rai8kleafnetbank.htm

Item 1.01 Entry into a Material Definitive Agreement.

See Item 2.01 below.

Item 2.01 Completion of Acquisition or Disposition of Assets.

On November 7, 2007, LEAF Funding, LLC, an indirect subsidiary of ours, acquired substantially all of the assets of NetBank Business Finance, a division of NetBank, from the Federal Deposit Insurance Corporation as Receiver of NetBank for a purchase price of $415.2 million, including assumed liabilities of $21.2 million. We had previously described the acquisition agreement between LEAF Funding and the FDIC in our Current Report on Form 8-K dated as of October 25, 2007. The assets of NetBank Business Finance are primarily equipment leases and loans.

We obtained $368.1 million of bridge financing for this acquisition from Morgan Stanley Bank and its affiliate. It is our intention to sell the assets we acquired in this transaction to investment partnerships sponsored by LEAF Financial Corporation, our indirect subsidiary, and repay the bridge financing, prior to November 1, 2008.

The bridge financing is provided through a Receivables Loan and Security Agreement, dated as of November 1, 2007, among LEAF Capital Funding III, LLC, as borrower, LEAF Financial Corporation, as servicer, Morgan Stanley Bank, as Class A Lender and as collateral agent, Morgan Stanley Asset Funding Inc., as Class B Lender, U.S. Bank National Association, as the custodian and lenders’ bank, and Lyon Financial Services, Inc. (d/b/a U.S. Bank Portfolio Services), as the backup servicer. LEAF Capital Funding III is a special purpose entity wholly-owned by LEAF Funding. LEAF Capital Funding III entered into a Purchase and Sale Agreement with LEAF Funding pursuant to which the assets acquired from the FDIC by LEAF Funding were sold to LEAF Capital Funding III in exchange for the proceeds of the loan.

The financing agreement provides for two loans to LEAF Capital Funding III, a Class A loan and a Class B loan. These loans are non-recourse to us or any of our affiliates other than LEAF Capital Funding III and the assets transferred to it. The agreement has a termination date of November 1, 2008 unless extended by the lenders in their sole discretion, at the written request of LEAF Capital Funding III.

The Class A loan is for the amount of $333.4 million. The interest rate for the Class A loan varies as follows: (i) from the closing date through August 7, 2008, the rate is the Adjusted Eurodollar Rate plus 2.00%, (ii) from August 8, 2008 through the termination date, the rate is the Adjusted Eurodollar Rate plus 2.50%, and (iii) from and after the termination date or during any event of default, the Adjusted Eurodollar Rate plus 3.00%. The Adjusted Eurodollar Rate is the 30 day London Interbank Offered Rate.

The Class B loan is for the amount of $34.7 million. The interest rate for the Class B loan varies as follows: (i) from the closing date through August 7, 2008, the rate is the Adjusted Eurodollar Rate plus 10.00%, (ii) from August 8, 2008 through the termination date, the rate is the Adjusted Eurodollar Rate plus 12.50%, and (iii) from and after the termination date or during any event of default, the Adjusted Eurodollar Rate plus 15.00%.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

See Item 2.01 above.

Delaware		0-4408		72-0654145
(State or other jurisdiction of incorporation)		(Commission File Number		(I.R.S. Employer Identification No.

	RESOURCE AMERICA, INC.

Date: November 13, 2007	By:	/s/ Steven J. Kessler
		Name: Steven J. Kessler
		Title: Executive Vice President and Chief Financial Officer