MUNICIPAL TAX-EXEMPT TRUST LEAF 2005 POOLING AND SERVICING AGREEMENT

 

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                                                                   EXHIBIT 10.10

 

                      MUNICIPAL TAX-EXEMPT TRUST LEAF 2005

 

                         POOLING AND SERVICING AGREEMENT

 

 

         THIS POOLING AND SERVICING AGREEMENT dated as of July 13, 2005, by and

among LEAF FUNDING, INC., a Delaware corporation, as originator of the Trust and

as seller of the Contracts (as defined below) (the "Seller"), LEAF FINANCIAL

CORPORATION, a Delaware corporation, as servicer of the Contracts ("LFC" or the

"Servicer"), Merrill Lynch, Pierce, Fenner & Smith Incorporated, a Delaware

corporation (the "Initial Purchaser"), and The Bank of New York, a New York

banking corporation, as trustee (in such capacity, the "Trustee") of the

Municipal Tax-Exempt Trust LEAF 2005 (the "Trust").

 

         In consideration of the premises and of the mutual agreements herein

contained, each party agrees on its own behalf, and on behalf of the

Beneficiaries as third-party beneficiaries under this Agreement, as follows:

 

                                    ARTICLE I

 

                                   Definitions

 

         SECTION 1.01. Definitions. Whenever used in this Agreement, the

following words and phrases, unless the context otherwise requires, shall have

the following meanings:

 

         "Accrued Interest": For any Contract as of the close of business on the

last day of any calendar month (the "determination month"), the aggregate amount

of interest (calculated for each month at one-twelfth of the Contract Rate and

for partial months in a fractional amount based upon actual days elapsed in such

partial month (not to exceed 30), divided by 30) that has accrued for each

calendar month (or partial month) from and including the Initial Month, to and

including the determination month on the Outstanding Principal Balance as of the

opening of business on the first day of the Collection Period beginning in the

Initial Month.

 

         "Addition Date": Any Business Day on which Additional Contracts are

transferred to the Trustee pursuant to Section 2.01, which shall not occur more

frequently than twice in each calendar month.

 

         "Additional Contract": Any Contract transferred to the Trustee on an

Addition Date pursuant to Section 2.01.

 

         "Additional Cut-Off Date": Each date as of which an Additional Contract

is to be transferred to the Trustee pursuant to Section 2.01, as specified in

the related Assignment.

 

 

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         "Additional Funds": Means the sum of (i) fifty percent (50%) of any

late payment fees, Breakage Fees or other incidental charges or fees collected

with respect to the Contracts and deposited into the Certificate Account

pursuant to the provisions of this Agreement during a particular Collection

Period, plus (ii) upon the occurrence and during the continuance of an Event of

Default, all Eligible Investments Earnings with respect to a particular

Collection Period.

 

         "Advance": The payment required to be made by the Servicer with respect

to any Distribution Date pursuant to Section 3.05, the amount of any such

payment being equal to the aggregate of Scheduled Payments due on the Contracts

during the related Collection Period but not received by the Servicer during the

related Collection Period, other than the aggregate amount of any such

delinquent payments that the Servicer, in its good faith judgment, has

determined would not be ultimately recoverable from the related Contracts.

 

         "Affiliate": With respect to any specified Person, any other Person

directly or indirectly controlling or controlled by or under direct or indirect

common control with such specified Person (including, with respect to the

Initial Purchaser, any Entity established by it or its Affiliates). For 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": This Pooling and Servicing Agreement as originally

executed and as amended, restated, modified or supplemented from time to time.

 

         "Applicable Margin": For any Contract, a per annum rate equal to 1.50%.

 

         "Assignment": An instrument of assignment substantially in the form

attached to this Agreement as Exhibit A pursuant to which the Seller transfers

Contracts to the Trustee.

 

         "Available Funds": For any Collection Period, the funds deposited into

the Certificate Account pursuant to Sections 3.01(a)(i), 3.03, 3.05, 3.06 and

10.02 with respect to such Collection Period, net of any Payaheads.

 

         "Beneficiaries": The Certificateholders.

 

         "Book-Entry Certificate": Means each Certificate owned by a

Certificateholder in book-entry form representing a beneficial interest in a

Certificate pursuant to the provisions of Section 6.06.

 

         "Breakage Fees": Any fees, penalties, charges, premiums or other

amounts (other than outstanding principal and accrued interest) required to be

paid by an Obligor with respect to a Contract as a result of its prepayment or

other early termination for any reason.

 

         "Business Day": A day other than (a) a Saturday or Sunday, or (b) a day

on which banking institutions in the city of New York, New York are authorized

or obligated by law, regulation, executive order or governmental decree to

close.

 

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         "Certificate": A certificate representing a fractional undivided

Interest in the assets of the Trust, including, without limitation, the

Contracts. Each Certificate will be issued either as a Book-Entry Certificate

or, if the conditions for issuance thereof are met, a Definitive Certificate.

Definitive Certificates will be issued substantially in the form attached as

Exhibit B hereto.

 

         "Certificate Account": The account established and maintained by the

Trustee pursuant to Section 3.02 in the name of the Trustee for the benefit of

the Certificateholders and designated "Certificate Account, The Bank of New

York, as trustee for the registered holders of Municipal Tax-Exempt Trust LEAF

2005, Adjustable Asset-Backed Certificates - Series A."

 

         "Certificateholder": The Person in whose name a Certificate is

registered in the Certificate Register on the applicable Record Date, except

that, solely for the purposes of giving any consent, waiver, request or demand

pursuant to this Agreement, any Certificate owned by the Seller, the Servicer or

any Affiliate of any of them shall not have any right to participate in giving

any such consent, request, waiver or demand and the Interest evidenced thereby

shall not be taken into account in determining whether the requisite Interest

necessary to effect any such consent, request, waiver or demand has been

obtained; provided, however, that in determining whether the Trustee shall be

protected in relying upon any such consent, waiver, request or demand, only

Certificates which a Responsible Officer of the Trustee knows to be so owned

shall be so disregarded.

 

         "Certificate Interest Rate": With respect to any Collection Period, a

per annum interest rate equal to the weighted average of the Minimum Contract

Rates of all Contracts during the related Collection Period.

 

         "Certificate Owner": For purposes of Section 2.04 and 4.02, the

beneficial owner of any Certificate (including an Entity, the assets of which

include any Certificate, but not including a holder of a beneficial interest in

such Entity).

 

         "Certificate Register": The register maintained pursuant to Section

6.02(a).

 

         "Claim Notice": The meaning ascribed to such term in Section

2.04(a)(iv).

 

         "Closing Date": The Initial Closing Date and each Addition Date.

 

         "Code": Internal Revenue Code of 1986, as amended.

 

         "Collection Period": With respect to any Distribution Date, the period

commencing on the first day of the calendar month preceding the calendar month

in which such Distribution Date occurs, and ending on the last day of the

calendar month preceding the calendar month in which such Distribution Date

occurs (or, with respect to the first Collection Period, commencing on the

Initial Closing Date and ending on the last day of the calendar month in which

the Initial Closing Date occurs).

 

         "Collections": All payments made by or on behalf of Obligors and

Insurers under the Contracts (including, without limitation, payments in respect

of Monthly Interest, Monthly Principal, Retained Items, Additional Funds,

Payaheads and any recoupments and payments in respect of Physical Damage

Insurance Policies or other insurance covering the Equipment).

 

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         "Contract Files": The documents pertaining to a Contract and delivered

to the Trustee in accordance with Section 2.01 or otherwise held by the Servicer

or its agents, as custodian, or the Trustee or its agents, including all

documents relating to the Contract delivered by the Seller to either the

Servicer or its agents, as custodian, or the Trustee or its agents in connection

with the purchase of the Contract from the Seller.

 

         "Contract Rate": The rate stated in a Contract (and/or certified to by

the Seller to the Trustee in a Sale Certificate prior to each Contract being

purchased by the Trust) at which interest accrues on the Outstanding Principal

Balance of the Contract pursuant to the terms thereof. The Contract Rate shall

be expressed as a percentage rate per annum.

 

         "Contracts": The rights and benefits (but not the obligations) of the

Seller under certain (i) state and local government installment payment master

agreements, (ii) term lease master agreements and (iii) certain state and local

government financing agreements or similar contracts, in each case relating to

Equipment to be acquired and used by the Obligor, transferred and assigned to

the Trustee pursuant to Section 2.01 and from time to time held as a part of the

Trust (other than those rights and benefits under Contracts which are Purchased

Contracts as of the last day of the Collection Period in which they so become

Purchased Contracts). The Contracts proposed to be sold to the Trust on each

Closing Date will be listed in both the Sale Certificate and the computer

diskette or electronic spreadsheet file relating to such Contracts and delivered

by the Seller to the Trustee on or before each Closing Date.

 

         "Corporate Trust Office": The office of the Trustee at which the

corporate trust business of the Trustee shall, at any particular time, be

principally administered. At the date of the execution of this Agreement, such

office is located at 101 Barclay Street, 8W, New York, NY 10286, Attention:

Asset Backed Securities Group. The Trustee may notify the Certificateholders and

the Servicer of a change of address from time to time hereafter.

 

         "Credit Rating": The rating of an Obligor's long term, unsecured and

unsubordinated indebtedness or deposits as provided by Moody's or S&P, as

applicable, from time to time.

 

         "Cut-Off Date": With respect to the Initial Contracts, the Initial

Cut-Off Date and with respect to each Additional Contract, the related

Additional Cut-Off Date.

 

         "Defaulted Contract": For any Collection Period, a Contract with

respect to which, as of or prior to the last day of such Collection Period, both

(a) any of the following has occurred: (i) such Contract is more than

one-hundred twenty (120) days delinquent, (ii) a Nonappropriation has occurred

or (iii) an Insolvency Event has occurred with respect to the Obligor on such

Contract, and (b) the Servicer, after exercising reasonable commercial efforts,

at least consistent with Servicer's then current policies and procedures, to

collect all amounts due under such Contract, has terminated such Contract in

accordance with its terms after determining that no further amounts will be

recoverable with respect to such Contract; provided that in no event shall a

Purchased Contract be deemed a Defaulted Contract.

 

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         "Definitive Certificate": Each Certificate owned by a Certificateholder

in definitive, fully registered form without interest coupons as set forth in

Section 6.01 and Section 6.06.

 

         "Determination Date": The twelfth day of each month, or if such day is

not a Business Day, the next succeeding Business Day, commencing in the month

following the month in which the Initial Closing Date occurs.

 

         "Distribution Date": The twenty-fifth day of each month, or if such day

is not a Business Day, the next succeeding Business Day, commencing in the month

following the month in which the Initial Closing Date occurs.

 

         "Distribution Date Statement": The written statement relating to each

Distribution Date prepared by the Servicer and verified in part by the Trustee

as described in Section 4.02.

 

         "Eligibility Criteria": The criteria set forth in Exhibit D hereto

which each Contract must meet in order to be eligible for purchase by the Trust,

unless in each specific instance where a Contract does not meet one or more of

the Eligibility Criteria at the time of purchase, the written consent of the

Majority Certificateholders to such failure to meet each criterion not being met

by such Contract is obtained prior to purchase of such Contract by the Trust.

 

         "Eligible Investments": Book-entry securities, negotiable instruments

or securities represented by instruments in bearer or registered form which

evidence:

 

                  (a) obligations of the United States or any agency thereof,

         provided such obligations are guaranteed as to the timely payment of

         principal and interest by the full faith and credit of the United

         States;

 

                  (b) general obligations of or obligations guaranteed by any

         state of the United States or the District of Columbia then assigned

         the highest rating by Moody's and S&P;

 

                  (c) interests in any money market fund (including, without

          limitation, a tax-exempt money market fund) which at the date of

         investment in such fund has the highest fund rating by Moody's and a

         rating of AAAm or AAAmg by S&P (which may include money market funds

         for which the Trustee may receive a fee as advisor, transfer agent,

         administrator or for performing a similar function);

 

                  (d) commercial paper which at the date of investment has the

         highest unsecured short-term debt rating by each of Moody's and S&P

         (including, without limitation, commercial paper meeting the foregoing

         criteria issued by any of the Seller, the Servicer or the Trustee);

 

                  (e) certificates of deposit, demand or time deposits, federal

          funds or banker's acceptances issued by any depository institution or

         trust company incorporated under the laws of the United States or of

         any state thereof (or any U.S. branch or agency of a foreign bank) and

         subject to supervision and examination by federal or state banking

         authorities, provided that the short-term unsecured deposit obligations

         of such depository institution or trust company are then rated at least

         P-1 by Moody's and A-1 by S&P;

 

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                  (f) demand or time deposits of, or certificates of deposit

         issued by, any bank, trust company, savings bank or other savings

         institution, which deposits are fully insured by the Federal Deposit

         Insurance Corporation, provided that the long-term unsecured debt

         obligations of such bank, trust company, savings bank or other savings

         institution are rated at the date of investment at least Aa2 by Moody's

         and AA- by S&P;

 

                  (g) repurchase obligations with respect to any security

         described in clauses (a), (b) or (h) hereof or any other security

         issued or guaranteed by the Federal National Mortgage Association or

          any agency or instrumentality of the United States which is backed by

         the full faith and credit of the United States, in either case entered

         into with a federal agency or a depository institution or trust company

         (acting as principal) described in clause (e) above;

 

                  (h) interests in any open-end or closed-end management type

         investment company or investment trust (x) registered under the

         Investment Company Act of 1940, (y) the portfolio of which is limited

         to the obligations of, or guaranteed by, the United States and to

         agreements to repurchase such obligations, which agreements, with

         respect to principal and interest, are at least 100% collateralized by

          such obligations marked to market on a daily basis and (z) the

         investment company or investment trust shall take delivery of such

         obligations either directly or through an independent custodian

         designated in accordance with the Investment Company Act of 1940;

 

                  (i) bonds or other obligations of any state of the United

         States of America or of any agency, instrumentality or local

         governmental unit of any such state (x) which are not callable at the

         option of the obligor or otherwise prior to maturity or as to which

         irrevocable notice has been given by the obligor to call such bonds or

         obligations on the date specified in the notice, (y) timely payment of

         which is fully secured by a fund consisting only of cash or obligations

         of the character described in paragraph (a) or (b) of this definition

         of "Eligible Investments," which fund may be applied only to the

         payment when due of such bonds or other obligations and (z) rated in

         the highest long-term rating categories by Moody's, S&P and Fitch (if

         rated by Fitch) and one of the two highest short-term rating categories

         by Moody's, S&P and Fitch (if rated by Fitch); and

 

                  (j) such other investments as are acceptable to the Majority

         Certificateholders.

 

Eligible Investments, if otherwise satisfying the criteria set forth above, may

be obligations of, or may be purchased by or through, the Trustee or its

Affiliates.

 

         "Eligible Investments Earnings": With respect to any Collection Period,

any income and gain, less the amount of any losses, realized on all Eligible

Investments in the Certificate Account.

 

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         "Entity": A pass-through entity for federal income tax purposes (such

as a grantor trust or partnership).

 

         "Equipment": To the extent subject to a Contract, the computer

equipment or other property which is financed by an Obligor under any Contract,

together with all additions, modifications or upgrades thereto and all

substitutions and replacements thereof.

 

         "Equipment Modification": The meaning ascribed to such term in Section

3.01(a)(i).

 

         "Event of Default": An event described in Section 8.01(a).

 

         "Final Maturity Date": The meaning ascribed to such term in Section

10.01(a).

 

         "Fitch": Fitch, Inc.

 

         "Gross-Up Amount": The amount calculated pursuant to Section

2.04(b)(iii).

 

          "Indemnity Amount": The amount payable by the Seller as provided in

Section 2.04(b)(i) and (ii).

 

         "Initial Closing Date": The first date on which Contracts are purchased

by the Trust pursuant to this Agreement.

 

         "Initial Contracts": The Contracts transferred to the Trustee on the

Initial Closing Date pursuant to Section 2.01.

 

         "Initial Cut-Off Date": The Initial Closing Date.

 

         "Initial Month": For any Contract as of the last day of any calendar

month (the "determination month"), the later of (a) the calendar month in which

a Scheduled Payment was last due on the Contract, but not earlier than July,

2005, and (b) the calendar month following the month in which a Prepayment was

last deemed to have been collected with respect to such Contract (unless such

following calendar month is the determination month, in which case clause (a)

shall apply), but not earlier than July, 2005.

 

         "Initial Purchaser": Merrill Lynch, Pierce, Fenner & Smith

Incorporated, a Delaware corporation.

 

         "Insolvency Event": The occurrence of any of the following: (i) an

Obligor ceases to be able to, or admits in writing its inability to, pay its

debts when and as they become due; (ii) an Obligor files, or consents by answer

or otherwise to the filing against it or any substantial portion of its assets

of, a petition for relief or reorganization or arrangement or any other petition

in bankruptcy or for liquidation, or takes advantage of any bankruptcy,

insolvency, reorganization, moratorium or other similar law of any jurisdiction;

(iii) an Obligor makes an assignment for the benefit of its creditors; (iv) the

entry of a decree or order by a court of competent jurisdiction for the

appointment of a custodian, receiver, trustee, liquidator or other officer with

similar powers with respect to the Obligor or with respect to any substantial

part of the Obligor's assets, or for the winding up or liquidation of the

Obligor's affairs, and either (A) the continuance of any such decree or order

unstayed and in effect for a period of 60 consecutive days, or (B) the Obligor's

consent to any such decree or order; or (v) an Obligor is adjudicated as

insolvent or to be liquidated.

 

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         "Insurers": Insurers issuing Physical Damage Insurance Policies or

other insurance covering the Equipment.

 

         "Interest": Each Certificateholder's (or, for purposes of Section 2.04,

each Certificate Owner's) fractional undivided interest in the Contracts. A

Certificateholder's (or, for purposes of Section 2.04, a Certificate Owner's)

Interest equals the Outstanding Principal Amount of the Certificate held by such

Certificateholder (or Certificate Owner) divided by the aggregate Outstanding

Principal Amount of all Certificates.

 

         "Interest Components of Scheduled Payments": The portion of Scheduled

Payments that, according to the Servicer's customary procedures (including,

without limitation, calculation based upon a 360-day year made up of twelve

30-day months), and based on the accrual method, is allocable to interest on the

related Contract.

 

         "Interest Distribution Amount": With respect to the Certificates and

any Distribution Date, the sum of (i) the aggregate amount of interest accrued

at the Certificate Interest Rate during the Collection Period ending immediately

prior to such Distribution Date on an amount equal to the aggregate Pool Balance

as of the first day of such Collection Period, minus (ii) the sum of (A) the

amount paid to the Trustee on such Distribution Date pursuant to Section

3.09(b)(ii) and (B) the amounts distributed pursuant to Section 3.09(b)(iii) and

(iv) on such Distribution Date, plus (iii) any Unpaid Interest Amount. The

Interest Distribution Amount will be calculated based upon a 360-day year made

up of twelve 30-day months.

 

         "Interest Portion": The portion of any Prepayment that, according to

the Servicer's customary procedures (including, without limitation, calculation

based upon a 360-day year made up of twelve 30-day months), and based on the

accrual method, is allocable to interest on the related Contract. Pursuant to

the Servicer's customary procedures, any Prepayment, including a partial

Prepayment, is required to include accrued but unpaid interest on the entire

Outstanding Principal Balance of the Contract through the date such Prepayment

is collected.

 

         "Interest Shortfall": With respect to the Certificates and any

Distribution Date, the amount by which the amount calculated in accordance with

clauses (i) and (ii) of the definition of Interest Distribution Amount exceeds

the amount of interest actually distributed on the Certificates on such

Distribution Date (whether out of the Certificate Account or out of the Reserve

Account).

 

         "Investment Notice": The document described as such in Section

5.02(a)(i).

 

         "LFC": LEAF Financial Corporation, a Delaware corporation.

 

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         "Lien": Any mortgage, lien, pledge, charge, security interest or other

encumbrance of any kind. For the purpose hereof, a Person shall be deemed to own

subject to a Lien any asset which it has acquired or holds subject to the

interest of a vendor or lessor under any conditional sale agreement, capital

lease or other title retention agreement relating to such asset.

 

         "Lockbox": The post office box to which payments representing

Collections (other than Wire Payments) are to be mailed as set forth in Section

3.03(a).

 

         "Lockbox Account": The account described as such in Section 3.03(b).

 

         "Majority Certificateholders": Certificateholders representing more

than 50% of the aggregate Outstanding Principal Amount of the Certificates.

 

         "Merrill Lynch": Merrill Lynch, Pierce, Fenner & Smith Incorporated, a

Delaware corporation.

 

         "Minimum Contract Rate": For each Contract proposed to be purchased by

the Trust on each Closing Date, a per annum rate of interest equal to (a) with

respect to each Contract with an Original Principal Balance less than $100,000,

the Municipal Index Rate applicable to the average life of such Contract as of

the first day of the calendar month in which the Closing Date occurs, plus (i)

the Applicable Margin and (ii) the Premium Margin (if any), (b) with respect to

each Contract with an Original Principal Balance of $100,000 or more, the

Municipal Index Rate applicable to the average life of such Contract as of such

Closing Date, plus (i) the Applicable Margin and (ii) the Premium Margin (if

any), or (c) notwithstanding the foregoing, if the Seller and the Majority

Certificateholders have previously agreed in writing to a specific Minimum

Contract Rate with respect to a Contract, the Minimum Contract Rate for such

specified Contract shall be such previously agreed amount, so long as any

expiration date provided for in such agreement has not passed as of the date

that the Minimum Contract Rate is being determined; provided, however, that the

Majority Certificateholders may notify the Trustee and Servicer of a revised

Minimum Contract Rate, or the method of determining same, at any time and from

time to time in order to reflect the occurrence of unusual market conditions or

excess volatility, and such revised Minimum Contract Rate or method of

determining same shall be effective as of the first day of the calendar month

immediately following the month in which the Trustee and Servicer have received

written notice thereof from the Majority Certificateholders; provided, further,

that if the Majority Certificateholders subsequently determine (in their sole

discretion) that the unusual market conditions or excess volatility resulting in

the revised Minimum Contract Rate or method of determining same have ceased,

they shall give notice thereof to the Trustee and Servicer, and the Minimum

Contract Rate and/or method of determining same shall thereupon return to the

original Minimum Contract Rate as of the first day of the calendar month

immediately following the month in which the Trustee and Servicer have received

written notice thereof from the Majority Certificateholders.

 

                  "Monthly Interest": For any Distribution Date and each

Contract, the sum without duplication of (a) the Interest Component of any

Scheduled Payment due and received by the Servicer on such Contract during the

related Collection Period, including any Advances with respect thereto, plus (b)

the Interest Component of any Scheduled Payments due on such Contract during

prior Collection Periods, but unpaid by the Obligor and not advanced against by

the Servicer, and received by the Servicer during the related Collection Period,

plus (c) the Interest Portion of Prepayments received by the Servicer during the

related Collection Period (but in the case of any amounts described in clauses

(a), (b) and (c), only to the extent that the aggregate of such amounts does not

exceed the Accrued Interest in respect of such Contract as of the last day of

the calendar month immediately preceding the month in which such Distribution

Date occurs).

 

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         "Monthly Principal": For any Distribution Date and each Contract, the

sum without duplication of (a) the Principal Component of the Scheduled Payment

due on such Contract during the related Collection Period and received by the

Servicer during the related Collection Period, including any Advances with

respect thereto, plus (b) the Principal Component of Scheduled Payments due on

such Contract, but unpaid by the Obligor and not advanced against by the

Servicer, during prior Collection Periods and received by the Servicer during

the related Collection Period, plus (c) the Principal Portion of Prepayments

received by the Servicer during the related Collection Period.

 

         "Moody's": Moody's Investors Service, Inc.

 

         "Municipal Index Rate": With respect to any Contract for which the

Minimum Contract Rate is being determined, the yield, expressed as a percentage,

as of the date of determination for a high grade municipal bond with a maturity

equal to the remaining average life of the Contract for which a Minimum Contract

Rate is being determined, as set forth in the Municipal Market Data Line

published on page {MMDL} by Bloomberg Financial Services, Inc. on the page

entitled "AAA Municipal Yields" and in the row for a maturity equal to the

remaining average life of the Contract for which a Minimum Contract Rate is

being determined.

 

         In the event Municipal Market Data no longer announces or publishes the

"AAA Municipal Yields" yield curve rate, the Municipal Index Rate shall be

determined by using the Consensus Scale Rate for a maturity equal to the

remaining average life of the Contract for which a Minimum Contract Rate is

being determined. The Consensus Scale yield curve is published daily by

Municipal Market Advisors on their web site (http://www.theconsensus.com/). The

yield curve used for determining the Municipal Index Rate will be the "Median"

of "The Consensus Mid-Market" curve. In the event Municipal Market Advisors no

longer announces or publishes the Consensus Scale, the Municipal Index Rate

shall be determined in good faith by the Majority Certificateholders and

provided in writing to the Trustee and the Seller.

 

         "Nonappropriation": The failure of the governing body of any Obligor to

appropriate funds sufficient for such Obligor to make all or any portion of the

Scheduled Payments pursuant to the related Contract as provided in such

Contract.

 

         "Nonappropriation Provision": A provision in a Contract which permits

the Obligor to terminate the Contract as a direct result of the occurrence of a

Nonappropriation.

 

         "Obligors": The original obligors under the Contracts and their

successors and assigns.

 

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         "Officer's Certificate": A certificate signed by a Responsible Officer

of the Servicer, the Trustee, the Seller, or by any Certificateholder, as

applicable.

 

         "Opinion of Counsel": A written opinion signed by legal counsel

satisfactory to the Trustee, which counsel may be an employee of or counsel to

the Trustee, the Servicer, the Seller or a Certificateholder.

 

         "Original Certificate": The meaning ascribed to such term in Section

5.01(a).

 

         "Original Pool Balance": The sum of (a) the aggregate Outstanding

Principal Balance of the Initial Contracts transferred to the Trust as of the

Initial Cut-Off Date, plus (b) the aggregate Outstanding Principal Balance of

all Additional Contracts transferred to the Trust as of their respective

Additional Cut-Off Dates.

 

         "Original Principal Amount": Means, with respect to a Definitive

Certificate, the amount shown on the face thereof, and with respect to a

Book-Entry Certificate, the amount recorded as such with respect to the

Certificateholder in the Certificate Register.

 

         "Outstanding Advances": With respect to any Contract, from time to

time, the aggregate amount calculated as such pursuant to Section 3.05.

 

         "Outstanding Principal Amount": For any Certificate on any date of

determination, the outstanding principal amount of such Certificate after giving

effect to both: (a) all principal payments allocable thereto made with (i)

distributions of Monthly Principal, (ii) payments out of the Reserve Account as

provided by Section 3.09(d) and (iii) payments out of the Pre-Funding Account as

provided by Section 5.04(d), as well as (b) the writing-off of a portion of such

principal as provided in Section 3.09(d)(ii), all as provided by Servicer and

verified as to mathematical accuracy by the Trustee, in its capacity as

calculation agent hereunder. The Outstanding Principal Amount on any date of

determination for any Certificate shall be as reflected on the books and records

of the Trustee.

 

         "Outstanding Principal Balance": With respect to any Contract and any

date of determination, 100% of the aggregate amount of all Principal Components

of Scheduled Payments due after such date and remaining unpaid.

 

         "Payahead": For any Contract, any payment by the Obligor of one or more

Scheduled Payments (or any portion thereof) due after the date on which such

payment is made, which, in accordance with the Servicer's customary procedures,

is applied to make the Scheduled Payment(s) on the date(s) due.

 

         "Person": Any individual, corporation, partnership, joint venture,

association, joint-stock company, limited liability company, trust,

unincorporated organization or government or any agency or political subdivision

thereof.

 

                                     - 11 -

<PAGE>

 

          "Physical Damage Insurance Policy": Any fire, property damage or other

hazard insurance policy or program maintained by any Person (including the

Seller or the Obligor) with respect to any Equipment.

 

         "Pool Balance": As of the opening of business on any date of

determination, the sum of the Outstanding Principal Balances of each Contract as

of such date, determined after taking into account, without duplication, (a) the

Principal Components of Scheduled Payments collected in preceding Collection

Periods, (b) the Principal Portion of Prepayments collected in preceding

Collection Periods, and (c) the writing-off of the Outstanding Principal Balance

of Defaulted Contracts which are not Purchased Contracts.

 

         "Pool Factor": As of the opening of business on the first day of any

Collection Period, the decimal number equal to the Pool Balance as of such day

divided by the Original Pool Balance as of such day, rounded to seven decimal

places, with 0.00000005 or higher being rounded up to 0.0000001.

 

         "Pre-Funding Account": The account established and maintained by the

Trustee pursuant to Section 5.04 in the name of the Trustee for the benefit of

the Certificateholders and designated "Pre-Funding Account, The Bank of New

York, as trustee for the registered holders of Municipal Tax-Exempt Trust LEAF

2005, Adjustable Asset-Backed Certificates - Series A."

 

         "Pre-Funding Account Earnings": With respect to any Collection Period,

any income and gain, less the amount of any losses, realized on all Eligible

Investments in the Pre-Funding Account.

 

         "Premium Amount": For any purchase of Contracts from the Seller by the

Trust on a Closing Date, an amount provided by the Seller to the Trustee in the

Sale Certificate relating to such Closing Date equal to, with respect to each

Contract, the amount (if any) to be paid by the Seller to the vendor(s) of

Equipment relating to such Contract on the date of purchase in excess of the

purchase price of such Equipment. The Premium Amount relating to each Contract

shall be reduced on each Distribution Date by any Premium Interest Amount paid

to the Certificateholders on such date. Notwithstanding anything herein to the

contrary, the Premium Amount relating to each Contract on any Closing Date shall

not exceed two percent (2%) of the Outstanding Principal Balance of such

Contract as of such Closing Date.

 

         "Premium Interest Amount": With respect to each Distribution Date, an

amount equal to the amount of accrued interest on the Certificates actually paid

to the Certificateholders on such Distribution Date pursuant to Sections

3.09(b)(v) and 3.09(d), minus the excess of (a) the Interest Distribution Amount

with respect to such Distribution Date over (b) an amount equal to the Interest

Distribution Amount with respect to such Distribution Date, assuming the

Certificate Interest Rate with respect to such Collection Period was calculated

as the weighted average of the Minimum Contract Rates of all Contracts during

such Collection Period, excluding the Premium Margin from each Minimum Contract

Rate.

 

         "Premium Margin": For any Contract, a per annum interest rate on the

Outstanding Principal Balance of such Contract determined by the Servicer as of

the date such Contract is acquired by the Trust such that, over the period from

the Closing Date when such Contract is acquired by the Trust, to the expiration

of the term of such Contract, and based upon scheduled payments of principal

thereunder, any Premium Amount paid by the Trust to the Seller for such Contract

will be fully amortized.

 

                                     - 12 -

<PAGE>

 

         "Prepayment": For any Contract, (a) any payment by the Obligor of a

Scheduled Payment or Payments (or a portion thereof) due after the date on which

such payment is made, other than a Payahead, and (b) in the case of a Purchased

Contract, the payment of the Purchase Amount.

 

         "Principal Components of Scheduled Payments": The portion of Scheduled

Payments that, according to the Servicer's customary procedures and based on the

accrual method, is allocable to the principal balance of the related Contract.

 

         "Principal Portion": The portion of any Prepayment that, according to

the Servicer's customary procedures and based on the accrual method, is

allocable to the principal balance of the related Contract.

 

         "Purchase Amount": The amount set forth as such pursuant to Section

2.01(e).

 

         "Purchase Date": The meaning ascribed to such term in Section 5.03.

 

         "Purchased Contract": Any Contract repurchased by the Seller pursuant

to Section 2.01, 2.03, 2.04 or 10.02, or purchased by the Servicer pursuant to

Section 3.01.

 

         "Ramp-up Period": The period from the date hereof through July 31,

2006.

 

         "Record Date": The close of business on the last Business Day of the

calendar month preceding the month of the related Distribution Date.

 

         "Related Documents": With respect to a Contract, the material

documents, if any, delivered to the Seller or Servicer in connection therewith,

including, without limitation, financial statements, governing board resolutions

or minutes of a governing board and opinions of counsel.

 

         "Relevant Distribution Date": The Distribution Date specified in

Section 2.04(c).

 

         "Required Deposit Rating": A rating on short-term deposits of at least

A-1 from S&P, P-1 from Moody's or F-1 from Fitch.

 

         "Reserve Account": The account established and maintained by the

Trustee pursuant to Section 3.04 in the name of the Trustee for the benefit of

the Certificateholders and designated "Reserve Account, The Bank of New York, as

trustee for the registered holders of Municipal Tax-Exempt Trust LEAF 2005,

Adjustable Asset-Backed Certificates - Series A."

 

                                      - 13 -

<PAGE>

 

         "Responsible Officer": When used with respect to the Servicer or the

Seller, the chairman of the board of directors, any vice chairman of the board

of directors, the chairman of the executive committee, any vice chairman of the

executive committee, the president, any vice president (whether or not

designated by numbers or words added before or after the title "vice

president"), the secretary, the treasurer, any assistant vice president, any

assistant secretary, any assistant treasurer, or any other officer or assistant

officer of the Servicer or the Seller customarily performing functions similar

to those performed by the Persons who at the time shall be such officers,

respectively, and when used with respect to the Trustee, any officer in its

Corporate Trust Department - Structured Finance Unit, including any Vice

President, Managing Director, Assistant Vice President, Secretary, Assistant

Secretary, Corporate Trust Officer or any other officer performing functions

similar to those performed by such officers or any Person to whom any corporate

trust matter is referred to by the Trustee because of such Person's knowledge of

and familiarity with the particular subject, in each case to the extent such

officer or Person has responsibility for performance of any of the Trustee's

obligations hereunder.

 

         "Retained Item": With respect to a Contract, (i) any principal amount

due on such Contract prior to the related Cut-Off Date and any interest accrued

on such Contract prior to the day immediately preceding the related Cut-Off

Date, (ii) any amounts described in Section 3.08 and (iii) fifty percent (50%)

of any late payment fee, Breakage Fee or other incidental charge or fee

collected with respect to such Contract; provided, however, that the amount of

Retained Items calculated pursuant to this clause (iii) may be reduced on one or

more Distribution Dates as provided in Section 3.09(a)(ii).

 

         "S&P": Standard & Poor's Ratings Group, a Division of The McGraw-Hill

Companies, Inc.

 

         "Sale Certificate": A certificate executed by a duly authorized officer

of the Seller on or prior to each Closing Date in a format and containing the

information approved in writing by the Majority Certificateholders from time to

time, but including, without limitation, the following information with respect

to each Contract proposed to be purchased by the Trust on the applicable Closing

Date, determined as of such Closing Date: (i) date of execution and Contract

number, (ii) final maturity date, (iii) average life, (iv) Obligor, (v)

Outstanding Principal Balance, (v) Contract Rate, (vi) payment frequency, (vii)

Equipment related to the Contract, (viii) vendor of Equipment, (ix) Obligor

address and (if different) location to which Equipment will be delivered, (x)

Premium Amount, (xi) purchase price to be paid for such Contract by the Trust

calculated in accordance with Section 2.01, (xii) Applicable Margin, (xiii)

Premium Margin, (xiv) Minimum Contract Rate and (xv) a certification that such

Contract fully satisfies all of the Eligibility Criteria, or if it does not, an

express statement that certain Eligibility Criteria are not met by the Contract

and a specific listing of all such Eligibility Criteria not met by the Contract.

 

         "Scheduled Payment": With respect to a Contract, any payment required

to be made by the Obligor.

 

         "Seller": LEAF Funding Inc., a Delaware corporation.

 

                                     - 14 -

<PAGE>

 

         "Servicer": LFC, or its successor in interest or any Successor Servicer

appointed as herein provided.

 

         "Servicer Breaches": The meaning ascribed to such term in Section

7.01(b).

 

         "Service Transfer": The termination of the Servicer as servicer

hereunder as described in Section 8.01(b).

 

         "Servicing Fee": The fee payable to the Servicer as provided in Section

3.11(a).

 

         "Servicing Fee Rate": A rate equal to 0.50% per annum.

 

         "Servicing Functions": The functions of the Servicer hereunder as

described in Section 8.01(b).

 

         "Servicing Officer": Any officer of the Servicer or any agent of the

Servicer involved in, or responsible for, the administration or servicing of the

Contracts whose name appears on a list of servicing officers furnished to the

Trustee by the Servicer in an Officer's Certificate, as such list may from time

to time be amended.

 

         "Subservicer": Any Person to which the Servicer from time to time may

delegate all or any part of its servicing obligations hereunder.

 

         "Successor Servicer": The successor to the Servicer as defined in

Section 8.01(c).

 

         "Tax Rate": With respect to any Certificate Owner for any calendar

month, the lesser of (a) the highest stated statutory marginal corporate federal

income tax rate on taxable income in effect during the calendar year (or portion

thereof) in which such calendar month occurs, expressed as a decimal

(disregarding the effect of disallowed deductions or similar items on such

marginal rate) and (b) 0.35.

 

         "Tax Return Preparer": The Initial Purchaser or such other Person as

may be designated as such by the Servicer by notice to the Trustee.

 

         "Transition Expenses": All reasonable costs and expenses incurred by a

Successor Servicer in connection with a transfer of servicing pursuant to

Section 8.02 to the extent not paid by the outgoing Servicer pursuant to Section

8.01(d).

 

         "Trust": The Municipal Tax-Exempt Trust LEAF 2005 created by this

Agreement, the corpus of which consists of the items listed in Section 2.01.

 

         "Trust Corpus" The meaning ascribed to such term in Section 2.01(a).

 

         "Trustee": The Bank of New York, a New York banking corporation, as

Trustee hereunder, or its successor in interest or any successor trustee

appointed as herein provided.

 

                                     - 15 -

<PAGE>

 

         "Unpaid Interest Amount": With respect to the Certificates and any

Distribution Date, the sum of the Interest Shortfalls for the Certificates from

each prior Distribution Date, plus interest on the amount of each such Interest

Shortfall from the Distribution Date where it was initially determined until the

Distribution Date on which it was ultimately paid at the applicable Certificate

Interest Rate(s) during such period(s), minus amounts paid to the Certificates

with respect to the Unpaid Interest Amount (as part of the Interest Distribution

Amount) on all previous Distribution Dates.

 

         "Wire Payments": The meaning ascribed to such term in Section 3.03(a).

 

         SECTION 1.02. Usage of Terms. With respect to all terms in this

Agreement, the singular includes the plural and the plural the singular; words

importing any gender include the other gender; references to "writing" include

printing, typing, lithography and other means of reproducing words in a

permanent visible form; references to agreements and other contractual

instruments include all subsequent amendments thereto or changes therein entered

into in accordance with their respective terms and not prohibited by this

Agreement; references to Persons include their permitted successors and assigns;

and the term "including " means "including without limitation".

 

         SECTION 1.03. Calculation of Interest. All calculations of interest

accruing on both the Contracts and the Certificates provided for herein shall be

made on the basis of a 360-day year made up of twelve 30-day months.

 

                                   ARTICLE II

 

                          Conveyance of the Contracts;

                     Original Issuance of the Certificates;

 

         SECTION 2.01. Conveyance of the Contracts.

 

                  (a) The Seller shall sell, transfer, assign, deliver, set over

and convey to the Trustee, in trust for the sole benefit of the

Certificateholders, finally without recourse or reversion, all right, title and

interest of the Seller in and to (i) on the Initial Closing Date, the Initial

Contracts as of the Initial Cut-Off Date, and on each Addition Date, the

Additional Contracts as of the related Additional Cut-Off Date, and all moneys

due and to become due thereunder on or after the Initial Cut-Off Date or

Additional Cut-Off Date, as the case may be, (ii) the Equipment, (iii) any

proceeds with respect to the Contracts from claims on any Physical Damage

Insurance Policy or other insurance covering the Equipment and (iv) the proceeds

of any and all the foregoing (collectively, the "Trust Corpus"). The sale by the

Seller will not constitute and is not intended to result in an assumption by the

Trustee or any Certificateholder of any obligation of the Seller to the Obligors

or any other Person in connection with the Contracts, the Contract Files, any

Physical Damage Insurance Policy or other insurance covering the Equipment or

under any agreements or instruments relating to any of the foregoing. In

consideration for each such sale of the Trust Corpus, the Trustee, as paying

agent, shall pay to the Seller on the Closing Date, cash in an amount equal to

the sum of (i) 100% of the Outstanding Principal Balance of the Contracts

transferred to the Trust on such Closing Date and (ii) the Premium Amount.

 

                                     - 16 -

<PAGE>

 

                  Notwithstanding the foregoing, however, the Trust shall not be

obligated to purchase any Contracts on any Closing Date, and the Trustee shall

not purchase them, unless a Responsible Officer of the Trustee has confirmed

each of the following:

 

                           (i) the Trustee has received all documents and

         materials from the Seller, the Servicer and their counsel described in

         Section 2.01(b) which are required to be delivered to the Trustee

         including, without limitation, the Sale Certificate from the Seller

         with respect to the proposed purchase of Contracts on such Closing

         Date;

 

                           (ii) the Trustee has given the Certificateholders

         written notice (together with a copy of the Sale Certificate (and

         attachments thereto) and computer diskette or electronic spreadsheet

          file provided to the Trustee by the Seller with respect to such

         Contracts) of its intent to purchase such Contracts on such Closing

         Date at least two (2) Business Days' prior to such Closing Date (unless

         this requirement is waived by the Majority Certificateholders);

 

                           (iii) if the Sale Certificate expressly states that

         any of the Contracts proposed to be purchased by the Trust on such

         Closing Date do not meet one or more of the Eligibility Criteria, the

         Trustee has received the prior written consent of the Majority

         Certificateholders to the purchase of each such Contract not meeting

         all of the Eligibility Criteria, including, with respect to each such

          Contract being consented to, a specific reference in such consent to

         each of the Eligibility Criteria not being met by such Contract;

 

                           (iv) if the Sale Certificate proposes the purchase of

         Contracts with an aggregate Outstanding Principal Balance in excess of

         $1,000,000 on such Closing Date, the Trustee has received the prior

         written consent of the Majority Certificateholders to the purchase of

         all such Contracts; and

 

                            (v) no Responsible Officer of the Trustee has

         received written notice from the Majority Certificateholders that they

         wish to liquidate and withdraw all funds on deposit in the Pre-Funding

         Account as provided in Section 5.04(d) on a date earlier than the

         earliest date set forth on any of the purchase orders received from the

         Seller with respect to the Equipment relating to such Contract, and

         either

 

                                    (A) the purchase price to be paid for such

                  Contracts set forth in the Sale Certificate does not exceed

                  the balance on deposit in the Pre-Funding Account as of the

                  Closing Date or

 

                                     (B) if additional Certificates are being

                  purchased on such Closing Date, (1) the purchase price to be

                  paid for such Contracts set forth in the Sale Certificate does

                  not exceed the balance on deposit in the Pre-Funding Account

                  as of the Closing Date plus the aggregate Outstanding

                  Principal Amount of all Certificates to be purchased on such

                  Closing Date and (2) the Trust has received the full amount of

                  the purchase price for all Certificates being purchased on

                  such Closing Date.

 

                                     - 17 -

<PAGE>

 

                  (b) In connection with the transfer and assignment of the

Contracts on each Closing Date, on or prior to each Closing Date, the Seller,

the Servicer and their counsel shall deliver to the Trustee (or in the case of

(iv), to the Servicer (or its Subservicer) as custodian on behalf of the

Trustee, to be returned to the Trustee upon its written request) with respect to

the Contracts proposed to be sold to the Trust on such Closing Date:

 

                           (i) an executed Sale Certificate (and, if applicable,

         attached thereto copies of any written agreement(s) among the Seller

         and the Majority Certificateholders setting forth the Minimum Contract

         Rates(s) of any Contracts(s) determined pursuant to clause (b) of the

         definition of "Minimum Contract Rate");

 

                            (ii) a computer diskette or electronic spreadsheet

         file providing information with respect to each of the Contracts as

         described in the definition of "Contracts" above, including, without

         limitation, all information appearing in the Sale Certificate;

 

                           (iii) an executed Assignment;

 

                             (iv) the Contract Files, including the original

                  executed Contracts (with photocopies of same and a written

                  certification that such photocopies represent a true and

                  complete copy of all such Contract Files being provided to the

                  Trustee), which Contracts shall identify the related Equipment

                  by, at a minimum, model number and serial number;

 

                           (v) on the Initial Closing Date only, filed stamped

                  copies of the UCC-1 financing statements described in Sections

                  2.01(c) and 11.15;

 

                           (vi) on the Initial Closing Date only, an executed

                  opinion from counsel for the Seller, addressed to the Initial

                  Purchaser and the Trustee and dated the Initial Closing Date,

                  satisfactory in form and substance to the Initial Purchaser,

                  regarding the true sale of the Contracts by the Seller to the

                  Trust, for the benefit of Certificateholders, on such Initial

                  Closing Date and each subsequent Closing Date (with an

                  original execution copy of such opinion also being delivered

                  to the Initial Purchaser on the Initial Closing Date);

 

                           (vii) a certificate of each of the Seller and

                  Servicer, signed by an executive officer thereof, dated the

                  applicable Closing Date, to the effect that:

 

                                    (A) the representations and warranties of

                  the Seller and Servicer in this Agreement are true and correct

                  in all material respects on and as of the Closing Date with

                  the same effect as if made on such date, and each of the

                  Seller and Servicer has complied with all the agreements,

                   performed all the obligations and satisfied all the conditions

                  on its part to be complied with, performed or satisfied under

                  this Agreement at or prior to the Closing Date; and

 

                                      - 18 -

<PAGE>

 

                                    (B) since the date of the Servicer's most

                  recent audited financial statements, there has been no

                  material adverse change, or any development respecting a

                   prospective change, in the condition (financial or other) of

                  the Servicer or the Seller, whether or not arising from

                  transactions in the ordinary course of business; and

 

                                     (C) (solely in the Servicer's certificate),

                  no event with respect to the Servicer has occurred and is

                  continuing which would constitute an Event of Default or an

                  event that with notice or lapse of time or both would become

                  an Event of Default under this Agreement.

 

                           (viii) photocopies of all purchase orders issued by

                  the Seller to all vendors of the Equipment relating to such

                   Contracts, together with a written certification that such

                  photocopies represent a true and complete copy of all such

                  purchase orders; and

 

                           (ix) such other documents as the Trustee may

                   reasonably request.

 

                  (c) Prior to the Initial Closing Date, the Seller, for the

benefit of the Trustee, shall, in connection with the conveyance described in

Section 2.01(a), deliver to the Servicer, the financing statements described in

Exhibit C. The Seller shall also arrange for the delivery to the Servicer or its

assignee, as applicable, of any appropriate Uniform Commercial Code continuation

statements as may be necessary in connection with the financing statements

referenced in the foregoing sentence. The Servicer shall cause such UCC-1

financing statements to be filed or recorded in all such appropriate places, and

shall take all other actions necessary to perfect (i) the first priority

ownership interests granted by the Seller to the Trustee in the Trust Corpus

pursuant to Section 2.01 and (ii) the first priority security interests granted

by the Seller to the Trustee in the Trust Corpus pursuant to Section 11.15. The

Servicer shall provide file stamped copies of all such UCC-1 financing

statements to the Trustee. The Servicer shall arrange for filing any appropriate

Uniform Commercial Code continuation statements or other appropriate forms,

notices or documents in connection with the ownership interests and security

interests granted by the Seller to the Trustee hereunder, and shall provide file

stamped copies of same to the Trustee. The Trustee shall have no obligation to

file or record any instrument or other document, including any UCC-1 financing

statement or continuation statement, and shall have no liability for the failure

to perfect or the loss of perfection of any security interest in the Trust

Corpus.

 

                  (d) All other documents or records delivered by the Seller in

connection with the sale, transfer or assignment of the Contracts will be

retained by or on behalf of the Servicer (or its Subservicer), as custodian on

behalf of the Trustee, and will be delivered to the Trustee upon written request

of the Trustee.

 

                                     - 19 -

<PAGE>

 

                  (e) If any document or documents constituting a part of a

Contract File are defective with respect to any Contract in any respect which

materially and adversely affects the interests of the Certificateholders, then

the Trustee or the Servicer, after the Servicer or a Responsible Officer of the

Trustee obtains knowledge of such defect, shall promptly notify the Seller,

whereupon the Seller shall have a period of three months, or such longer period

as the Trustee, acting at the direction of the Majority Certificateholders, may

consent to, within which to correct or cure any such defect. If any such

material defect has not been corrected or cured in all material respects,

notwithstanding any other provision of this Agreement (except as provided in

this sentence) including the restrictions or limitations set forth in this

Section 2.01, the Seller will, as of the last day of the third calendar month

after the month in which the Trustee or the Servicer so notifies the Seller with

respect to such defect (or earlier if the Seller elects), repurchase the related

Contract from the Trustee at a price equal to, without duplication, the sum of

(i) the Outstanding Principal Balance of such Contract plus, without

duplication, the aggregate amount of all Principal Components of Scheduled

Payments on such Contract due prior to the last day of the Collection Period as

of which such repurchase occurs not previously made by the Obligor or advanced

by the Servicer; (ii) the amount of any Outstanding Advances made in respect of

such Contract; (iii) the aggregate amount of all Interest Components of

Scheduled Payments on such Contract due prior to the last day of such Collection

Period not previously made by the Obligor or advanced by the Servicer, (iv) the

amount that would constitute Accrued Interest with respect to the Contract

(calculated as of the last day of such Collection Period) and (v) an amount

equal to the Premium Amount relating to such Contract as of the last day of such

Collection Period (collectively, the "Purchase Amount"); provided, however, that

any such material defect in respect of a Contract shall not cause the Seller to

repurchase such Contract pursuant to this paragraph so long as the Obligor

continues to make its Scheduled Payments or the Servicer is making Advances in

respect thereof, it being understood that if the Obligor ceases to continue

making its Scheduled Payments and the Servicer fails to make Advances in respect

thereof the Seller will, if at that time such defect with respect to such

Contract has not been corrected or cured and such defect materially and

adversely affects the interests of the Certificateholders, repurchase such

Contract. The Purchase Amount shall be deposited by the Seller in the

Certificate Account in immediately available funds at least one (1) Business Day

prior to the Distribution Date which relates to the Collection Period in which

such repurchase occurs and shall be distributed as provided herein on such

Distribution Date and, upon receipt by the Trustee of written notification of

such deposit signed by a Responsible Officer of the Seller and verification by

the Trustee of the receipt of such deposit, the related Contract Files shall be

deemed to be released to the Seller and the related Contract shall be deemed

transferred and assigned back to the Seller, without recourse, representation or

warranty. The Trustee shall promptly reimburse the Servicer for any Outstanding

Advances made in respect of such Contract upon the funds deposited in respect of

the Purchase Amount becoming available. It is understood and agreed that the

enforcement of the obligation of the Seller to repurchase any Contract as to

which a material defect in a constituent document exists and to make the

payments described in this Section 2.01(e) and Section 2.04 shall constitute the

sole remedy against the Seller with respect to such defect available to the

Trust, the Certificateholders or the Trustee on behalf of the

Certificateholders.

 

                                     - 20 -

<PAGE>

 

         SECTION 2.02. Acceptance by Trustee; Servicer. The Trustee hereby

acknowledges its acceptance on behalf of the Trust of all right, title and

interest to the Contracts and other property conveyed to the Trustee from time

to time by the Seller in accordance with Section 2.01. The Trustee hereby

declares that it holds and will hold such property and the documents

constituting a part of the Contract Files delivered to it as trustee and the

remainder of the corpus of the Trust in trust, upon the terms herein set forth,

for the sole use and benefit of the Certificateholders. The Trustee hereby

appoints the Servicer as custodian to hold the Contract Files in safekeeping for

the benefit of the Certificateholders. The Trustee shall not be responsible for

any of the duties or obligations of the Servicer, or for any action or inaction,

including any misconduct or negligence, on the part of the Servicer.

 

         The Servicer, by execution and delivery hereof, accepts its appointment

as custodian of, and acknowledges receipt of, the Contract Files. The Servicer

shall indicate in its computer files that the Contracts have been sold to the

Trust for the benefit of all present and future Certificateholders and shall

maintain accurate records pertaining to each Contract as will enable the

Servicer and the Trustee to comply with the terms and conditions of this

Agreement. The Servicer shall make the Contract Files available to the Trustee

and the Certificateholders for inspection by the Trustee at such times as the

Trustee or any Certificateholder shall reasonably request. The Trustee agrees

that the Servicer shall be entitled to rely and act upon advice of counsel with

respect to its performance as custodian of the Contract Files and shall be

without liability for any action reasonably taken in good faith pursuant to such

advice, provided that such action is not in violation of applicable federal or

state law. The Servicer agrees to return the Contract Files to the Trustee upon

its written request.

 

         SECTION 2.03. Representations and Warranties of the Seller and

Servicer.

 

                  (a) The Seller hereby represents and warrants to the Trustee

that as of the date hereof and as of each Closing Date, unless expressly stated

otherwise:

 

                            (i) Corporate Existence and Power. The Seller (A) is

a corporation duly incorporated, validly existing and in good standing under the

laws of the State of Delaware, (B) has all corporate power and all material

governmental licenses, authorizations, consents and approvals required to carry

on its business as now conducted and (C) is duly qualified to transact business

as a foreign corporation in each jurisdiction where the nature of its business

requires the same except where the failure to so qualify would not have a

material adverse effect on its ability to perform its obligations hereunder or

on the enforceability by it of a material amount of Contracts.

 

                           (ii) Authorization of Seller. The execution, delivery

and performance by the Seller of this Agreement are within the Seller's

corporate powers, have been duly authorized by all necessary corporate action,

require no action by or in respect of, or filing with, any governmental body,

agency or official (except such as have been taken or made), do not require the

consent or approval of any Person under any Contract or other agreement or

instrument to which the Seller is a party (except such as have been obtained),

and do not contravene, or constitute a default under, any provision of

applicable law or regulation or of the certificate of incorporation or by-laws

of the Seller or of any agreement, judgment, injunction, order, decree or other

instrument binding upon the Seller.

 

                                     - 21 -

<PAGE>

 

                           (iii) Binding Effect on Seller. This Agreement

constitutes a legal, valid and binding agreement of the Seller enforceable in

accordance with its terms except as (A) the enforceability thereof may be

limited by applicable bankruptcy, insolvency or similar laws affecting

creditors' rights generally and (B) the availability of equitable remedies may

be limited by equitable principles of general applicability.

 

                           (iv) Contracts.

 

                                     (A) The Seller owns the Contracts free and

         clear of all Liens and has full right to transfer the Contracts and its

         interest in the related Equipment and the proceeds of any Physical

         Damage Insurance Policies or other insurance covering the Equipment to

         the Trustee, and the conveyance of the Contracts hereunder constitutes

         a valid sale, transfer and assignment to the Trustee of all right,

         title and interest of the Seller in the Contracts, including any rights

         in the Equipment subject thereto and in the Physical Damage Insurance

         Policies or other insurance covering such Equipment created thereby,

         free and clear of all Liens.

 

                                    (B) Each Contract constitutes a legal, valid

         and binding obligation of the applicable Obligor, in each case

         enforceable in accordance with its terms in all material respects

         except as (w) the enforceability thereof may be limited by applicable

         bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium

         or other similar laws affecting creditors' rights generally from time

         to time in effect; (x) the availability of equitable remedies may be

         limited by equitable principles of general applicability; (y) certain

         remedies may not be enforceable in certain jurisdictions, provided,

         however, that the remedies which are enforceable are adequate to make

         the Contract enforceable against the Obligor and (z) certain

         undertakings with respect to non-substitution by the Obligor may not be

         enforceable in certain jurisdictions.

 

                                    (C) The information provided with respect to

          the Contracts in the Sale Certificate and the computer diskette or

         electronic spreadsheet file delivered by the Seller to the Trustee on

         the related Closing Date is true and correct in all material respects.

 

                                     (D) The Equipment covered by an installment

         payment master agreement with the Seller or the Servicer is subject to

         a Lien for the benefit of the Seller or the Servicer, as applicable,

         except as noted in the Contract Files.

 

                                    (E) (i) Interest in respect of each of the

         Contracts is eligible for the exclusion from gross income under Section

         103 of the Code and does not constitute an item of tax preference for

         purposes of the alternative minimum tax provisions of the Code

         (collectively, "Tax-Exempt Eligibility") and (ii) payment of any

         Premium Amount with respect to the Contracts to any person or entity

         will not adversely affect the Tax-Exempt Eligibility of any Contract.

 

                                     - 22 -

<PAGE>

 

                                    (F) No provision of any Contract has been

         waived, altered or modified in any material respect, other than through

         waiver of payment delinquencies, except by instruments or documents

         identified in the Contract File.

 

                                    (G) No Contract is subject to any right of

         rescission, counterclaim or defense, including the defense of usury,

         and the operation of any of the terms of the Contract or the exercise

         of any right thereunder will not subject the Contract to the right of

         rescission, counterclaim or defense, including the defense of usury,

         and no such right of rescission, counterclaim or defense has been

         asserted with respect thereto.

 

                                    (H) No Contract was originated in or is

         subject to the laws of any jurisdiction the laws of which would make

         the transfer of the Contract or any interest therein (including any

         interest in the Equipment) to the Trustee under this Agreement or

         pursuant to transfers of the Certificates unlawful.

 

                                    (I) All requirements of any federal, state

         or local law, including, without limitation, usury laws, applicable to

         each Contract have been complied with in all material respects.

 

                                    (J) Each of the Contracts complies with all

         of the Eligibility Criteria set forth in Exhibit D hereto, except to

         the extent that both (i) any failure of a specified Contract to meet

         any of the Eligibility Criteria has been noted and explained in the

          Sale Certificate relating to such Contract and (ii) the Majority

         Certificateholders have consented in writing to the purchase by the

         Trust of such Contract notwithstanding its failure to meet any of the

         Eligibility Criteria described in the applicable Sale Certificate after

         being provided with a copy of such Sale Certificate.

 

                                    (K) For each Contract that by its terms

         requires the Seller to obtain consent to assignment, the Seller has

         obtained such consent.

 

                  (b) It is understood and agreed that the representations and

warranties set forth in this Section 2.03 shall survive the delivery of the

Contract Files. Upon discovery by the Seller, the Servicer or a Responsible

Officer of the Trustee of a breach of any of the foregoing representations and

warranties with respect to any Contract, which breach materially and adversely

affects the interests of the Certificateholders, or a breach of the

representations and warranties set forth in Section 2.03(a)(iv)(A), (B), (E),

(J) or (K), the party discovering such breach shall give prompt written notice

to the other parties hereto. If as of the last day of the third calendar month

after the month in which such notice of breach is given (or earlier if the

Seller elects or is required pursuant to Section 2.04) or, with the prior

written consent of a Responsible Officer of the Trustee, such later date as is

specified in such consent, the Seller has not cured such breach in all material

respects, notwithstanding any other provision of this Agreement (except as

provided in this sentence) including the restrictions or limitations set forth

in Section 2.01, the Seller shall repurchase each affected Contract from the

Trustee; provided, however, that any breach of the representations and

warranties contained in this Section 2.03, except with respect to Sections

2.03(a)(iv)(A), (B), (E), (J) and (K), in respect of a Contract shall not cause

the Seller to repurchase such Contract pursuant to this paragraph so long as the

Obligor continues to make its Scheduled Payments or the Servicer is making

Advances in respect thereof, it being understood that if the Obligor ceases to

continue making its Scheduled Payments and the Servicer elects not to make

Advances in respect thereof the Seller will, if at that time such breach with

respect to such Contract has not been cured and such breach materially and

adversely affects the interests of the Certificateholders, repurchase such

Contract.

 

                                     - 23 -

<PAGE>

 

                  (c) Any such repurchase of a Contract by the Seller shall be

accomplished in the manner set forth in Section 2.01(e) and at a price equal to

the Purchase Amount. It is understood and agreed that the enforcement of the

obligation of the Seller to repurchase any Contract as to which a breach by the

Seller under this Section 2.03 occurred and is continuing and to make the

payments which may be required by this Section 2.03 and Section 2.04 shall

constitute the sole remedy against the Seller respecting such breach available

to the Trust, the Certificateholders or the Trustee on behalf of the

Certificateholders.

 

                  (d) (i) In addition to the representations and warranties made

by LFC in its capacity as the Servicer herein, LFC hereby represents and

warrants to the Trustee that all of the representations and warranties of the

Seller set forth in this Agreement are true and accurate in all respects.

 

                      (ii) LFC hereby covenants that it shall comply with the

obligations of the Seller to pay (A) the Purchase Amount with respect to

Contracts required to be repurchased by the Seller pursuant to Sections 2.01(e)

and 2.03, (B) the Indemnity Amount pursuant to Section 2.04, (C) the amount to

be deposited to the Certificate Account upon an Equipment Modification as

provided in Section 3.01(a)(i) and (D) all other financial obligations of the

Seller under this Agreement, in the event that the Seller defaults on its

performance of such obligations.

 

                      (iii) In the event that, with respect to any Distribution

Date, the Seller failed to perform any of its payment obligations as described

in Section 2.03(d)(ii), that was required to have been deposited or paid, as the

case may be, on or prior to such Distribution Date, the Trustee shall notify LFC

in writing on or promptly following such Distribution Date that LFC will be

required to make a payment pursuant to Section 2.03(d) with respect to such

Distribution Date and the amount of any such payment. The amount of any such

payment shall equal the aggregate amount of payments owed by the Seller under

this Agreement and remaining unpaid as of such Distribution Date. The Trustee

shall deposit promptly any and all funds paid to it by LFC pursuant to this

Section 2.03(d) directly into the Certificate Account for the benefit of the

Certificateholders.

 

                      (iv) Upon the payment by LFC of all amounts required to be

paid pursuant to this Section 2.03(d) in respect of a Contract which the Seller

is required to repurchase pursuant to this Agreement, the Trustee shall, as of

the last day of the Collection Period during which such Contract became was

required to be repurchased, be deemed to have transferred and assigned all its

right, title and interest in such Contract to the Seller (for treatment in

accordance with paragraph (v) below), without recourse, representation or

warranty.

 

                      (v) The Servicer shall have the right to be reimbursed for

any Outstanding Advances with respect to Purchased Contracts in respect of which

a payment is made by LFC pursuant to this Section 2.03(d) from the amount of any

such payment. The Outstanding Advances shall be reduced by the amount by which

the Servicer is so reimbursed.

 

                                     - 24 -

<PAGE>

 

         SECTION 2.04.   Tax Indemnification.

 

                  (a) This Section 2.04 shall apply if each of the following

conditions is satisfied:

 

                           (i) a Certificate Owner or the Trust receives written

         notice from the Internal Revenue Service of its intent to assert a

         claim for taxes due;

 

                           (ii) such claim is to be based on the assertion that

         either (1) as of the related Cut-Off Date, interest on any Contract was

         not eligible for the exclusion from gross income under Section 103 of

         the Code or constituted an item of tax preference for purposes of the

         alternative minimum tax provisions of the Code or (2) payment of

         Premium Amount on one or more Contracts to any person or entity

         adversely affected the Tax-Exempt Eligibility of the Contracts;

 

                           (iii) such notice is received prior to the

         termination of the Trust;

 

                           (iv) the Certificate Owner or the Trust, as

         applicable, (a) after receiving such notice and prior to the

         termination of the Trust, provides the Seller with a copy of such

          notice or written notice thereof (the "Claim Notice"), and (b) if the

         Seller elects to contest the claim, the Certificate Owner or the Trust,

         as applicable, at its option, either (x) permits the Seller at its own

         expense to contest the claim through administrative or judicial

         procedures, or (y) contests the claim at its own expense

         (administratively and through the courts) and permits the Seller to

         participate in such contest at its own expense, and in the case of (x)

         and (y) agrees not to enter into any settlement of the claim with the

         relevant taxing authority without the Seller's prior written consent,

         such consent not to be unreasonably withheld; and

 

                            (v) either the Seller elects not to contest the

         claim, or, if the Seller elects to contest the claim, the claim is

         upheld. For the avoidance of doubt, if Seller does not provide written

         notice to the Certificate Owner or the Trust, as applicable, of its

         intent to contest a claim within 30 days after receiving the Claim

         Notice, Seller will be deemed to have elected not to contest the claim.

 

If any Certificate Owner or the Trust provides a Claim Notice to the Seller as

described in clause (iv) above, the requirements in clauses (iii) and (iv) for

notice prior to termination of the Trust shall be deemed satisfied for all

Certificate Owners and the Trust with respect to claims arising from the

Contract(s) giving rise to the claim described in such notice. The Seller shall

promptly (but in no event later than 30 calendar days) after receipt of any

written notice for indemnification provide copies thereof to the Servicer, the

Trustee and all Certificateholders.

 

                  (b) (i) If each of the conditions of Section 2.04(a) is

satisfied, the Seller will pay an amount (the "Indemnity Amount") to such

Certificate Owners as and to the extent provided herein. In addition, interest

will be paid on the Indemnity Amount as so determined, at the rate of interest

payable on tax deficiencies to the relevant taxing authority, for the period

from the date 30 days after the Servicer receives from the Certificate Owner or

the Trust written notice of the proposed claim of such taxing authority to the

date 10 days before the Seller pays the Indemnity Amount.

 

                                     - 25 -

<PAGE>

 

                      (ii) The "Indemnity Amount" will equal the sum of the

Gross-Up Amounts with respect to such Contract for each calendar month in which

the Certificate Owner owned the relevant Certificates in the period from the

Closing Date to and including the first month in which the Contract was

repurchased by the Seller or matured.

 

                      (iii) The "Gross-Up Amount" with respect to such Contract

for any month is the amount determined by dividing (A) the product of (1)

interest that would accrue for such month on the Outstanding Principal Balance

of such Contract as of the first day of the Collection Period beginning in such

month at one-twelfth of the Contract Rate multiplied by the Certificate Owner's

Interest in such Contract and (2) the applicable Tax Rate in effect for such

month, by (B) one minus such Tax Rate.

 

                      (iv) The Indemnity Amount will not include any interest

(except as provided above) or penalties assessed against the Certificate Owner

or the Trust, or any taxes other than federal income taxes payable by the

Certificate Owner, or any alternative minimum taxes payable by the Certificate

Owner, or any taxes payable by the Trust, or any taxes arising from the fact

that the Certificate Owner or the Trust is not the owner of the Contracts for

federal income tax purposes, and in any event will not take into account any

special tax situation of the Certificate Owner. The Indemnity Amount will be

paid to a Certificate Owner only if the Certificate Owner and the Trust provide

the Seller and the Servicer all information required to calculate the Indemnity

Amount in respect of such Certificate Owner.

 

                  (c) If the Trust is still in existence when each of the

conditions for payment of an Indemnity Amount is satisfied, the Indemnity Amount

will be payable by the Seller for distribution to the relevant Certificate Owner

no later than the Distribution Date relating to the second Collection Period

after that in which the claim is upheld or the Seller decides not to contest the

claim, but in any case not later than the final Distribution Date for the Trust

(the "Relevant Distribution Date"). In such event, the Seller shall notify the

Servicer of the outcome of the claim and the Servicer shall promptly after

receipt of such notice calculate the Indemnity Amount and give notice thereof to

the Seller and the Trustee. The Seller shall deposit the Indemnity Amount in the

Certificate Account no later than the Relevant Distribution Date. The Trustee

will distribute to the Certificate Owner the Indemnity Amount so deposited at

the written direction of the Servicer. Alternatively, if the Trust is no longer

in existence when each of the conditions for the payment of the Indemnity Amount

is satisfied, the Indemnity Amount will be payable by the Seller directly to the

Certificate Owner within 60 days after the claim is upheld or the Seller decides

not to contest the claim.

 

                  (d) If the Seller is required to pay an Indemnity Amount to

any Certificate Owner, then the Seller will repurchase the related Contract or

Contracts as of the last day of the Collection Period relating to the Relevant

Distribution Date, if the Contract has not been previously repurchased pursuant

to Section 2.03. Any such repurchase shall be accomplished in the manner set

forth in Section 2.01(e) and at a price equal to the Purchase Amount(s). This

Section 2.04 shall not in any manner limit the obligation, if any, of the Seller

pursuant to Section 2.03(b) and (c) to repurchase any Contract.

 

                                     - 26 -

<PAGE>

 

                  (e) It is understood and agreed that the enforcement of the

obligation of the Seller to repurchase the affected Contract and pay the

Purchase Amount and the Indemnity Amount shall constitute the sole remedy

against the Seller available to the Trust, the Certificate Owners or the Trustee

on behalf of the Certificate Owners or the Trust in the event of the

determination of the taxability of interest on a Contract.

 

                  (f) The Seller may, but shall not be obligated to, pay an

Indemnity Amount to any Certificate Owner prior to the latest date required

under this Section 2.04 and/or repurchase the related Contract prior to the last

day of the Collection Period relating to the Relevant Distribution Date if, in

the Seller's discretion, it appears that any relevant taxing authority intends

to send or has sent to any Certificate Owner or the Trust a notice of the type

described in Section 2.04(a).

 

                  (g) If the Certificate Owner is an Entity, a direct or

indirect holder of an equity interest in the Entity that is taxable on the

income of the Entity (but not the Entity itself) shall be eligible for payment

of an Indemnity Amount under this Section 2.04 if the conditions of this Section

are satisfied as to such holder as if such holder were a Certificate Owner;

provided that (1) the Gross-up Amount shall be based on such holder's share of

the income of the Entity, (2) no Indemnity Amount shall be paid to any such

holder unless the Entity (as well as any intermediate Entity and such holder)

complies with Section 2.04(a)(iv), (3) an Indemnity Amount will only be payable

to any such holder if such holder would be entitled to an indemnity payment if

it directly held the entire interest in an underlying Certificate and (4) this

paragraph (g) (except for clause (3)) shall not apply to an Entity that is a

regulated investment company under Section 851 of the Code or a partnership

subject to partnership-level audits under Section 6221 et seq. of the Code.

 

                                   ARTICLE III

 

                  Administration and Servicing of the Contracts

 

         SECTION 3.01. Servicing of the Contracts; Distribution Date Statement.

 

                  (a) The Servicer or any Person that may serve as Subservicer

shall service, administer and enforce the Contracts in accordance with its

customary servicing procedures for servicing installment payment, lease,

financing agreement and similar obligations similar to the Contracts held in its

own portfolio or otherwise serviced by it, and shall have full power and

authority to do any and all things in connection with such servicing and

administration which it may deem necessary or desirable including, but not

limited to, waiving nonpayment defaults, late payment charges or any other

similar fees that may be collected in the ordinary course of servicing the

Contracts; provided that:

 

                                     - 27 -

<PAGE>

 

                           (i) the Servicer shall not permit any modification or

         waiver with respect to any Contract that would make it fail to comply

         with all of the Eligibility Criteria or which would reduce the Contract

         Rate, reduce the Outstanding Principal Balance (except for actual

         payments of principal), extend the due date of any payment on such

         Contract or the final maturity date of such Contract, waive or reduce

         any Breakage Fees with respect to such Contract or release the

         Trustee's interest in the Trust Corpus (including, without limitation,

         the Equipment related to such Contract), except in connection with a

         payment in full of such Contract; provided that if the Obligor on a

         Contract and the vendor of the Equipment relating to that Contract

         agree to a return, replacement, modification, upgrade or similar change

         to the Equipment relating to such Contract either (A) as permitted by

         the standard provisions of the Contract or (B) with prior written

         notice to the Majority Certificateholders and no objection from the

          Majority Certificateholders within three (3) days after receipt of such

         notice (in either case, an "Equipment Modification"), Servicer may

         permit a modification of that Contract solely to change the Equipment

         specified as relating to such Contract following such Equipment

         Modification and, if applicable, (i) if all Equipment relating to the

         Contract is being returned and not replaced, the Outstanding Principal

         Balance of such Contract shall be reduced to zero or (ii) if the

         Equipment Modification results in a reduction in the value of the

         Equipment relating to such Contract, the Outstanding Principal Balance

         of such Contract shall be reduced by the amount of reduction in

          Equipment Value; provided further, that in the event any Equipment

         Modification results in any reduction to the Outstanding Principal

         Balance of a Contract, prior to the end of the Collection Period in

         which such Equipment Modification takes place, the Seller shall deposit

         an amount to the Certificate Account equal to the sum of (A) the amount

         of such reduction in Outstanding Principal Balance of the applicable

         Contract plus (B) any remaining Premium Amount relating to such

         Contract, and the full amount of such deposit shall be deemed the

         Principal Portion of a Prepayment of such Contract, so that it will be

         paid directly to the Certificateholders on the Distribution Date in the

         month following such Collection Period pursuant to Section 3.09(c).

 

                           (ii) the Servicer shall not take any action or permit

         any action (including modifying the terms of a Contract) which is

         within its control to be taken which would adversely affect the

         Tax-Exempt Eligibility of the Contract in any manner; and

 

                           (iii) the Servicer shall take any additional action,

         including making any additional filings, which it has taken in respect

         of all other installment payment, lease, financing agreement and

         similar obligations similar to the Contracts held in its own portfolio

         or otherwise serviced by it which may be necessary pursuant to changes

         in the applicable law of certain jurisdictions in order to perfect the

         interest of the Trustee in the Trust Corpus.

 

                  (b) As of the last day of the calendar month in which occurs

the discovery by or notice to the Servicer of (x) a breach of clause (a)(iii)

above with respect to any Contract which breach materially and adversely affects

the interests of the Certificateholders, or (y) a breach of clause (a)(i) or

(a)(ii) with respect to any Contract, the Servicer, unless it cures the breach

in all material respects, will purchase the Contract from the Trustee in the

manner set forth in Section 2.01(e) with respect to repurchases by the Seller

and at a price equal to the Purchase Amount (calculated without giving effect to

any modification of the Contract giving rise to such obligation to repurchase);

provided, however, that any breach of the covenant contained in clause (a)(iii)

above in respect of a Contract shall not cause the Servicer to purchase such

Contract pursuant to this Section 3.01 so long as the Obligor continues to make

its Scheduled Payments or the Servicer is making Advances in respect thereof, it

being understood that if the Obligor ceases to continue making its Scheduled

 

 

                                      - 28 -

<PAGE>

 

Payments and the Servicer elects not to make Advances in respect thereof the

Servicer will, if at that time such breach with respect to such Contract has not

been cured and such breach materially and adversely affects the interests of the

Certificateholders, repurchase such Contract. It is understood and agreed that

the enforcement of the obligation of the Servicer to repurchase any Contract as

to which a breach by the Servicer under this Section 3.01 has occurred and is

continuing and to make the payments which may be required by this Section 3.01

shall, except as otherwise expressly provided in Article VIII, constitute the

sole remedy against the Servicer respecting such breach available to the Trustee

on behalf of any Beneficiaries.

 

                   (c) The Servicer shall remain fully responsible for its duties

hereunder notwithstanding the appointment of a Subservicer. The Servicer or any

Subservicer may perform its obligation to service the Contracts either directly

or through agents or independent contractors. Without limiting the generality of

the foregoing, and except as otherwise provided herein, or unless otherwise

directed by the Trustee, the Servicer is hereby authorized and empowered by the

Trustee to execute and deliver, on behalf of itself, the Certificateholders and

the Trustee, or any of them, any and all instruments of satisfaction or

cancellation, or of partial or full release or discharge, and all other

comparable instruments with respect to the Contracts and with respect to the

Equipment. The Trustee or the Certificateholders shall furnish the Servicer with

any powers of attorney and other documents necessary or appropriate to enable

the Servicer to implement its servicing and administrative duties hereunder.

 

                   (d) Not later than 10:00 a.m. on the Determination Date

immediately preceding each Distribution Date, the Servicer shall deliver to the

Trustee a proposed Distribution Date Statement with respect to such Distribution

Date as provided in Sections 4.02(a) and 4.03.

 

                  (e) The relationship of the Servicer (and any Successor

Servicer) to the Trustee under this Agreement is intended by the parties to be

that of an independent contractor and not that of a joint venturer, partner or

agent.

 

         SECTION 3.02. The Certificate Account.

 

                  (a) The Certificate Account shall be a separate trust account

established and maintained by the Trustee. Should a successor Trustee be

appointed, then the Servicer shall, with the Trustee's assistance as may be

reasonably necessary, cause the Certificate Account to be moved to the successor

Trustee. Except as provided in paragraph (b) below, all funds deposited in the

Certificate Account shall be held in trust for the benefit of the

Certificateholders until applied in accordance with Section 3.09.

 

                  (b) Funds on deposit in the Certificate Account shall be

invested at the written direction of the Servicer (which may be in the form of

standing instructions) by the Trustee in Eligible Investments maturing on or

before the Business Day preceding the following Distribution Date. All such

Eligible Investments shall be made in the name of the Trustee, for the benefit

of the Certificateholders. So long as no Event of Default shall have occurred

and be continuing, all Eligible Investments Earnings on deposit in the

Certificate Account shall be for the benefit of the Servicer as servicing

compensation and shall be remitted to it monthly as provided herein. If an Event

of Default has occurred and is continuing, all Eligible Investments Earnings

shall be deposited into the Certificate Account for distribution as part of

Additional Funds pursuant to Section 3.09(b) on each Distribution Date. The

amount of any realized losses in the Certificate Account in respect of any such

investments shall promptly be deposited by the Servicer (from its own funds) in

the Certificate Account. The Trustee in its fiduciary capacity shall not be

liable for the amount of any loss incurred in respect of any investment or lack

of investment of funds held in the Certificate Account and made in accordance

with this Section 3.02(b).

 

                                     - 29 -

<PAGE>

 

                  (c) The Trustee shall keep and maintain appropriate accounting

records relating to deposits to and withdrawals from the Certificate Account.

 

         SECTION 3.03. Collections; Lockbox; Lockbox Account; Collections

Reporting.

 

                  (a) Neither the Seller nor the Servicer is to collect or

receive Collections in respect of the Contracts. Rather, the Seller and Servicer

have instructed all existing Obligors and Insurers, and will instruct all future

Obligors and Insurers, to make all payments representing Collections only (A) by

check or money order made payable to "The Bank of New York, as trustee of

Municipal Tax-Exempt Trust LEAF 2005," and mailed to The Bank of New York - Lock

Box Department, Leaf Financial Corporation/Box #11341A, 101 Barclay Street, 3rd

Floor, New York, NY 10286 (the "Lockbox"), or (B) by wire transfer directly to

the Certificate Account ("Wire Payments").

 

                  (b) On each Business Day, the Trustee shall collect all

checks, money orders and other instruments received in the Lockbox and shall

endorse (and, to the extent necessary, the Seller and/or Servicer shall endorse)

all such checks, money orders and other instruments so that the same can be

deposited by the Trustee into a lockbox account maintained by the Trustee in the

name of the Trust (the "Lockbox Account"), in the form so received (with all

necessary endorsements), no later than the next Business Day after the Business

Day on which they are received. Once the funds representing each such deposit

have cleared, the Trustee shall, no later than the next Business Day, withdraw

all such cleared funds out of the Lockbox Account and deposit them in the

Certificate Account. In addition, notwithstanding that Collections should be

made by the applicable payors either (i) via Wire Payment into the Certificate

Account or (ii) via check, money order or other instrument mailed to the

Lockbox, the Seller and Servicer each hereby covenants and agrees to send wired

funds representing Collections and received by either of them or any of their

Affiliates for deposit to the Certificate Account via wire transfer, and to mail

checks, money orders or other instruments representing Collections received by

either of them or their Affiliates, in the form so received (with all necessary

endorsements), not later than the close of business on the Business Day

following the date a Responsible Officer thereof shall have actual notice of

such receipt. The Trustee is hereby authorized to establish the Lockbox and the

Lockbox Account.

 

                  (c) In the event that for any reason a successor Trustee is

appointed and a new Certificate Account is established with such successor

Trustee, then the Trustee, Seller and Servicer shall promptly notify all

relevant Obligors and Insurers to send Collections payments to the new Lockbox,

and to make all future Wire Payments to the new Certificate Account, established

by the successor Trustee. The Trustee shall not close any Lockbox or Certificate

Account unless it shall have (i) received the prior written consent of the

Majority Certificateholders, (ii) established a new lockbox, corresponding

lockbox account and/or certificate account, (iii) (whereupon, for all purposes

of this Agreement and the Related Documents, such new lockbox shall become the

Lockbox, such new corresponding lockbox account shall become the Lockbox Account

and such new certificate account shall become the Certificate Account, and (iv)

taken all such action as the Majority Certificateholders shall require to grant

and perfect a first priority security interest in any new Certificate Account to

the Trustee for the benefit of the Certificateholders.

 

                                     - 30 -

<PAGE>

 

                  (d) The Seller and the Servicer hereby grant to the Trustee a

durable power of attorney to endorse to the Trust on their behalf any checks,

instruments, money orders or other payments representing Collections received in

the Lockbox or otherwise received by the Trustee, and to take any other actions

on their behalf as may be necessary or desirable in connection with the deposit

of Collections to the Lockbox Account and/or the Certificate Account. Such power

of attorney is irrevocable being a power coupled with an interest.

 

                  (e) On each Business Day, the Trustee shall make available to

the Servicer via its Internet web-based programs, CASH-Register Plus, Onsite and

Inform (or any successor programs thereto): (i) information with respect to (A)

each check, money order or other instrument received in the Lockbox and (B) each

Wire Payment received in the Certificate Account, promptly following receipt of

such Collections; such information to include the date of such payment, its

amount and the name of the payor making such payment, and (ii) following the

deposit by the Trustee of each check, money order or other instrument received

in the Lockbox into the Lockbox Account, information as to whether the funds

represented by each such deposit have cleared or whether any such check, money

order or other instrument has been refused for insufficient funds.

 

         SECTION 3.04. The Reserve Account.

 

                  (a) The Reserve Account shall be a separate trust account

established and maintained by the Trustee. Should a successor Trustee be

appointed, then the Servicer shall, with the Trustee's assistance as may be

reasonably necessary, cause the Reserve Account to be moved to the successor

Trustee. Except as provided in paragraph (d) below, all funds deposited in the

Reserve Account shall be held in trust for the benefit of the Certificateholders

until applied in accordance with Section 3.09.

 

                  (b) Funds on deposit in the Reserve Account shall be invested

at the written direction of the Majority Certificateholders (which may be in the

form of standing instructions) by the Trustee in Eligible Investments maturing

on or before the Business Day preceding the following Distribution Date. All

such Eligible Investments shall be made in the name of the Trustee, for the

benefit of the Certificateholders. All income and gain net of any losses

realized from Eligible Investments made with funds on deposit in the Reserve

Account shall be deposited into the Reserve Account. The Trustee in its

fiduciary capacity shall not be liable for the amount of any loss incurred in

respect of any investment or lack of investment of funds held in the Reserve

Account and made in accordance with this Section 3.04(b).

 

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                  (c) The Trustee shall keep and maintain appropriate accounting

records relating to deposits to and withdrawals from the Reserve Account.

 

                  (d) Upon termination of the Trust, after all accrued interest

and unpaid principal on the Certificates has been paid in full, any amounts

remaining in the Reserve Account shall be distributed by the Trustee, as paying

agent, to the Servicer as additional servicing compensation.

 

         SECTION 3.05. Advances. The Servicer shall determine on or before each

Determination Date whether it is required to make Advances pursuant to the

definition thereof. If the Servicer determines it is required to make Advances,

it shall, on or before the Determination Date, deposit into the Certificate

Account an amount equal to such Advances in immediately available funds. With

respect to each Contract, the Advance shall increase Outstanding Advances.

Outstanding Advances shall be reduced by amounts applied to reimburse the

Servicer for Outstanding Advances pursuant to Section 3.09(a).

 

         SECTION 3.06. Additional Deposits. The Servicer shall deposit in the

Certificate Account the Purchase Amount for the purchase of a Contract pursuant

to Section 3.01. The Seller (or, as provided in Section 2.03(d), LFC) shall

deposit in the Certificate Account the Purchase Amount for the repurchase of a

Contract by the Seller pursuant to Section 2.01, 2.03, 2.04 or 10.02 and any

Indemnity Amount pursuant to Section 2.04. The Servicer, the Seller or LFC, as

the case may be, shall make all such deposits not later than one Business Day

prior to the relevant Distribution Date.

 

         SECTION 3.07. Additional Collection Procedures. The Servicer shall make

reasonable efforts to ensure that all payments due with respect to the Contracts

are paid into the Certificate Account in a timely fashion, and shall, in a

manner consistent with this Agreement, continue such normal collection

procedures as it follows with respect to other contracts similar to the

Contracts held in its own portfolio or otherwise serviced by it.

 

         SECTION 3.08. Recovery of Certain Moneys by the Servicer. The Servicer

shall be entitled to receive (as a Retained Item) any amounts rebated pursuant

to any payment of premiums by the Servicer for any Physical Damage Insurance

Policy on behalf of an Obligor.

 

         SECTION 3.09. Permitted Application of Funds on Distribution Dates. The

Trustee, in its capacity as paying agent hereunder, shall apply and remit or

cause to be applied and remitted (i) the Available Funds and Eligible Investment

Earnings in the Certificate Account, (ii) the amount on deposit in the Reserve

Account and (iii) any amounts to be distributed to Certificateholders out of the

Pre-Funding Account pursuant to Section 5.04(d), on each Distribution Date in

accordance with the Distribution Date Statement prepared by the Servicer and

verified by the Trustee as provided in Section 4.02(a), for the purposes set

forth below in the following priority, and for no other purpose:

 

                  (a) From Available Funds and from Eligible Investments

Earnings for the relevant Collection Period in the Certificate Account,

 

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                           (i) first, to the Certificateholders, in an amount

         equal to the lesser of (A) the aggregate remaining Premium Amount

         relating to all Contracts that terminated early for any reason during

         the Collection Period to which such Distribution Date relates and (B)

         50% of the total amount of Breakage Fees received during such

         Collection Period with respect to the Contracts described in clause (A)

         hereof, as an additional payment of interest on the Certificates; and

 

                           (ii) second, to the Servicer, (A) first, in an amount

         equal to the Retained Items received in respect of the Collection

          Period to which such Distribution Date relates; provided, that the

         amount of Retained Items payable to the Servicer pursuant to this

         clause (A) shall be reduced dollar for dollar by the amount paid to the

         Certificateholders pursuant to Section 3.09(a)(i) on such Distribution

         Date, (B) second, in reimbursement of Outstanding Advances, such right

         of reimbursement pursuant to this clause (a)(ii) being limited to

         (x)amounts received on the Contracts in respect of which such

         Outstanding Advances were made during the Collection Period to which

         such Distribution Date relates, excluding any Purchase Amount proceeds

         received from the Trustee pursuant to Section 2.01 and (y) Outstanding

         Advances made and not yet reimbursed with respect to Contracts that

         became Defaulted Contracts (excluding Purchased Contracts) during the

         Collection Period to which such Distribution Date relates, and (iii)

         third, in payment of any Eligible Investments Earnings (except upon the

         occurrence and during the continuance of an Event of Default, when

         Eligible Investments Earnings will be distributed as part of Additional

         Funds).

 

                  (b) From Monthly Interest and Additional Funds for the

relevant Collection Period in the Certificate Account:

 

                           (i) first, to the extent the amount paid to the

         Certificateholders pursuant to Section 3.09(a)(i) above was not

         sufficient to pay all remaining Premium Amount relating to all

         Contracts that terminated early for any reason during the Collection

         Period to which such Distribution Date relates, to the

         Certificateholders, in an amount equal to the lesser of (A) the

         aggregate remaining Premium Amount relating to all Contracts that

         terminated early for any reason during the Collection Period to which

         such Distribution Date relates, after taking into account any payment

         made to the Certificateholders on such Distribution Date pursuant to

         Section 3.09(a)(i) and (B) 50% of the total amount of Breakage Fees

         received during such Collection Period with respect to the Contracts

         described in clause (A) hereof, as an additional payment of interest on

         the Certificates;

 

                           (ii) second, to the Trustee (including any

         predecessor Trustee) in payment of accrued and unpaid fees, indemnities

          and expenses (including in reimbursement of Transition Expenses) owing

         to it in each of its capacities under this Agreement; provided, that

         payments pursuant to this subclause (ii) on such Distribution Date

         shall not exceed $30,000 in the aggregate; provided further, that on

         any Distribution Date occurring during the period from the date hereof

         through July 31, 2006 (the "Ramp-up Period"), if Monthly Interest and

         Additional Funds for the Collection Period relating to such

         Distribution Date are not sufficient to pay the full amount owed to the

         Trustee pursuant to this Section 3.09(b)(ii) in accordance with the

         priorities of payment set forth herein, any remaining amount owed to

         the Trustee pursuant to this Section 3.09(b)(ii) (up to a maximum

         amount equal to the net investment earnings that have accrued on

         amounts on deposit in the Pre-Funding Account since the last

         Distribution Date (or, in the case of the first Distribution Date,

         since the date hereof) shall be withdrawn from the Pre-Funding Account

         and paid to the Trustee. After expiration of the Ramp-up Period,

         amounts due to the Trustee shall only be paid out of available funds in

         the Certificate Account in accordance with the priorities of payment

         set forth herein;

 

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                           (iii) third, to the Servicer in an amount equal to

          fifty percent (50%) of the Servicing Fee that accrued during the

         Collection Period to which such Distribution Date relates;

 

                           (iv) fourth,

 

                                    (A) if the aggregate amount deposited in the

         Reserve Account pursuant to this Section 3.09(b)(iv)(A) on all prior

         Distribution Dates does not equal at least 1.00% of the aggregate

         Original Pool Balance of all Contracts purchased by the Trust from the

         date of this Agreement to such Distribution Date (the "Required Deposit

         Amount"), (1) first, to the Reserve Account in an amount equal to the

         lesser of (x) fifty percent (50%) of the Servicing Fee that accrued

         during the Collection Period to which such Distribution Date relates

         and (y) the amount necessary to make the aggregate amount deposited in

         the Reserve Account pursuant to this Section 3.09(b)(iv)(A) on all

         prior Distribution Dates and on such Distribution Date equal to the

         Required Deposit Amount; and (2) second, to the Servicer in an amount

         equal to the excess, if any, of the amount calculated in accordance

         with subclause (1)(x) over the amount calculated in accordance with

          subclause (1)(y) of this Section 3.09(b)(iv)(A); or

 

                                    (B) if the aggregate amount deposited in the

         Reserve Account pursuant to Section 3.09(b)(iv)(A) on all prior

         Distribution Dates equals or exceeds the Required Deposit Amount, to

         the Servicer in an amount equal to fifty percent (50%) of the Servicing

         Fee that accrued during the Collection Period ending immediately prior

         to such Distribution Date;

 

                            (v) fifth, to the payment of the Interest

         Distribution Amount with respect to the Certificates in accordance with

         Section 4.01;

 

                           (vi) sixth, to pay the Servicer any overdue Servicing

         Fees that were payable on previous Distribution Dates and remain

         unpaid, but excluding those used to make deposits to the Reserve

         Account;

 

                           (vii) seventh, to the Trustee in payment of any

         amounts payable to it in each of its capacities under this Agreement

         pursuant to Section 3.09(b)(ii) above but remaining unpaid due to the

         proviso contained therein; and

 

                           (viii) eighth, the remainder to the Servicer as

         additional servicing compensation.

 

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                  (c) Monthly Principal for the relevant Collection Period in

the Certificate Account shall be paid to the Certificateholders as a repayment

of principal on their Certificates in accordance with Section 4.01.

 

                  (d) (i) first, to the extent the amount of Monthly Interest

and Additional Funds available on any Distribution Date is not sufficient to pay

the Interest Distribution Amount to the Certificateholders pursuant to Section

3.09(b)(v) on such Distribution Date in accordance with the payment priorities

set forth in Section 3.09(b), an amount sufficient to make such payment in full

(or any lesser amount on deposit in the Reserve Account) shall be withdrawn from

the Reserve Account and used to make such payment; and

 

                      (ii) second, with respect to any Contracts that became

Defaulted Contracts during the Collection Period to which such Distribution Date

relates, an amount equal to the lesser of (A) the aggregate Outstanding

Principal Balance of such Contracts immediately prior to their being declared

Defaulted Contracts and (B) the remaining amount on deposit in the Reserve

Account as of such Distribution Date, shall be withdrawn from the Reserve

Account and paid to the Certificateholders as a repayment of principal on their

Certificates in accordance with Section 4.01. To the extent the amount

determined pursuant to clause (A) (the "Clause A Amount") is greater than the

amount pursuant to clause (B) (the "Clause B Amount") of this Section

3.09(d)(ii), the Outstanding Principal Amount of each Certificate shall be

written down by a pro rata portion (based on its Outstanding Principal Amount

compared to the aggregate Outstanding Principal Amount of all Certificates) of

an amount equal to the excess of the Clause (A) Amount over the Clause (B)

Amount. For the avoidance of doubt, the Servicer shall calculate and set forth

all amounts described in this Section 3.09(d)(ii) in its monthly Distribution

Date Statement, and the Trustee, in its capacity as calculation agent, shall

verify all such calculations as to mathematical accuracy.

 

                      In addition, upon termination of the Trust, any Eligible

Investments in the Reserve Account shall be sold and the cash balance in the

Reserve Account shall be applied in the following order of priority (i) to

payment of any accrued Interest Distribution Amount on the Certificates

remaining unpaid after application of Monthly Interest and Additional Funds

pursuant to Section 3.09(b), (ii) to payment of the Outstanding Principal Amount

of the Certificates (if any) after application of Monthly Principal and any

amounts received out of the Pre-Funding Account pursuant to Section 5.04(d)(ii)

and (iii) the remainder to the Servicer as additional servicing compensation.

 

                  (e) Pre-Funding Account Earnings (if any) for the relevant

Collection Period shall be withdrawn from the Pre-Funding Account and paid to

the Certificateholders as an additional payment of interest on their

Certificates in accordance with Section 5.4(d)(i).

 

         SECTION 3.10. Release of Contract Files. Upon the payment in full of

any Contract by the Obligor or in the case of a Purchased Contract, the Servicer

shall, and is hereby authorized by the Certificateholders to, promptly release

the Contract Files with respect to any such Contract from the Trust. Upon any

such payment, or the receipt of such notification, the Servicer is authorized to

release the related Contract.

 

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         SECTION 3.11. Servicing Compensation; Payment of Certain Expenses by

the Servicer.

 

                  (a) As compensation for acting as Servicer hereunder and for

the expenses set forth in paragraph (b) below, the Servicer shall be entitled to

receive a monthly Servicing Fee from the Certificate Account for each Collection

Period. The Servicing Fee on each Distribution Date shall equal the product of

(A) one-twelfth (or for any Collection Period, or any portion of a Collection

Period during which the Servicer was acting in such capacity hereunder, less

than a full calendar month, one-twelfth, divided by 30, multiplied by the actual

number of days in such Collection Period), (B) the Servicing Fee Rate and (C)

the Pool Balance as of the first day of the Collection Period to which such

Distribution Date relates; provided, however, that any portion of the Servicing

Fee otherwise payable to the Servicer that is deposited into the Reserve Account

as required by Section 3.09 shall reduce the Servicing Fee payable to the

Servicer on such Distribution Date by an equivalent amount. The Servicing Fee

shall be calculated by the Servicer on the Determination Date immediately

preceding each Distribution Date and shall be payable to the extent funds are

available in the Certificate Account in accordance with the priorities of

payment set forth in Section 3.09. Any portion of the Servicing Fee not paid to

the Servicer on a particular Distribution Date (excluding amounts deposited to

the Reserve Account as provided in Section 3.09) due to the unavailability of

funds therefor in accordance with the payment priorities set forth in Section

3.09, shall continue to be due and owing to the Servicer and shall be paid on

the next Distribution Date when funds are available therefor in accordance with

the payment priorities set forth in Section 3.09. Any such Servicing Fees that

have their payment deferred shall not accrue interest. The Servicer shall also

be entitled to additional servicing compensation separate from the Servicing Fee

under the circumstances described in Section 3.09.

 

                  (b) The Servicer shall be required to pay all expenses

incurred by it in connection with its servicing activities hereunder, including,

without limitation, taxes imposed on the Servicer, the fees and disbursements of

its attorneys and independent accountants, outside auditor fees, data processing

costs, and other related expenses incurred in connection with administering the

Contracts) and shall not be entitled to reimbursement therefor except as

specifically provided herein. The Servicer agrees to perform all its duties and

obligations under this Agreement, regardless of its receipt of servicing

compensation hereunder.

 

          SECTION 3.12. Annual Statement as to Compliance.

 

                  (a) The Servicer will deliver to the Trustee, on or before

March 31 of each year, beginning March 31, 2006, an Officer's Certificate

stating that (i) a review of the activities of the Servicer during the preceding

calendar year (or portions thereof or, in the case of the first such

certificate, during the period from the date of this Agreement to December 31,

2005) and of its performance under this Agreement has been made under such

officer's supervision and (ii) to the best of such officer's knowledge, based on

such review, the Servicer has fulfilled all its obligations under this Agreement

throughout such period, or if there has been a material default in the

fulfillment of any such obligations, specifying each such material default known

to such officer and the nature and status thereof.

 

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                  (b) The Servicer will deliver to the Trustee, promptly upon

any Servicing Officer's becoming aware of any material default in the

fulfillment of any of its obligations under this Agreement, an Officer's

Certificate specifying such material default and the nature and status thereof.

 

         SECTION 3.13. Annual Independent Public Accountants' Report. On or

before March 31 of each year, beginning March 31, 2006, the Servicer at its own

expense shall cause a firm of independent public accountants (who may also

render other services to the Servicer or the Seller or any agent or Affiliate of

either) to furnish a report to the Servicer and Trustee summarizing the results

of certain procedures performed with respect to certain documents and records

relating to the servicing of the Contracts during the preceding calendar year

(or portions thereof or, in the case of the first such report, during the period

from the date of this Agreement to December 31, 2005) which documents and

records shall include the reports furnished to Certificateholders pursuant to

Section 4.02 and the reports prepared by the Servicer and furnished to the

Trustee pursuant to Section 4.03 during the preceding calendar year or other

period. The procedures to be performed and reported upon by the independent

public accountants shall be those agreed to by the Servicer and the Majority

Certificateholders. In the event such firm requires the Trustee to agree to the

procedures performed by such firm, the Servicer and Majority Certificateholders

shall jointly direct the Trustee in writing to so agree; it being understood and

agreed that the Trustee will deliver such letter of agreement in conclusive

reliance upon the direction of the Servicer, and shall make no independent

inquiry or investigation as to, and shall have no obligation or liability in

respect of, the sufficiency, validity or correctness of such procedures.

 

         SECTION 3.14. Access to Certain Documentation and Certain Information

Regarding the Contracts. The Servicer will provide to the Trustee access to the

documentation in its possession regarding the Contracts, such access being

afforded without charge but only during normal business hours and upon

reasonable notice at the offices of the Servicer designated by it. The Trustee

shall, and is hereby authorized by the Certific