of which is the aggregate Discounted Balances of all Eligible
      Receivables at such time;

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

        
          	
                   
      

                	
                  (iv)

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

                

        

         

        
          	
                   
      

                	
                  (v)

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

                

        

         

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

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

        
          	
                   
      

                	
                  (iv)

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

                

        

         

        
          	
                   
      

                	
                  (v)

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

                

        

         

        
          	
                   
      

                	
                  (vi)

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

                

        

         

        
          	
                   
      

                	
                  (vii)

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

                

        

         

        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

        

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

         

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

         

        “Practice Acquisition Loan
Contract” means, collectively, (i) a “Term Note (Level Payments)”
together with the “Master Loan and Security Agreement” related thereto and
incorporated by reference therein, each in the form attached hereto as Exhibit D-3 (as
such exhibit may be updated from time to time by the Borrower with the consent
of the Lender) or a “Finance Agreement” in one of the forms attached as Exhibit D-2(c)
(as such exhibit may be updated from time to time by the Borrower with the
consent of the Lender) or (ii) a loan agreement and promissory note otherwise
approved by the Servicer in compliance with the Credit and Collection Policy as
to which the Servicer has notified the Collateral Agent in writing, in each
case, pursuant to which Originator makes a loan to an Obligor to enable such
Obligor to acquire a dental, medical, osteopathic medical, optometric or
veterinary practice, secured by Equipment related to the practice of dentistry,
medicine or veterinary medicine and certain non-equipment assets, together with
all schedules, supplements and amendments thereto and each other document and
instrument related thereto.

         

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

         

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

         

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

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

                	
                      following the
      occurrence of a Program Termination Event described in clause (xi) of
      the definition thereof, such Program Termination Event is
      cured;

                

        

         

        provided that, in any event, no other Program
Termination Event shall have occurred and be continuing.

         

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

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

                	
                      an Event of
      Default has occurred and is
continuing;

                

        

         

        
          	
                   
      

                	
                  (iii)

                	
                      the Facility
      Maturity Date shall have
occurred;

                

        

         

        
          
            
            

          

          
            21

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  (iv)

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

                

        

         

        
          	
                   
      

                	
                  (v)

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

                

        

         

        
          	
                   
      

                	
                  (vi)

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

                

        

         

        
          	
                   
      

                	
                  (vii)

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

                

        

         

        
          	
                   
      

                	
                  (viii)

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

                

        

         

        
          	
                   
      

                	
                  (ix)

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

                

        

         

        
          	
                   
      

                	
                  (x)

                	
                       a Servicer Default has occurred
      and is continuing; or

                

        

         

        
          	
                   
      

                	
                  (xi)

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

                

        

         

        
          	
                   
      

                	
                  (xii)

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

                

        

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            22

            
              

            

          

          
            
            

          

        

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

         

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

         

        “Real Estate
Contract” means a loan
agreement and promissory note, finance agreement or similar agreement, in each
case, (i) in a form approved in writing by the Lender (in its reasonable
discretion) and that is consistent with the Credit and Collection Policy and
(ii) pursuant to which the Originator makes a loan to an Obligor secured by
rentals or other receivables arising from the use of real property, together
with all schedules, supplements and amendments thereto and each other document
and instrument related thereto.

         

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

         

        “Receivable
File” means with respect to
each Receivable:

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

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

         

        
          	
                   
      

                	
                  (i)

                	
                      (1) if a
      promissory note was executed by the related Obligor in connection with
      such Loan Contract or Practice Acquisition Loan Contract, the original of
      such executed promissory note and certified
      copies of amendments thereto (with a fully executed, original
      Allonge attached thereto); provided that, with regard to any “Finance
      Agreement”, no executed promissory note or fully executed, original
      Allonge need be included, (2) a true, executed copy of the related
      “Master Loan and Security Agreement”, “Finance Agreement” or similar
      agreement pursuant to which

                

        

         

        
          
            
            

          

          
            23

            
              

            

          

          
            
            

          

           

          
            
              	
                       
      

                    	
                       

                    	
                      the Originator made the related
      loan to the related Obligor (and anyall amendments thereto), (3) a
      true copy of the related Insurance Certificate if such Receivable is
      related to Equipment with an original cost in excess of $100,000 and
      (4) other than with respect to a Receivable related to Equipment
      which has an original cost of less than $25,000, a “transmittal order”
      from the Servicer to 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 (except for
      vendor contracts),
      that the Borrower keeps on file with respect to such
      Receivable;

                

        

         

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

         

        
          	
                   
      

                	
                  (i)

                	
                      (1) if a
      promissory note was executed by the related Obligor in connection with
      such Underlying Originator Loan Contract, the original of such executed
      promissory note and certified
      copies of amendments thereto (with a fully executed, original
      Allonge attached thereto); provided that, with regard to any “Finance
      Agreement”, no executed promissory note or fully executed, original
      Allonge need be included, (2) a true, executed copy of the related
      security agreement and certified
      copies of all amendments thereto, unless such Underlying Originator
      Loan Contract is in the form of a “Master Purchase and Sale Agreement” ,
      “Finance Agreement” or such other form of agreement approved in writing by
      the Lender (in its reasonable discretion) that, in any case, includes
      language granting to the purchaser thereunder a security interest in all
      the related Underlying Originator Loan Collateral and other property
      pledged by the related Obligor to secure its obligations under such
      Underlying Originator Loan Contract, and (3) a “transmittal order” from
      the Servicer to a filing service company and an “in process report” from
      such filing service company to the Servicer (or other evidence of the
      submission of the related UCC financing statement for filing in the
      appropriate filing office) and, within 45 days of the related Contract
      being executed, a file-stamped copy of the related UCC financing
      statement; and

                

        

         

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

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

         

        
          	
                   
      

                	
                  (i)

                	
                      (1) the
      related original, executed Underlying Lease Contract and certified
      copies of amendments thereto (or, in the case of an Underlying
      Lease Contract under a master lease, a machine or facsimile copy of the
      related master lease and all
      amendments thereto, in each case 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 certified
      copies of amendments thereto) and (2) other than with
      respect to an Underlying Lease Contract related to Equipment which has an
      original cost of less than $25,000 if such Underlying Lease Contract is a
      Dollar Purchase Option Contract or $50,000 if such Underlying Lease
      Contract is a FMV Contract, a “transmittal order” from the Underlying
      Originator to a filing service company and an “in process report” from
      such filing service company to the Underlying Originator (or other
      evidence of the submission of the related UCC financing statement for
      filing in the appropriate filing office) and, within 45 days of the
      related Underlying Lease Contract being executed, a file-stamped copy of
      the related UCC financing statement;
and

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          
            
            

          

          
            24

            
              

            

          

          
            
            

          

        

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

                	
                      copies of any
      additional documents, other than servicing related documents (except for
      vendor contracts),
      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.

         

        “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 Discounted Balance
of such Pledged Receivable at the time of such release plus interest accrued thereon at the
Discount Rate from and including the Remittance Date immediately preceding the
date such Pledged Receivable is to be released through (but not including) the
next succeeding Remittance Date.

         

        
          
            
            

          

          
            25

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

                	
                      the failure of
      the Servicer to satisfy any of its reporting, certification, notification
      or documentation requirements under the terms hereof or of any other
      Transaction Document or the failure of the Servicer to observe or perform
      any material term, covenant or agreement hereunder or under any other
      Transaction Document (other than those described in clause (i) above)
      and such failure shall remain unremedied for 10 days (or, with
      respect to a failure with respect to any such requirement set forth in
      Section 6.10(e) hereof, 1 Business Day) 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;

                

        

         

        
          
            
            

          

          
            26

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  (iv)

                	
                      the occurrence
      of an Event of Default;

                

        

         

        
          	
                   
      

                	
                  (v)

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

                

        

         

        
          	
                   
      

                	
                  (vi)

                	
                      the occurrence
      of any Bankruptcy Event in respect of the
  Servicer.

                

        

         

        “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 Agreement Electronic Images”
has the meaning set forth in Section 5.02.

         

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

         

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

         

        “Servicing
Fee Rate” means
1.00%.

         

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

         

        “Standby
Backup Servicer’s Fee”
means, for any Fee Period or portion thereof prior to the occurrence of a
Servicer Default and the appointment of the Backup Servicer as Servicer
hereunder, an amount, payable out of Collections on the Pledged Receivables and
amounts applied to the payment of, or treated as payments on, the Pledged
Receivables, equal to the greater of (i) the Standby Backup Servicing Fee Rate,
multiplied by the Net Eligible Receivables Balance as of the first day of such
Fee Period, multiplied by a fraction, the numerator of which shall be the actual
number of days in such Fee Period and the denominator of which shall be 360, or
(ii) $1,500.  The “Standby Backup Servicer’s Fee” shall also include
(i) a one-time acceptance fee of $4,0006,000 payable on the
Closing DateNovember 13,
2008 and (ii) reasonable
out-of-pocket expenses incurred by the Standby Backup Servicer in the
performance of its duties.

         

        “Standby
Backup Servicing Fee Rate”
means .0215%.0310%.

         

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

         

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

         

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

         

        “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.

         

        
          
            
            

          

          
            27

            
              

            

          

          
            
            

          

        

        “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
(excluding, solely with respect to the Owner and only to the extent otherwise
included in such consolidated net worth, any mark-to-market gain or loss on any
swap or other hedge transaction of the Owner and its consolidated subsidiaries),
plus (ii) to the extent not otherwise
included in such consolidated net worth, unsecured subordinated Debt of such
Person (and, solely with respect to the Owner and only to the extent not
otherwise included in such consolidated net worth, (x) intercompany Debt of the
Owner and (y) the aggregate outstanding principal balance of the Owner Secured
Recourse Promissory Notes held by Persons that are not Affiliates of the Owner)
and its consolidated subsidiaries, the terms and conditions of which are
reasonably satisfactory to the Lender, minus (iii) the consolidated intangibles
of such Person and its consolidated subsidiaries, including, without limitation,
goodwill, trademarks, tradenames, copyrights, patents, patent allocations, licenses
and rights in any of the foregoing and other items treated as intangibles in
accordance with GAAP.

         

        “Titling
Requirements” means
that:

         

        
          	
                   
      

                	
                  (i)

                	
                      in the case of
      any Vehicle leased or sold to an Obligor pursuant to a Pool A Contract,
      the Certificate of Title for such Vehicle indicates the Obligor, as owner,
      and the Borrower or an Approved Lienholder, as
      lienholder;

                

        

         

        
          	
                   
      

                	
                  (ii)

                	
                      in the case of
      any Vehicle leased or sold to an Underlying Obligor pursuant to an
      Underlying Contract, the Certificate of Title for such Vehicle indicates
      the Underlying Obligor, 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
Security Deposit Account Agreement, each Cash Reserve Account Agreement, the Fee
Letter, the Custodial Agreement, the Originator Insurance Agreement, any lease
bailment agreement with a sub-custodian and each Qualifying Interest Rate Swap
and each document and instrument related to any of the
foregoing.

         

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

         

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

         

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

         

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

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

        
          
            
            

          

          
            28

            
              

            

          

          
            
            

          

        

        
          	
                   
      

                	
                  (iv)

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

                

        

         

        
          	
                   
      

                	
                  (v)

                	
                      the related
      Underlying Equipment has been
  repossessed.

                

        

         

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

         

        day of the immediately preceding
Collection Period divided by (ii) the aggregate Discounted Balances with
respect to all Eligible Pool B Underlying Lease Contracts and Eligible
Pool B Underlying Loan Contracts related to such Underlying Originator as
of such day.

         

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

         

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

         

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

         

        “Underlying
Lease Contract” means a
lease contract, finance agreement and/or similar agreement(s) (in any case,
which is in the form of a lease) pursuant to which Underlying Equipment is
leased to an Underlying Obligor by an Underlying Originator, together with all
schedules, supplements and amendments thereto and each other document and
instrument related to such lease contract.

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            29

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

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

         

        “United
States” means the United
States of America.

         

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

         

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

         

        “Weekly Collection Period” means, with
respect to any calendar week, the period beginning on, and including, the first
day of the most recently ended calendar week and ending on, and including, the
last day of the most recently ended calendar
week.

         

        “Weekly Reporting Date” has the meaning
set forth in Section 6.10(e).

         

        “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.

         

        
          
            
            

          

          
            30

            
              

            

          

          
            
            

          

        

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

         

        
          
            	
                    ARTICLE
      II.

                  

          

        

         

        
          
            	
                    THE RECEIVABLES
      FACILITY

                  

          

        

         

            SECTION
2.01 Borrowings.  On the terms and conditions
hereinafter set forth, the Lender shall make loans (“Loans”) to the Borrower secured by Pledged
Assets from time to time during the period from the date hereof until the
earlier of the Program Termination Date or the Facility Maturity Date. Separate
Loans will be made to finance the Borrower’s acquisition of (x) Pool A
Receivables (“Pool A
Loans”) and
(y) Pool B Receivables (“Pool B
Loans”), and no Loan shall
finance both Pool A Receivables and Pool B
Receivables.  Under no circumstances shall the Lender make, or the
Borrower request, any Loan if (a) the principal amount of such Loan is less
than (i) with

         

        respect to the initial Borrowing only,
$10,000,000 and (ii) with respect to any Subsequent Borrowing, $500,000, or
(b) after giving effect to the Borrowing of such Loan, either (i) a
Program Termination Event or an event that but for notice or lapse of time or
both would constitute a Program Termination Event has occurred and is continuing
or (ii) the aggregate Facility Amount hereunder would exceed the lesser of
(A) the Borrowing Limit and (B) the Borrowing Base.  Under
no circumstances shall the Lender make, or the Borrower request, any Loan
secured by Pool A Receivables if after giving effect to the Borrowing of
such Loan, either (1) the aggregate Facility Amount hereunder, calculated
solely with respect to Loans secured by Pool A Receivables, would exceed
the Pool A Borrowing Base or (2) a Pool A Termination Event shall
exist.  Under no circumstances shall the Lender make, or the Borrower
request, any Loan secured by any Pool B Receivable if after giving effect
to the Borrowing of such Loan, either (1) the aggregate Facility Amount
hereunder, calculated solely with respect to Loans secured by Pool B
Receivables, would exceed the Pool B Borrowing Base or (2) a Pool B
Termination Event shall exist with respect to the Underlying Originator related
to such Pool B Receivable.

         

            SECTION
2.02  The Initial
Borrowing and Subsequent Borrowings.

         

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

         

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

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

                	
                      The Loans shall
      bear interest at the Interest
Rate.

                

        

         

         

        
          
            
            

          

          
            31

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  (iv)

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

                

        

         

        
          	
                   
      

                	
                  (v)

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

                

        

         

            SECTION
2.03  Determination of
Interest Periods and Interest Rates.

         

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

         

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

         

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

         

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

         

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

         

            SECTION
2.04 Remittance
Procedures.  TheSubject to the
proviso set forth in Section 2.04(c), the Servicer, as agent for the
Lender,
with the prior written consent of the Collateral Agent, shall instruct the Lender’s Bank and,
if the Servicer fails to do so, the Collateral Agent shall instruct the Lender’s
Bank, to apply funds on deposit in the Collection Account as described in this
Section 2.04.

         

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

        
          
            
            

          

          
            32

            
              

            

          

          
            
            

          

          Period, the Lender shall notify the Servicer of the accrued
and unpaid interest for such Interest Period and the Servicer shall, on the last
day of each Interest Period, direct the Lender’s Bank to pay collected funds set
aside in respect of accrued and unpaid interest pursuant to this Section 2.04(a) to the Lender (or the designee of the
Lender) in respect of payment of such accrued and unpaid interest for such
Interest Period.  On any Business Day on which an amount is set aside
in respect of Breakage Fees pursuant to this Section 2.04(a), the Servicer shall direct the Lender’s
Bank to pay such funds to the Lender in payment of such Breakage
Fees.

           

        

        (b) Interest
Period Loan Principal Repayment.  The Servicer shall, and if
the Servicer fails to do so the Lender may, by 10:00 a.m. (St. Paul, Minnesota
time) on the last day of each Interest Period that is not a Remittance Date,
direct the Lender’s Bank to transfer collected funds held by the Lender’s Bank
in the Collection Account on such date, to pay the Lender in payment (or partial
payment) of the outstanding principal amount of all Loans allocated to such
Interest Period, in an amount equal to the least of (i) the amount of such
collected funds held in the Collection Account other than funds set aside
pursuant to Section 2.04(a), (ii) the aggregate outstanding
principal

         

        amount of Loans allocated to such
Interest Period, (iii) if no Program Termination Event shall have occurred
and be continuing, an amount equal to the sum of (A) the excess, if any, of
the Facility Amount immediately prior to such distribution, calculated solely
with respect to Loans secured by Pool A Receivables over the Pool A
Borrowing Base and (B) the excess, if any, of the Facility Amount
immediately prior to such distribution, calculated solely with respect to Loans
secured by Pool B Receivables over the Pool B Borrowing Base (with respect
to Pool A Loans and Pool B Loans collectively, after giving effect to
any Borrowing made on such date and any distributions of amounts on deposit in
the Collection Account made on such date) or (iv) if no Program Termination
Event shall have occurred and be continuing, an amount equal to the excess, if
any, of the Facility Amount immediately prior to such distribution over the
lesser of (A) the Borrowing Base and (B) the Borrowing Limit (after
giving effect to any Borrowing made on such date and any distributions of
amounts on deposit in the Collection Account made on such
date).

         

        (c) Remittance
Date Transfers From Collection Account.  The Servicer
shall,
with the prior written consent of the Collateral Agent, 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 Lender’s Bank to transfer collected funds held by
the Lender’s Bank in the Collection Account which were remitted to the
Collection Account during the Collection Period with respect to such Remittance
Date (“Available
Funds”), in the following
amounts and priority:; provided, however,
that if the Lender’s Bank does not receive such instruction from (i) the
Servicer (accompanied by the Collateral Agent’s written consent) or (ii) the
Collateral Agent by 10:00 a.m. (St. Paul, Minnesota time) on such Remittance
Date, subject to the provisions of the Discrepancy Procedure, the Lender’s Bank
shall apply such funds in accordance with the information calculated by the
Servicer on the related Monthly Remittance Report:

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

        
          	
                   
      

                	
                  (iv)

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

                

        

         

        
          
            
            

          

          
            33

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  (v)

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

                

        

         

        
          	
                   
      

                	
                  (vi)

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

                

        

         

        
          	
                   
      

                	
                  (vii)

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

                

        

         

                             (x)       any Borrowing Base
Deficiency;

         

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

         

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

         

        
          	
                   
      

                	
                  (viii)

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

                

        

         

        
          	
                   
      

                	
                  (ix)

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

                

        

         

        
          	
                   
      

                	
                  (x)

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

                

        

         

        
          	
                   
      

                	
                  (xi)

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

                

        

         

        
          	
                   
      

                	
                  (xii)

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

                

        

         

        
          	
                   
      

                	
                  (xiii)

                	
                      to the order of
      the Borrower, any remaining
amounts.

                

        

         

        
          
            
            

          

          
            34

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

        SECTION
2.05  Security Deposit
Account.

         

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

         

        
          
            
            

          

          
            35

            
              

            

          

          
            
            

          

        

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

         

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

         

        any Permitted Investment and other than
to the extent such loss results from the gross negligence or wilful misconduct
of the Servicer).

         

        (d)  Disbursements from the
Security Deposit Account shall be made, to the extent funds therefore are
available, only as follows: (and with the prior
written consent of the Collateral Agent in the case of clause (i) below;
provided, however, that if the Lender’s Bank receives the Servicer’s direction
in accordance with clause (i) below but does not receive such written consent of
the Collateral Agent prior to 2:00 p.m. New York time on the Business Day
prior to any Remittance Date, subject to the provisions of the Discrepancy
Procedure, the Lender’s Bank shall disburse such funds in accordance with the
information calculated by the Servicer on the related Monthly Remittance
Report):

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

        SECTION
2.06 Cash Reserve
Account.

         

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

         

        
          
            
            

          

          
            36

            
              

            

          

          
            
            

          

        

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

         

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

         

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

        
           

          
            	
                     
      

                  	
                    (i)

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

                  

          

           

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

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

         

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

         

        (c)  If any Borrowing requested
by the Borrower and approved by the Lender pursuant to Section 2.02 is not for any reason whatsoever,
except as a result of the gross negligence or wilful misconduct of the Lender or
an Affiliate thereof, made or effectuated, as the case may be, on the date
specified therefor, the Borrower shall indemnify the Lender against any loss,
cost or expense incurred by the Lender 

        
          
            
            

          

          
            37

            
              

            

          

          
            
            

          

          related thereto (other than any such loss, cost or expense
solely due to the gross negligence or willful misconduct of the Lender or an
Affiliate thereof), including, without limitation, any loss (including cost of
funds and reasonable out-of-pocket expenses), cost or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by the
Lender to fund Loans or maintain Loans during such Interest
Period.  The Lender shall provide to the Borrower documentation
setting forth the amounts of any loss, cost or expense referred to in the
previous sentence, such documentation to be conclusive absent manifest
error.

           

        

            SECTION
2.08 Fees.  (a) The Borrower shall pay the Lender
certain fees (the “Fees”) in the amounts and on the dates set
forth in a fee letter (the “Fee
Letter”), dated the date
hereof, among the Borrower and the Lender, as may be amended, restated,
supplemented or otherwise modified from time to time.

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            38

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

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

         

        (d)  the Records relating to any
Pledged Receivables;

         

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

         

        (f)  [Reserved];

         

        
          
            
            

          

          
            39

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

            SECTION
2.12 Evidence of
Debt.  The Lender
shall maintain an account or accounts evidencing the indebtedness of the
Borrower to the Lender resulting from each Loan owing to the Lender from time to
time,

         

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

         

            SECTION
2.13 Release of
Pledged Receivables.  (a) Subject to Section 2.15 hereof, upon the repayment of any Loan,
the Borrower may obtain the release of any Pledged Receivable and the related
Other Conveyed Property or Related Security securing such Loan (including,
without limitation, the release of any security interest of the Collateral Agent
or the Borrower therein) by depositing into an account designated by the Lender
the Release Price therefor on the date of such repayment; provided, that the foregoing release shall only
be available if, after giving effect thereto and the application of the proceeds
thereof in accordance with the terms hereof, there shall not be a Borrowing Base
Deficiency, Program Termination Event, Pool A Termination Event or a
Pool B Termination Event (and such Pool B Termination Event is related
to such Pledged Receivable), or an event that but for notice or lapse of time or
both would constitute any of the foregoing events.

         

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

         

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

         

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

         

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

        
          
            
            

          

          
            40

            
              

            

          

          
            
            

          

          related thereto) shall be due and payable on the Prepayment
Date specified therein.  Notwithstanding the foregoing, any payment by
the Borrower required pursuant to Section 2.04(c)(vii), Section 2.04(d),(e) or
(f) or, in connection with the occurrence of an Event of Default, pursuant to
Section 7.01 hereof shall not be considered an optional prepayment and no
Prepayment Premium shall be required to be paid in respect thereof.

           

        

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

         

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

         

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

         

        
          
            	
                    ARTICLE
      III.

                  

          

        

         

        
          
            	
                    CONDITIONS OF
      LOANS

                  

          

        

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            41

            
              

            

          

          
            
            

          

        

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

        
          	
                   
      

                	
                  (iv)

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

                

        

         

        
          
            	
                     
      

                  	
                    (v)

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

                  

          

        

         

        
          
            	
                     
      

                  	
                    (vi)

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

                  

          

        

         

        
          
            
            

          

          
            42

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  (vii)

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

                

        

         

        
          
            	
                     
      

                  	
                    (viii)

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

                  

          

        

         

        
          	
                   
      

                	
                  (ix)

                	
                      if the Obligor
      Collateral related to any Receivable securing such Borrowing is a Vehicle,
      the Borrower shall have delivered to the applicable Registrar of Titles an
      application for a Certificate of Title for such Vehicle satisfying the
      Titling Requirements; and

                

        

         

        
          	
                   
      

                	
                  (x)

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

                

        

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            43

            
              

            

          

          
            
            

          

           

        

        
          
            	
                    ARTICLE
      IV.

                  

          

        

         

        
          
            	
                    REPRESENTATIONS AND
      WARRANTIES

                  

          

        

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            44

            
              

            

          

          
            
            

          

        

        (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 is located at 110 Poplar Street, Suite 101, Wilmington, DE 19801
and the location of the Borrower’s records regarding the Pledged Receivables
(other than those delivered to the Custodian)) is at One Commerce Square, 2005
Market Street, 15th Floor, Philadelphia, PA
19103.

         

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

         

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

         

        (o)  The Borrower has no
subsidiaries.

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            45

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

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

         

        (y)  Notwithstanding anything to
the contrary in the Netbank Facility, no Pledged Receivable constitutes (for
purposes of the Netbank Facility) an “Eligible Receivable” as defined under the
Netbank 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 each Borrowing Date, on each Remittance
Date and on the first day of each Rollover Interest Period, as
follows:

         

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

         

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

         

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

         

        (d)  The execution, delivery and
performance of this Agreement by the Servicer and all other agreements and
instruments executed and delivered or to be executed and delivered by the
Servicer pursuant hereto or thereto in connection with the Pledge of the Pledged
Assets will not (i) create any Adverse Claim on the Pledged Assets or
(ii) violate any provision of any existing law or regulation or any

         

        
          
            
            

          

          
            46

            
              

            

          

          
            
            
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.

        

         

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

         

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

         

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

         

        (h)  The chief executive office
of the Servicer (and the location of the Servicer’s records regarding the
Pledged Receivables (other than those delivered to the Custodian)) is located at
One Commerce Square, 2005 Market Street, 15th Floor, Philadelphia, PA
19103.

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            47

            
              

            

          

          
            
            

          

        

        (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 Netbank Facility, no Pledged Receivable constitutes (for
purposes of the Netbank Facility) an “Eligible Receivable” as defined under the
Netbank 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 shall have an obligation to, and the Borrower shall, resell to the
Originator pursuant to the Purchase and Sale Agreement (and the Collateral Agent
may enforce such obligation of the Borrower to sell) any Pledged Receivable
adversely affected by any such breach.  The Servicer shall notify the
Collateral Agent promptly, in writing, of any failure by the Borrower to so
resell any such Pledged Receivable.  In connection with the resale of
such Pledged Receivable, the Borrower shall remit funds in an amount equal to
the Release Price for such Pledged Receivable to the Collection Account on the
date of such resale. It is understood and agreed that the obligation of the
Borrower to resell to the Originator, and the obligation of the Originator to
purchase, any Receivables which are adversely effected by a LEAF Purchase Event
is not intended to, and shall not, constitute a guaranty of the collectibility
or payment of any Receivable which is not collected, not paid or uncollectible
on account of the insolvency, bankruptcy, or financial inability to pay of the
related Obligor.

         

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

         

         

        
          
            	
                    ARTICLE
      V.

                  

          

        

         

        
          
            	
                    GENERAL COVENANTS OF THE BORROWER
      AND THE SERVICER

                  

          

        

         

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

         

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

        
           

          
            
              
              

            

            
              48

              
                

              

            

            
              
              

            

          

        

        (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 Lender, act in accordance with instructions
and directions, delivered in accordance with the terms hereof, from the
Borrower, and/or the Lender in connection with its servicing of
the

         

        Pledged Receivables hereunder, and will
ensure that, at all times when it is dealing with or in connection with the
Pledged Receivables in its capacity as Servicer, it holds itself out as
Servicer, and not in any other capacity.

         

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

         

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

         

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

         

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

         

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

        
           

          
            
              
              

            

            
              49

              
                

              

            

            
              
              

            

          

        

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

         

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

         

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

         

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

         

        (o)  The Servicer shall
cause:

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

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

         

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

         

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

         

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

        
           

          
            
              
              

            

            
              50

              
                

              

            

            
              
              

            

          

        

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

         

        (u)  Each of the Servicer (if the
Servicer is LEAF Financial or an Affiliate thereof) and the Borrower shall take
all actions necessary to ensure that each Pool B Contract purchased by the
Borrower under the Purchase and Sale Agreement contains “Seller Events of
Default” or similar events of default (“Parallel
Defaults”) which (i) would
occur if a Pool B Termination Event with respect to the related Underlying
Originator occurred, (ii) would entitle the Borrower, as assignee of the
Originator’s rights under such Contract, to deliver, or cause the delivery of,
redirection notices which would require all Underlying Obligors to make all
payments under Underlying Contracts sold or pledged to the Originator under such
Contract to the Lockbox Account or an account designated by the Borrower or such
Servicer and (iii) would entitle the Borrower, as assignee of the Originator’s
rights under the Contract, to receive 100% of all payments under the Underlying
Contracts sold or pledged to the Originator under such Contract in the event of
such a Parallel Default.  If a Parallel Default or any “Seller Events
of Default” or similar events of default under a Pool B Contract related to the
financial condition of the applicable Underlying Originator, the tangible net worth of
the applicable Underlying Originator or any cross default (a Parallel Default or
any such “Seller Events of Default” or similar events of default being referred
to herein as “Critical
Defaults”) shall occur,
then each of the Servicer (if the Servicer is LEAF Financial or an Affiliate
thereof) and the Borrower shall take all actions necessary to ensure (x) that no
such Critical Default is waived and (y) the prompt delivery to all related
Underlying Obligors of a redirection notice which would require such Underlying
Obligors to make all payments under Underlying Contracts sold or pledged to the
Originator under such Contract to the Lockbox Account.  Each of the
Servicer and the Borrower shall notify the Lender promptly upon learning of the
occurrence of any “Seller Event of Default” or similar event of default under
any Pool B Contract.

         

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

         

        (w)  In connection with
satisfying the Titling Requirements, the Servicer shall take commercially
reasonable efforts to deliver or cause to be delivered to the Custodian in
accordance with this Agreement and the Custodial Agreement, the original
certificate of title for each Vehicle registered in Florida.

         

         (x)  The Pledged Receivables
shall not be refinanced with any proceeds of the Netbank
Facility.

         

         (y)  Within the
applicable time period required by any agreement, document or instrument related
to a credit facility, provided to (i) LEAF Financial, Resource America, any LEAF
Managed Entity or any of such Person’s respective Affiliates that have entered
into any credit facility where such Person is a lender (a “LEAF Affiliate
Borrower”) or (ii) any subsidiary of LEAF Financial, Resource America or any
LEAF Managed Entity, (each, a “LEAF Credit Facility Document”), but in any event
no later than two days following the Servicer’s knowledge thereof, the Servicer
shall notify the Collateral Agent and each Lender if (i) LEAF Financial,
Resource America, any of their respective subsidiaries or any LEAF Affiliate
Borrower fails to observe or perform any covenant or agreement under any LEAF
Credit Facility Document or (ii) any event of default, servicer default,
unmatured event of default or unmatured servicer default (each such event set
forth in clause (i) or (ii), an “Other Default”) occurs under any such LEAF
Credit Facility Document, whether or not such Other Default is called, waived or
cured.

         

         (z)  LEAF Financial
shall not and shall not cause any subordinated Debt of LEAF Financial or any of
its consolidated subsidiaries, in either case, which has been issued to such
Person’s parent, to be accelerated prior to the Facility Maturity
Date.

         

            SECTION
5.02 Delivery of Servicing
Agreement Electronic Images to the Backup Servicer.  On or prior to
November 26, 2008, the Servicer shall deliver to the Backup Servicer electronic
images of all existing servicing agreements and vendor contracts related to the
Pledged Receivables (“Servicing Agreement Electronic Images”) in an electronic
format mutually acceptable to the Servicer and the Backup
Servicer.  On each Backup Servicer Delivery Date following November
26, 2008, the Servicer shall deliver to the Backup Servicer all Servicing

        
          
            
              
              

            

            
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Agreement Electronic
Images in an electronic format mutually acceptable to the Servicer and the
Backup Servicer with respect to all then existing servicing agreements and
vendor contracts which had not previously been delivered to the Backup
Servicer.

          

        

         

        
          
            	
                    ARTICLE
      VI.

                  

          

        

         

        
          
            	
                    ADMINISTRATION AND SERVICING;
      CERTAIN COVENANTS

                  

          

        

         

           SECTION 6.01 Appointment
and Designation of the Servicer.  (a) The Borrower and the Lender hereby
appoint the Person designated by the Lender from time to time, pursuant to this
Section 6.01 (the “Servicer”), as their agent to service,
administer and collect the Pledged Receivables and otherwise to enforce their
respective rights and interests in and under the Pledged Receivables and the
other Pledged Assets.  The Servicer shall collect such Pledged
Receivables under the conditions referred to above by means of the collection
procedures as set forth in the Credit and Collection Policy, to the extent
consistent with the provisions of this Article VI.  Unless otherwise specified
by the Borrower, the Servicer’s authorization under this Agreement shall
terminate on the Collection Date.

         

            Until the Lender
gives notice to the Borrower of a designation of a new Servicer upon the
occurrence and during the continuance of any Servicer Default, or consents in
writing to the appointment by the Borrower of a new Servicer, LEAF Financial is
hereby designated as, and hereby agrees to perform the duties and obligations
of, the Servicer, pursuant to the terms hereof at all times until the earlier of
the Lender’s designation of the Backup Servicer or any other Person as the new
Servicer (upon the occurrence and during the continuance of any Servicer
Default), the delivery by the Lender of its written consent to the appointment
by the Borrower of a new Servicer or the Collection Date.  Upon the
occurrence and during the continuance of any Servicer Default, the Lender may at
any time designate as Servicer the Backup Servicer, or any other Person with
demonstrated experience in servicing equipment leases and loans, to succeed LEAF
Financial or any successor Servicer, on the condition in each case that any such
Person so designated shall agree to perform the duties and obligations of the
Servicer pursuant to the terms hereof.  Each of
the Borrower and LEAF Financial hereby grants to any successor Servicer an
irrevocable power of attorney to take any and all steps in the Borrower’s, LEAF
Financial’s or the Servicer’s name, as applicable, and on behalf of the Borrower
or LEAF Financial, necessary or desirable, in the determination of such
successor Servicer, to service, administer or collect any and all Pledged
Receivables including, without limitation, to make withdrawals from the Security
Deposit Account pursuant to Section 2.05 and any
Cash Reserve Account pursuant to Section 2.06.

         

        Each of the Borrower and LEAF Financial
hereby grants to any successor Servicer an irrevocable power of attorney to take
any and all steps in the Borrower’s, LEAF Financial’s or the Servicer’s name, as
applicable, and on behalf of the Borrower or LEAF Financial, necessary or
desirable, in the determination of such successor Servicer, to service,
administer or collect any and all Pledged Receivables including, without
limitation, to make withdrawals from the Security Deposit Account pursuant to
Section 2.05 and any Cash Reserve Account pursuant to
Section 2.06.  In accordance therewith,
each of the Borrower and LEAF Financial shall deliver an executed power of
attorney in the form of Exhibit H hereto to each of the Backup Servicer and the
Collateral Agent.

         

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

        
           

          
            
              
              

            

            
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thereto) related to any Pledged
Receivables, complying with the terms of the Lockbox
Agreement, accounting for Collections with respect to any Pledged Receivable,
furnishing monthly and annual statements to the Lender with respect to
distributions and performing the other duties specified
herein.

          

        

         

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

         

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

         

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

         

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

        
           

          
            
              
              

            

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

         

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

         

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

         

            SECTION
6.05 Maintenance
of Security Interests in Obligor Collateral.  (a) The initial Servicer and the Borrower
shall take all steps necessary, under all applicable law, in order to
(i) cause a valid, subsisting and enforceable first priority perfected
security interest to exist in favor of the Collateral Agent in the Borrower’s
interests in the Obligor Collateral, all Other Conveyed Property and all Related
Security related to each Receivable (and the proceeds thereof) being Pledged
hereunder, to secure a Loan on the Borrowing Date thereof including (A) the
filing of a UCC financing statement in the applicable jurisdiction adequately
describing the Obligor Collateral, Other Conveyed Property and all Related
Security and naming the Borrower as debtor and the Collateral Agent as the
secured party, (B) filing Obligor Financing Statements against all Obligors
purchasing or leasing Obligor Collateral, (C) other than with respect to an
Underlying Lease Contract related to Equipment which has an original cost of
less than $25,000 if such Underlying Lease Contract is a Dollar Purchase Option
Contract or $50,000 if such Underlying Lease Contract is a FMV Contract, causing
the filing of UCC-3 assignment statements in the applicable jurisdictions
adequately describing the Underlying Originator Loan Collateral being
transferred thereunder and naming the applicable Underlying Originator as the
assignor and Originator as the assignee, and (D) other than with respect to
an Underlying Lease Contract related to Equipment which has an original cost of
less than $25,000 if such Underlying Lease Contract is a Dollar Purchase Option
Contract or $50,000 if such Underlying Lease
Contract is a FMV Contract, causing the filing of UCC-3 assignment statements in
the applicable jurisdictions adequately describing the 

        
           

          
            
              
              

            

            
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Underlying Originator Loan Collateral
being transferred thereunder and naming the applicable Underlying Originator as
the assignor and Originator as the assignee (ii) ensure that such security
interest is and shall be prior to all other liens upon and security interests in
the Borrower’s interests in such Obligor Collateral, Other Conveyed Property and
Related Security (and the proceeds thereof) that now exist, or may hereafter
arise or be created other than Permitted Liens, and (iii) ensure that
immediately prior to the Pledge of such Receivable by the Borrower to the
Collateral Agent, such Obligor Collateral, Other Conveyed Property and Related
Security is free and clear of all Adverse Claims other than Permitted Liens;
and

          

        

        
           

        

        (b)  The initial Servicer shall
take all steps, as are necessary (subject to Section 6.05(a)), to maintain perfection of the
security interest in the Borrower’s interests in the Obligor Collateral, Other
Conveyed Property and Related Security related to each Pledged Receivable (and
the proceeds thereof) in favor of the Collateral Agent including but not limited
to, obtaining the execution by the Borrower and the recording, registering,
filing, rerecording, refiling, and reregistering of all security agreements,
financing statements and continuation statements as are necessary to maintain
and/or perfect such security interests granted by the Borrower and the
recordation of the 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 the Lender each hereby authorizes the initial Servicer, and the
initial Servicer agrees, to take any and all steps necessary (subject to
Section 6.05(a)) to re-perfect the security interest in
the Borrower’s interests in any Obligor Collateral (and the Borrower’s interests
therein), Other Conveyed Property and Related Security related to each Pledged
Receivable (and the proceeds thereof) in favor of the Collateral Agent as may be
necessary, due to the relocation of such Obligor Collateral or for any other
reason.

         

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

         

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

         

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

         

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

          

        

         

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

         

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

         

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

         

        (d)  At least four (4) Business
Days prior to each Remittance Date (each such day, a “Backup
Servicer Delivery Date”),
the Servicer shall prepare and deliver, or have delivered, to the Backup
Servicer (i) athe 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 (x) the information with respect to the
Pledged Receivables during such Collection Period which was necessary for
preparation of such Monthly Remittance Report orand (y) any other
information which is
reasonably requested by the Backup Servicer or the Collateral
Agent.

         

        (e)  No later than the second
Business Day of each calendar week commencing with the week beginning on
November 24, 2008 (each such day, a “Weekly Reporting Date”), the Servicer shall
prepare and deliver, or have delivered, to the Collateral Agent and the Backup
Servicer a computer tape or a diskette or any other electronic transmission in a
format acceptable to the Backup Servicer containing any information which is
reasonably requested by the Backup Servicer or the Collateral
Agent.

         

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

         

        (g)   Each of the
Borrower and the Servicer shall prepare and deliver, or have delivered, to the
Lender, the Collateral Agent and the Backup Servicer any information which is
reasonably requested by the Backup Servicer, the Lender or the Collateral
Agent.

         

            SECTION
6.11 Statements
as to Compliance; Financial Statements.  (a) The Servicer shall deliver to the
Backup Servicer, the Borrower and the Lender on or before March 31st of each
year, beginning with 2007, an Officers’ Certificate stating, as to each
signatory thereof, that (x) a review of the activities of the Servicer
during the preceding calendar year (or the portion of the preceding

        
          
            
              
              

            

            
              56

              
                

              

            

            
              
              
calendar year commencing on the date of this Agreement
and ending December 31, 2006 in the case of the first such review) and of
its performance under this Agreement has been made under such officer’s
supervision, and (y) to the best of such officers’ knowledge, based on such
review, the Servicer has fulfilled all of its obligations under this Agreement
throughout such calendar year (or portion thereof, as the case may be) or, if
there has been a default in the fulfillment of any such obligation, specifying
each such default known to such officers and the nature and status thereof and
the action being taken to cure such default.

          

        

         

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

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          
            
              
              

            

            
              57

              
                

              

            

            
              
              

            

          

        

        
          	
                   
      

                	
                  (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.

                

        

         

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

        
           

          
            	
                     
      

                  	
                    (i)

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

                  

          

           

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

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

        
           

          
            
              
              

            

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

          

        

         

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

         

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

         

            SECTION
6.13 Backup
Servicer.  If a
Servicer Default shall occur, then the Lender may, by notice to the Servicer,
the Borrower and the Backup Servicer, terminate all of the rights and
obligations of the Servicer under this Agreement.  Upon the delivery
to the Servicer of such notice, all authority and power of the Servicer under
this Agreement, whether with respect to the Pledged Assets or otherwise, shall
pass to and be vested in the Backup Servicer pursuant to and under this Section
(unless the Lender shall have appointed a different successor Servicer pursuant
to Section 6.01 hereof or the Backup Servicer is unable
to act as Servicer and a successor is appointed as provided in the fourth
paragraph of this Section 6.13), and, without limitation, the Backup
Servicer is hereby authorized and empowered to execute and deliver, on behalf of
the Servicer, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination or to perform
the duties of the Servicer under this Agreement including, without limitation,
to make withdrawals from the Security Deposit Account pursuant to Section 2.05 and any Cash Reserve Account pursuant
to Section 2.06.  The Servicer agrees to
cooperate with the Lender and the Backup Servicer in effecting the termination
of the Servicer’s responsibilities and rights hereunder, including, without
limitation, providing notification to the Obligors of the assignment of the
servicing function, providing notification to the Lender’s Bank of the Backup
Servicer’s right to make withdrawals from the Security Deposit Account pursuant
to Section 2.05 and any Cash Reserve Account pursuant to Section 2.06, providing
the Backup Servicer, at the Servicer's expense, with all records, in electronic
or other form, reasonably requested by the Backup Servicer, in such form as the
Backup Servicer may reasonably request and at such times as the Backup Servicer
may reasonably request, to enable the Backup Servicer to assume the servicing
functions hereunder and the transfer to the Backup Servicer for administration
by it of all cash amounts which at the time should be or should have been
deposited by the Servicer in the Collection Account or thereafter be received by
the Servicer with respect to the Pledged Receivables.  Additionally,
the Servicer agrees to cooperate in providing, at the Servicer’s expense, the
Backup Servicer as successor Servicer, with reasonable access (including at the
premises of the Servicer) to Servicer’s employees and any and all

        
           

          
            
              
              

            

            
              59

              
                

              

            

            
              
              
books, records or other information
reasonably requested by it to enable the Backup Servicer, as successor
Servicer, to assume the servicing functions hereunder.  Neither the
Lender nor the Backup Servicer shall be deemed to have breached any obligation
hereunder as a result of a failure to make or delay in making any distribution
as and when required hereunder caused by the failure of the Servicer to remit
any amounts received by it or to deliver any documents held by it with respect
to the Pledged Assets.  The Backup Servicer (including as successor
Servicer) undertakes to perform only such duties and obligations as are
specifically set forth in this Agreement, it being understood by all parties
hereto that there are no implied duties or obligations of the Backup Servicer
hereunder.

          

        

         

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

         

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

         

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

         

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

         

        Notwithstanding anything contained in
this Agreement to the contrary, absent specific knowledge by any Lyon Financial
Services, Inc. account representative assigned to this transaction from time

        
           

          
            
              
              

            

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

          

        

         

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

         

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

         

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

         

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

         

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

         

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

         

        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 

        
           

          
            
              
              

            

            
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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.

         

        The Backup Servicer may, upon one
hundred twenty (120) days’ prior written notice to each of the parties hereto,
resign as Backup Servicer.  If the Backup Servicer resigns under this
Agreement, then the Collateral Agent and the Lender (with the consent of the
Servicer if no Program Termination Event or Event of Default has occurred and is
then continuing) during such period may appoint a successor backup servicer,
whereupon such successor backup servicer shall succeed to the rights, powers and
duties of such Backup Servicer, and the term “Backup Servicer”, shall mean such
successor backup servicer, effective upon its acceptance of such appointment and
its delivery of a duly executed counterpart of this Agreement and an
acknowledgment to the Backup Servicer and the other parties hereto, and such
former Backup Servicer’s rights, powers and duties as Backup
Servicer, shall be terminated (other than the covenant of the Backup Servicer
set forth in Section 9.08, which expressly survives termination of this
Agreement), without any other or further act or deed on the part of such former
Backup Servicer or any of the parties to this Agreement.  Such
resigning Backup Servicer shall cooperate with the Custodian, the Collateral
Agent and the successor backup servicer in order to transfer its rights and
obligations as Backup Servicer hereunder to such successor Backup
Servicer.

         

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

         

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

         

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

         

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

         

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

         

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

        
           

          
            
              
              

            

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

        
           

          
            
              
              

            

            
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Section 4.02, Section 6.05 or Article V; provided, however, that the failure to provide any such
notice shall not diminish, in any manner whatsoever, any obligation of the
Servicer hereunder to repurchase any Pledged Receivable.  Unless such
breach shall have been cured by the last day of the first full calendar month
following the discovery by or notice to the Servicer of such breach (and
provided that a Borrowing Base Deficiency exists on such last day), the Servicer
(if LEAF Financial or an Affiliate thereof) shall have an obligation, and the
Borrower shall and the Collateral Agent may, enforce such obligation of the
Servicer (if LEAF Financial or an Affiliate thereof), to repurchase any Pledged
Receivable materially and adversely affected by such breach.  The
Borrower shall notify the Collateral Agent promptly, in writing, of any failure
by the Servicer to so repurchase any such Pledged Receivable.  In
consideration of the repurchase of such Pledged Receivable, the Servicer shall
remit funds in an amount equal to the Release Price for such Pledged Receivable
to the Collection Account on the date of such 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 Eligible Receivables Balance, shall no longer be deemed
to be an Eligible Receivable and, therefore, shall no longer be included in the
calculation of the Eligible Receivables Balance.  In the case of any
Receivable excluded from the calculation of the Eligible Receivables Balance
pursuant to the previous sentence, the Receivable so excluded from the
calculation of the Eligible Receivables Balance may at a later time be included
in the calculation of the Eligible Receivables Balance, provided, that (i) the Custodian shall have
received the Certificate of Title described above with respect to such
Receivable from the applicable Registrar of Titles and delivered such
Certificate of Title to the Custodian and (ii) such Receivable is otherwise
an Eligible Receivable at such time.

         

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

         

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

         

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

        
           

          
            
              
              

            

            
              64

              
                

              

            

            
              
              

            

          

        

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

         

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

         

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

         

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

         

        
           

          
            
              	
                      
                        ARTICLE
      VII.

                      

                    

            

          

           

          
            
              	
                      
                        EVENTS
      OF DEFAULT

                      

                    

            

          

           

        

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

         

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

         

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

         

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

         

        (d)  the Borrower, Owner, the
Originator, 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, the Owner or the Servicer or
any other event, shall occur if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of such Debt; or any
such Debt shall be declared to be due and payable or required to be prepaid
(other than by a regularly scheduled required prepayment) prior to the stated
maturity thereof; or

         

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

         

        (f)  (i) the Collateral
Agent shall at any time fail to have a valid, perfected, first priority security
interest in any of the Pledged Assets (other than Equipment which has a value of
less than (x) $25,000 if such Equipment is leased under Dollar Purchase
Option Contracts or (y) $50,000 if such Equipment is leased under FMV
Contracts) or (ii) any purchase by the Borrower of a Receivable and the
Collections, Related Security and Other Conveyed
Property with respect thereto under the Purchase and Sale Agreement shall, for
any reason, cease to create in favor of the Borrower a perfected

        
           

          
            
              
              

            

            
              65

              
                

              

            

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

         

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

         

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

         

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

         

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

         

        (q)  any occurrence of an
event described in clause (ii) of the definition of Other Default;
or

        
           

          
            
              
              

            

            
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        (r)  the occurrence of any
“Event of Default” or “Program Termination Event” under and as defined in the
Netbank Facility;

         

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

         

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

         

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

         

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

         

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

         

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

         

         

        
          
            	
                    ARTICLE
      VIII.

                  

          

        

         

        
          
            	
                    INDEMNIFICATION

                  

          

        

        
           

          
            
              
              

            

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

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

        
          	
                   
      

                	
                  (iv)

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

                

        

         

        
          	
                   
      

                	
                  (v)

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

                

        

         

        
          	
                   
      

                	
                  (vi)

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

                

        

         

        
          	
                   
      

                	
                  (vii)

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

                

        

         

        
          	
                   
      

                	
                  (viii)

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

                

        

        
           

          
            
              
              

            

            
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                  (ix)

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

                

        

         

        
          	
                   
      

                	
                  (x)

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

                

        

         

        
          	
                   
      

                	
                  (xi)

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

                

        

         

        
          	
                   
      

                	
                  (xii)

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

                

        

         

        
          	
                   
      

                	
                  (xiii)

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

                

        

         

        
          	
                   
      

                	
                  (xiv)

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

                

        

         

        
          	
                   
      

                	
                  (xv)

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

                

        

         

        
          	
                   
      

                	
                  (xvi)

                	
                      [Reserved];

                

        

         

        
          	
                   
      

                	
                  (xvii)

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

                

        

         

        
          	
                   
      

                	
                  (xviii)

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

                

        

         

        
          	
                   
      

                	
                  (xix)

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

                

        

         

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

         

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

         

            SECTION
8.02 Indemnities
by Servicer.  (a) 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

         

        
          
            
            

          

          
            69

            
              

            

          

          
            
            
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 Borrowing Base
      Certificate or Monthly Remittance Report or other report prepared by it
      hereunder, of any Pledged Receivables which were not Eligible Receivables
      as of the date of any such
computation;

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

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

                

        

         

        
          	
                   
      

                	
                  (iv)

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

                

        

         

        
          	
                   
      

                	
                  (v)

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

                

        

         

        
          	
                   
      

                	
                  (vi)

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

                

        

         

        
          	
                   
      

                	
                  (vii)

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

                

        

         

        
          	
                   
      

                	
                  (viii)

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

                

        

         

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

        
          
            
              
              

            

            
              70

              
                

              

            

            
              
              

            

          

        

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

         

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

         

         

        
          
            	
                    ARTICLE
      IX.

                  

          

        

         

        
          
            	
                    MISCELLANEOUS

                  

          

        

         

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

         

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

         

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

         

            SECTION
9.03 No Waiver;
Remedies.  No
failure on the part of the Lender to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any 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.  (a) This Agreement shall be binding upon
and inure to the benefit of the Borrower, the Servicer, the Lender, the Backup
Servicer, the Custodian, the Lender’s Bank and their respective successors and
permitted assigns.  This Agreement and the Lender’s rights and
obligations hereunder and interest herein shall be assignable in whole or in
part (including by way of the sale of participation interests therein) by the
Lender and its successors and assigns.  None of the Borrower, the
Servicer or the Backup Servicer may assign any of its rights and obligations
hereunder or any interest herein without the prior written consent of the
Lender.  The parties to each assignment or participation made pursuant
to this Section 9.04 shall execute and deliver to the
Lender, for its acceptance and recording in its books and records, an assignment
and acceptance agreement (an “Assignment
and Acceptance”) or a
participation agreement or other transfer instrument reasonably satisfactory in
form and substance to the Lender and the Borrower.  Each such
assignment or participation shall be effective as of the date specified in the
applicable Assignment and Acceptance or other agreement or instrument only after
the execution, delivery, acceptance and recording thereof as described in the
preceding sentence.  The Lender shall notify the Borrower of any
assignment or participation thereof made pursuant to
this Section 9.04.  The Lender may, in
connection with any assignment or participation or any proposed assignment or
participation pursuant to this 

        
          
            
              
                
                

              

              
                71

                
                  

                

              

              
                
                

              

            

          

          Section 9.04, disclose to the assignee or
participant or proposed assignee or participant any information relating to the
Borrower and the Pledged Assets furnished to the Lender by or on behalf of the
Borrower or the Servicer; provided, however, that the Lender shall not disclose any
such information until it has obtained an agreement from such assignee or
participant or proposed assignee or participant that it shall treat as
confidential (under terms mutually satisfactory to the Lender, the Borrower, the
Servicer and such assignee or participant or proposed assignee or participant)
any information obtained which is not already publicly known or
available.

        

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            72

            
              

            

          

          
            
            

          

        

            SECTION
9.07 Costs,
Expenses and Taxes.  (a) In addition to the rights of
indemnification granted to the Backup Servicer (whether in its capacity as
Backup Servicer or successor Servicer), the Custodian, the Lender’s Bank, the
Lender and its Affiliates under Section 8.01 hereof, the Borrower agrees to pay on
demand all reasonable (and reasonably documented) costs and expenses of the
Backup Servicer, the Custodian, the Lender’s Bank and the Lender incurred in
connection with the preparation, execution or delivery of, or any waiver or
consent issued or amendment prepared in connection with, this Agreement, the
other Transaction Documents and the other documents to be delivered hereunder or
in connection herewith or therewith or incurred in connection with any
amendment, waiver or modification of this Agreement, any other Transaction
Document, and any other documents to be delivered hereunder or thereunder or in
connection herewith or therewith that is necessary or requested (and, with
respect to the Lender, actually entered into) by any of the Borrower, the
Servicer, the Lender or made necessary or desirable as a result of the actions
of any regulatory, tax or accounting body affecting the Lender and its
Affiliates, or which is related to an Event of Default, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Backup Servicer, the Custodian, the Lender’s Bank and the Lender with respect
thereto and with respect to advising the Backup Servicer, the Custodian, the
Lender’s Bank and the Lender as to their respective rights and remedies under
this Agreement and the other documents to be delivered hereunder or in
connection herewith, and all costs and expenses, if any (including reasonable
counsel fees and expenses), incurred by the Backup Servicer, the Custodian,
the Lender’s Bank or the Lender in connection with the enforcement of this
Agreement and the other documents to be delivered hereunder or in connection
herewith.

         

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

         

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

         

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

         

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

         

            SECTION
9.08 No
Proceedings.  The
Servicer, the Backup Servicer, the Custodian, the Lender and the Lender’s Bank
each hereby agree that it will not institute against, or join any other Person
in instituting against, the Borrower any proceedings of the type referred to in
the definition of Bankruptcy Event prior to the date that is one year and one
day following 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 the Lender as contained in
this Agreement or any other agreement, instrument or document entered into by
the Borrower or the Lender pursuant hereto or in connection herewith shall be
had against any administrator of the Borrower or the Lender or any incorporator,
affiliate, stockholder, officer, employee or director of the Borrower or the
Lender or of any such administrator, as such, by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute or
otherwise; it being expressly agreed and understood that the agreements of each party
hereto contained in 

         

        
          
            
            

          

          
            73

            
              

            

          

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

        

         

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

         

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

         

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

         

        
          
            	
                    ARTICLE
      X.

                  

          

        

         

        
          
            
              	
                      
                        THE
      COLLATERAL
AGENT

                      

                    

            

          

        

         

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

         

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

         

        
          
            
            

          

          
            74

            
              

            

          

          
            
            
be other than genuine and to have been
signed or presented by the proper party or parties or, in the case of cables,
telecopies and telexes, to have been sent by the proper party or
parties.  Absent its gross negligence or willful misconduct, the
Collateral Agent may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Collateral Agent and conforming to the requirements of
this Agreement and the other Transaction Documents, if
any.

        

         

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

         

        [Signature page to
follow.]

         

        
          
            
            

          

          
            75

            
              

            

          

          
            
            

          

        

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

         

         

         

        
          
            
              
                
                  	
                          THE
    BORROWER:

                        	
                          RESOURCE CAPITAL FUNDING II,
      LLC

                           

                          By:                                        

                              Name:

                              Title:

                           

                        
	
                          THE
    SERVICER:

                        	
                          LEAF FINANCIAL
      CORPORATION

                           

                          By:                                        

                              Name:

                              Title:

                           

                        
	 
      	 
      
	
                          THE LENDER:

                        	
                          MORGAN STANLEY
      BANK

                           

                          By:                                        

                              Name:

                             Title:

                           

                        
	
                          THE CUSTODIAN
      AND

                          THE LENDER’S
      BANK:

                        	
                          U.S. BANK NATIONAL
      ASSOCIATION

                           

                          By:                                        

                              Name:

                              Title:

                           

                        
	
                          THE BACKUP
      SERVICER

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

                          U.S. BANK PORTFOLIO
      SERVICES)

                           

                          By:                                        

                          
                                Name:

                                Title:

                          

                        

                

              

            

          

        

         

        
          
            
            

          

          
            S-1

            
              

            

          

          
            
            

          

        

         

        SCHEDULE I

         

        CONDITION PRECEDENT
DOCUMENTS

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            Sch.
I-1

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            Sch.
I-2

            
              

            

          

          
            
            

          

        

        

        SCHEDULE II

         

        PRIOR NAMES, TRADENAMES, FICTITIOUS
NAMES

         

        AND “DOING BUSINESS AS”
NAMES

         

        1.           Borrower:  None

         

        2.           Servicer:  LEAF Financial
Corp.

         

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

         

        
          
            
            

          

          
            Sch. II-1

            
              

            

          

          
            
            

          

        

        SCHEDULE III-A

         

        REPRESENTATIONS AND WARRANTIES
WITH

         

        RESPECT TO ELIGIBLE POOL A
RECEIVABLES

         

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

         

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

         

        2.                                      [Intentionally omitted.]

         

        3.                                      To the extent that such Contract
consists of a “Term Note (Level Payments)” or “Term Note (Step Payments)” or
similar promissory note, together with the “Master Loan and Security Agreement”,
“Finance Agreement” or similar agreement related thereto and incorporated by
reference therein, each other “Term Note (Level Payments)” or “Term Note (Step
Payments)” or similar promissory note related to the same “Master Loan and
Security Agreement”, “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.                                      Each such Contract, at the time of
origination and at all times thereafter, conformed to all requirements of the
Credit and Collection Policy applicable to such Contract and, in any case, no
such Contract would be required to be written off pursuant to the Credit and
Collection Policy.

         

        5.                                      Each such Contract (i) was (a)
originated by Originator in the ordinary course of Originator’s business
(and, on
and after November 13, 2008, was originated by Originator no more than 6 months
prior to the date that such Contract was purchased by (or otherwise transferred
to) the Borrower pursuant to the terms of the Purchase and Sale Agreement)
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, on and after
November 13, 2008, was originated by such Seller no more than 6 months prior to
the date that such Contract was purchased by (or otherwise transferred to) the
Borrower pursuant to the terms of the Purchase and Sale Agreement) and who had all

         

        
          
            
            

          

          
            Sch.
III-A-1

            
              

            

          

          
            
            
necessary licenses and permits to
originate Contracts in the State where the related Obligor and the related
Obligor Collateral were located, (ii) was sold by Originator to the
Borrower under the Purchase and Sale Agreement and the Borrower has all
necessary licenses and permits to own Receivables and enter into Contracts in
the state where the related Obligor and the related Obligor Collateral are
located, (iii) contains customary and enforceable provisions, such as to
render the rights and remedies of the Borrower (and any assignee thereof)
adequate for realization against the collateral security related thereto and
(iv) provides for level Scheduled Payments during the term of such Contract or
such Contract is a Non-Level Payment Contract.

        

         

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

         

        7.                                      No such Contract is the subject of any
litigation, nor is it subject to any right of rescission, setoff, counterclaim
or defense on the part of the Obligor thereunder.

         

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

         

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

         

        10.                                      Each such Contract (i) is
calculated at a fixed yield, (ii) is fully amortizing in periodic
installments over its remaining term (which may include a Balloon Payment or Put
Payment not in excess of 45% of the Discounted Balance of such Contract at the
time of origination), (iii) has a remaining term of 180 months or less and
does not permit renewal or extension, (iv) provides for acceleration of the
Scheduled Payments thereunder if the related Obligor is in default under or has
otherwise violated or breached any material provision of such Contract,
(v) prohibits the related Obligor from applying any part of the Security
Deposit or cash collateral paid under such Contract to the Scheduled Payments
due under such Contract (and neither the Originator, the Servicer, the Borrower
or any other Person has applied any part of the Security Deposit or cash
collateral paid under such Contract to any of the Scheduled Payments due under
such Contract) and (vi) has not been assigned by the related Obligor nor
has there been any sub-lease of the Obligor Collateral.

         

        11.                                      [Intentionally
omitted.]Whether such Contract
was originated by Originator or purchased by Originator from a Person which is
an Affiliate or subsidiary of Resource Capital or LEAF Financial, no portion of
such Contract or the Receivable related to such Contract had been financed by
Originator or such Person pursuant to any LEAF Credit Facility Document other
than a LEAF Credit Facility Document where National City Bank is the
agent.

         

        
          
            
            

          

          
            Sch.
III-A-2

            
              

            

          

          
            
            

          

        

        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.

         

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

         

        17.                                      The Security Deposit, if any, related to
such Contract has been deposited into the Security Deposit Account within ten
Business Days of the Pledge of the related Receivable.

         

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

         

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

         

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

         

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

         

        
          
            
            

          

          
            Sch.
III-A-3

            
              

            

          

          
            
            

          

        

        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).

         

        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 Borrowing Base Certificate and
Monthly Remittance Report is true and correct in all
respects.

         

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

         

        
          
            
            

          

          
            Sch.
III-A-4

            
              

            

          

          
            
            

          

        

        29.                                      With respect to each such Contract there
exists a Receivable File and such Receivable File contains each item listed in
the definition of Receivable File with respect to such Contract and such
Receivable File has been delivered to the Custodian.

         

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

         

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

         

        32.                                      [Intentionally
Omitted].

         

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

         

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

         

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

         

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

         

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

         

        38.                                      [Intentionally omitted.]

         

        39.                                      The Borrower has delivered to the
Custodian the sole original counterpart of each such Contract (or a true and
correct copy thereof) and such document

         

        
          
            
            

          

          
            Sch.
III-A-5

            
              

            

          

          
            
            
constitutes the entire agreement between
the parties thereto in respect of the related Obligor
Collateral.

        

         

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

         

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

         

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

         

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

         

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

         

        45.                                      The Borrower and the Servicer have duly
fulfilled all obligations on their part to be fulfilled under or in connection
with the origination, acquisition and assignment of such Contract, including,
without limitation, giving any notices and obtaining any consents necessary to
effect the acquisition of such Contract by the Borrower, and have done nothing
to impair the rights of the Borrower or the Lender in the Contract or payments
with respect thereto.

         

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

         

        47.                                      [Intentionally
Omitted].

         

        
          
            
            

          

          
            Sch.
III-A-6

            
              

            

          

          
            
            

          

        

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

         

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

         

        50.                                      No such Contract 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.

         

        54.                                      The final Scheduled Payment required by
each such Contract is less than or equal to the Discounted Balance of such
Contract at the time of origination.

         

        55.                                      The Obligor Collateral related to such
Contract is not one or more Vehicles regularly engaged in the long-haul
transportation of goods.

         

        56.                                      The Obligor with respect to any such
Contract which is a lease of, or is secured by, Equipment related to the
practice of dentistry, medicine or veterinary medicine is a dentist, doctor or
veterinarian.

         

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

         

        
          
            
            

          

          
            Sch.
III-A-7

            
              

            

          

          
            
            

          

        

        SCHEDULE III-B

         

        REPRESENTATIONS AND WARRANTIES WITH
RESPECT TO

         

        ELIGIBLE POOL B
RECEIVABLES

         

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

         

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

         

        2.                                      [Intentionally omitted.]

         

        3.                                      The Obligor under such Contract has been
continuously originating lease or loan agreements related to equipment with an
original cost of less than $100,000 for at least three (3) complete calendar
years unless such Obligor is Pentech Financial Services,
Inc.

         

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

         

        5.                                      Each such Contract (i) was
originated by Originator in the ordinary course of Originator’s business
(and, on
and after November 13, 2008, was originated by Originator no more than 6 months
prior to the date that such Contract was purchased by (or otherwise transferred
to) the Borrower pursuant to the terms of the Purchase and Sale Agreement)
and Originator had all
necessary licenses and permits to originate Contracts in the State where the
related Obligor and the related Obligor Collateral were located, (ii) was
sold by Originator to the Borrower under the Purchase and Sale Agreement and the
Borrower has all necessary licenses and permits to own Receivables and enter
into Contracts in the state where the related Obligor and the related Obligor
Collateral are located, (iii) contains customary and enforceable
provisions, such as to render the rights and remedies of the Borrower (and any
assignee thereof) adequate for realization against the collateral security
related thereto and (iv) provides for level Scheduled Payments during the term
of such Contract or such Contract is a Non-Level Payment
Contract.

         

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

         

        
          
            
            

          

          
            Sch.
III-B-1

            
              

            

          

          
            
            

          

        

        7.                                      No such Contract is the subject of any
litigation, nor is it subject to any right of rescission, setoff, counterclaim
or defense on the part of the Obligor thereunder.

         

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

         

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

         

        10.                                      Each such Contract (i) is
calculated at a fixed yield, (ii) is fully amortizing in periodic
installments over its remaining term (which amortization may include a Balloon
Payment or Put Payment not in excess of 10% of the aggregate original cost of
the related Underlying Equipment), (iii) has a remaining term of 120 months
or less and does not permit renewal or extension, (iv) provides for
acceleration of the Scheduled Payments thereunder if the related Obligor is in
default under or has otherwise violated or breached any material provision of
such Contract, (v) prohibits the related Obligor from applying any part of
the Cash Reserve (if any) paid under such Contract to the Scheduled Payments due
under such Contract (and neither the Originator, the Servicer, the Borrower or
any other Person has applied any part of the Cash Reserve paid under such
Contract to any of the Scheduled Payments due under such Contract) and
(vi) has not been assigned by the related Obligor nor has there been any
sub-lease of the Obligor Collateral.

         

        11.                                      The obligations of the Obligor under
each such Contract are secured by Underlying Originator Loan Collateral which
includes Eligible Pool B Underlying Lease Contracts and Eligible
Pool B Underlying Loan Contracts with aggregate Discounted Balances equal
to or greater than the Discounted Balance of such Contract.

         

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

         

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

         

        14.                                      [Intentionally
omitted.]Whether such Contract
was originated by Originator or purchased by Originator from a Person which is
an Affiliate or subsidiary of Resource Capital or LEAF Financial, no portion of
such Contract or the Receivable related to such Contract had been financed by
Originator or such Person pursuant to any LEAF Credit Facility Document other
than a LEAF Credit Facility Document where National City Bank is the
agent.

         

        15.                                      Each such Contract is by its terms an
absolute and unconditional obligation of the related Obligor and is
non-cancelable and non-prepayable without the payment in full of principal and
accrued interest and finance charges prior to the

         

        
          
            
            

          

          
            Sch.
III-B-2

            
              

            

          

          
            
            
expiration of the term of such Contract;
such Contract does not provide for the substitution, exchange or addition of any
other items of Underlying Originator Loan Collateral related to such Contract if
the effect thereof would be to reduce or extend the Scheduled Payments related
thereto; and the rights with respect to such Contract are assignable by
Originator (and its successors and assigns, including the Borrower) without the
consent of or notice to any Person.

        

         

        16.                                      Each such Contract conforms with the
criteria set forth in Exhibit D-4 hereto.

         

        17.                                      The Cash Reserve, if any, related to
such Contract has been deposited into a Cash Reserve Account within ten Business
Days of the Pledge of the related Receivable.

         

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

         

        19.                                      The applicable Underlying Obligor (other
than a lessee under an Underlying Lease Contract that is a “true lease”) has
good and marketable title to Underlying Originator Loan Collateral related to
such Contract and such Underlying Originator Loan Collateral is free and clear
of all Adverse Claims.

         

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

         

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

         

        22.                                      (A) The Originator shall have taken
or caused to be taken all steps necessary under all applicable law (including
the filing of an Obligor Financing Statement with respect to each such Contract)
in order to cause a valid, subsisting and enforceable perfected, first priority
security interest to exist in Originator’s favor in the Obligor Collateral
securing each such Contract (other than with respect to Underlying Equipment
relating to such Contract which has an original value of less than $25,000 if
such Underlying Equipment is leased under Dollar Purchase Option Contracts or
$50,000 if such Underlying Equipment is leased under FMV Contracts),
(B) Originator shall have assigned the perfected, first priority security
interest in the Obligor Collateral referred to in clause (A) above to the
Borrower pursuant to the Purchase and Sale Agreement and (C) the Borrower
shall have assigned the perfected, first priority security interest in the
Obligor Collateral referred to in clause (A) above to the Collateral Agent
pursuant to Section 2.13 hereof.

         

        23.                                      The Borrower has taken all steps
necessary under all applicable law in order to perfect the security interest of
the Collateral Agent in (i) the Borrower’s interest in the Obligor
Collateral related to each such Contract (other than with respect to Underlying
Equipment relating to such Contract which has an original value of less than
$25,000 if such Underlying Equipment is leased under Dollar Purchase Option
Contracts or $50,000 if such

         

        
          
            
            

          

          
            Sch.
III-B-3

            
              

            

          

          
            
            
Underlying Equipment is leased under FMV
Contracts) and (ii) each such Contract and the Receivable, Related Security
and Other Conveyed Property related thereto (and the proceeds thereof), and
there exists in favor of the Collateral Agent as secured party, a valid,
subsisting and enforceable first priority perfected security interest in
(i) the Borrower’s interest in such Obligor Collateral and (ii) such
Contract and the Receivable, Related Security and Other Conveyed Property
related thereto (and the proceeds thereof) and such security interest is and
shall be prior to all other liens upon and security interests in (i) the
Borrower’s interest in such Obligor Collateral and (ii) such Contract and
the Receivable, Related Security and Other Conveyed Property related thereto
(and the proceeds thereof) that now exist or may hereafter arise or be created
(other than Permitted Liens).

        

         

        24.                                      [Intentionally omitted.]

         

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

         

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

         

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

         

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

         

        29.                                      With respect to each such Contract there
exists a Receivable File and such Receivable File contains each item listed in
the definition of Receivable File with respect to such Contract and such
Receivable File is in the possession of the Custodian.

         

        30.                                      No such Contract has been repaid,
prepaid, satisfied, subordinated or rescinded, and the Obligor Collateral
securing such Contract has not been released from the lien of the Lender in
whole or in part.

         

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

         

        32.                                      [Intentionally
Omitted].

         

        33.                                      No such Contract has been sold,
transferred, assigned or pledged by the Originator to any Person other than the
Borrower.  Borrower has not taken any action to convey any right to
any Person that would result in such Person having a right to
payments due under any such Contract or
payments received under the related Insurance Policy or otherwise to impair the
rights of the Borrower or the Lender in such Contract, the related Insurance
Policy or any proceeds thereof.

         

        
          
            
            

          

          
            Sch.
III-B-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 the Lender have been utilized in selecting any such Contract from
all other similar Contracts originated or purchased by
Originator.

         

        37.                                      The Obligor Collateral related to any
such Contract is not subject to any  Adverse
Claim.

         

        38.                                      [Intentionally omitted.]

         

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

         

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

         

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

         

        42.                                      [Intentionally omitted.]

         

        43.                                      [Intentionally omitted.]

         

        44.                                      Neither the operation of any of the
terms of any such Contract nor the exercise by the Borrower, the Servicer or the
Obligor of any right under any such Contract will render such Contract
unenforceable in whole or in part nor subject to any right of rescission,
setoff, claim, counterclaim or defense, and no such right of rescission,
set-off, claim, counterclaim or defense has been asserted with respect
thereto.

         

        
          
            
            

          

          
            Sch.
III-B-5

            
              

            

          

          
            
            

          

        

        45.                                      The Borrower and the Servicer have duly
fulfilled all obligations on their part to be fulfilled under or in connection
with the origination, acquisition and assignment of the Contract, including,
without limitation, giving any notices and obtaining any consents necessary to
effect the acquisition of the Contract by the Borrower, and have done nothing to
impair the rights of the Borrower or the Lender in the Contract or payments with
respect thereto.

         

        46.                                      The Originator and the Servicer have
duly fulfilled all obligations on their part to be fulfilled under or in
connection with the origination, acquisition and assignment of the Contract,
including, without limitation, giving any notices and obtaining any consents
necessary to effect the acquisition of the Contract by the Borrower pursuant to
the Purchase and Sale Agreement, and have done nothing to impair the rights of
the Borrower in the Contract or payments with respect
thereto.  Originator, the Servicer and Borrower have duly fulfilled
all continuing obligations on their part to be fulfilled under or in connection
with such Contract.

         

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

         

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

         

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

         

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

         

        51.                                      [Intentionally
omitted.]

         

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

         

        53.                                      The final Scheduled Payment required by
each such Contract is less than or equal to the Discounted Balance of such
Contract at the time of origination.

         

        
          
            
            

          

          
            Sch.
III-B-6

            
              

            

          

          
            
            

          

        

        54.                                      [Intentionally omitted.]

         

        55.                                      [Intentionally omitted.]

         

        56.                                      Such Contract contains “Seller Events of
Default” or similar events of default which (i) would occur if a Pool B
Termination Event with respect to the related Underlying Originator occurred,
(ii) would entitle the Borrower, as assignee of the Originator’s rights under
the Contract, to deliver, or cause the delivery of, a redirection notice which
would require all Underlying Obligors to make all payments under Underlying
Contracts sold or pledged to the Originator under such Contract to Lockbox
Account or an account designated by the Borrower or the Servicer and (iii) would
entitle the Borrower, as assignee of the Originator’s rights under the Contract,
to receive 100% of all payments under the Underlying Contracts sold or pledged
to the Originator under such Contract.

         

        57.                                      Each such Contract shall require all
amounts payable thereunder to be paid before the return to the applicable
Obligor of, and without setoff with respect to, the amount of any loan principal
or purchase price which would otherwise have been advanced by the Originator to
the applicable Obligor pursuant to the terms of such Contract, but which was
held back by the Originator as a liquidity reserve or similar
reserve.

         

        58.                                      The Obligor with respect to such
Contract is not Northern Leasing Systems, Inc. or any Affiliate
thereof.

         

        
          
            
            

          

          
            Sch.
III-B-7

            
              

            

          

          
            
            

          

        

         

        SCHEDULE III-C

         

        REPRESENTATIONS AND WARRANTIES WITH
RESPECT TO

         

        ELIGIBLE POOL B UNDERLYING
CONTRACTS

         

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

         

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

         

        2.                                      [Intentionally omitted.]

         

        3.                                      [Intentionally omitted.]

         

        4.                                      Each such Underlying Contract at the
time of origination and at all times thereafter, conformed to all requirements
of the credit and collection policy of the applicable Underlying Originator
applicable to such Underlying Contract and, in any case, no such Underlying
Contract would be required to be written off pursuant to such credit and
collection policy.

         

        5.                                      Each such Underlying Contract
(i) was originated by an Eligible Underlying Originator in the ordinary
course of its business and such Underlying Originator had all necessary licenses
and permits to originate Underlying Contracts in the State where the related
Underlying Obligor and the related Underlying Collateral were located,
(ii) was pledged by such Underlying Originator to the Originator under the
applicable Pool B Contract and (iii) contains customary and
enforceable provisions, such as to render the rights and remedies of such
Underlying Originator (and any assignee thereof, including, without limitation,
the Borrower) adequate for realization against the collateral security related
thereto.

         

        6.                                      Each such Underlying Contract was
originated by the applicable Underlying Originator without any fraud or material
misrepresentation on the part of the related Underlying Obligor or Underlying
Originator.  Each such Underlying Contract was pledged by such
Underlying Originator to Originator without any fraud or material
misrepresentation on the part of such Underlying Originator or Originator, as
applicable.

         

        7.                                      No such Underlying Contract is the
subject of any litigation, nor is it subject to any right of rescission, setoff,
counterclaim or defense on the part of the Underlying Obligor
thereunder.

         

        
          
            
            

          

          
            Sch.
III-C-1

            
              

            

          

          
            
            

          

        

        8.                                      Each such Underlying Contract has had no
provision thereof waived, amended, altered or modified in any respect since its
origination except in conformity with the credit and collection policy of the
applicable Underlying Originator.

         

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

         

        10.                                      Each such Underlying Contract
(i) is calculated at a fixed yield, (ii) is fully amortizing in
periodic installments over its remaining term (which may include a Balloon
Payment or Put Payment not in excess of  10% of the original cost of the
related Underlying Equipment), (iii) has an remaining term of 120 months or
less and does not permit renewal or extension, (iv) provides for
acceleration of the Underlying Scheduled Payments thereunder if the related
Underlying Obligor is in default under or has otherwise violated or breached any
material provision of such Underlying Contract, (v) prohibits the related
Underlying Obligor from applying any part of the Underlying Security Deposit (if
any) paid under such Underlying Contract to the Underlying Scheduled Payments
due under such Underlying Contract (and neither the Underlying Originator, the
Originator, the Servicer, the Borrower or any other Person has applied any part
of the Underlying Security Deposit paid under such Underlying Contract to any of
the Underlying Scheduled Payments due under such Underlying Contract) and
(vi) has not been assigned by the related Underlying Obligor nor has there
been any sub-lease of the Underlying Obligor Collateral.

         

        11.                                      Such Underlying Contract has a
Discounted Balance of not greater than $800,000.

         

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

         

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

         

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

         

        15.                                      Each such Underlying Contract is by its
terms an absolute and unconditional obligation of the related Underlying Obligor
and is non-cancelable (in the case of

         

        
          
            
            

          

          
            Sch.
III-C-2

            
              

            

          

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

        

         

        16.                                      [Intentionally
omitted.]The Underlying
Originator with respect to such Underlying Contract is not an Affiliate or
subsidiary of Resource Capital or LEAF Financial.

         

        17.                                      [Intentionally omitted.]

         

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

         

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

         

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

         

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

         

        22.                                      (A) The applicable Underlying
Originator shall have taken or caused to be taken all steps necessary under all
applicable law (including the filing of a sufficient UCC-1 Financing Statement
with respect to each such Underlying Contract) in order to cause a valid,
subsisting and enforceable perfected, first security interest to exist in such
Underlying Contract’s favor in the Underlying Collateral securing each such
Underlying Contract (other than with respect to Equipment which has a value of
less than $25,000 and is leased under Dollar Purchase Option Contracts or
$50,000 and is leased under FMV Contracts) and (B) such Underlying
Originator shall have assigned the perfected, first priority security interest
in the Underlying Collateral referred to in clause (A) above to Originator
pursuant to the applicable Pool B Contract.  Such security
interest is and shall be prior to all other liens upon and security interests in
(i) the Underlying Originator’s in such Underlying Collateral and
(ii) such Underlying Contract (and the proceeds thereof) that now exist or
may hereafter arise or be created.

         

        23.                                      [Intentionally omitted.]

         

        
          
            
            

          

          
            Sch.
III-C-3

            
              

            

          

          
            
            

          

        

        24.                                      If the Underlying Collateral related to
such Underlying Contract includes a Vehicle, such Underlying Contract shall be
an Underlying 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 Underlying Contract meets any of
the following criteria:

         

        
          	
                   
      

                	
                  (i)

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

                

        

         

        
          	
                   
      

                	
                  (ii)

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

                

        

         

        
          	
                   
      

                	
                  (iii)

                	
                  any payment or other material
      terms of the related Underlying Contract have been modified due to credit
      related reasons after such Underlying Contract was acquired by the
      Originator pursuant to the applicable Pool B
      Contract;

                

        

         

        
          	
                   
      

                	
                  (iv)

                	
                  a Bankruptcy Event has occurred
      with respect to the related Underlying Obligor or such Underlying Contract
      has been or should otherwise be deemed uncollectible by the Underlying
      Originator in accordance with its credit and collection
      policy;

                

        

         

        
          	
                   
      

                	
                  (v)

                	
                  with respect to such Underlying
      Contract the Underlying Originator has repossessed the related Underlying
      Equipment;

                

        

         

        
          	
                   
      

                	
                  (vi)

                	
                  any Underlying Scheduled Payment
      (or other amount payable under the terms of such Underlying Contract)
      remains unpaid for more than 30 days but not more than 120 days
      after the due date therefor set forth in such Underlying
      Contract.

                

        

         

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

         

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

         

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

         

        29.                                      [Intentionally omitted.]

         

        
          
            
            

          

          
            Sch.
III-C-4

            
              

            

          

          
            
            

          

        

        30.                                      No such Underlying Contract has been
repaid, prepaid, satisfied, subordinated or rescinded, and the Underlying
Collateral securing such Underlying Contract has not been released from the lien
of the related Underlying Originator, in whole or in part.

         

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

         

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

         

        33.                                      [Intentionally omitted.]

         

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

         

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

         

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

         

        37.                                      The Underlying Collateral related to any
such Underlying Contract is not subject to any Adverse
Claim.

         

        38.                                      [Intentionally omitted.]

         

        39.                                      The related Underlying Originator has
delivered to the Originator the sole original counterpart (or a true and correct
copy) of each such Underlying Contract and such document constitutes the entire
agreement of the parties thereto in respect of the related Underlying
Collateral.

         

        
          
            
            

          

          
            Sch.
III-C-5

            
              

            

          

          
            
            

          

        

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

         

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

         

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

         

        43.                                      The Underlying Obligor with respect to
any such Underlying Contract is not a merchant with respect to the Underlying
Equipment related to such Underlying Contract and is not a partner, member or
Affiliate of the Underlying Originator.

         

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

         

        45.                                      The Underlying Originator has duly
fulfilled all obligations on its part to be fulfilled under or in connection
with the origination, acquisition and assignment of the Underlying Contract,
including, without limitation, giving any notices and obtaining any consents
necessary to effect, as applicable, the acquisition of the Underlying Contract
by, or the pledge of the Underlying Contract to, the Originator, and has done
nothing to impair the rights of Originator in the Underlying Contract or
payments with respect thereto.  The Underlying Originator, Originator,
the Servicer and Borrower, as applicable, have duly fulfilled all continuing
obligations on their part to be fulfilled under or in connection with such
Underlying Contract.

         

        46.                                      [Intentionally omitted.]

         

        
          
            
            

          

          
            Sch.
III-C-6

            
              

            

          

          
            
            

          

        

        47.                                      The sale from the related Underlying
Originator to Originator of each such Underlying Contract does not violate the
terms or provisions of any agreement to which either of them is a party or by
which it is bound.

         

        48.                                      [Intentionally omitted.]

         

        49.                                      The pledge of the Underlying Contract
from the related Underlying Originator to Originator pursuant to the related
Pool B Contract is not subject to or will result in any tax, fee or
governmental charge payable by Originator or any other Person to any federal,
state or local government.

         

        50.                                      No such Underlying Contract 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
Underlying Obligor under Section 365 of the Bankruptcy Code in the event
that a Bankruptcy Event has occurred with respect to such Underlying
Obligor.

         

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

         

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

         

        53.                                      The promissory note, if any, related to
each such Underlying Contract (i) was payable to the related Underlying
Originator immediately prior to its transfer to Originator pursuant to the
related Pool B Contract and has not been endorsed by the related Underlying
Originator to any Person other than Originator.

         

        54.                                      The final Underlying Scheduled Payment
required by each such Underlying Contract is less than or equal to the
Discounted Balance of such Underlying Contract at the time of
origination.

         

        55.                                      The Underlying Collateral related to
such Underlying Contract is not one or more Vehicles regularly engaged in the
long-haul transportation of goods.

         

        56.                                      The related Underlying Originator is not
a guarantor under any Underlying Contract.

         

        57.                                      The vendor of the Underlying Equipment
relating to such Underlying Contract has received payment in full from the
Underlying Obligor prior to the pledge of such Underlying Contract under the
related Pool B Contract and has no remaining obligations with respect to
such Underlying Equipment except for any applicable
warranty.

         

        
          
            
            

          

          
            Sch.
III-C-7

            
              

            

          

          
            
            

          

        

        58.                                      Such Underlying Contract was not
originated by Northern Leasing Systems, Inc. or any Affiliate
thereof.

         

        
          
            
            

          

          
            Sch.
III-C-8

            
              

            

          

          
            
            

          

        

        SCHEDULE IV

         

        CREDIT AND COLLECTION
POLICY

         

        Attached.

         

        
          
            
            

          

          
            Sch. IV-1

            
              

            

          

          
            
            

          

        

        SCHEDULE V

         

        EQUIPMENT CATEGORIES

         

        
          
            
            

          

          
            Sch.
V-1

            
              

            

          

          
            
            

          

        

        SCHEDULE VI

         

        ADDRESSES FOR NOTICE

         

        Resource Capital Funding II,
LLC

        c/o LEAF Commercial Finance Fund,
LLC

        One Commerce Square

        2005 Market Street, 15th
Floor

        Philadelphia, PA
19103

        Attention:  Matthew
Goldenberg

        Facsimile No.:  (215)
640-6370

        Confirmation No.:  (215)
231-7070

         

        LEAF Financial
Corporation

        One Commerce Square

        2005 Market Street, 15th
Floor

        Philadelphia, PA
19103

        Attention:  Miles Herman

        Facsimile No.:  (215)
640-6363

        Confirmation No.:  (215)
717-3358

        

        Morgan Stanley Capital Services
Inc.

        Transaction Management
Group

        1585 Broadway

        New York, NY
10236-8293

        Attention:  Chief Legal
Officer

        Facsimile No.:
001-212-507-4022

        

        Morgan Stanley
Credit

        750 Seventh Avenue

        New York, NY 10019

        Facsimile No.: (212)
507-5890

        E-mail:
spvmonthlyreport@morganstanley.com

        

        Morgan Stanley Bank

        1221
Avenue of the Americas

        New York,
NY 10020

        1 Pierrepont
Plaza

        Brooklyn, NY 11201

        Attention:  Peter
Woroniecki

        Facsimile No.:  (212)
762-6943

        Confirmation
No.:  (212)
762-6942718)
754-8614

        

        

        
          
            
            

          

          
            Sch.
VI-1

            
              

            

          

          
            
            

          

        

        U.S. Bank National
Association

        EP-MN-WS3D

        60 Livingston Ave.

        St. Paul, MN 55107

        Attention:  Diane
Reynolds

        Facsimile No.:  (651)
495-8090

        Confirmation No.:  (651)
495-3923

        

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

        U.S. Bank Portfolio
Services

        1310 Madrid Street

        Marshall, MN 56258

        Attention:  Joe
Andries

        Facsimile No.:  (866)
806-0775

        Confirmation No.:  (507)
532-7129

        

        
          
            
            

          

          
            Sch.
VI-2

            
              

            

          

          
            
            

          

        

         

        EXHIBIT A

         

        FORM OF BORROWING BASE
CERTIFICATE

         

        BORROWING
BASE CERTIFICATE

         

                                                                                                                   __________, 200__

         

        To:      Morgan Stanley Bank

                   1221
Avenue of the Americas 

                   New York,
NY 10020 

                   1 Pierrepont
Plaza

                      
Brooklyn, NY
11201

                   Attn: Peter
Woroniecki

         

        Ladies and
Gentlemen:

         

        Reference is made to the Receivables
Loan and Security Agreement dated as of October 31, 2006 (the “Loan
Agreement”), among Resource
Capital Funding II, LLC, (the “Borrower”), Leaf Financial Corporation, as the
Servicer, Morgan Stanley Bank, as Lender, U.S. Bank National Association, as the
Custodian and the Lender’s Bank and Lyon Financial Services, Inc. (d/b/a U.S.
Bank Portfolio Services) as the Backup Servicer.  Capitalized terms
used herein but not defined herein shall have the meanings assigned to such
terms in the Loan Agreement.

         

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

         

        (1)           the aggregate Facility Amount under the
Loan Agreement does not exceed the lesser of (A) the Borrowing Limit and (B) the
Borrowing Base;

        (2)           if such Borrowing is to be secured by
Pool A Receivables, the aggregate Facility Amount under the Loan Agreement,
calculated solely with respect to Loans secured by Pool A Receivables, does not
exceed the Pool A Borrowing Base;

        (3)           if such Borrowing is to be secured by
Pool B Receivables, the aggregate Facility Amount under the Loan Agreement,
calculated solely with respect to Loans secured by Pool B Receivables, does not
exceed the Pool B Borrowing Base;

        (4)           no Program Termination Event
exists;

        (5)           if such Borrowing is to be secured by
Pool A Receivables, no Pool A Termination Event exists;

        (6)           if such Borrowing is to be secured by
Pool B Receivables, no Pool B Termination Event exists; and

         

        The Borrower hereby further certifies
that attached hereto as Schedule
A are true and correct
calculations evidencing the accuracy of the statements set forth in paragraphs
(1) and, as applicable, (2) or (3) above.

         

        Very truly yours,

         

        RESOURCE CAPITAL FUNDING II,
LLC

         

        By:                                                                

                                                                                Name:   Miles Herman

                                                                                Title:     
Vice
President

        
          
            
            

          

          
            Exh.
A-1

            
              

            

          

          
            
            

          

        

         

        EXHIBIT B

         

        FORM OF REQUIRED DATA
FIELDS

         

         

        (a)           Obligor lease
number;

         

        (b)           Obligor name;

         

        (c)           Underlying Obligor
name;

         

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

         

        (e)           Collateral location (city and
state);

         

        (f)           Contract type (pool A or
B);

         

        (g)           Equipment
category/type;

         

        (h)           Non Level Payment Contract
flag;

         

        (i)           Balloon flag and put payment
flag;

         

        (j)           Stand Alone Working Capital Loan
Flag;

         

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

         

        (l)           Lease type
(true/installment);

         

        (m)           Serial Number (if
available);

         

        (n)           SIC Code (if
available);

         

        (o)           Vendor;

         

        (p)           Commencement Date

         

        (q)           Maturity Date;

         

        (r)           Date Next Due;

         

        (s)           Original Term;

         

        (t)           Remaining Term;

         

        (u)           Payment Frequency;

         

        (v)           Original Receivable
Balance;

         

        (w)           Current Receivable
Balance;

         

        (x)           Original Equipment
Cost;

         

        (y)           Amortized Equipment
Cost;

         

        
          
            
            

          

          
            Exh.
B-1

            
              

            

          

          
            
            

          

        

        (z)           Scheduled Payment;
and

         

        (aa)           Discounted Balance.

        

        
          
            
            

          

          
            Exh.
B-2

            
              

            

          

          
            
            

          

        

         

        EXHIBIT C

         

        FORM OF MONTHLY REMITTANCE
REPORT

         

        (See attached.)

         

        
          
            
            

          

          
            Exh.
C-1

            
              

            

          

          
            
            

          

        

        EXHIBIT D

         

        FORMS OF CONTRACT

         

        (See attached.)

         

        
          
            
            

          

          
            Exh.
D-1

            
              

            

          

          
            
            

          

        

        EXHIBIT E

         

         

        Vehicle Lienholder Nominee
Agreement

         

         

        This Vehicle
Lienholder Nominee Agreement (this “Agreement”) is made as of __________, 2007, among
__________ (the “Lienholder”), as Lienholder, Resource Capital
Funding II, LLC (the “Borrower”) and Morgan Stanley Bank, as Lender
(the “Lender”).

         

        Whereas, from time to time LEAF Funding, Inc.
(“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 Lender in order to
secure loans being advanced to the Borrower by, and the other obligations of the
Borrower to, the Lender (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 Lender 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 Lender but instead, from and after the date
hereof, the Lienholder will act as the Borrower’s and the Lender’s 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 Lender
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 [Add for Pool A:
(which is solely as stated
lienholder on the Titles)] in and to the Vehicles shall be solely
for the respective benefit of the Borrower and the Lender.  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 Lender)
or the Lender 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 Lender in order to maintain,
preserve and protect the Borrower’s security

         

        
          
            
            

          

          
            Exh.
E-1

            
              

            

          

          
            
            

          

        

        interest in such Vehicles and the
Lender’s security interest in the Borrower’s security interest in such Vehicles
and if the Lienholder fails to take any or all such actions, the Lender or any
designee of the Lender may take such actions at the sole expense of the
Borrower, and the Lienholder hereby grants to the Lender 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 [Add for Pool
A: (which is solely as
stated lienholder)] on the Titles to the Vehicles from time
to time pledged to the Borrower and repledged to the Lender, 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
Lender, 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 Lender, the Lender 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 [Pool B
add-on: (except its
security interest in the Vehicles, which is to be held under this Agreement
solely for the benefit of the Borrower and the Lender)];

         

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

         

        
          
            
            

          

          
            Exh.
E-2

            
              

            

          

          
            
            

          

        

         

                              (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 [Pool B
alternative: , except for
its security interest in the Vehicles, which is to be held under this Agreement
solely for the benefit of the Borrower and the Lender].

         

        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 Lender as
stated lienholder on all Titles, and the Lienholder shall have no further
responsibility for removing the Lienholder as stated lienholder on the
Titles.

         

        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 Lender of the receipt thereof, and shall remit promptly
such payments or proceeds to the account specified by the

         

        Lender as set forth herein, or as
otherwise identified by the Lender 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 Lender to such effect, the
Lender).

         

        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 one year and one day shall have elapsed since
the payment in full of all indebtedness and other obligations owed by Borrower
to the Lender, Lender’s 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 Lender.

         

        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:

         

        Resource Capital Funding II,
LLC

        One Commerce Square

        2005 Market Street, 15th Floor

        Philadelphia,
Pa  19103

        Attention: Miles Herman

        Facsimile No.: (215)
640-6363

        Confirmation No.: (215)
717-3358

         

        If to the Lender:

         

        Morgan Stanley Bank

        1221
Avenue of the Americas

        New York,
NY  10020

        1 Pierrepont
Plaza

        Brooklyn, NY 11201

        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.  Each party 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)

         

              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 Lender 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.

         

        
          
            
            

          

          
            Exh.
E-4

            
              

            

          

          
            
            

          

        

             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
Lender 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) “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.

         

        (v)“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.

         

        (vi)“Servicer” means LEAF Financial
Corporation.

        

         

        (vii) “State” means one of the fifty
states of the United States of America or the District of
Columbia.

         

        (viii) “Title” means with respect to a
Vehicle, (i) if such Vehicle is registered in Florida, (x) to the extent the
related Receivable has been originated by Funding, an original certificate of
title or (y) to the extent the related Receivable has been originated by a
Person other than Funding, (A) an original certificate of title or (B) if the
original certificate of title has been sent to the registered owner of such
Vehicle, an original computer confirmation of lien, (ii) if such Vehicle is
registered in Kansas, a true copy of the application for certificate
of  title and registration, (iii) if such Vehicle is registered in
Kentucky, an original notice of lien, (iv) if such Vehicle is registered in
Maryland, an original notice of security interest filing, (v) if such Vehicle is
registered in Minnesota, an original lien card, (vi) if such Vehicle is
registered in Missouri, an original notice of recorded lien, (vii) if such
Vehicle is registered in Montana, a true copy of the application for certificate
of title, (viii) if such Vehicle is registered in New York, an original notice
of lien, (ix) if such Vehicle is registered in Oklahoma, an original,
file-stamped lien entry form, (x) if such Vehicle is registered in Wisconsin, an
original lien confirmation card or (xi) if such Vehicle is registered in any
other State, an original certificate of title, in each case issued by the
Registrar of Titles of the applicable State listing the lienholder of record
with respect to such Vehicle (it being understood and agreed that solely for
purposes of clauses
(i) through (x) above (other than clauses
(i)(x) and (i)(y)(A)), the “original” of any document
required thereby shall consist of whatever documentation has been issued by the
Registrar of Titles of the related State to the lienholder).

         

        
          
            
            

          

          
            Exh.
E-5

            
              

            

          

          
            
            

          

        

         

        (ix)“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.]

         

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

         

        
           

          
            
              
                
                  
                    
                      	
                               

                            	
                              
                                [LIENHOLDER]

                              

                               

                              By:                                        

                                  Name:  ___________________              
                                        

                                  Title:     ___________________                                                 

                               

                            
	 
      	 
      

                    

                  

                

              

            

          

        

        
           

          
            
              
                
                  
                    
                      
                        
                          	
                                   

                                	
                                  RESOURCE CAPITAL FUNDING II, LLC,
      as Borrower

                                   

                                  By:                                        

                                       Name:  ___________________              
                                        

                                        
      Title:     ___________________                                                 

                                     

                                  

                                
	 
      	 
      
	
                                   

                                	
                                  MORGAN STANLEY BANK, as
      Lender

                                   

                                  
                                    By:                                        

                                         Name:  ___________________              
                                        

                                          
      Title:     ___________________                                                 

                                    

                                  

                                   

                                

                        

                         

                        
                          
                            
                            

                          

                          
                            Exh.
E-6

                            
                              

                            

                          

                          
                            
                            

                          

                        

                      

                    

                  

                

              

            

          

        

        EXHIBIT F

         

        FORM OF NOTICE OF
BORROWING

         

        NOTICE OF
BORROWING

         

                                                                                                                   __________, 200__

         

        To:       Morgan Stanley Bank

                   1221
Avenue of the Americas 

                   New York,
NY 10020 

                   1 Pierrepont
Plaza

               
Brooklyn, NY 11201

                   Attn: Peter
Woroniecki

         

        Notice of Borrowing
No.:  [1]

         

        Gentlemen:

         

        Reference is made to the Receivables
Loan and Security Agreement dated as of October 31, 2006 (the “Loan
Agreement”), among Resource
Capital Funding II, LLC, (the “Borrower”), Leaf Financial Corporation, as the
Servicer, Morgan Stanley Bank, as Lender, U.S. Bank National Association, as the
Custodian and the Lender’s Bank and Lyon Financial Services, Inc. (d/b/a U.S.
Bank Portfolio Services) as the Backup Servicer.  Capitalized terms
used herein but not defined herein shall have the meanings assigned to such
terms in the Loan Agreement.

         

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

         

        1.           Requested aggregate amount of
Borrowing:                $__________

                   To be comprised of

         

        a.           Requested Pool A
Loans                                           $__________

                              and;

         

        b.           Requested Pool B
Loans;                                           $__________

        2.           Requested date of Borrowing: __________,
200__

        3.           In connection with this
Borrowing we Pledge to you the Eligible Pool A Receivables and the Eligible Pool

        B Receivables set forth
on the Schedule of Receivables attached hereto.

         

        
          
            
            

          

          
            Exh. F-1

            
              

            

          

          
            
            

          

        

         

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

         

        

        (Signature page to
follow)

         

         

        
          
            
            

          

          
            Exh. F-2

            
              

            

          

          
            
            

          

        

         

        
           

          
            
              
                
                  
                    
                      
                        
                          	
                                   

                                	
                                  Very truly
      yours,

                                   

                                  RESOURCE CAPITAL FUNDING II,
      LLC

                                   

                                  By:  /s/
      Miles Herman                            

                                       Name:  Miles
      Herman

                                        
      Title:     Vice President                                   

                                     

                                  

                                
	 
      	 
      

                        

                      

                    

                  

                

              

            

          

        

         

        
          
            
            

          

          
            Exh. F-3

            
              

            

          

          
            
            

          

        

        EXHIBIT G

         

        FORM OF ALLONGE

         

        (See attached.)

         

        
          
            
            

          

          
            Exh. G-1

            
              

            

          

          
            
            

          

        

         

        
          TABLE OF
CONTENTS

          

          Page

           

        

        EXHIBIT H

         

        FORM OF POWER OF
ATTORNEY

         

        (See attached.)

         

         

        
          
            
            

          

          
            Exh. H-1

            
              

            

          

          
            
            

          

        

         

        
          TABLE OF CONTENTS

          

          Page

           

        

         

        
          	
                  ARTICLE
    I.

                	
                  DEFINITIONS 

                	
                  1

                

        

         

        
          	
                   
      

                	
                  SECTION
1.01

                	
                  Certain Defined
      Terms 

                	
                  1

                

        

         

        
          	
                   
      

                	
                  SECTION
1.02

                	
                  Other
      Terms 

                	
                  30

                

        

         

        
          	
                   
      

                	
                  SECTION
1.03

                	
                  Computation of Time
      Periods 

                	
                  30

                

        

         

        
          	
                  ARTICLE II.

                	
                  THE RECEIVABLES
      FACILITY 

                	
                  30

                

        

         

        
          	
                   
      

                	
                  SECTION
2.01

                	
                  Borrowings 

                	
                  30

                

        

         

        
          	
                   
      

                	
                  SECTION
2.02

                	
                  The Initial Borrowing and
      Subsequent Borrowings 

                	
                  30

                

        

         

        
          	
                   
      

                	
                  SECTION
2.03

                	
                  Determination of Interest Periods
      and Interest Rates 

                	
                  31

                

        

         

        
          	
                   
      

                	
                  SECTION
2.04

                	
                  Remittance
      Procedures 

                	
                  32

                

        

         

        
          	
                   
      

                	
                  SECTION
2.05

                	
                  Security Deposit
      Account 

                	
                  34

                

        

         

        
          	
                   
      

                	
                  SECTION
2.06

                	
                  Cash Reserve
      Account 

                	
                  35

                

        

         

        
          	
                   
      

                	
                  SECTION
2.07

                	
                  Payments and Computations,
      Etc 

                	
                  36

                

        

         

        
          	
                   
      

                	
                  SECTION
2.08

                	
                  Fees 

                	
                  37

                

        

         

        
          	
                   
      

                	
                  SECTION
2.09

                	
                  Increased Costs; Capital
      Adequacy 

                	
                  37

                

        

         

        
          	
                   
      

                	
                  SECTION
2.10

                	
                  Collateral Assignment of
      Agreements 

                	
                  38

                

        

         

        
          	
                   
      

                	
                  SECTION
2.11

                	
                  Grant of a Security
      Interest 

                	
                  38

                

        

         

        
          	
                   
      

                	
                  SECTION
2.12

                	
                  Evidence of
      Debt 

                	
                  39

                

        

         

        
          	
                   
      

                	
                  SECTION
2.13

                	
                  Release of Pledged
      Receivables 

                	
                  39

                

        

         

        
          	
                   
      

                	
                  SECTION
2.14

                	
                  Treatment of Amounts Paid by the
      Borrower 

                	
                  39

                

        

         

        
          	
                   
      

                	
                  SECTION
2.15

                	
                  Prepayment; Certain
      Indemnification Rights; Termination 

                	
                  39

                

        

         

        
          	
                   
      

                	
                  SECTION
2.16

                	
                  Increase of Borrowing
      Limit 

                	
                  40

                

        

         

        
          	
                  ARTICLE
III.

                	
                  CONDITIONS OF
      LOANS 

                	
                  40

                

        

         

        
          	
                   
      

                	
                  SECTION
3.01

                	
                  Conditions Precedent to Initial
      Borrowing 

                	
                  40

                

        

         

        
          	
                   
      

                	
                  SECTION
3.02

                	
                  Conditions Precedent to All
      Borrowings 

                	
                  40

                

        

         

        
          	
                   
      

                	
                  SECTION
3.03

                	
                  Advances Do Not Constitute a
      Waiver 

                	
                  42

                

        

         

        
          	
                  ARTICLE IV.

                	
                  REPRESENTATIONS AND
      WARRANTIES 

                	
                  43

                

        

         

        
          	
                   
      

                	
                  SECTION
4.01

                	
                  Representations and Warranties of
      the Borrower 

                	
                  43

                

        

         

        
          	
                   
      

                	
                  SECTION
4.02

                	
                  Representations and Warranties of
      the Servicer 

                	
                  45

                

        

         

        
          	
                   
      

                	
                  SECTION
4.03

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

                	
                  47

                

        

         

        
          	
                   
      

                	
                  SECTION
4.04

                	
                  Representations and Warranties of
      the Lender 

                	
                  47

                

        

         

        
          	
                  ARTICLE V.

                	
                  GENERAL COVENANTS OF THE BORROWER
      AND THE SERVICER 

                	
                  47

                

        

         

        
          	
                   
      

                	
                  SECTION
5.01

                	
                  General
      Covenants 

                	
                  4748

                

        

         

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

         

        
          	
                   
      

                	
                  SECTION
5.01

                	
                  Delivery of Servicing Agreement
      Electronic Images to the Backup Servicer                                                                       51

                

        

         

        
          	
                  ARTICLE VI.

                	
                  ADMINISTRATION AND SERVICING;
      CERTAIN COVENANTS 

                	
                  50

                

        

         

        
          	
                   
      

                	
                  SECTION
6.01

                	
                  Appointment and Designation of the
      Servicer 

                	
                  5052

                

        

         

        
          	
                   
      

                	
                  SECTION
6.02

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

                	
                  5254

                

        

         

        
          	
                   
      

                	
                  SECTION
6.03

                	
                  Realization Upon
      Receivables 

                	
                  5254

                

        

         

        
          	
                   
      

                	
                  SECTION
6.04

                	
                  Insurance Regarding
      Equipment 

                	
                  5254

                

        

         

        
          
            	
                     
      

                  	
                    SECTION
6.05

                  	
                    
                      Maintenance of Security Interests
      in Obligor Collateral

                    

                  	
                    5355

                  

          

        

         

        
          	
                   
      

                	
                  SECTION
6.06

                	
                  Pledged Receivable
      Receipts 

                	
                  5355

                

        

         

        
          	
                   
      

                	
                  SECTION
6.07

                	
                  No Rights of
      Withdrawal 

                	
                  5355

                

        

         

        
          	
                   
      

                	
                  SECTION
6.08

                	
                  Permitted
      Investments 

                	
                  5355

                

        

         

        
          	
                   
      

                	
                  SECTION
6.09

                	
                  Servicing
      Compensation 

                	
                  5456

                

        

         

        
          	
                   
      

                	
                  SECTION
6.10

                	
                  Reports to the Lender and the Backup
      Servicer; Account
      Statements; Servicing Information 

                	
                  5456

                

        

         

        
          
            	
                     
      

                  	
                    SECTION
6.11

                  	
                    Statements as to Compliance;
      Financial Statements

                  	
                    5758

                  

          

        

         

        
          	
                   
      

                	
                  SECTION
6.12

                	
                  Access to Certain Documentation;
      Obligors; Background Check 

                	
                  5758

                

        

         

        
          	
                   
      

                	
                  SECTION
6.13

                	
                  Backup
      Servicer 

                	
                  5758

                

        

         

        
          
            	
                     
      

                  	
                    SECTION
6.14

                  	
                    Additional Remedies of Lender Upon
      Event of Default

                  	
                    6061

                  

          

        

         

        
          	
                   
      

                	
                  SECTION
6.15

                	
                  Waiver of
      Defaults 

                	
                  6061

                

        

         

        
          	
                   
      

                	
                  SECTION
6.16

                	
                  Maintenance of Certain
      Insurance 

                	
                  6061

                

        

         

        
          	
                   
      

                	
                  SECTION
6.17

                	
                  Segregation of
      Collections 

                	
                  6061

                

        

         

        
          	
                   
      

                	
                  SECTION
6.18

                	
                  UCC Matters; Protection and
      Perfection of Pledged Assets 

                	
                  6061

                

        

         

        
          	
                   
      

                	
                  SECTION
6.19

                	
                  Servicer
      Advances 

                	
                  6162

                

        

         

        
          	
                   
      

                	
                  SECTION
6.20

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

                	
                  6162

                

        

         

        
          	
                   
      

                	
                  SECTION
6.21

                	
                  Compliance with Applicable
      Law 

                	
                  6263

                

        

         

        
          	
                   
      

                	
                  SECTION
6.22

                	
                  Receipt of Certificates of
      Title 

                	
                  6263

                

        

         

        
          	
                   
      

                	
                  SECTION
6.23

                	
                  Lender’s Bank Limitation of
      Liability 

                	
                  6264

                

        

         

        
          	
                  ARTICLE
VII.

                	
                  EVENTS OF
      DEFAULT 

                	
                  6364

                

        

         

        
          	
                   
      

                	
                  SECTION
7.01

                	
                  Events of
      Default 

                	
                  6364

                

        

         

        
          	
                   
      

                	
                  SECTION
7.02

                	
                  Additional Remedies of the
      Lender 

                	
                  6564

                

        

         

        
          	
                   
      

                	
                  ARTICLE VIII.INDEMNIFICATION6566

                

        

         

        
          	
                   
      

                	
                  SECTION
8.01

                	
                  Indemnities by the
      Borrower 

                	
                  6567

                

        

         

        
          	
                   
      

                	
                  SECTION
8.02

                	
                  Indemnities by
      Servicer 

                	
                  67

                

        

         

        
          
            
            

          

          
            ii

            
              

            

          

          
            
            

          

           

        

        
          	
                   
      

                	
                  ARTICLE
      IX.

                	
                  MISCELLANEOUS 

                	
                  6970

                

        

         

        
          	
                   
      

                	
                  SECTION
9.01

                	
                  Amendments and
      Waivers 

                	
                  6970

                

        

         

        
          	
                   
      

                	
                  SECTION
9.02

                	
                  Notices,
      Etc 

                	
                  6970

                

        

         

        
          	
                   
      

                	
                  SECTION
9.03

                	
                  No Waiver;
      Remedies 

                	
                  6971

                

        

         

        
          	
                   
      

                	
                  SECTION
9.04

                	
                  Binding Effect; Assignability;
      Multiple Lenders 

                	
                  6971

                

        

         

        
          	
                   
      

                	
                  SECTION
9.05

                	
                  Term of This
      Agreement 

                	
                  7071

                

        

         

        
          	
                   
      

                	
                  SECTION
9.06

                	
                  GOVERNING LAW; JURY WAIVER;
      CONSENT TO JURISDICTION 

                	
                  7071

                

        

         

        
          	
                   
      

                	
                  SECTION
9.07

                	
                  Costs, Expenses and
      Taxes 

                	
                  7072

                

        

         

        
          	
                   
      

                	
                  SECTION
9.08

                	
                  No
      Proceedings 

                	
                  7173

                

        

         

        
          	
                   
      

                	
                  SECTION
9.09

                	
                  Recourse Against Certain
      Parties 

                	
                  7173

                

        

         

        
          
            	
                     
      

                  	
                    SECTION
9.10

                  	 Execution
      in Counterparts; Severability; Integration	
                    7273

                  

          

        

         

        
          	
                   
      

                	
                  SECTION
9.11

                	
                  Tax
      Characterization 

                	
                  7273

                

        

         

        
          	
                   
      

                	
                  SECTION
9.12

                	
                  Calculation of Performance
      Triggers 

                	
                  7273

                

        

         

        
          	
                  ARTICLE X.

                	
                  THE COLLATERAL
      AGENT 

                	
                  7274

                

        

         

        
          	
                   
      

                	
                  SECTION
    10.01

                	
                  No Implied
      Duties 

                	
                  7274

                

        

         

        
          	
                   
      

                	
                  SECTION
    10.02

                	
                  Limits on
      Liability 

                	
                  7274

                

        

         

        
          	
                   
      

                	
                  SECTION
    10.03

                	
                  Acknowledgement 

                	
                  7274

                

        

         

        

        
          
            
            

          

          
            iii

            
              

            

          

          
            
            

          

        

        LIST OF SCHEDULES AND
EXHIBITS

         

        
          	
                   
      

                	
                  SCHEDULES

                

        

        
          	
                  SCHEDULE I

                	
                  Condition Precedent
      Documents

                

        

        
          	
                  SCHEDULE II

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

                

        

        
          	
                  SCHEDULE
III

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

                

        

        
          	
                  SCHEDULE IV

                	
                  Credit and Collection
      Policy

                

        

        
          
            	
                    SCHEDULE V

                  	
                    Equipment Categories                

                  
	SCHEDULE
      VI  	Addresses
      for Notice

          

        

                                   

         

        

         

        
          	
                   
      

                	
                  EXHIBITS

                

        

        
          	
                  EXHIBIT A

                	
                  Form of Borrowing Base
      Certificate

                

        

        
          	
                  EXHIBIT B

                	
                  Form of Required Data
      Fields

                

        

        
          	
                  EXHIBIT C

                	
                  Form of Monthly Remittance
      Report

                

        

        
          	
                  EXHIBIT
    D-1(a)

                	
                  Form of Master Lease
      Agreement

                

        

        
          	
                  EXHIBIT
    D-1(b)

                	
                  Form of Master Lease Schedule
      (Dollar Purchase Option)

                

        

        
          	
                  EXHIBIT
    D-1(c)

                	
                  Form of Master Lease Schedule (FMV
      Purchase Option)

                

        

        
          	
                  EXHIBIT
    D-1(d)

                	
                  Form of Master Lease Schedule
      (Put)

                

        

        
          	
                  EXHIBIT
    D-1(e)

                	
                  Form of Stand Alone Lease
      Agreement

                

        

        
          	
                  EXHIBIT
    D-2(a)

                	
                  Form of Loan
      Contract

                

        

        
          	
                  EXHIBIT
    D-2(b)

                	
                  Form of Loan
      Contract

                

        

        
          	
                  EXHIBIT
    D-2(c)

                	
                  Form of Finance
      Agreement

                

        

        
          	
                  EXHIBIT D-3

                	
                  Form of Practice Acquisition Loan
      Contract

                

        

        
          	
                  EXHIBIT D-4

                	
                  Eligibility Requirements for Pool
      B Transactions
  (Documentation  Criteria)

                

        

        
          	
                  EXHIBIT E

                	
                  Form of Vehicle Lienholder Nominee
      Agreement

                

        

        
          	
                  EXHIBIT F

                	
                  Form of Notice of
      Borrowing

                

        

        
          	
                  EXHIBIT G

                	
                  Form of
    Allonge

                

        

        
          	
                  EXHIBIT H

                	
                  Form of Power of
      Attorney

                

        

        

        IVex4-1.htm

    

      Exhibit
4.1

      

      EXECUTION
COPY

      THIRD
AMENDMENT

       

      THIRD
AMENDMENT, dated as of January 30, 2009 (this “Amendment”), to the
Revolving Credit Agreement, dated as of August 19, 2005 (as the same may be
amended (including pursuant to this Amendment), supplemented or otherwise
modified from time to time, the “Credit Agreement”),
among SMITHFIELD FOODS, INC., a Virginia corporation (the “Borrower”); each of
the Subsidiaries of the Borrower from time to time party to the Credit Agreement
(individually, a “Subsidiary Guarantor”
and, collectively, the “Subsidiary
Guarantors” and, together with the Borrower, the “Obligors”), the
lenders from time to time party to the Credit Agreement (the “Lenders”), CALYON NEW
YORK BRANCH, COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A. “RABOBANK
INTERNATIONAL”, NEW YORK BRANCH and SUNTRUST BANK, as co-documentation agents
(in such capacities, the “Co-Documentation Agents”), CITICORP USA, INC., as
syndication agent (in such capacity, the “Syndication Agent”) and JPMORGAN CHASE
BANK, N.A., as administrative agent (in such capacity, the “Administrative
Agent”).

       

       

      W I T N E S S E T H :

       

      WHEREAS,
pursuant to the Credit Agreement, the Lenders have agreed to make, and have
made, certain loans and other extensions of credit to the Borrower;

       

      WHEREAS,
the Borrower has requested certain amendments to the Credit Agreement as more
fully set forth herein; and

       

      WHEREAS,
the Lenders have agreed to such amendments but only on the terms and conditions
contained in this Amendment.

       

      NOW,
THEREFORE, the parties hereto hereby agree as follows:

       

      SECTION
1. Defined
Terms.  Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.

       

      SECTION
2. Amendments to Section 1.01
of the Credit Agreement.  The following definitions set forth
in Section 1.01 of the Credit Agreement shall be amended and restated to read in
their entirety as follows:

       

       “Alternate Base Rate”
means, for any day, a rate per annum (rounded upwards, if necessary, to the next
1/16th of 1%)
equal to the greatest of (a) the Prime Rate in effect on such day, (b) the
Federal Funds Effective Rate for such day plus 0.50% and (c)
the LIBO Quoted Rate for such day plus 1%.  As used herein, the term
“LIBO Quoted Rate” means, for any
day, the rate per annum determined on the basis of the rate for deposits in
Dollars for a one-month interest period appearing on Page 3750 of the Telerate
screen as of 11:00 a.m., London time, on such day (or if such day is not a
Business Day, on the immediately preceding Business Day). Any change in the
Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the LIBO Quoted Rate shall be effective from and including the
effective date of such change in the Prime Rate, the Federal Funds Effective
Rate or the LIBO Quoted Rate, respectively.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      “Applicable Rate”
means, for any day, with respect to any ABR Loan, Eurocurrency Revolving Loan,
Letter of Credit, Swingline Loan, or with respect to the Commitment Fees payable
hereunder, as the case may be, the applicable rate per annum set forth below for
Loans of such Type, for Letters of Credit or Commitment Fees, as the case may
be:

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    ABR
      Loans and

                                    Swingline Loans

                                  	
                                    Eurocurrency
      Loans, and

                                    Letters of Credit

                                  	
                                    Commitment

                                    Fee

                                  
	
                                    2.50%

                                  	
                                    3.50%

                                  	
                                    0.50%

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                         

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      “Interest Period”
means, with respect to any Eurocurrency Borrowing, the period commencing on the
date of such Borrowing and ending 14 days or on the numerically corresponding
day in the calendar month that is one, two, three or six months thereafter, as
the Borrower may elect; provided, that (i)
subject to clause (iv), if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (ii) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period,
(iii) no Interest Period shall extend beyond the Maturity Date and (iv) 14 day
Interest Periods shall end on a Business Day and shall be subject to other
requirements to be specified by the Administrative Agent.  For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.

       

      SECTION
3. Amendments to Section
2.02(d) of the Credit Agreement.  Section 2.02(d) of the Credit
Agreement is hereby amended in its entirety to read as follows:

       

      “(d)  Certain
Limits on Interest Periods.  Notwithstanding any other provision of
this Agreement, the Borrower shall (1) not be entitled to request, or to elect
to convert or continue any Borrowing if the Interest Period requested thereto
would end after the Maturity Date or (2) not be entitled to request, or to elect
to convert or continue Eurocurrency Loans with 14 day Interest Periods to the
extent that, after giving effect thereto, the aggregate principal amount of
Eurocurrency Loans with 14 day Interest Periods would exceed
$200,000,000.”

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      

      SECTION
4. Amendments
to Section 2.03(a) of the Credit Agreement.  Section 2.03(a) of the
Credit Agreement is hereby amended by deleting clause (iii) thereof and
substituting in lieu thereof the following:

       

      “(iii)  in
the case of an ABR Borrowing, not later than 11:30 a.m., New York City time, on
the date of the proposed Borrowing.”

      

      SECTION
5. Amendments to Section
2.06(a) of the Credit Agreement.  Section 2.06(a) of the Credit
Agreement is hereby amended by deleting “1:00 p.m.” and substituting in lieu
thereof “1:30 p.m.”.

       

      SECTION
6. Amendments
to Section 6.12(b) of the Credit Agreement.  Section 6.12(b) of the Credit
Agreement is hereby amended in its entirety to read as follows:

       

      “(b)  Consolidated
Interest Coverage Ratio.  The Borrower will not permit the ratio of
Consolidated EBITDA to Consolidated Interest Expense for any period of four
consecutive fiscal quarters of the Borrower ended on the last day of each fiscal
quarter set forth below to be less than the ratio set forth opposite such fiscal
quarter:

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            	
                                                                                    Fiscal Quarter Ending

                                                                                  	
                                                                                    Ratio

                                                                                  
	
                                                                                    February
      1, 2009

                                                                                  	
                                                                                    1.6
      to 1

                                                                                  
	
                                                                                    May
      3, 2009

                                                                                  	
                                                                                    1.2
      to 1

                                                                                  
	
                                                                                    August
      2, 2009

                                                                                  	
                                                                                    1.35
      to 1

                                                                                  
	
                                                                                    November
      1, 2009

                                                                                  	
                                                                                    1.35
      to 1

                                                                                  
	
                                                                                    January
      31, 2010

                                                                                  	
                                                                                    2.0
      to 1

                                                                                  
	
                                                                                    May
      2, 2010 and thereafter

                                                                                  	
                                                                                    3.0
      to
1

                                                                                  

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

      SECTION
7. Amendments to Section
6.12(c) of the Credit Agreement.  Section 6.12(c) of the Credit
Agreement is hereby amended and restated in its entirety to read as
follows:

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      “(c)  Inventory
and Receivables.  The Borrower will not, on any date on or before the
Security Termination Date, permit the ratio of (i) the sum of 65% of the
aggregate amount of Inventory plus 85% of the aggregate amount of Accounts
Receivable, in each case, of the Borrower and the other Grantors (other than any
Grantor that has sold, conveyed or otherwise transferred Accounts Receivable in
connection with a Receivables Financing) subject to the Lien of the Security
Agreement (the sum of the foregoing amounts shall be calculated based on the
book value of Inventory and Accounts Receivable, as applicable, in accordance
with GAAP as set forth in the financial statements delivered pursuant to Section
5.01(a) or (b), as applicable, and shall apply, for purposes of determining
compliance with this Section, from the date such financial statements are
delivered until such sum is subsequently redetermined as described herein) to
(ii) the aggregate Revolving Credit Exposure of all the Lenders under this
Agreement and any Pari Passu Debt, in either case at such date, to be less than
1.30 to 1 (the “Coverage
Covenant”).”

      

      SECTION
8. Amendments to Section 1 of
the Security Agreement.  The definition of “Guarantor
Obligations” set forth in Section 1 of the Security Agreement is hereby amended
by inserting “and all obligations in respect of purchase cards owed to any
Lenders or their Affiliates” after the phrase “automated clearinghouse transfer
funds” in clause (ii), and by inserting “(it being agreed that all of the
foregoing shall constitute Guaranteed Obligations for purposes of the Credit
Agreement)” at the end of the parenthetical in clause (ii) thereof.

       

      SECTION
9. Federal Funds
Borrowings.  Notwithstanding anything to the contrary in the
Credit Agreement, no Federal Funds Loans or Federal Funds Borrowings shall (i)
be outstanding as of the Third Amendment Effective Date (other than Federal
Funds Loans as to which the Borrower shall have delivered notices under Section
2.07(b) of the Credit Agreement electing to convert such Federal Funds Loans to
ABR Loans or Eurocurrency Loans in accordance with the requirements of such
Section) or (ii) be made or requested after the Third Amendment Effective
Date.

       

      SECTION
10. Real Property
Mortgages.  The Borrower hereby agrees to execute and deliver,
or to cause to be executed and delivered, to the Administrative Agent, within 30
days (or such longer period as shall be consented to by the Administrative
Agent) after the Amendment Effective Date a deed of trust (in form and substance
reasonably satisfactory to the Administrative Agent) with respect to the real
property (including buildings and improvements) of the Borrower and its
Subsidiaries located in Bladen County, North Carolina, known as the Tar Heel
pork processing plant. Borrower shall also (i) deliver, or cause to be
delivered, to the Administrative Agent in respect of such property, a policy of
title insurance issued by First American Title Insurance Company (which title
insurance policy shall be a fully paid policy of title insurance (or marked-up
title insurance commitment having the effect of a policy of title insurance)
insuring the Lien of such deed of trust as a valid first Lien on the real
property and fixtures described therein in the amount equal to not less than the
fair market value of such real property and fixtures, issued by First American
Title Insurance Company, which shall (a) to the extent  required by
the Administrative Agent, include such reinsurance arrangements (with provisions
for direct access, if necessary) as shall be reasonably acceptable to the
Administrative Agent, (b) has been supplemented by such endorsements or
affirmative coverage as shall be reasonably requested by the Administrative
Agent (including endorsements on matters relating to usury, first loss,
contiguity (to the extent applicable), revolving credit, doing business,
non-imputation, public road access, survey, variable rate, environmental lien
(to the extent available and commercially reasonable), subdivision (to the
extent applicable), separate tax lot (to the extent applicable), and so-called
comprehensive coverage over covenants and restrictions), and (c) contain no
exceptions to title other than Liens permitted under the Credit Agreement), (ii)
deliver, or cause to be delivered, to the Administrative Agent in respect of
such property, such existing surveys, abstracts, certificates, title documents,
appraisals (to the extent appraisals are required to comply with government
regulations), local counsel opinions and other documents as the Administrative
Agent may reasonably request with respect to such property, in each case in form
and substance reasonably satisfactory to the Administrative Agent, and
(iii)  take or cause to be taken such other actions, in each case, as
the Administrative Agent shall reasonably request or require in connection with
the foregoing.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      SECTION
11. Conditions to
Effectiveness.  This Amendment shall become effective upon the
date (the “Third
Amendment Effective Date”) on which the following conditions are
satisfied:  (i) the Administrative Agent shall have received
counterparts of this Amendment, executed and delivered by a duly authorized
officer of each of the Obligors and Lenders constituting the Required Lenders;
(ii) the Administrative Agent shall have received, for the account of each
Lender which consents to this Amendment on or prior to 5:00 p.m. (EST) on
January 30, 2009, an amendment fee in an amount separately agreed by the
Borrower and the Administrative Agent and notified to the Lenders; (iii) the
Borrower shall be in compliance with the provisions of Section 5 hereof; and
(iv) no Default or Event of Default shall have occurred and be continuing as of
the Third Amendment Effective Date.

       

      SECTION
12. Representations and
Warranties.  The Borrower represents and warrants to the
Administrative Agent and the Lenders that as of the Third Amendment Effective
Date, after giving effect to this Amendment, no Default or Event of Default has
occurred and is continuing and the representations and warranties made by the
Borrower in or pursuant to the Credit Agreement or any other Loan Document are
true and correct in all material respects on and as of the Third Amendment
Effective Date as if made on such date (except to the extent that any such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties were true and correct in all material
respects on and as of such earlier date).

       

      SECTION
13. Effect of
Amendment.  (a)  This Amendment shall not constitute
an amendment or waiver of or consent to any provision of the Credit Agreement
and the other Loan Documents not expressly referred to herein and shall not be
construed as an amendment, waiver or consent to any action on the part of the
Borrower that would require an amendment, waiver or consent of the
Administrative Agent or the Lenders except as expressly stated
herein.  Except as expressly amended hereby, the provisions of the
Credit Agreement and the other Loan Documents are and shall remain in full force
and effect in accordance with its terms.

       

      (b)  On
and after the Third Amendment Effective Date, each reference in the Credit
Agreement to “this Agreement”, “hereunder”, “hereof”, “herein”, or words of like
import, and each reference to the Credit Agreement in any other Loan Document
shall be deemed a reference to the Credit Agreement as amended
hereby.  This Amendment shall constitute a “Loan Document” for all
purposes of the Credit Agreement and the other Loan Documents.

      

      SECTION
14. Costs and
Expenses.  The Borrower agrees to reimburse the Administrative
Agent for its reasonable out-of-pocket expenses in connection with this
Amendment, including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent.

       

      SECTION
15. Headings.  The
headings of this Amendment are for purposes of reference only and shall not
limit or otherwise affect the meaning hereof.

       

      SECTION
16. Counterparts.  This
Amendment may be executed by one or more of the parties to this Amendment on any
number of separate counterparts (including by facsimile or other electronic
transmission), each of which when so executed and delivered shall be deemed an
original and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      SECTION
17. GOVERNING
LAW.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

       

      [The
remainder of this page is intentionally left blank.]

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed and delivered by their respective proper and duly authorized officers
as of the day and year first above written.

      

      
        	 
      	
                SMITHFIELD
      FOODS, INC

              
	 
      	 
      
	 
      	 
      
	 
      	
                By    /s/ Carey J.
      Dubois                

              
	 
      	
                Name:
      Carey J. Dubois

              
	 
      	
                Title:
      Vice President, Finance

              

      

      

      SUBSIDIARY
GUARANTORS

      

      
        	
                THE
      SMITHFIELD PACKING COMPANY, INCORPORATED

                IOWA
      QUALITY MEATS, LTD.

                JOHN
      MORRELL & CO.

                NORTH
      SIDE FOODS CORP.

                PATRICK
      CUDAHY INCORPORATED

                QTF
      LIQUIDATION CORP.

                STEFANO
      FOODS, INC.

                MURPHY
      FARMS OF TEXHOMA, INC.

                 

              	
                BROWN’S
      OF CAROLINA LLC

                CARROLL’S
      FOODS LLC

                CARROLL’S
      FOODS OF

                  VIRGINIA
      LLC

                CENTRAL
      PLAINS FARMS LLC

                CIRCLE
      FOUR LLC

                MURPHY
      FARMS LLC

                QUARTER
      M FARMS LLC,

                MURPHY-BROWN
      HOLDINGS LLC

                each
      a Delaware limited liability company

                 

                 

                By           MURPHY-BROWN
      LLC,

                a Delaware limited liability
      company,

                as a sole member of
      each

                 

                 

                By           JOHN
      MORRELL & CO.,

                a Delaware
      corporation,

                as its sole member

                 

                                               
      /s/
      Carey J. Dubois            

                Name:  Carey J.
      Dubois

                Title:    Vice
      President

              
	
                SMITHFIELD
      GLOBAL PRODUCTS INC.

                FARMLAND
      FOODS, INC.

                 

                By           /s/
      Carey J.
      Dubois                          
      

                     Name:  Carey
      J. Dubois

                     Title:    Vice
      President

                 

              	 
      

      

      
        
          
            Signature
Page to Third Amendment to

            Smithfield
Foods, Inc. Revolving Credit Agreement

          

           

        

        
           

          
            

          

        

        
           

        

      

      

      
        	
                MURPHY-BROWN
      LLC,

                  a
      Delaware limited liability company

                 

                By        JOHN
      MORRELL & CO.,

                a Delaware
      corporation,

                as its sole member

                 

                 

                             /s/
      Carey J. Dubois        

                Name:  Carey J.
      Dubois

                Title:    Vice
      President

              

      

      

      JPMORGAN
CHASE BANK, N.A., as Administrative Agent and as a Lender

      

      By:     /s/ Barbara R. Marks            

      Name:
Barbara R. Marks

      Title:
Executive Director

      

      AgFirst
Farm Credit Bank

      

      By:     /s/ John W. Burnside,
Jr          

      Name:  John
W. Burnside, Jr.

      Title:  Vice
President

      

      AgStar
Financial Services, FLCA

      

      By:     /s/ Donald G.
Lindeman                               

      Name:  Donald
G. Lindeman

      Title:  Vice
President

      

      BANK OF
AMERICA, N.A.

      

      By:     /s/ William F.
Sweeney                                

      Name:  William
F. Sweeney

      Title:  Senior
Vice President

      

      BNP
Paribas

      

      By:     /s/ Michael
Pearce                                        

      Name:  Michael
Pearce

      Title:  Director

      

      By:     /s/ Fikret
Durmus                                          

      Name:  Fikret
Durmus

      Title:  Vice
President

      
        
          
            Signature
Page to Third Amendment to

            Smithfield
Foods, Inc. Revolving Credit Agreement

          

           

        

        
           

          
            

          

        

        
           

        

      

      Calyon
New York Branch,

      

      By:     /s/ David
Cagle                                             

      Name:  David
Cagle

      Title:  Managing
Director

      

      By:     /s/ Robert
Smith                                            

      Name:  Robert
Smith

      Title:  Managing
Director

      

      Citicorp
USA, Inc.

      

      By:     /s/ Robert J.
Kane                                         

      Name:  Robert
J. Kane

      Title:  Managing
Director

      

      CoBANK,
ACB

      

      By:     /s/ Jeff
Norte                                                  

      Name:  Jeff
Norte

      Title:  Vice
President

      

      COMMERZBANK
AG, NEW YORK

      AND GRAND
CAYMAN BRANCHES

      

      By:     /s/ G. Rod
McWalters                                  

      Name:  G.
Rod McWalters

      Title:  Senior
Vice President

      

      By:     /s/ Douglas L.
Glickman                               

      Name:  Douglas
L. Glickman

      Title:  First
Vice President

      

      COOPERATIEVE
CENTRALE RAIFFEISEN-

      BOERENLEENBANK
B.A., “RABOBANK NEDERLAND”, NEW YORK BRANCH

      

      By:     /s/ Jeff P.
Geisbauer                                      

      Name:  Jeff
P. Geisbauer

      Title:  Vice
President

      

      By:     /s/ Andrew
Sherman                                    

      Name:  Andrew
Sherman

      Title:  Executive
Director

      
        
          
            Signature
Page to Third Amendment to

            Smithfield
Foods, Inc. Revolving Credit Agreement

          

           

        

        
           

          
            

          

        

        
           

        

      

      FARM
CREDIT BANK OF TEXAS

      

      By:     /s/ Alan
Robinson                                        

      Name:  Alan
Robinson

      Title:  Vice
President

      

      Farm
Credit Services of America, PCA

      

      By:     /s/ Bruce
Dean                                              

      Name:  Bruce
Dean

      Title:  Vice
President

      

      FARM
CREDIT SERVICES OF MID-AMERICA, FLCA

      

      By:     /s/ Ralph M.
Bowman                                   

      Name:  Ralph
M. Bowman

      Title:  Vice
President

      

      FARM
CREDIT WEST, FLCA

      

      By:     /s/ Ben
Madonna                                          

      Name:  Ben
Madonna

      Title:  Vice
President

      

      FCS
FINANCIAL, PCA

      

      By:     /s/ Lee
Fuchs                                                 

      Name:  Lee
Fuchs

      Title:  Vice
President

      

      First
Pioneer Farm Credit, ACA

      

      By:     /s/ James M.
Papai                                        

      Name:  James
M. Papai

      Title:  Vice
President

      

      Fresno-Madera
Production Credit Association

      

      By:     /s/ Bruce L.
McAbee                                    

      Name:  Bruce
L. McAbee

      Title:  Executive
Vice President

      

      

      
        
          
            Signature
Page to Third Amendment to

            Smithfield
Foods, Inc. Revolving Credit Agreement

          

           

        

        
           

          
            

          

        

        
           

        

      

      GENERAL
ELECTRIC CAPITAL CORPORATION

      

      By:     /s/ Robert E.
Kelly                                        

      Name:  Robert
E. Kelly

      Title:  Duly
Authorized Signatory

      

      GOLDMAN
SACHS CREDIT PARTNERS, L.P.

      

      By:     /s/ Andrew
Caditz                                         

      Name:  Andrew
Caditz

      Title:  Vice
President

      

      GreenStone
Farm Credit Services, ACA/FLCA

      

      By:     /s/ Alfred S. Compton,
Jr.                            

      Name:  Alfred
S. Compton, Jr.

      Title:  VP/Managing
Director

      

      Harris
N.A.

      

      By:     /s/ John
Carley                                              

      Name:  John
Carley

      Title:  Vice
President

      

      HSBC Bank
USA, National Association

          

      By:     /s/ Robert J.
Devir                                         

      Name:  Robert
J. Devir

      Title:  Managing
Director

      

      ING
Capital LLC

      

      By:     /s/ Lina
Garcia                                               

      Name:  Lina
Garcia

      Title:  Vice
President

      

      MidAtlantic
Farm Credit, ACA

      

      By:     /s/ William J.
Rutter                                      

      Name:  William
J. Rutter

      Title:  Vice
President

      

      

      

      
        
          
            Signature
Page to Third Amendment to

            Smithfield
Foods, Inc. Revolving Credit Agreement

          

           

        

        
           

          
            

          

        

        
           

        

      

      MIZUHO
CORPORATE BANK, LTD.

      

      By:     /s/ Robert
Gallagher                                      

      Name:  Robert
Gallagher

      Title:  Authorized
Signatory

      

      Northwest
Farm Credit Services, FLCA

      

      By:     /s/ Carol L.
Sobson                                       

      Name:  Carol
L. Sobson

      Title:  Vice
President

      

      THE ROYAL
BANK OF SCOTLAND PLC

      

      By:      /s/ William
McGinty                                    

      Name:  William
McGinty

      Title:  Senior
Vice President

      

      SOCIETE
GENERALE

      

      By:     /s/ Sebastien
Ribatto                                    

      Name:  Sebastien
Ribatto

      Title:  Managing
Director

      

      SUNTRUST
BANK

      

      By:     /s/ M. Gabe
Bonfield                                    

      Name:  M.
Gabe Bonfield

      Title:  Vice
President

      

      United
FCS, FLCA d/b/a FCS Commercial Finance Group

      

      By:     /s/ Lisa
Caswell                                             

      Name:  Lisa
Caswell

      Title:  Assistant
Vice President

      

      U.S.
AgBank, FCB

      

      By:     /s/ Travis W.
Ball                                          

      Name:  Travis
W. Ball

      Title:  Vice
President

      
        
          
            Signature
Page to Third Amendment to

            Smithfield
Foods, Inc. Revolving Credit Agreement

          

           

        

        
           

          
            

          

        

        
           

        

      

      U.S. BANK
NATIONAL ASSOCIATION

      

      By:     /s/ Thomas
Martin                                        

      Name:  Thomas
Martin

      Title:  Senior
Vice President

      

      Wachovia
Bank, National Association

      

      By:     /s/ Beth
Rue                                                   

      Name:  Beth
Rue

      Title:  Vice
President

      
        
          
            Signature
Page to Third Amendment to

            Smithfield
Foods, Inc. Revolving Credit Agreement

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