<PAGE>

                                                                    EXHIBIT 10.3


                          FOURTH AMENDED AND RESTATED
             FINANCING SERVICES AND CONTRIBUTED CAPITAL AGREEMENT


          FOURTH AMENDED AND RESTATED FINANCING SERVICES AND CONTRIBUTED CAPITAL
AGREEMENT ("Agreement") dated as of the 12th day of January, 2000, between
SOUTHERN STATES COOPERATIVE, INCORPORATED (the "Cooperative"), a Virginia
corporation, and STATESMAN FINANCIAL CORPORATION ("Statesman"), a Virginia
corporation.

          Cooperative desires from time to time to sell to Statesman certain
accounts receivable owing to it, certain installment sales contracts and certain
Crop Time Notes, and Statesman is interested in purchasing such receivables,
installment sales contracts and Crop Time Notes.  The parties desire to set
forth the terms and conditions upon which such sales may be made.  The
Cooperative also desires to have Statesman issue from time to time credit cards
to customers of the Cooperative and its Local Cooperatives and Dealerships, to
extend from time to time asset based financing, agricultural production loans
and term loans to customers of the Cooperative pursuant to separate agreements
to be entered into between each such customer and Statesman and to lease
personal property from time to time to customers of the Cooperative, Local
Cooperatives and Dealerships.  Therefore, the parties hereto agree as follows:

                                   ARTICLE I
                                   ---------

                       DEFINITIONS AND ACCOUNTING TERMS
                       --------------------------------

          SECTION 1.01.  DEFINED TERMS.  As used in this Agreement, the
                         -------------
following terms have the following meanings (terms defined in the singular to
have the same meaning when used in the plural and vice versa):

          "Accounts Receivable - Local Cooperative" means the amounts advanced
           ---------------------------------------
by the Cooperative to a Local Cooperative and owing from time to time from such
Local Cooperative to the Cooperative.

          "Agreement" means this Fourth Amended and Restated Financing Services
           ---------
and Contributed Capital Agreement, as it may be amended, supplemented, or
modified from time to time.

          "Agricultural Production Loan" means to loan for a term of not more
          -----------------------------
than one year, the proceeds of which are used to raise crops or livestock.

          "Approved Contracts" means those Installment Sales Contracts arising
           ------------------
out of the sale of goods by a Retail Service or a customer of the Cooperative
which have been approved in advance by Statesman as evidenced by a Statesman
Approval Number.
<PAGE>

          "Approved Notes" means those Crop Time Notes arising out of the sale
           --------------
of goods and services by the Cooperative which have been approved in advance by
Statesman.

          "Asset Based Financing" means financing of a Dealership by Statesman
           ---------------------
secured by accounts receivable, inventory, equipment, including rolling stock,
real estate and other fixed assets, or any of such items.

          "Average Total Delinquency Percentage" means with respect to each of
           ------------------------------------
Retail Accounts, Grain Marketing Accounts and Accounts Receivable - Local
Cooperatives (each a "type" of Receivable) that percentage determined by
dividing the average total delinquent Receivables of that type (including any
Receivables of that type sold to Statesman which are delinquent), measured as of
the last day of each calendar month, for the twelve-month period ending on the
last Business Day of the calendar month preceding a settlement date by the
average total Receivables of that type owing the Cooperative (including those
sold to Statesman), measured as of the last day of each calendar month, for the
same twelve-month period.  "Average Total Delinquency Percentage" means with
                            ------------------------------------
respect to Wholesale Accounts that percentage determined by dividing the average
total delinquent Wholesale Accounts (including any Wholesale Accounts sold to
Statesman which are delinquent), measured as of the last day of each calendar
month, for the twelve-month period ending on the last Business Day of the
calendar month preceding the date of determination by the average total
Wholesale Accounts owing the Cooperative (including those sold to Statesman),
measured as of the last day of each calendar month, for the same twelve-month
period.

          "Average Total Delinquency Percentage Variance" means with respect to
           ---------------------------------------------
each of Retail Accounts, Grain Marketing Accounts and Accounts Receivable -
Local Cooperatives (each a "type" of Receivable) the difference, regardless of
which is greater, between (i) the Average Total Delinquency Percentage for that
type of Receivables computed as of the last Business Day of the calendar month
preceding any settlement date and (ii) the percentage obtained by dividing the
total delinquent Receivables of that type (including Receivables of that type
sold to Statesman which are delinquent) on such date by the total Receivables of
that type (including those sold to Statesman) on such date.  "Average Total
                                                              -------------
Delinquency Percentage Variance" means with respect to Wholesale Accounts the
-------------------------------
difference, regardless of which is greater, between (i) the Average Total
Delinquency Percentage for Wholesale Accounts computed as of the last Business
Day of the calendar month preceding the date of determination and (ii) the
percentage obtained by dividing the total delinquent Wholesale Accounts
(including Wholesale Accounts sold to Statesman which are delinquent) on such
date by the total Wholesale Accounts (including those sold to Statesman) on such
date.

          "Balances Owed" means the net amount payable to the Cooperative on
           -------------
Receivables as a result of goods sold or services performed, or both, after
adjustment for all rebates, credits and all other adjustments made by the
Cooperative on all Purchased Receivables.

          "Business Day" means any day other than a Saturday, Sunday or other
           ------------
day on which commercial banks in Richmond, Virginia, are authorized or required
to close under applicable law.

                                       2
<PAGE>

          "Collateral" means any property which is subject to a purchase money
           ----------
security interest securing the obligations of the obligor on a Purchased
Contract or a Purchased Note.

          "Crop Time Notes" means promissory notes of Customers of the
           ---------------
Cooperative evidencing amounts due for the purchase of goods and services from
the Cooperative, which are payable in one year or less.

          "Customer of the Cooperative" means a member of the Cooperative or
           ---------------------------
other Person who purchases goods or services from the Cooperative.

          "Dealership" means any wholesale customer of the Cooperative which has
           ----------
purchased merchandise or products from the Cooperative for resale to its
customers and shall include a private dealer of the Cooperative but shall not
include a Retail Service or a Local Cooperative.

          "Default" means any of the events specified in Article X, whether or
           -------
not any requirement for the giving of notice or the lapse of time, or both, has
been satisfied.

          "Dispute" has the meaning set forth in Section 4.06.
           -------

          "Eligible Contracts" means Installment Sales Contracts arising out of
           ------------------
the sale of goods by Retail Services or a customer of the Cooperative other than
Approved Contracts which Statesman has determined to purchase from the
Cooperative.

          "Eligible Notes" means Crop Time Notes other than Approved Notes which
           --------------
Statesman has determined to purchase from the Cooperative.

          "Eligible Receivables" means Receivables which Statesman has
           --------------------
determined to purchase from the Cooperative.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
           -----
amended from time to time, and the regulations and published interpretations
thereof.

          "Event of Default" means any of the events specified in Section 10.01,
           ----------------
provided that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.

          "GAAP" means generally accepted accounting principles consistently
           ----
applied with respect to a corporation conducting a business the same as or
similar to that of the Cooperative and its Subsidiaries, if any, as in effect
from time to time.

          "Grain Marketing Accounts" means amounts owed to the Cooperative for
           ------------------------
the purchase of grain commodities, whether evidenced by open account, note, or
otherwise or any combination thereof.

          "Headquarters" means the office of Statesman at 6606 West Broad
           ------------
Street, Post Office Box 25567, Richmond, Virginia 23260.

                                       3
<PAGE>

          "Historical Charge Off Percentage" means with respect to each of
           --------------------------------
Retail Accounts, Grain Marketing Accounts and Accounts Receivable - Local
Cooperatives (each a "type" of Receivable) that percentage which is obtained by
dividing (a) the sum of (i) gross bad debt expense of the Cooperative for
Receivables of that type for any fiscal year and (ii) the gross bad debt expense
of Statesman for such fiscal year for Receivables of that type purchased from
the Cooperative by (b) the total dollar volume for sales which generate
Receivables of that type (whether cash or non-cash) of the Cooperative for such
fiscal year.

          "Independent Cooperative" means a cooperative which is not a Local
           -----------------------
Cooperative.

          "Installment Sales Contract" means a written agreement providing for
           --------------------------
the deferred payment of the purchase price of goods sold in the ordinary course
of business.

          "Installment Sales Financing" means the purchasing by Statesman of
           ---------------------------
chattel paper (as defined in Article 9 of the Uniform Commercial Code of
Virginia) arising out of a sale of merchandise by a Retail Service, Local
Cooperative or Dealership.

          "Leases" means contracts for the lease of personal property for a
           ------
fixed period of time by Statesman to the Cooperative, a Local Cooperative, a
Dealership or a customer of any.

          "Lien" means any mortgage, deed of trust, pledge, security interest,
           ----
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), charge or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code of Virginia or comparable law of any jurisdiction to evidence
any of the foregoing).

          "Local Cooperative" means any corporation which is managed by the
           -----------------
Cooperative under a management agreement or contract.

          "Loan" means an Agricultural Production Loan, a Term Loan, an asset
           ----
based loan or any substantially similar extension of credit now or hereafter
made by Statesman to a Customer of the Cooperative or other Person.

          "Manufacturer" means the original equipment manufacturer of goods
           ------------
offered for sale by the Cooperative.

          "Multiemployer Plan" means a Plan described in Section 4001(a)(3) of
           ------------------
ERISA which covers employees of the Cooperative or to which the Cooperative is
or may be required to make contributions under ERISA.

          "Net Balance" means with respect to an Installment Sales Contract, the
           -----------
outstanding balance owing on such Installment Sales Contract including any
applicable late charges but exclusive of any unearned finance charges as
provided for in such Installment Sales Contract and means with respect to a Crop
Time Note, the outstanding principal balance owing on such Crop Time Note and
all accrued and unpaid interest thereon.

                                       4
<PAGE>

          "PBGC" means the Pension Benefit Guaranty Corporation or any entity
           ----
succeeding to any or all of its functions under ERISA.

          "Person" means an individual, partnership, corporation, business
           ------
trust, joint stock company, trust, unincorporated association, joint venture,
governmental authority, or other entity of whatever nature.

          "Plan" means any employee welfare plan established or maintained by
           ----
the Cooperative or to which the Cooperative has made contributions in the past
or may in the future be required to make contributions under ERISA.

          "Prohibited Transaction" means any transaction set forth in Section
           ----------------------
406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended
from time to time.

          "Purchased Contracts" means Approved Contracts and Eligible Contracts
           -------------------
which have been purchased by Statesman from the Cooperative or a customer of the
Cooperative.

          "Purchased Notes" means Approved Notes and Eligible Notes which have
           ---------------
been purchased by Statesman from the Cooperative.

          "Purchased Receivables" means Eligible Receivables which have been
           ---------------------
purchased by Statesman from the Cooperative.

          "Purchased Wholesale Accounts" means Wholesale Accounts which have
           ----------------------------
been purchased by Statesman from the Cooperative.

          "Receivables" means the amounts owing the Cooperative from time to
           -----------
time for the sale of goods or the performance of services in the ordinary course
of business and shall include Retail Accounts, Grain Marketing Accounts, and
Accounts Receivable - Local Cooperatives.

          "Receivables Certificate" means the certificate referred to in Section
           -----------------------
2.03(1).

          "Reserve Account" means the account established under the provisions
           ---------------
of Section 2.04.

          "Retail Accounts" means amounts owing the Cooperative arising out of
           ---------------
the sale in the ordinary course of business of goods and services by Retail
Services or by stores which were then owned and operated by Gold Kist Inc.,
which amounts are not evidenced by Installment Sales Contracts.

          "Retail Service" means any retail store owned and operated by the
           --------------
Cooperative.

          "Southern States Credit Card Program" means the program of Statesman
           -----------------------------------
to approve revolving or open-end credit in specific amounts for individual
customers of the Cooperative, Local Cooperatives and Dealerships, to extend
credit to such customers for the purchase of goods from the Cooperative, Local
Cooperatives and Dealerships and to settle periodically with the Cooperative,
Local Cooperatives and Dealerships for purchases made by customers pursuant to
that program, as such program may exist from time to time.

                                       5
<PAGE>

          "Statesman Approval Number" means a number given by Statesman to a
           -------------------------
Retail Service to evidence that a particular Installment Sales Contract is an
Approved Contract.

          "Subsidiary" means any corporation the majority of the voting shares
           ----------
of which at the time are owned directly or indirectly by the Cooperative and/or
by one or more Subsidiaries of the Cooperative.

          "Term Loan" means a secured loan with the principal amortized over a
           ---------
period of 5 to 7 years, the proceeds of which are used for agricultural
production.

          "Termination Date" means that date on which certain obligations of the
           ----------------
parties hereunder may be terminated as provided in Section 11.04.

          "Wholesale Accounts" means any obligation arising out of the sale of
           ------------------
goods or the performance of services in the ordinary course of business which is
not an Account Receivable - Local Cooperative, Grain Marketing Account, or
Retail Account.

          "Wholesale Reserve Account" means the account established under the
           -------------------------
provisions of Section 4.04.

                                  ARTICLE II
                                  ----------

                         ACCOUNTS RECEIVABLE FINANCING
                         -----------------------------

          SECTION 2.01.  PURCHASE OF RECEIVABLES.  Statesman may from time to
                         -----------------------
time, at its option upon the terms and subject to the conditions contained in
this Agreement, purchase Receivables from the Cooperative, provided that
Statesman has determined in its sole and absolute discretion that such
Receivables are acceptable to it (which acceptable Receivables are herein
referred to as the "Eligible Receivables"), and in no event shall Statesman
purchase Receivables if after such purchase the aggregate amount owing on all
Receivables purchased by Statesman from the Cooperative shall exceed TWO HUNDRED
MILLION DOLLARS ($200,000,000).  All such purchases shall be made without
recourse to the Cooperative except so far as Statesman shall have the right to
make charges to the Reserve Account as provided in Section 2.05, and nothing
contained herein shall obligate Statesman to purchase any Receivables.

          SECTION 2.02.  OFFER TO SELL.  The Cooperative may from time to time
                         -------------
offer to sell Receivables to Statesman as herein provided, but, except as the
parties may otherwise agree, no Receivable from any obligor shall be sold unless
all accounts owing from such obligor to the Cooperative are sold, and no Retail
Account arising out of a sale at any Retail Service shall be sold unless all
Retail Accounts arising out of sales at such Retail Service are sold.

          SECTION 2.03.  PROCEDURES.
                         ----------

          (1) Prior to 11:00 a.m. (Richmond, Virginia, time) on the tenth
Business Day of each month, or such later day as may be agreed to by Statesman,
the Cooperative shall deliver to Statesman by hand or send by telecopy a
certificate substantially in the form of Exhibit A attached
                                         ---------

                                       6
<PAGE>

hereto (a "Receivables Certificate") with the blanks therein appropriately
completed and reflecting the following information for the preceding month:

          (a) the amount of all Receivables arising out of sales of goods or
services during the preceding month, if any, which were sold by the Cooperative
to Statesman as of the end of such preceding month;

          (b) Receivables which were previously sold to Statesman under the
provisions of this Article II showing the outstanding balances as of the last
day of the preceding month in the aggregate for Retail Accounts, Grain Marketing
Accounts and Accounts Receivable - Local Cooperatives;

          (c) Receivables which were previously sold to Statesman pursuant to
this Article II upon which there was any change in the outstanding balance
during such month, and all debits and credits thereon, including without
limitation payments and other remittances by or on behalf of the account
obligor, credits, rebates and adjustments, showing in the aggregate for Retail
Accounts, Grain Marketing Accounts and Accounts Receivable - Local Cooperatives
the prior balance, the amount and nature of adjustments and the balance as of
the last day of the preceding month;

          (d) the Cooperative shall promptly make available to Statesman, at
Statesman's request, listings of accounts with balances and other referenced
amounts by obligor that are referred to in Sections 2.03(1)(a), (b) and (c).

     (2)  Not later than 11:00 a.m. (Richmond, Virginia, time) on the fifth
Business Day after receipt by Statesman of the Receivables Certificate,
Statesman shall pay to the Cooperative the amount by which (a) the aggregate
outstanding balance on each Receivable it has purchased exceeds (b) the Purchase
Discount (as herein defined) and the amount, if any, to be placed in the Reserve
Account pursuant to Section 2.04, provided, however, that Statesman may choose
not to pay for any Receivable evidenced by a promissory note or other instrument
unless such note or other instrument has been endorsed and delivered to
Statesman.

     (3)  Promptly upon delivery of the certificate described in Section
2.03(1), the Cooperative shall assign and transfer as provided in such
certificate those Receivables Statesman is purchasing and all proceeds thereof,
cash or non-cash.

     (4)  (a) For purposes of this Article II, the Purchase Discount for Retail
Accounts shall be the product obtained by multiplying the outstanding balance of
the Retail Accounts being purchased by (i) the average Historical Charge Off
Percentage of the Cooperative for Retail Accounts for the three preceding fiscal
years times (ii) the sum of 1 plus the Average Total Delinquency Percentage
Variance for Retail Accounts, plus the anticipated interest charges for the
current month relating to the outstanding purchased Retail Accounts. Such amount
shall be computed according to the following formula:

     Discount  =  Retail Accounts being purchased x [(aHCO%) x (1 + ADV)] + AIC

                                       7
<PAGE>

     where

     aHCO%  =   average Historical Charge Off Percentage for Retail Accounts for
                the three preceding fiscal years which for purposes of this
                calculation shall not be less than 0.35% or such other
                percentage as may be from time to time agreed to by the
                Cooperative and Statesman.

     ADV    =   Average Total Delinquency Percentage Variance for Retail
                Accounts.

     AIC    =   the anticipated interest charges for the current month for
                borrowings relating to outstanding Retail Accounts purchased by
                Statesman.

          (b) For purposes of this Article II, the Purchase Discount for Grain
Marketing Accounts shall be the product obtained by multiplying the outstanding
balance of the Grain Marketing Accounts being purchased by (i) the average
Historical Charge Off Percentage of the Cooperative for Grain Marketing Accounts
for the three preceding fiscal years times (ii) the sum of 1 plus the Average
Total Delinquency Percentage Variance for Grain Marketing Accounts, plus the
anticipated interest charges for the current month relating to the outstanding
purchased Grain Marketing Accounts.  Such amount shall be computed according to
the following formula:

     Discount  =  Grain Marketing Accounts being purchased x
                  [(aHCO%) x (1 + ADV)] + AIC

     where

     aHCO%     =   average Historical Charge Off Percentage for Grain Marketing
                   Accounts for the three preceding fiscal years which for
                   purposes of this calculation shall not be less than 0.15% or
                   such other percentage as may be from time to time agreed to
                   by the Cooperative and Statesman.

     ADV       =   Average Total Delinquency Percentage Variance for Grain
                   Marketing Accounts.

     AIC       =   the anticipated interest charges for the current month for
                   borrowings relating to outstanding Grain Marketing Accounts
                   purchased by Statesman.

          (c) For purposes of this Article II, the Purchase Discount for
Accounts Receivable - Local Cooperatives shall be the product obtained by
multiplying the outstanding balance of the Accounts Receivable - Local
Cooperatives being purchased by (i) the average Historical Charge Off Percentage
of the Cooperative for Accounts Receivable - Local Cooperatives for the three
preceding fiscal years times (ii) the sum of 1 plus the Average Total
Delinquency Percentage Variance for Accounts Receivable - Local Cooperatives,
plus the anticipated interest charges for the current month relating to the
outstanding purchased Accounts Receivable - Local Cooperatives.  Such amount
shall be computed according to the following formula:

     Discount  =  Accounts Receivable - Local Cooperatives being purchased x

                                       8
<PAGE>

                [(aHCO%) x (1 + ADV)] + AIC
     where

     aHCO%   =  average Historical Charge Off Percentage for Accounts
                Receivable -Local Cooperatives for the three preceding fiscal
                years which for purposes of this calculation shall not be less
                than .05% or such other percentage as may be from time to time
                agreed to by the Cooperative and Statesman.

     ADV     =  Average Total Delinquency Percentage Variance for Accounts
                Receivable - Local Cooperatives.

     AIC     =  the anticipated interest charges for the current month for
                borrowings relating to outstanding Accounts Receivable - Local
                Cooperatives purchased by Statesman.

     Notwithstanding anything to the contrary contained in this Agreement, a
portion of such purchase price shall be placed in the reserve account described
in Section 2.04.

     SECTION 2.04.  RESERVE ACCOUNT.  Statesman shall place in a reserve account
                    ---------------
(the "Reserve Account") an amount not to exceed one-eighth of one percent
(0.125%) of the aggregate outstanding balance on each Receivable it elects to
purchase, provided, however, that in no event shall any additional amount be
deducted from the Purchase Price paid to the Cooperative or placed in the
Reserve Account if the aggregate amount in the Reserve Account is equal to or
greater than one quarter of one percent (0.25%) of the aggregate unpaid balance
of all Receivables which Statesman has purchased from the Cooperative (including
the Receivables being paid for on such date).  Funds in the Reserve Account need
not be segregated from other funds of Statesman.  If at the end of any fiscal
year of Statesman, the balance in the Reserve Account after charges to the
Reserve Account as permitted in Section 2.05 is greater than one-eighth of one
percent (0.125%) of the balance owing on Receivables which Statesman has
purchased from the Cooperative, no Event of Default shall have occurred and be
continuing and no obligation of the Cooperative to Statesman is then due and
payable, Statesman will upon request of the Cooperative remit such excess to the
Cooperative.

     SECTION 2.05.  CHARGES TO RESERVE ACCOUNT.  Statesman may in its sole and
                    --------------------------
absolute discretion charge losses on Purchased Receivables related to Credit
Risk (as defined in Section 4.06) against the Reserve Account.  Statesman agrees
to add to the Reserve Account the amount received as a recovery less associated
collection costs on any Purchased Receivables which were previously charged to
the Reserve Account.  Statesman shall notify the Cooperative promptly in writing
of any such reduction in the Reserve Account.  As of the end of each month,
Statesman will provide the Cooperative with a report of transactions in the
Reserve Account during such month showing the balance in such account as of the
end of such month.

     SECTION 2.06.  PAYMENTS FROM THE COOPERATIVE.  Monthly with the delivery of
                    -----------------------------
each Receivables Certificate the Cooperative shall remit to Statesman in
immediately available funds an amount equal to the sum of (i) all payments
received by the Cooperative during

                                       9
<PAGE>

the preceding month on Purchased Receivables, (ii) all rebates or credits on any
Purchased Receivable allowed by the Cooperative during the preceding month, and
(iii) all other adjustments made by the Cooperative on any Purchased Receivable
during such month which resulted in a reduction of the amount owing thereon,
minus any proceeds the Cooperative has collected on Purchased Receivables and
paid to Statesman since the delivery of the previous Receivables Certificate.

     SECTION 2.07.  METHOD OF PAYMENT.  All payments from the Cooperative to
                    -----------------
Statesman under the terms of this Agreement shall be made to Statesman in
immediately available funds in Richmond, Virginia.  Whenever any payment is
scheduled to be made on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day.

     SECTION 2.08.  FACILITY FEES FOR PURCHASE OF RECEIVABLES.  The Cooperative
                    -----------------------------------------
will pay to Statesman by the tenth Business Day of each month, or such later day
as may be agreed to by Statesman, a Facility Fee in such amount as shall be
agreed upon from time to time by the Cooperative and Statesman.

     SECTION 2.09.  COLLECTION OF RECEIVABLES.  Statesman hereby authorizes the
                    -------------------------
Cooperative to collect Purchased Receivables, subject to direction and control,
but Statesman may, without cause or notice, curtail or terminate said authority
at any time.  Upon receipt of all checks, drafts, cash and other remittance in
payments of or on account of the Purchased Receivables, the Cooperative will
account to Statesman for such proceeds as herein provided.  The Cooperative will
endorse all checks, drafts and other items evidencing such proceeds where
necessary to permit collection of such items, which endorsement Statesman is
also hereby authorized to make, as attorney-in-fact on behalf of the
Cooperative.

     The Cooperative will pay all proceeds it collects on Purchased Receivables
to Statesman monthly no later than the tenth Business Day of each month or at
such other intervals as Statesman may from time to time request.

     If the Cooperative receives any promissory note or other instrument (other
than a check) in payment of or on account of any Purchased Receivable, it will
immediately endorse the same and deliver it to Statesman.

     Within ten (10) days of receipt of a written request of Statesman, the
Cooperative will notify the obligor on each Purchased Receivable to make
payments to Statesman at its Headquarters or at such other address as Statesman
shall have furnished to the Cooperative in writing and shall promptly deliver to
Statesman all proceeds of any Purchased Receivables then held by the
Cooperative.  From and after receipt of such request, the Cooperative will
promptly forward to Statesman all checks, drafts, cash and other remittances
received by it in payment of or on account of any Purchased Receivable.

     If the Cooperative shall fail to notify account obligors to make payments
to Statesman as herein provided, and in any event upon the occurrence of an
Event of Default, Statesman may so notify such account obligors.

                                       10
<PAGE>

     SECTION 2.10.  REPURCHASE OF RECEIVABLES.  If the Cooperative shall at any
                    -------------------------
time determine not to sell to Statesman the Retail Accounts arising out of sales
made at any Retail Service, the Cooperative will with the consent of Statesman
promptly repurchase from Statesman all Retail Accounts arising out of sales made
at such Retail Service which Statesman has previously purchased from it.  The
purchase price for such Retail Accounts will be the Balances Owed on the Retail
Accounts giving credit for all payments received by Statesman to the date of
sale to the Cooperative.

                                  ARTICLE III
                                  -----------

                          INSTALLMENT SALES FINANCING
                          ---------------------------

     SECTION 3.01.  GENERAL.  Statesman will from time to time, upon the terms
                    -------
and subject to the conditions contained in this Agreement, purchase from the
Cooperative Approved Contracts.  Statesman may from time to time, at its option,
purchase from the Cooperative other Installment Sales Contracts arising out of
the sale of goods by Retail Services as provided in Section 3.03.  Nothing
contained herein shall obligate Statesman to purchase any Installment Sales
Contract other than those Installment Sales Contracts which have been approved
in advance by Statesman as evidenced by a Statesman Approval Number (which
contracts are herein referred to as "Approved Contracts").

     SECTION 3.02.  NON-RECOURSE PURCHASES.  Statesman will from time to time
                    ----------------------
upon the terms and subject to the conditions contained in this Agreement,
purchase Approved Contracts from the Cooperative.  Such purchases shall be
without recourse to the Cooperative except as specifically provided for herein.

     SECTION 3.03.  FULL RECOURSE OPTION.
                    --------------------

     (1) Statesman may from time to time, at its option upon the terms and
subject to the conditions contained in this Agreement, purchase from the
Cooperative Installments Sales Contracts arising out of the sales of goods by
Retail Services, which Installment Sales Contracts Statesman has determined in
its sole and absolute discretion to be acceptable (which contracts are herein
referred to as "Eligible Contracts"), notwithstanding the fact that such
contracts have not been previously approved by Statesman and do not bear an
appropriate Statesman Approval Number.  All purchases of such contracts shall be
subject to full recourse to the Cooperative as provided in paragraph (2) of this
Section 3.03.

     (2) If any installment on any Installment Sales Contract purchased under
the provisions of this Section 3.03 is not paid within ninety (90) days of the
date it is scheduled to be paid, upon written demand by Statesman, the
Cooperative will repurchase such contract immediately for its Net Balance.

     SECTION 3.04.  PURCHASE PRICE; DELIVERY OF PURCHASED CONTRACTS.  The
                    -----------------------------------------------
purchase price for Approved Contracts and Eligible Contracts shall be the Net
Balance or such other amount as may from time to time be agreed to in writing by
the Cooperative and Statesman.  Upon receipt of an Approved Contract or Eligible
Contract duly

                                       11
<PAGE>

endorsed and all related credit information, and the satisfaction of all the
conditions set forth in Article VI hereof, provided no Event of Default shall
have occurred and be continuing, and provided Statesman shall not then be
entitled to require that the Cooperative repurchase Purchased Contracts under
the provisions of Section 3.03 hereof, Statesman shall pay the Cooperative in
cash the purchase price for each such Approved Contract or Eligible Contract.
Promptly thereafter, the Cooperative will notify each obligor on each such
Purchased Contract to make all future payments to Statesman at its Headquarters.
The Cooperative authorizes Statesman to insert its name, or the name of any
other assignee, in the space provided therefor in the assignment clause of all
Purchased Contracts and to return to the Cooperative all Installment Sales
Contracts not purchased. Statesman will identify in writing those contracts it
agrees to purchase and will return those contracts it declines to purchase. The
Cooperative is authorized to cancel the endorsement on each Installment Sales
Contract which Statesman does not purchase.

     SECTION 3.05.  WARRANTIES.
                    ----------

     (1)  By the delivery and sale of each such Installment Sales Contract under
the provisions of Section 3.02 or Section 3.03, the Cooperative warrants to
Statesman that:

          (a) It has good title to such Installment Sales Contract or is
authorized to obtain payment on behalf of one who has good title and the sale
and transfer thereof are otherwise rightful;

          (b) Each such Installment Sales Contract is a binding obligation
arising from the sale of merchandise by a Retail Service in the ordinary course
of business as described in the contract to a person or entity specified therein
as the obligor and constitutes the valid and legally binding obligation of such
obligor enforceable in accordance with its terms; such contract states the full
agreement of the parties and arises out of legally sufficient consideration;

          (c) All signatures on such Installment Sales Contract are genuine or
authorized and all obligors thereon have the capacity to execute such contract;

          (d) Such Installment Sales Contract has not been materially altered;

          (e) No obligor on such Installment Sales Contract has any defense, set
off or counterclaim against the Cooperative which is good against it;

          (f) The conduct of the Cooperative in making the sale out of which
each contract arose was in all material respects in compliance with all
applicable laws and was not induced by fraud, false or misleading
representations or any other manner of unfair or deceptive trade practices or
other unlawful conduct;

          (g) All credit information concerning the obligors on such contracts
was obtained and recorded in strict compliance with all applicable state and
federal laws, and the Cooperative has no reason to believe that any such
information is false, misleading or incomplete in any respect;

                                       12
<PAGE>

          (h) All current credit information with respect to such obligors has
been accurately reported to Statesman;

          (i) The Installment Sales Contract forms provided by Statesman have
not been altered, modified or supplemented in any respect;

          (j) All information required to be disclosed in such forms has been
accurately recorded therein and the Cooperative has complied with the Truth-in-
Lending Act and all other applicable disclosure laws, federal and state;

          (k) No fee has been charged with respect to any contract and no such
contract includes any deferred payment price or other charge which violates any
applicable usury law or consumer protection law;

          (l) Such Installment Sales Contract contains all of the terms and
conditions of the agreement between the Cooperative and the obligors with
respect to such purchase and the Cooperative has not entered into any other
agreement with any obligor with respect to such contract and has not waived or
agreed to waive any term or condition contained in the form or taken any other
action which might result in any constructive or implied waiver or modification
thereof;

          (m) Each down payment shown in each Installment Sales Contract has
actually been received in cash from the obligors or a person paying such amount
on behalf of the obligors and no part thereof has been directly or indirectly
advanced by the Cooperative;

          (n) Each trade-in shown in each Installment Sales Contract has
actually been delivered to the Cooperative and the amount recorded in the
contract accurately reflects the agreed value thereof;

          (o) All aspects of the sale have been in strict compliance with all
applicable consumer protection acts and regulations, including without
limitation the Truth-in-Lending Act, the Equal Credit Opportunity Act and any
applicable state law;

          (p) All applicants for credit have been given all notices required by
applicable law;

          (q) The Cooperative has no knowledge of any insolvency proceeding
involving any party obligated on such Installment Sales Contract; and

          (r) Such Installment Sales Contract is not subject to any claim, lien,
security interest, charge or other encumbrance in favor of any one other than
the Cooperative and Statesman, and the Cooperative has not offered such Contract
for sale to any purchaser other than Statesman.

     (2)  The Cooperative further represents and warrants that it is and shall
be solvent at the time of each sale of any Installment Sales Contract.

                                       13
<PAGE>

     SECTION 3.06.  REMEDIES OF STATESMAN WITH RESPECT TO INSTALLMENT SALES
                    -------------------------------------------------------
CONTRACTS PURCHASED UNDER THE PROVISIONS OF THIS ARTICLE THREE.
--------------------------------------------------------------

     (1) Breach of Warranty.  If any warranty made by the Cooperative under the
         ------------------
provisions of Section 3.05 of this Agreement shall prove to have been false in
any material respect as it relates to any Purchased Contract, the Cooperative
covenants and agrees promptly upon written demand by Statesman to purchase such
Purchased Contract for the Net Balance in immediately available funds.
Statesman covenants and agrees that upon receipt of such payment it will cancel
the endorsement and deliver such Purchased Contract to the Cooperative at the
address stated in Section 11.07 of this Agreement.  Statesman represents and
warrants to the Cooperative with respect to each such Installment Sales Contract
that the Net Balance paid to it is the Net Balance of such contract and that
except as disclosed in a writing accompanying such contract, Statesman has not
released any party to such contract from its obligation thereunder, released any
security interest directly securing such contract or consented to any reduction
in the amount owing thereon or the extension of the due date for any payment or
installment thereunder.  Such transfer from Statesman to the Cooperative will be
without recourse and except as provided in the immediately preceding sentence,
without representation or warranty of any nature or type.

     (2) Determination of Breach.  For the purpose of determining whether or not
         -----------------------
any warranty made by the Cooperative under the provisions of Section 3.05 was
false and that the Cooperative is therefore obliged to repurchase any Purchased
Contract, the Cooperative shall be bound by a written statement of an officer of
Statesman that in the reasonable judgment of Statesman it has determined that
any obligor under any Purchased Contract has refused to make any scheduled
payment under such contract because of any fact which has been represented as
otherwise by the Cooperative to Statesman under the provisions of Section 3.05
hereof.

     SECTION 3.07.  CONTRACT FORMS.  Statesman will provide and the Cooperative
                    --------------
will use forms of contracts and credit applications previously approved by
Statesman.  In the event Statesman determines that any previously approved form
should not be used, it will so advise the Cooperative and the Cooperative will
discontinue any use of such form.

     SECTION 3.08.  PAYMENTS.  The Cooperative will cause each Retail Service on
                    --------
the day of receipt of any payment on any Purchased Contract to report such
payment to Statesman at its Headquarters.  The Cooperative covenants and agrees
that all payments received by it on Purchased Contracts will be charged to the
Cooperative's intercompany accounts payable to Statesman and paid to Statesman
in collected funds no less frequently than every five (5) business days.  In the
event the Cooperative shall fail to endorse any check or other item when
necessary to permit its collection, Statesman is authorized, as its attorney-in-
fact to make such endorsement on behalf of the Cooperative.

     SECTION 3.09.  OBLIGOR COMPLAINTS AND RETURNED MERCHANDISE.
                    -------------------------------------------

     (1) The Cooperative shall, within three (3) Business Days of its receipt,
provide Statesman with a copy of any written complaint from any obligor(s)
relating to any Purchased Contract or any merchandise or service purchased
thereunder;

                                       14
<PAGE>

     (2) If the purchaser under any Purchased Contract returns merchandise, for
any reason, within 10 days from the date of the sale, the Cooperative will fully
reimburse such purchaser for any down payment and immediately repurchase the
Purchased Contract from Statesman for its Net Balance.

     SECTION 3.10.  MODIFICATIONS, EXTENSIONS.  Statesman may, without affecting
                    -------------------------
the agreements of the Cooperative herein, change, modify, extend or renew the
dates and amounts of the periodic installment payments in any Purchased
Contract.

     SECTION 3.11.  WARRANTY, SERVICE, OR SIMILAR AGREEMENTS.  The Cooperative
                    ----------------------------------------
covenants and agrees to indemnify and hold Statesman harmless from any and all
losses arising out of the breach of any performance or extended warranties and
all service or similar agreements made by Manufacturer, the Cooperative, or any
other Person relating to merchandise which is the subject of any Purchased
Contract, even if any such warranty, service, or similar agreements are not
immediately effective.  Unless such agreement expressly provides otherwise, the
Cooperative agrees to provide repairs and service to the purchaser of the
merchandise at its usual rates of charge.

     SECTION 3.12.  REPOSSESSION.
                    ------------

     (1) The Cooperative will, at Statesman's request, act as its agent in the
repossession of any property described in any Purchased Contract in accordance
with all applicable laws and in that capacity take certain actions, including
the transportation of the property from its location to the Cooperative's place
of business, repair and restoration of the property to a marketable condition,
and storage, without storage fee.  Statesman will compensate the Cooperative for
its reasonable actual costs in such transportation, repair, and restoration,
except as covered by an extended warranty or service agreement.  In the event
Statesman directs the Cooperative on its behalf to sell the property, it will
pay the Cooperative such commission as is agreed upon from time to time by the
Cooperative and Statesman and as evidenced by Statesman's letter.  The
Cooperative agrees to sell said property in accordance with the applicable
provisions of the Uniform Commercial Code, as it may be amended from time to
time, and other applicable law.

     (2) Where an extended warranty or service agreement is included in the
sales contract purchased, the Cooperative hereby agrees to perform at its
expense or have performed such warranty or service work under the terms of such
extended warranty or service agreement.  A pro rata refund will be paid in cash
to Statesman of the unearned identifiable charge assessed for the extended
warranty or service agreement, which will then be credited to any balance due on
such Purchased Contract.

                                  ARTICLE IIIA
                                  ------------

                             CREDIT CARD FINANCING
                             ---------------------

     SECTION 3A.01.  APPROVAL OF CUSTOMER'S CREDIT.  Statesman agrees to review
                     -----------------------------
information on customers of the Cooperative, Local Cooperatives and Dealerships

                                       15
<PAGE>

recorded on its Statesman Revolving Credit Card Application and Agreement forms
and submitted to it by the Cooperative, a Local Cooperative or a Dealership and
to approve extending open-end or revolving credit to such customers in a
specific dollar amount or to deny such credit.

     SECTION 3A.02.  PURCHASES BY CREDIT CARD CUSTOMERS.  After Statesman has
                     ----------------------------------
approved the credit of a customer in the Southern States Credit Card Program, so
long as the customer pays his or her account in accordance with the terms
thereof established from time to time by Statesman and otherwise complies with
the terms thereof and is not bankrupt or insolvent, Statesman will extend credit
to such customer up to the preapproved dollar limit for the purchase of goods
and services from the Cooperative, a Local Cooperative or a Dealership.

     SECTION 3A.03.  APPROVAL OF REQUESTS TO CHANGE CREDIT.  Statesman agrees
                     -------------------------------------
upon request of the Cooperative, a Local Cooperative or a Dealership to review
information on customers of the Cooperative, such Local Cooperative or such
Dealership and to approve changing the amount of open-end or revolving credit
for such customers to a specific dollar amount or to deny such change.

     SECTION 3A.04.  SETTLEMENT FOR PURCHASES.  Statesman will periodically
                     ------------------------
settle with the Cooperative and each Local Cooperative and Dealership for
purchases made from the Cooperative or such Local Cooperative or Dealership, as
the case may be, under the Southern States Credit Card Program by periodically
crediting to the Cooperative or such Local Cooperative or Dealership, as the
case may be, the aggregate amount of such purchases since the last settlement
date, net of the applicable merchant's discount as may be agreed to from time to
time by the Cooperative or such Local Cooperative or Dealership, as the case may
be, and Statesman.  All sales under the Southern States Credit Card Program made
in accordance with the instructions provided from time to time by Statesman to
the Cooperative, the Local Cooperatives and the Dealerships will be without
recourse.  Statesman may, however, require the Cooperative, a Local Cooperative
or a Dealership to reimburse it for certain purchases as may be agreed to from
time to time by Statesman and the Cooperative, such Local Cooperative or such
Dealership.  The parties acknowledge and agree that in the event of any conflict
between the terms hereof and any other agreement between the parties or between
Statesman and a Local Cooperative or a Dealership with respect to such rights
and obligations, the terms of the other agreement shall govern.

                                  ARTICLE IIIB
                                  ------------

                             ASSET BASED FINANCING
                             ---------------------

     SECTION 3B.01.  GENERAL.  From time to time at the request of the
                     -------
Cooperative, Statesman may extend asset based financing to customers of the
Cooperative.  Such financing shall be extended pursuant to separate agreements
to be entered into between each such customer and Statesman.

     SECTION 3B.02.  TERMS AND CONDITIONS.  Nothing contained herein shall
                     --------------------
obligate Statesman to extend any asset based financing to any person.  All
decisions with respect

                                       16
<PAGE>

to asset based financing shall be made by Statesman in its sole discretion,
subject to such agreements as Statesman may enter into from time to time with
its asset based borrowers.

                                 ARTICLE IIIC
                                 ------------

                           PERSONAL PROPERTY LEASING
                           -------------------------

     SECTION 3C.01.  LEASES TO THE COOPERATIVE.  Statesman will from time to
                     -------------------------
time lease computers, computer equipment and other equipment to the Cooperative,
which equipment may be subleased by the Cooperative to others.  Such leases
shall be on such terms and conditions as may be agreed to from time to time by
Statesman and the Cooperative and will be evidenced by lease agreements between
Statesman and the Cooperative.

     SECTION 3C.02.  APPROVAL OF CUSTOMER'S CREDIT.  Statesman agrees to review
                     -----------------------------
information on customers of the Cooperative, Local Cooperatives and Dealerships
recorded on its Statesman application forms for the lease of liquid propane
tanks (or other personal property then being leased by Statesman) and submitted
to it by the Cooperative, a Local Cooperative or a Dealership and to approve
leasing such property to such customers or to determine not to lease such
property.

     SECTION 3C.03.  PAYMENT FOR LEASED PROPERTY.  If Statesman approves the
                     ---------------------------
lease of personal property to customers of the Cooperative, a Local Cooperative
or a Dealer, it will promptly notify the Cooperative or the Local Cooperative or
Dealership which requested such lease, and if it has received a properly
completed Lease Agreement appropriately signed by the customer and the
Cooperative, the Local Cooperative or the Dealership, as the case may be, it
will remit to the Cooperative, or to the Local Cooperative or Dealership which
requested such lease the invoice price of the leased equipment.

     SECTION 3C.04.  COLLECTION OF RENT.  The Cooperative, or the Local
                     ------------------
Cooperative or Dealership which requested the lease will serve as the agent of
Statesman in the collection of the monthly rent due under the lease and will
remit to Statesman monthly from the proceeds of liquid propane sold to the
lessee the monthly rentals due under the lease.

                                 ARTICLE IIID
                                 ------------

                         AGRICULTURAL PRODUCTION LOANS
                         -----------------------------


     SECTION 3D.01.  GENERAL.  Statesman may from time to time extend
                     -------
Agricultural Production Loans to customers of the Cooperative and other Persons.
Such financing shall be extended pursuant to separate agreements to be entered
into between each such Person and Statesman.

     SECTION 3D.02.  TERMS AND CONDITIONS.  Nothing contained herein shall
                     --------------------
obligate Statesman to extend any Agricultural Production Loan to any person.
All decisions with

                                       17
<PAGE>

respect to Agricultural Production Loans shall be made by Statesman in its sole
discretion, subject to such agreements as Statesman may enter into from time to
time with its Agricultural Production Loan borrowers.

                                 ARTICLE IIIE
                                 ------------

                                CROP TIME NOTES
                                ---------------


     SECTION 3E.01.  GENERAL.  Statesman will from time to time, upon the terms
                     -------
and subject to the conditions contained in this Agreement, purchase from the
Cooperative Crop Time Notes which have been approved by Statesman.  Nothing
contained herein shall obligate Statesman to purchase any Crop Time Note other
than those Crop Time Notes which have been approved in advance by Statesman
(which Notes are herein referred to as "Approved Notes").

     SECTION 3E.02.  NON-RECOURSE PURCHASES.  The purchase of Crop Time Notes
                     ----------------------
under this Agreement shall be without recourse to the Cooperative except as
specifically provided for herein.

     SECTION 3E.03.  FULL RECOURSE OPTION.
                     --------------------

     (1) Statesman may from time to time, at its option upon the terms and
subject to the conditions contained in this Agreement, purchase from the
Cooperative Crop Time Notes arising out of the sales of goods or the providing
of services by the Cooperative, which Crop Time Notes Statesman has determined
in its sole and absolute discretion to be acceptable (which Notes are herein
referred to as "Eligible Notes"), notwithstanding the fact that such Notes have
not been previously approved by Statesman.  All purchases of such Notes shall be
subject to full recourse to the Cooperative as provided in paragraph (2) of this
Section 3E.03.

     (2) If any Crop Time Note purchased under the provisions of this Section
3E.03 is not paid within ninety (90) days of the date it is scheduled to be
paid, upon written demand by Statesman, the Cooperative will repurchase such
Note immediately for its Net Balance.

     SECTION 3E.04  PURCHASE PRICE; DELIVERY OF PURCHASED NOTES.  The purchase
                    -------------------------------------------
price for Approved Notes and Eligible Notes shall be the Net Balance or such
other amount as may from time to time be agreed to in writing by the Cooperative
and Statesman.  Upon receipt of an Approved Note or Eligible Note duly endorsed
and all related credit information, and the satisfaction of all the conditions
set forth in Article VI hereof, provided no Event of Default shall have occurred
and be continuing, and provided Statesman shall not then be entitled to require
that the Cooperative repurchase Eligible Notes under the provisions of Section
3E.03 hereof, Statesman shall pay the Cooperative in cash the purchase price for
each such Approved Note or Eligible Note.  Promptly thereafter, the Cooperative
will notify each obligor on each such Crop Time Note to make all future payments
to Statesman at its Headquarters.  The Cooperative authorizes Statesman to
insert its name, or the name of any other assignee, in the space provided
therefor in the assignment clause of all Crop Time Notes it has purchased and to
return to the Cooperative all Crop Time Notes not purchased.  Statesman will
identify in writing

                                       18
<PAGE>

those Notes it agrees to purchase and will return those Notes it declines to
purchase. The Cooperative is authorized to cancel the endorsement on each Crop
Time Note which Statesman does not purchase.

     SECTION 3E.05.  WARRANTIES.
                     ----------

     (1)  By the delivery and sale of each such Crop Time Note under the
provisions of Section 3E.02 or Section 3E.03, the Cooperative warrants to
Statesman that:

          (a) It has good title to such Crop Time Note or is authorized to
obtain payment on behalf of one who has good title and the sale and transfer
thereof are otherwise rightful;

          (b) Each such Crop Time Note is a binding obligation arising from the
sale of merchandise or services by the Cooperative in the ordinary course of
business as described in the Note to a person or entity specified therein as the
obligor and constitutes the valid and legally binding obligation of such obligor
enforceable in accordance with its terms; such Note states the full agreement of
the parties and arises out of legally sufficient consideration;

          (c) All signatures on such Crop Time Note are genuine or authorized
and all obligors thereon have the capacity to execute such Note;

          (d) Such Crop Time Note has not been materially altered;

          (e) No obligor on such Crop Time Note has any defense, set off or
counterclaim against the Cooperative which is good against it;

          (f) The conduct of the Cooperative in making the sale out of which
each Note arose was in all material respects in compliance with all applicable
laws and was not induced by fraud, false or misleading representations or any
other manner of unfair or deceptive trade practices or other unlawful conduct;

          (g) All credit information concerning the obligors on such Notes was
obtained and recorded in strict compliance with all applicable state and federal
laws, and the Cooperative has no reason to believe that any such information is
false, misleading or incomplete in any respect;

          (h) All current credit information with respect to such obligors has
been accurately reported to Statesman;

          (i) The Crop Time Note forms provided by Statesman have not been
altered, modified or supplemented in any respect;

          (j) All information required to be disclosed in such forms has been
accurately recorded therein and to the extent applicable, the Cooperative has
complied with the Truth-in-Lending Act and all other applicable disclosure laws,
federal and state;

                                       19
<PAGE>

          (k) No fee has been charged with respect to any Note and no such Note
includes any deferred payment price or other charge which violates any
applicable usury law or consumer protection law;

          (l) Such Crop Time Note contains all of the terms and conditions of
the obligation of the obligors evidenced thereby and the Cooperative has not
entered into any other agreement with the obligor with respect to such Note and
has not waived or agreed to waive any term or condition contained in the form or
taken any other action which might result in any constructive or implied waiver
or modification thereof;

          (m) All aspects of the sale out of which such Crop Time Note arose
have been in strict compliance with all applicable consumer protection acts and
regulations, including without limitation the Truth-in-Lending Act, the Equal
Credit Opportunity Act and any applicable state law;

          (n) All applicants for credit have been given all notices required by
applicable law;

          (o) The Cooperative has no knowledge of any insolvency proceeding
involving any party obligated on such Crop Time Note; and

          (p) Such Crop Time Note is not subject to any claim, lien, security
interest, charge or other encumbrance in favor of any one other than the
Cooperative and Statesman, and the Cooperative has not offered such Note for
sale to any purchaser other than Statesman.

     (2) The Cooperative further represents and warrants that it is and shall be
solvent at the time of each sale of any Crop Time Note.

     SECTION 3E.06.  REMEDIES OF STATESMAN WITH RESPECT TO CROP TIME NOTES
                     -----------------------------------------------------
PURCHASED UNDER THE PROVISIONS OF THIS ARTICLE THREE.
----------------------------------------------------

     (1)  Breach of Warranty.  If any warranty made by the Cooperative under the
          ------------------
provisions of Section 3E.05 of this Agreement shall prove to have been false in
any material respect as it relates to any Purchased Note, the Cooperative
covenants and agrees promptly upon written demand by Statesman to purchase such
Purchased Note for the Net Balance in immediately available funds.  Statesman
covenants and agrees that upon receipt of such payment it will cancel the
endorsement and deliver such Purchased Note to the Cooperative at the address
stated in Section 11.07 of this Agreement.  Statesman represents and warrants to
the Cooperative with respect to each such Crop Time Note that the Net Balance
paid to it is the Net Balance of such Note and that except as disclosed in a
writing accompanying such Note, Statesman has not released any party to such
Note from its obligation thereunder, released any security interest directly
securing such Note or consented to any reduction in the amount owing thereon or
the extension of the due date for any payment or installment thereunder.  Such
transfer from Statesman to the Cooperative will be without recourse and except
as provided in the immediately preceding sentence, without representation or
warranty of any nature or type.

                                       20
<PAGE>

     (2) Determination of Breach.  For the purpose of determining whether or not
         -----------------------
any warranty made by the Cooperative under the provisions of Section 3E.05 was
false and that the Cooperative is therefore obliged to repurchase any Purchased
Note, the Cooperative shall be bound by a written statement of an officer of
Statesman that in the reasonable judgment of Statesman it has determined that
any obligor under any Purchased Note has refused to make any scheduled payment
under such Note because of any fact which has been represented as otherwise by
the Cooperative to Statesman under the provisions of Section 3E.05 hereof.

     SECTION 3E.07.  NOTE FORMS.  Statesman will provide and the Cooperative
                     ----------
will use forms of Crop Time Notes and credit applications previously approved by
Statesman.  In the event Statesman determines that any previously approved form
should not be used, it will so advise the Cooperative and the Cooperative will
discontinue any use of such form.

     SECTION 3E.08.  PAYMENTS.  The Cooperative will on the day of receipt of
                     --------
any payment on any Purchased Note forward such payment to Statesman at its
Headquarters. In the event the Cooperative shall fail to endorse any check or
other item when necessary to permit its collection, Statesman is authorized, as
its attorney-in-fact to make such endorsement on behalf of the Cooperative.

     SECTION 3E.09. OBLIGOR COMPLAINTS AND RETURNED MERCHANDISE.
                    -------------------------------------------

     (1) The Cooperative shall, within three (3) Business Days of its receipt,
provide Statesman with a copy of any written complaint from any obligor relating
to any Purchased Note or any merchandise or service purchased thereunder;

     (2) If the obligor on any Purchased Note returns merchandise, for any
reason, within 10 days from the date of the sale, the Cooperative will fully
reimburse such obligor for any down payment and immediately repurchase the
Purchased Note from Statesman for its Net Balance.

     SECTION 3E.10.  MODIFICATIONS, EXTENSIONS.  Statesman may, without
                     -------------------------
affecting the agreements of the Cooperative herein, change, modify, extend or
renew the dates and amounts of any scheduled payment on any Purchased Note.

     SECTION 3E.11  REMEDIES.
                    --------

     Statesman may exercise such remedies with respect to the enforcement of the
Purchased Notes as it may deem appropriate.  The Cooperative will cooperate with
Statesman in the enforcement of the Purchased Notes.

                                 ARTICLE IIIF
                                 ------------

                                  TERM LOANS
                                  ----------

     SECTION 3F.01.  GENERAL.  Statesman may from time to time extend Term Loans
                     -------
to Customers of the Cooperative and other Persons.  Such loans shall be extended
pursuant to separate agreements to be entered into between each such Person and
Statesman.

                                       21
<PAGE>

     SECTION 3F.02.  TERMS AND CONDITIONS.  Nothing contained herein shall
                     --------------------
obligate Statesman to extend any Term Loan to any person.  All decisions with
respect to Term Loans shall be made by Statesman in its sole discretion, subject
to such agreements as Statesman may enter into from time to time with its Term
Loan borrowers.


                                  ARTICLE IV
                                  ----------

                         FINANCING WHOLESALE ACCOUNTS
                         ----------------------------

     SECTION 4.01.  PURCHASE OF WHOLESALE ACCOUNTS.  Statesman shall from time
                    ------------------------------
to time, upon the terms and subject to the conditions contained in this
Agreement, purchase Wholesale Accounts from the Cooperative, provided that
Statesman has determined in its sole and absolute discretion that such Wholesale
Accounts are acceptable to it and as to which approval has not been withdrawn by
Statesman as provided below.  All such purchases shall be made without recourse
to the Cooperative except as provided in Sections 4.09 and 4.11 and except so
far as Statesman shall have the right to make charges to the Wholesale Reserve
Account as provided in Section 4.05.

     SECTION 4.02.  REPAYMENT TERMS OFFERED ON CREDIT SALES.  The Cooperative
                    ---------------------------------------
agrees to provide Statesman with a comprehensive list of all credit repayment
plans (the "Repayment Terms") which it plans to offer to Cooperative Wholesale
Account customers.  Statesman will review the Repayment Terms to be offered
prior to their implementation by the Cooperative and will advise the Cooperative
of its acceptance of the proposed Repayment Terms.  Statesman will purchase only
those invoices which are in conformity with the preestablished Repayment Terms
which have been approved by Statesman.  The Cooperative will not make any
changes in the Repayment Terms offered to the Wholesale Account customers
without first obtaining Statesman's written approval.

     The requested credit line, anticipated sales volume, financial information,
credit application and any other information which Statesman in its sole
discretion may request shall be obtained by the Cooperative, and each and every
sale to Wholesale Accounts shall be made only in accordance with the Statesman
approved Repayment Terms and the Statesman Approval, which may be withdrawn at
any time before actual delivery of merchandise or rendition of services to the
customer.

     SECTION 4.03.  PROCEDURES.
                    ----------

     (1) Prior to the generation of new receivables, the Cooperative will
provide to Statesman information concerning customers to which the Cooperative
plans to sell merchandise or render a service which will result in the creation
of a Wholesale Account.  Statesman will review the information and determine in
its sole and absolute discretion the terms under which the Cooperative may sell
to the customer such that Statesman will purchase the resulting Wholesale
Account (the "Statesman Approval").  Any customer which has been approved by
Statesman will

                                       22
<PAGE>

hereinafter be referred to as an "Approved Wholesale Account." Statesman will
notify the Cooperative in writing of its decision.

     (2) Not later than 10:00 a.m. (Richmond, Virginia, time) on each Business
Day, the Cooperative will provide to Statesman information on Approved Wholesale
Accounts being offered to Statesman for purchase.  This information shall
include all information which Statesman may reasonably request and shall be in a
form satisfactory to Statesman.

     (3) Not later than 12 noon (Richmond, Virginia, time) on the same Business
Day, Statesman will confirm to the Cooperative those Approved Wholesale Accounts
it is purchasing and will prepare and deliver its check drawn on Crestar Bank,
Richmond, Virginia, or other bank satisfactory to the Cooperative, or make an
ACH transfer or wire transfer, for the face amount of the Wholesale Accounts
which Statesman is purchasing less any amount to be placed in the Wholesale
Reserve Account pursuant to Section 4.04 and less the Purchase Discount for
Wholesale Accounts.  Statesman may choose not to pay for any Wholesale Account
evidenced by a promissory note or other instrument unless such note or other
instrument has been endorsed and delivered to Statesman.

     (4) For purposes of this Article IV, the Purchase Discount for Wholesale
Accounts shall be the product obtained by multiplying the outstanding balance of
the Wholesale Accounts being purchased by (i) the average Historical Charge Off
Percentage of the Cooperative for Wholesale Accounts for the three preceding
fiscal years times (ii) the sum of 1 plus the Average Total Delinquency
Percentage Variance for Wholesale Accounts, plus the anticipated net interest
charges for the current month relating to the outstanding purchased Wholesale
Accounts.  Such amount shall be computed according to the following formula:

     Discount    =  Wholesale Accounts being purchased x [(aHCO%) x (1 + ADV)] +
                    AIC

     where

     aHCO%       =  average Historical Charge Off Percentage for Wholesale
                    Accounts for the three preceding fiscal years which for
                    purposes of this calculation shall not be less than .35% or
                    such other percentage as may be from time to time agreed to
                    by the Cooperative and Statesman.

     ADV         =  Average Total Delinquency Percentage Variance for Wholesale
                    Accounts.

     AIC         =  the amount by which the anticipated interest charges for the
                    current month for borrowings relating to outstanding
                    Wholesale Accounts purchased by Statesman exceed the finance
                    charges anticipated to be collected during such month by
                    Statesman on Wholesale Accounts.

     (5)  Upon receipt of such payment, the Cooperative shall sell, assign, and
convey to Statesman and without any further action on its part, shall be deemed
to have sold, assigned and conveyed to Statesman each such Approved Wholesale
Account, and all of the Cooperative's interest in the goods represented by such
Wholesale Accounts and in all goods that may be returned by customers obligated
on such Wholesale Accounts, all its rights as an unpaid vendor or

                                       23
<PAGE>

lienor, all its rights of stoppage in transit, replevin and reclamation relating
thereto, all its rights in and to all security therefor and guarantees thereof,
and guarantees thereto, all of its rights against third parties with respect
thereto, and all other proceeds thereof, cash or non-cash. Any goods so
recovered or returned shall be segregated in a manner acceptable to Statesman
and held for Statesman's account as owner. The Cooperative shall notify
Statesman promptly of all such returned or recovered goods.

     (6) Statesman may at any time and from time to time revoke the Statesman
Approval with respect to any customer of the Cooperative or reduce the amount of
Wholesale Accounts owing from such customer which it will purchase from the
Cooperative or change the Repayment Term approved for such customer.  It will
promptly notify the Cooperative of its decision to revoke the Statesman Approval
for any Wholesale Account, or to reduce the amount of such Account or change
terms and Statesman shall not be obligated to purchase any Wholesale Account
arising out of the delivery of any merchandise to or the commencement of any
service for such obligor which occurs after such notice is given to the
Cooperative except as Statesman shall have otherwise agreed.  The revocation or
alteration of the Statesman Approval with respect to a customer shall not affect
the right of the Cooperative to extend credit for merchandise or services to any
customer, but all payments received from such customer shall be applied to
earliest invoices first, and payments shall be applied to invoices included in
Wholesale Accounts purchased by Statesman before they are applied to invoices
arising after the revocation or alteration of the Statesman Approval with
respect to such customer or the reduction of the amount of credit approved for
such customer.

     SECTION 4.04.  WHOLESALE RESERVE ACCOUNT.  Statesman shall place in a
                    -------------------------
reserve account (the "Wholesale Reserve Account") an amount not to exceed one-
eighth of one percent (0.125%) of the aggregate outstanding balance on each
invoice it elects to purchase, provided, however that in no event shall any
additional amount be deducted from the amount paid to the Cooperative under this
Article IV or placed in the Wholesale Reserve Account if the aggregate amount in
the Wholesale Reserve Account is equal to or greater than one quarter of one
percent (0.25%) of the aggregate unpaid balance of all Wholesale Accounts which
Statesman has purchased from the Cooperative (including the invoices being
purchased on such date).  Funds in the Wholesale Reserve Account need not be
segregated from other funds of Statesman.  If at the end of any fiscal year of
Statesman, the balance in the Wholesale Reserve Account after charges to the
Reserve Account as provided in Section 4.05 is greater than one-eighth of one
percent (0.125%) of the balance owing on Wholesale Accounts which Statesman has
purchased from the Cooperative, no Event of Default shall have occurred and be
continuing and no obligation of the Cooperative to Statesman is then due and
payable, Statesman will upon request of the Cooperative remit such excess to the
Cooperative.

     SECTION 4.05.  CHARGES TO WHOLESALE RESERVE ACCOUNT.  Statesman may in its
                    ------------------------------------
sole and absolute discretion charge losses on Purchased Wholesale Accounts
related to Credit Risk as set forth in Section 4.06 against the Wholesale
Reserve Account.  Statesman agrees to add to the Wholesale Reserve Account the
amount received as a recovery less associated collection costs on any purchased
Wholesale Accounts which were previously charged to the Wholesale Reserve
Account.  Statesman shall notify the Cooperative promptly in writing of any such
reduction in the Wholesale Reserve Account.  As of the end of each month,
Statesman

                                       24
<PAGE>

will provide the Cooperative with a report of transactions in the Wholesale
Reserve Account during such month showing the balance in such account as of the
end of such month.

     SECTION 4.06.  CREDIT RISK.  On all Purchased Wholesale Accounts, Statesman
                    -----------
agrees to assume any loss which is due solely to the financial inability of the
customer to pay at maturity (the "Credit Risk") unless the representation
contained in paragraph (l)(i) of Section 4.10 was not true at the time Statesman
purchased such Wholesale Account, provided the customer has received and
accepted the goods and/or services which gave rise to such Purchased Wholesale
Account without any Dispute.  The term "Dispute" shall mean any dispute,
deduction, claim, offset, defense or counterclaim of any kind, including,
without limitation, any dispute relating to goods or services already paid for
or relating to any obligation to the Cooperative other than the Wholesale
Account on which payment is being withheld.

     SECTION 4.07.  FACILITY FEE FOR PURCHASED WHOLESALE ACCOUNTS.  The
                    ---------------------------------------------
Cooperative will pay to Statesman by the tenth Business Day of each month, or
such later day as may be agreed to by Statesman, a Facility Fee in such amount
as shall be agreed upon from time to time by the Cooperative and Statesman.

     SECTION 4.08.  PAYMENTS FROM THE COOPERATIVE.  If any remittances on
                    -----------------------------
Wholesale Accounts which have been purchased by Statesman are made directly to
the Cooperative, the Cooperative shall immediately deliver them to Statesman in
Richmond, Virginia, in precisely the form received, and until they are so
delivered they shall be held in trust by the Cooperative for the benefit of
Statesman.

     SECTION 4.09.  DISPUTES.  The Cooperative will promptly notify Statesman of
                    --------
and settle at the Cooperative's cost and expense, including attorneys' fees, all
Disputes relating to Wholesale Accounts which Statesman has purchased.  However,
if any Dispute is not settled by the Cooperative within sixty days after the
invoice date or within such shorter period as Statesman may determine, Statesman
may settle, compromise or litigate such Dispute in Statesman's or the
Cooperative's name upon such terms as Statesman in Statesman's sole discretion
may deem advisable and for the Cooperative's account and risk.  Statesman may
also at its discretion and without notice to the Cooperative take possession of
and sell any returned goods at such prices and upon such terms as Statesman
deems advisable.  The Cooperative shall promptly pay to Statesman any
deficiency, and all costs and expenses, including attorneys' fees, resulting
from any such Dispute, and if the Cooperative fails to pay such amount,
Statesman may deduct it from any payment it is required to make to the
Cooperative under the terms of this Agreement.

     SECTION 4.10.  WARRANTIES.
                    ----------

     (1) With respect to each Approved Wholesale Account which the Cooperative
offers to sell under this Article IV, the Cooperative warrants to Statesman
that:

         (a)  It has good title to such Wholesale Account, there is no
restriction on its sale and transfer and the sale and transfer thereof is
otherwise rightful;

                                       25
<PAGE>

          (b) Such Wholesale Account is a binding obligation arising from the
sale of merchandise or the provision of a service by the Cooperative in the
ordinary course of business, as described in the invoice relating to such
transaction, to a person or entity specified therein as the obligor, arises out
of legally sufficient consideration, and constitutes the valid and legally
binding obligation of such obligor enforceable in accordance with its terms;

          (c) No invoice has been materially altered;

          (d) The obligor on such Wholesale Account has no defense, set off or
counterclaim against the Cooperative which is good against it;

          (e) The conduct of the Cooperative in making the sale or sales out of
which such Wholesale Account arose was in all material respects in compliance
with all applicable laws and was not induced by fraud, false or misleading
representations or any other manner of unfair or deceptive trade practices or
other unlawful conduct;

          (f) All credit information concerning the obligor on such Wholesale
Account was obtained and recorded in strict compliance with all applicable state
and federal laws, and the Cooperative has no reason to believe that any such
information is false, misleading or incomplete in any respect;

          (g) All current credit information with respect to such obligor has
been accurately reported to Statesman;

          (h) The terms and conditions of the agreement between the Cooperative
and the obligor with respect to such Wholesale Account, including the Repayment
Terms, are not materially different from those approved by Statesman for such
obligor, and the Cooperative has not amended or waived or agreed to amend or
waive any such term or condition or taken any other action which might result in
any constructive or implied waiver or modification thereof;

          (i) The Cooperative has no knowledge of any insolvency proceeding
involving the obligor on such Wholesale Account; and

          (j) Such Wholesale Account is not subject to any claim, lien, security
interest, charge or other encumbrance in favor of any one other than the
Cooperative and Statesman, and the Cooperative has not offered such Wholesale
Account for sale to any purchaser other than Statesman.

     (2)  The Cooperative further represents and warrants that it is and shall
be solvent at the time of each sale of Wholesale Accounts.

     SECTION 4.11.  REMEDIES OF STATESMAN WITH RESPECT TO WHOLESALE ACCOUNTS
                    --------------------------------------------------------
PURCHASED UNDER THE PROVISIONS OF THIS ARTICLE FOUR.
---------------------------------------------------

     (1) Breach of Warranty.  If any warranty made by the Cooperative under the
         ------------------
provisions of Section 4.10 of this Agreement shall prove to have been false in
any material respect

                                       26
<PAGE>

as it relates to any Wholesale Account purchased by Statesman, the Cooperative
covenants and agrees promptly upon written demand by Statesman to purchase such
Wholesale Account for the net balance owing thereon, including accrued interest,
in immediately available funds. Statesman covenants and agrees that upon receipt
of such payment it will promptly transfer and assign such Wholesale Account and
all proceeds thereof to the Cooperative. Statesman represents and warrants to
the Cooperative with respect to each such Wholesale Account it sells back to the
Cooperative that the net balance paid to it is the net balance owing on such
Wholesale Account and that except as disclosed in a writing at the time of such
sale, Statesman has not released the obligor thereon of its obligation
thereunder, or consented to any reduction in the amount owing thereon or the
extension of the due date for any payment or installment thereunder. Such
transfer from Statesman to the Cooperative will be without recourse and except
as provided in the immediately preceding sentence, without representation or
warranty of any nature or type.

     (2) Determination of Breach.  For the purpose of determining whether or not
         -----------------------
any warranty made by the Cooperative under the provisions of Section 4.10 was
false and that the Cooperative is therefore obliged to repurchase any Wholesale
Account, the Cooperative shall be bound by a written statement of an officer of
Statesman that in the reasonable judgment of Statesman it has determined that
any obligor under any Wholesale Account has refused to make any scheduled
payment under such contract because of any fact which has been represented as
otherwise by the Cooperative to Statesman under the provisions of Section 4.10
hereof.

     SECTION 4.12.  WHOLESALE ACCOUNTS WHICH ARE NOT APPROVED.  Statesman may
                    -----------------------------------------
from time to time purchase Wholesale Accounts other than Approved Wholesale
Accounts at such price as may from time to time be agreed to by the parties
hereto.  Except for the price and the absence of any obligation of Statesman to
purchase such Wholesale Accounts, and to the extent the parties may otherwise
agree at the time of such sale, all aspects of such sales shall be similar to
the sales of Approved Wholesale Accounts.

     SECTION 4.13.  NOTICE TO OBLIGORS; STATEMENTS.  Statesman may notify the
                    ------------------------------
obligor on each Wholesale Account that Statesman purchases from the Cooperative
that such account has been purchased by Statesman and that all payments with
respect to such Wholesale Accounts and inquiries with respect thereto should be
addressed to Statesman at its address.  Such notice may at the option of
Statesman be given in the name of the Cooperative or of Statesman.  Thereafter,
Statesman will maintain the records with respect to each such account and send
appropriate statements to each obligor thereon.

                                   ARTICLE V
                                   ---------

                        REPRESENTATIONS AND WARRANTIES
                        ------------------------------

     To induce Statesman to purchase Receivables, Installment Sales Contracts,
Wholesale Accounts and Crop Time Notes from it and to make Loans to Customers of
the Cooperative, the Cooperative represents and warrants to Statesman as
follows:

     SECTION 5.01.  SUBSIDIARIES.  The Cooperative has the following
                    ------------
Subsidiaries and none others:

                                       27
<PAGE>

<TABLE>
<CAPTION>
          Name of Subsidiary                   Percentage Owned by Cooperative
          ------------------                   -------------------------------
<S>                                            <C>
     AgriLand Exchange, Inc.                                 100%
     Mountain State Greenhouses, Inc.                        100%
     SSC Insurance Agency, Inc.                              100%
     Southern States Holdings, Inc.                          100%
     Southern States Underwriters, Inc.                      100%
     Virginia Seed Service, Inc.                             100%
     Wetsel, Inc.                                            100%
</TABLE>

     SECTION 5.02.  GOOD STANDING.  Each of the Cooperative and its Subsidiaries
                    -------------
is a corporation organized and existing in good standing under the laws of its
respective jurisdiction of incorporation and each has the corporate power to own
its property and to carry on its business as now being conducted and is duly
qualified to do business and is in good standing in each jurisdiction in which
the character of the properties owned by it therein or in which the transaction
of its business makes such qualification necessary.

     SECTION 5.03.  CORPORATE AUTHORITY.  The Cooperative has full power and
                    -------------------
authority to enter into this Agreement, to sell Receivables, Approved Contracts,
Eligible Contracts, Wholesale Accounts and Crop Time Notes, to execute and
deliver Receivables Certificates and instruments conveying such Receivables,
contracts and notes, to endorse contracts and notes and to incur the obligations
provided for herein, all of which have been duly authorized by all proper and
necessary corporate action.  No consent or approval of stockholders or of any
public authority is required as a condition to the validity of this Agreement or
the sale of any Receivable, Installment Sales Contract, Wholesale Account or
Crop Time Note.

     SECTION 5.04.  BINDING AGREEMENTS.  This Agreement constitutes, and each
                    ------------------
endorsement by the Cooperative of a Purchased Contract, when made and such
Purchased Contract is delivered pursuant hereto for value received, will
constitute, the valid and legally binding obligations of the Cooperative
enforceable against the Cooperative in accordance with its terms.

     SECTION 5.05.  LITIGATION.  There are no proceedings pending or, so far as
                    ----------
the officers of the Cooperative know, threatened before any court or
administrative agency that, in the opinion of the officers of the Cooperative,
will materially adversely affect the financial condition or operations of the
Cooperative or any of its Subsidiaries.

     SECTION 5.06.  NO CONFLICTING AGREEMENTS.  There is no charter, bylaw or
                    -------------------------
preference stock provision of the Cooperative or any of its Subsidiaries and no
provision of any existing mortgage, indenture, contract or agreement binding on
the Cooperative or any of its Subsidiaries or affecting their respective
properties that would conflict with or in any way prevent the execution,
delivery or carrying out of the terms of this Agreement or the sale or transfer
of any Receivable, Installment Sales Contract, Wholesale Account or Crop Time
Note.

     SECTION 5.07.  BALANCE SHEET.  The consolidated balance sheet of the
                    -------------
Cooperative and its Subsidiaries as of June 30, 1998, and the related
consolidated statements of

                                       28
<PAGE>

operations, patrons' equity and of cash flows for the period then ended
certified by PricewaterhouseCoopers L.L.P., and the unaudited consolidated
balance sheet of the Cooperative and its Subsidiaries as of September 30, 1998,
and the related statement of operations for the period then ended, heretofore
delivered to Statesman, are complete and correct and fairly present the
financial condition of the Cooperative and its Subsidiaries and the results of
their operations and transactions in their surplus accounts as of the dates and
for the periods referred to therein and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the period involved. There are no liabilities, direct or indirect,
fixed or contingent of the Cooperative or any of its Subsidiaries as of the
dates of such balance sheets that are not reflected therein or in the notes
thereto. There has been no material adverse change in the financial condition or
operations of the Cooperative since the dates of those balance sheets, and there
has been no other material adverse change in the Cooperative.

     SECTION 5.08.  LICENSES.  The Cooperative has all licenses necessary or
                    --------
desirable for it to conduct its businesses as presently being conducted and such
businesses are in compliance with all applicable laws in all material respects.

     SECTION 5.09.  EMPLOYEE BENEFIT PENSION PLANS.  No fact, including but not
                    ------------------------------
limited to, any Reportable Event as defined in Section 4043 of ERISA, exists in
connection with any employee benefit pension plan of the Cooperative covered by
said Act, which might constitute grounds for the termination of any such plan by
the PBGC or for the appointment of any trustee to administer any such plan by
the appropriate United States District Court.

     SECTION 5.10.  RECEIVABLES FREE OF LIENS.  Except as the Cooperative has
                    -------------------------
expressly disclosed to Statesmen in writing, no Receivable is subject to any
mortgage, pledge, security interest or other lien or encumbrance of any kind.

                                  ARTICLE VI
                                  ----------

                                  CONDITIONS
                                  ----------

     The Cooperative will not offer to sell any Receivables, Installment Sales
Contracts, Wholesale Accounts or Crop Time Notes to Statesman unless:

     SECTION 6.01.  LEGAL MATTERS.  It shall have satisfied any legal concerns
                    -------------
reported to the Cooperative by Statesman or its counsel with respect to the
purchase of any Receivable, Installment Sales Contract, Wholesale Account or
Crop Time Note.

     SECTION 6.02.  EVIDENCE OF CORPORATE ACTION.  Statesman shall have received
                    ----------------------------
certified copies of papers evidencing all corporate action taken by the
Cooperative to authorize this Agreement and the sale of Receivables, Installment
Sales Contracts, Wholesale Accounts and Crop Time Notes, and such other papers
as Statesman may reasonably require.

     SECTION 6.03.  REPRESENTATIONS AND WARRANTIES.  Each of the representations
                    ------------------------------
and warranties set forth in Article V hereof shall be true and correct as of the
date of such offer, except to the extent they relate solely to an earlier date.

                                       29
<PAGE>

     SECTION 6.04.  ABSENCE OF DEFAULTS.  No Default or Event of Default shall
                    -------------------
have occurred and be continuing.

     SECTION 6.05.  CERTIFICATE OF INCUMBENCY.  The Cooperative shall have
                    -------------------------
delivered to Statesman in a form satisfactory to Statesman a list setting forth
the names and signatures of each officer or employee of the Cooperative who is
authorized to sign Receivables Certificates, to transfer Receivables and to
transfer and endorse Installment Sales Contracts and Crop Time Notes, together
with the signature of such person.

     SECTION 6.06.  FINANCING STATEMENTS.  Statesman shall have received
                    --------------------
receipted copies of financing statements in appropriate form and showing they
have been filed in the appropriate offices to satisfy the filing requirements of
the applicable Uniform Commercial Code relating to the sale of accounts.

     SECTION 6.07.  OPINION OF COUNSEL FOR THE COOPERATIVE.  Statesman shall
                    --------------------------------------
have received a favorable written opinion of counsel for the Cooperative dated
as of the date of the first purchase of Receivables, Installment Sales Contracts
or Wholesale Accounts hereunder, and, if so requested by Statesman, annually
thereafter, as to all matters referred to in Article V, except Sections 5.07,
5.08 and 5.09, that financing statements in the appropriate form have been filed
in the appropriate offices in which to file financing statements for any
Receivables sold by the Cooperative and stating that as of the date of such
opinion the indices to financing statements in such offices do not disclose any
financing statements of record showing the Cooperative or any of its
Subsidiaries as debtor and including a description of any accounts, contract
rights, general intangibles or other rights to the payment of money of such
debtor.

     SECTION 6.08.  CREDIT STANDARDS.  The Cooperative shall have delivered to
                    ----------------
Statesman a written statement of its then current standards for extending credit
to its customers and its collection policy for Receivables, Installment Sales
Contracts, Wholesale Accounts and Crop Time Notes, together with any applicable
additions thereto, deletions therefrom or modifications thereof.

                                  ARTICLE VII
                                  -----------

                             AFFIRMATIVE COVENANTS
                             ---------------------

     The Cooperative covenants and agrees with Statesman that so long as the
Cooperative may offer to sell Receivables, Installment Sales Contracts,
Wholesale Accounts or Crop Time Notes to Statesman hereunder and until payment
in full of all Purchased Receivables, Purchased Contracts, Purchased Wholesale
Accounts and Purchased Notes and performance of all other obligations of the
Cooperative hereunder, the Cooperative will:

     SECTION 7.01.  FINANCIAL STATEMENTS.  Furnish to Statesman (i) as soon as
                    --------------------
available, but in no event more than forty-five (45) days after the end of each
quarterly period in each of its fiscal years, a consolidated balance sheet of
the Cooperative and its Subsidiaries as of the close of such quarter and a
consolidated statement of operations to the close of such quarter, certified by
the chief financial officer of the Cooperative and accompanied by a certificate
of that

                                       30
<PAGE>

officer stating whether any event has occurred that constitutes an Event of
Default hereunder or that would constitute such an Event of Default with the
giving of notice or the lapse of time, or both, and, if so, stating the facts
with respect thereto; (ii) as soon as available, but in no event more than
ninety (90) days after the close of each of the Cooperative's fiscal years, a
copy of the annual audit report of the Cooperative in reasonable detail,
substantially similar to the financial statements referred to in Section 5.07
above, prepared in accordance with generally accepted accounting principles
applied on a basis consistent with that of the preceding year and certified by
PricewaterhouseCoopers L.L.P. or other independent certified public accountants
of recognized national standing, which report shall include a consolidated
balance sheet of the Cooperative and its Subsidiaries as of the end of such
fiscal year, consolidated statements of operations, patrons' equity and of cash
flows for such fiscal year, accompanied by a certificate of said accountants
stating whether any event existed as of the end of such fiscal year that
constituted a Default or an Event of Default hereunder; (iii) promptly upon
their becoming available, copies of all financial statements, reports, notices,
and proxy statements sent by the Cooperative to patrons or stockholders and of
all regular, periodic and special reports or any registration statement filed by
the Cooperative or any of its Subsidiaries with any securities exchange or with
the Securities and Exchange Commission or any governmental authority succeeding
to any or all of the functions of the Securities and Exchange Commission; and
(iv) such additional information, reports, or statements, including interim
financial statements, as Statesman may from time to time reasonably request. The
Cooperative will also upon request permit Statesman and its agents to inspect
its books and records.

     SECTION 7.02.  TAXES.  Pay and discharge all taxes, assessments, and
                    -----
governmental charges upon it, its income, and its properties prior to the date
on which penalties are attached thereto, unless and to the extent only that such
taxes, assessments, and governmental charges shall be contested by it in good
faith and by appropriate proceedings, and the Cooperative shall have set aside
on its books adequate reserves with respect to any such tax, assessment or
charge so contested.

     SECTION 7.03.  BUSINESS PLAN.  Furnish to Statesman as soon as available,
                    -------------
but in any event within 120 days after the Cooperative's new fiscal year, a copy
of the Cooperative's new fiscal year business plan which will contain, but not
be limited to, projected balance sheets, profit and loss statements, changes in
cash flow each prepared in accordance with generally accepted accounting
principles consistently applied, estimated usage of indebtedness, and
assumptions utilized in preparing the business plan.

     SECTION 7.04.  PAYMENT OF OBLIGATIONS.  Pay and discharge at or before
                    ----------------------
their maturity all its indebtedness and other obligations and liabilities,
except when the same may be contested in good faith and by appropriate
proceedings, and the Cooperative shall have set aside on its books adequate
reserves with respect to any such obligation or liability.

     SECTION 7.05.  INSURANCE.  Maintain adequate insurance with responsible
                    ---------
companies satisfactory to Statesman in such amounts and against such risks as is
customarily carried by owners of similar businesses and property.

                                       31
<PAGE>

     SECTION 7.06.  CORPORATE EXISTENCE, LICENSES, PERMITS, ETC.  Maintain its
                    --------------------------------------------
corporate existence in good standing and maintain all permits and licenses
necessary or desirable for the conduct of its business.

     SECTION 7.07.  PROPERTIES.  Maintain, preserve, and protect all franchises
                    ----------
and trade names and preserve all the remainder of its property used or useful in
the conduct of its business and keep the same in good repair, working order, and
condition, and from time to time make or cause to be made all necessary and
proper repairs, renewals, replacements, betterments, and improvements thereto so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times, and permit Statesman and its agents to
enter upon and inspect such properties.

     SECTION 7.08.  EMPLOYEE BENEFIT PENSION PLANS.  Promptly during each year,
                    ------------------------------
pay contributions that in the judgment of the chief executive and chief
financial officers of the Cooperative after reasonable inquiry are believed
adequate to meet at least the minimum funding standards set forth in Sections
302 through 305 of ERISA, with respect to each employee benefit plan of the
Cooperative, if any, covered by that Act; file each annual report required to be
filed pursuant to Section 103 of ERISA in connection with each such plan for
each year; and notify Statesman within ten (10) days of the occurrence of a
Reportable Event (as defined in Section 4043 of ERISA) that might constitute
grounds for termination of any such plan by PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer any such
plan, provided that nothing contained herein shall prohibit the Cooperative from
terminating any such plan if it has theretofore complied with the provisions of
this Section.

     SECTION 7.09.  COMPLIANCE WITH LAWS.  The Cooperative shall not knowingly
                    --------------------
be in violation of any laws, ordinances, governmental rules and regulations
(collectively "Laws") to which it is subject and will not knowingly fail to
obtain any licenses, permits, franchises or other governmental authorizations
necessary to the ownership of its property or to the conduct of its business,
which violation or failure to obtain might materially adversely affect the
business, profit, operations, or condition (financial or otherwise) of the
Cooperative, provided, however, that the Cooperative shall be deemed to have
complied with this provision so long as it is contesting in good faith and by
the appropriate proceedings the violation of any such law and has set aside on
its books adequate reserves in respect thereof, if so required, in accordance
with generally accepted accounting principles.  Without limiting the foregoing,
the Cooperative agrees to comply, and to cause all persons occupying, leasing or
renting any properties of the Cooperative to comply with all laws relating to
environmental protection.

     SECTION 7.10.  RECORD RETENTION.  Retain records of compliance with all
                    ----------------
applicable consumer protection laws and the log of any complaints for the longer
of twenty-five (25) months or any time period required by applicable law.

     SECTION 7.11.  BOOKS AND RECORDS.  Maintain complete and accurate books and
                    -----------------
records with respect to all transactions with all account obligors of Purchased
Receivables and Purchased Wholesale Accounts and all parties obligated on
Purchased Contracts and Purchased Notes, including without limitation records of
all sales, deliveries, charges, payments, discounts, allowances and other
credits, make such records available for inspection by Statesman

                                       32
<PAGE>

and its agents at all reasonable times and upon request of Statesman deliver the
same to Statesman at its Headquarters.

     SECTION 7.12.  COOPERATION.  The Cooperative will cooperate with Statesman
                    -----------
in all reasonable respects in collecting any Receivables, Installment Sales
Contracts or Wholesale Accounts or Crop Time Notes which Statesman has acquired
from the Cooperative, but nothing contained herein shall obligate the
Cooperative to incur any out of pocket expenses.

                                 ARTICLE VIII
                                 ------------

                              NEGATIVE COVENANTS
                              ------------------

     The Cooperative covenants and agrees with Statesman that so long as the
Cooperative may offer to sell Receivables, Installment Sales Contracts,
Wholesale Accounts or Crop Time Notes to Statesman hereunder and until payment
in full of all Purchased Receivables, Purchased Contracts, Purchased Wholesale
Accounts and Purchased Notes and performance of all other obligations of the
Cooperative hereunder, without the written consent of Statesman, the Cooperative
will not:

     SECTION 8.01.  MORTGAGES AND PLEDGES.  Create, incur, assume, or suffer to
                    ---------------------
exist any mortgage, pledge, lien, or other encumbrance of any kind upon, or any
security interest in, any of its property or assets, whether now owned or
hereafter acquired, except (i) liens for taxes not yet delinquent or being
contested in good faith and by appropriate proceedings; (ii) liens in connection
with workers' compensation, unemployment insurance, or other social security
obligations; (iii) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory obligations, surety
or appeal bonds, and other obligations of like nature arising in the ordinary
course of business; (iv) mechanic's, workman's, materialman's, landlord's,
carrier's, or other like liens arising in the ordinary course of business with
respect to obligations that are not due or that are being contested in good
faith; (v) those mortgages, pledges, liens, and encumbrances reflected in the
financial statements referred to in Section 5.07 above; (vi) mortgages, pledges,
liens, and encumbrances in favor of Statesman; (vii) zoning restrictions,
easements, licenses, restrictions on the use of real property or minor
irregularities in the title thereto, which do not, in the opinion of the
Cooperative, materially impair the use of such property in the operation of the
business of the Cooperative or the value of such property for the purposes of
such business; and (viii) any mortgage, encumbrance or other lien upon, or
security interest in, any property hereafter acquired by the Cooperative created
contemporaneously with such acquisition to secure or provide for the payment or
financing of any part of the purchase price thereof, or the assumption of any
mortgage, encumbrance or lien upon, or security interest in, any such property
hereafter acquired existing at the time of such acquisition, or the acquisition
of any such property subject to any mortgage, encumbrance or other lien or
security interest without the assumption thereof, provided that each such
mortgage, encumbrance, lien or security interest shall attach only to the
property so acquired and fixed improvements thereon. Nothing contained in this
Section 8.01 shall prohibit the Cooperative from entering into any lease
required to be capitalized by generally accepted accounting principles in
accordance with the Financial

                                       33
<PAGE>

Accounting Standards Board Statement No. 13 (Accounting for Leases) in effect on
the date of this Agreement, provided such lease is not otherwise prohibited by
the terms of this Agreement.

     SECTION 8.02.  MERGER, ACQUISITION OR SALE OF ASSETS.  (1) Enter into any
                    -------------------------------------
merger or consolidation with, or acquire all or substantially all of the assets
of, any person, firm, joint venture, or corporation, unless the Cooperative is
the surviving corporation and upon the consummation of its merger the net worth
of the surviving corporation is not less than the net worth of the Cooperative
prior to the merger and there shall exist no Event of Default, provided,
however, that in the case of any merger of a Local Cooperative, as defined in
Article I - Section 1.01, the Cooperative's Chief Financial Officer shall
certify to Statesman Financial Corporation that the Cooperative has Net Worth in
an amount not less than 95% of the Net Worth of the Cooperative immediately
prior to such merger and no event shall have occurred or condition exist which
with the giving of notice or lapse of time, or both, would constitute such an
Event of Default, or (2) sell, lease, or otherwise dispose of all or
substantially all of its assets except in the ordinary course of its business.

     SECTION 8.03.  CHANGES IN NAME; LOCATION.  Without giving Statesman at
                    -------------------------
least sixty (60) days prior written notice, change its name, its principal place
of business or the place in which it may keep its records relating to
Receivables, Installment Sales Contracts and Wholesale Accounts.

     SECTION 8.04.  AMENDMENT OF PAYMENT TERMS.  Amend or modify any Purchased
                    --------------------------
Receivable, Purchased Contract or Purchased Wholesale Account or consent to the
extension of the time of any payment or release of any collateral securing the
obligation of the obligor or otherwise waive any term or condition of such
Purchased Receivable, Purchased Contract or Purchased Wholesale Account except
to the extent the Cooperative may deem appropriate to facilitate the ultimate
collection of such obligation.

     SECTION 8.05.  CREDIT STANDARDS; COLLECTION POLICY.  Amend in any material
                    -----------------------------------
respect its standards for extending credit to its customers or its collection
policy for Receivables, Installment Sales Contracts, Wholesale Accounts and Crop
Time Notes; or make any other amendment or modification to such standards or
policy without having given Statesman not less than ten (10) days prior written
notice thereof.

                                  ARTICLE IX
                                  ----------

                           CONTRIBUTED CAPITAL PLAN
                           ------------------------

     SECTION 9.01.  DEFINITIONS.  As used in this Article the following terms
                    -----------
shall have the following definitions:

     "Contributed Capital Rate" means the ratio of debt to tangible net worth
      ------------------------
which institutional lenders extending credit to Statesman require it to maintain
from time to time, whether such ratio is stated as an affirmative or negative
covenant, and in the event Statesman is required to maintain different ratios on
different dates, "Contributed Capital Rate" means the ratio which is in effect
                  ------------------------
on the applicable TAPOS Determination Date.

                                       34
<PAGE>

     "Determination Period" or "Determination Periods" means the calendar month,
      --------------------      ---------------------
the six calendar month period and the twelve calendar month period immediately
preceding the TAPOS Determination Date.

     "Minimum Class A Investment" means the number of shares of Statesman Class
      --------------------------
A Preferred Stock determined by Statesman as follows:


     MI        =    (HT/(PV x R)) - RE

     where

     MI        =    Minimum Class A Investment (stated at the par value).

     HT        =    the highest TAPOS computed for the Cooperative during any of
                    the three Determination Periods.

     PV        =    the par value of one share of the Statesman Class A
                    Preferred Stock.

     R         =    the Contributed Capital Rate, expressed as a decimal.

     RE        =    As of the TAPOS Determination Date (x) the product of (i)
                    the percentage of the total outstanding common stock of
                    Statesman held by the Cooperative and (ii) the sum of
                    Statesman's Retained Earnings and Paid In Capital divided by
                    (y) the par value of Class A Preferred Stock.

     If the Minimum Class A Investment computed using this formula is a
fraction, it will be rounded upward to the next whole number of shares.

     "TAPOS" means calculated total program outstanding as determined by
      -----
Statesman for each of the three Determination Periods according to the following
formula:

     TAPOS     =    RPP + NR + ISF + PN + WA + LN + CCR + L + NBC - SAP

     where

     RPP       =    average Purchased Receivables previously purchased and
                    outstanding during such Determination Period.

     NR        =    Eligible Receivables tendered for purchase subsequent to the
                    end of the previous Determination Period.

     ISF       =    average net Purchased Contracts outstanding during such
                    Determination Period.

     PN        =    average net Purchased Notes outstanding during such
                    Determination Period.

     WA        =    average net Purchased Wholesale Accounts outstanding during
                    such Determination Period.

                                       35
<PAGE>

     LN        =    average Loans outstanding during such Determination Period.

     CCR       =    average amount outstanding on accounts of customers of the
                    Cooperative, Local Cooperatives and Dealerships under the
                    Southern States Credit Card Program during such
                    Determination Period.

     L         =    average Leases outstanding to the Cooperative, Local
                    Cooperatives, Dealerships and customers of any of them
                    during such Determination Period.

     NBC       =    average investment (stated at par value) which Statesman was
                    required to maintain in CoBank ACB (formerly the National
                    Bank for Cooperatives) during such Determination Period in
                    support of Cooperative related borrowings.

     SAP       =    average outstanding Class A Preferred Stock of Statesman
                    held by the Cooperative during such Determination Period
                    (stated at the par value).

     In the computation for a Determination Period of one month, the amounts of
RPP, ISF, PN, WA, LN, CCR, L, NBC, TD and SAP as of the last Business Day of
such calendar month shall be used as the average for such month. In computations
for other Determination Periods, the average for each such amount shall be
computed using the outstanding amounts as of the last Business Day of each month
in such Determination Period.

     "TAPOS Determination Date" means the date during each calendar month on
      ------------------------
which the month-end calculation is made to determine the amount due.

     SECTION 9.02.  PURCHASE OF STOCK.  Upon the delivery to Statesman of the
                    -----------------
first Receivables Certificate hereunder the Cooperative will purchase Statesman
Class A Preferred Stock with such par value as will cause it to have a Minimum
Class A Investment in Statesman Class A Preferred Stock and on each TAPOS
Determination Date thereafter it will acquire such additional Statesman Class A
Preferred Stock if any as may be necessary for it to maintain a Minimum Class A
Investment.

     SECTION 9.03.  REDEMPTION OF CLASS A PREFERRED STOCK.  Statesman covenants
                    -------------------------------------
and agrees that if on any TAPOS Determination Date the amount of Statesman Class
A Preferred Stock held by the Cooperative exceeds the Minimum Class A Investment
computed as of such date, it will, subject to the provisions of Section 9.04,
upon written demand by the Cooperative redeem for cash at its par value those
shares held by the Cooperative which are in excess of the Minimum Class A
Investment determined as of such date. The Cooperative covenants and agrees that
notwithstanding the provisions contained in paragraph (v) of subsection 5(b) of
Article II of the Articles of Incorporation of Statesman the Cooperative shall
not have any right to redeem shares held by it except as provided herein.

     SECTION 9.04.  CUMULATIVE OBLIGATIONS.  The obligation of the Cooperative
                    ----------------------
hereunder to purchase Statesman Class A Preferred Stock shall be in addition to
any other undertaking the Cooperative may have entered into or may hereafter
enter into to purchase such stock as a result of Asset Based Financing or
Installment Sales Financing provided by Statesman

                                       36
<PAGE>

to any Local Cooperative, Independent Cooperative or Dealership of the
Cooperative or any lease financing by Statesman for the Cooperative, and the
obligations of the Cooperative to purchase Statesman Class A Preferred Stock
under, or as a condition to, each such financing arrangement shall be
cumulative.

                                   ARTICLE X
                                   ---------

                               EVENTS OF DEFAULT
                               -----------------

     SECTION 10.01.  Each of the following shall constitute an "Event of
Default" hereunder:

          (a)  Default shall be made in the payment of any amount payable
hereunder, when and as the same becomes due and payable, whether at the stated
maturity thereof or by acceleration or otherwise; or

          (b)  Default shall be made in the due observance or performance of any
other term, covenant, or agreement contained in this Agreement; or

          (c)  Any representation or warranty made by the Cooperative herein, or
in any Receivables Certificate or any statement or representation made in any
other certificate, report, or opinion delivered pursuant hereto shall prove to
have been incorrect in any material respect when made; or

          (d)  The Cooperative or any Subsidiary of the Cooperative shall become
insolvent or unable to meet its obligations as they mature, make an assignment
for the benefit of creditors, consent to the appointment of a trustee or a
receiver, or admit in writing its inability to pay its debts as they mature; or

          (e)  A trustee or receiver shall be appointed for the Cooperative or
any Subsidiary of the Cooperative or for a substantial part of its properties
without the consent of the Cooperative or such Subsidiary and not be discharged
within thirty (30) days; or

          (f)  Bankruptcy, reorganization, arrangement, insolvency, or
liquidation proceedings shall be instituted by or against the Cooperative or any
Subsidiary of the Cooperative, and, if instituted against it, be consented to by
the Cooperative or such Subsidiary or remain undismissed for a period of thirty
(30) days; or

          (g)  Any default shall be made with respect to any obligation for the
payment of borrowed money of the Cooperative or any Subsidiary of the
Cooperative when due or the performance of any other obligation incurred in
connection with any indebtedness for borrowed money of the Cooperative or any
Subsidiary of the Cooperative, if the effect of such default is to accelerate
the maturity of such indebtedness; or

          (h)  Any final judgment for the payment of money in excess of ONE
HUNDRED THOUSAND DOLLARS ($100,000.00) which in the opinion of Statesman is not
adequately insured or indemnified against shall be rendered against the
Cooperative or any

                                       37
<PAGE>

Subsidiary of the Cooperative and the same shall remain undischarged for a
period of thirty (30) days during which time execution shall not be effectively
stayed; or

          (i)  Any substantial part of the properties of the Cooperative or any
Subsidiary of the Cooperative shall be sequestered or attached and shall not
have been returned to the possession of the Cooperative or such Subsidiary or
released from such attachment within thirty (30) days; or

          (j)  The occurrence of a Reportable Event as defined in Section 4043
of ERISA which might constitute grounds for termination of any employee benefit
plan of the Cooperative or any Subsidiary of the Cooperative covered by ERISA by
PBGC or grounds for the appointment by the appropriate United States District
Court of a trustee to administer any such plan; or

          (k)  Complete or partial withdrawal under Section 4201 or 4204 of
ERISA from a Multiemployer Plan by any other party which is or may be required
under the provisions of ERISA to make a contribution to such Plan, except as a
result of the merger of such party with the Cooperative.

     Upon the occurrence and continuation of any Event of Default, Statesman
may, by notice to the Cooperative take any or all of the following actions: (i)
terminate any obligation it may have to review any Receivables, Installment
Sales Contract, Wholesale Account or Crop Time Note tendered to it, (ii)
terminate any obligation it may otherwise have to purchase any Eligible
Receivable, any Approved Contract, any Eligible Contract, any Wholesale Account,
any Approved Note or any Eligible Note, (iii) terminate any obligation it may
have to repay to the Cooperative any part of the Reserve Account so long as any
Purchased Receivable shall remain unpaid, and (iv) terminate any obligation it
may have to repay to the Cooperative any part of the Wholesale Reserve Account
so long as any Purchased Wholesale Account shall remain unpaid.

                                  ARTICLE XI
                                  ----------

                                 MISCELLANEOUS
                                 -------------

     SECTION 11.01.  INDEMNIFICATION.
                     ---------------

          (a)  The Cooperative shall indemnify Statesman, its officers,
directors, agents and employees and hold them and each of them harmless from and
against all loss, cost, damage, and expense, including reasonable attorney fees,
at any time incurred:

               (1)  because of any liability of the Cooperative, Manufacturer,
or any other Person (other than Statesman) related to any merchandise which is
the subject of any sale or to any service performed or goods furnished by the
Cooperative, Manufacturer, or any other Person or entity in connection with any
sale out of which any Purchased Receivable, Purchased Contract, Purchased
Wholesale Account or Purchased Note arose, including, but not limited to,
services performed under any warranty or other agreement obligating the
Cooperative, Manufacturer, or other Person or entity to perform such services or
furnish goods; or

                                       38
<PAGE>

               (2)  because of any liability of the Cooperative for any action
at any time taken or not taken by the Cooperative.

          (b)  The Cooperative covenants and agrees to indemnify Statesman, its
officers, directors, agent and employees and hold them and each of them harmless
from and against all loss, cost, damage, and expense, including reasonable
attorneys' fees, at any time incurred by them or any of them because of any
violation of state or Federal law or regulation by the Cooperative or other
illegal or actionable conduct resulting from acts or omissions by the
Cooperative or its agents in connection with the sale of merchandise, providing
of services or extension of credit.

     SECTION 11.02.  NOTICES.
                     -------

          (a)  By Statesman.  In consideration of the Agreement of the
               ------------
Cooperative to make a capital investment in Statesman based upon the amount of
asset based loans made by Statesman to customers of the Cooperative, Statesman
covenants and agrees to use its best efforts to notify the Cooperative promptly
in the event it terminates its agreement to extend asset based financing to any
Dealership of the Cooperative (as defined in the Agreement), if it gives any
notice to any such Dealership of any event of default under the terms of any
financing agreement between such Dealership and Statesman, if any such
Dealership defaults in the payment of any obligation for principal or interest
owing to Statesman and such default continues for a period of ten (10) days or
more, or if any officer of Statesman has knowledge that any condition exists or
event has occurred with respect to such Dealership which constitutes grounds for
the termination by Statesman of its financing arrangements with such Dealership
or which would constitute such grounds with the giving of notice or lapse of
time or both.

          (b)  By Cooperative. In consideration of the agreement by Statesman to
               --------------
provide the Cooperative with such notices, the Cooperative covenants and agrees
it will promptly notify Statesman upon the occurrence of any of the following
events: the Cooperative puts any such Dealership on C.O.D. or otherwise limits
sales to such Dealership, or terminates any existing agreement between the
Cooperative and any such Dealership; any such Dealership makes any material
misrepresentation to the Cooperative; there is a material change in the
management or ownership of such Dealership; any material adverse change occurs
in the financial condition or operations of such Dealership; or if to the
knowledge of any executive officer of the Cooperative an event of default has
occurred under any agreement between any such Dealership and the Cooperative or
any condition exists or event has occurred which with the giving of notice or
lapse of time or both would constitute such an Event of Default.

     SECTION 11.03.  FAILURE TO RECORD SECURITY INSTRUMENT.  No failure
                     -------------------------------------
(intentional or inadvertent) by Statesman to file any financing statement
relating to a security instrument (whether conditional sales contract, chattel
mortgage, or security agreement) contained in or arising out of any Eligible
Contract or any Receivable shall impair or void the obligations of the
Cooperative hereunder.

     SECTION 11.04.  TERMINATION.  This Agreement may be terminated by either
                     -----------
party hereto by giving the other party ninety days (90) prior written notice of
such termination prior

                                       39
<PAGE>

to any anniversary date of this Agreement. No such termination shall affect any
rights of the parties accruing up to the date of final payment of all Purchased
Contracts, Purchased Receivables, Purchased Wholesale Accounts, Purchased Notes
and Southern States Credit Card Program outstandings previously purchased or
relieve the Cooperative from ownership requirements for Statesman Class A
Preferred Stock as required in Section 9.02.

     SECTION 11.05.  SUCCESSORS.  The covenants, representations, and agreements
                     ----------
herein set forth shall be binding upon the parties hereto and their successors
and assigns.

     SECTION 11.06.  AMENDMENTS, ETC.  No amendment, modification, termination,
                     ----------------
or waiver of any provision of this Agreement shall in any event be effective
unless the same shall be in writing and signed by Statesman, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

     SECTION 11.07.  NOTICES, ETC.  All notices and other communications
                     -------------
provided for under this Agreement shall be in writing and mailed, faxed,
telegraphed or delivered, if to the Cooperative at its address at:

          SOUTHERN STATES COOPERATIVE, INCORPORATED
          6606 WEST BROAD STREET (ZIP 23230)
          POST OFFICE BOX 26234
          RICHMOND, VIRGINIA 23260
          ATTENTION:  MR. J. A. HAWKINS

and if to Statesman, at its address at

          STATESMAN FINANCIAL CORPORATION
          6606 WEST BROAD STREET (ZIP 23230)
          POST OFFICE BOX 25567
          RICHMOND, VIRGINIA 23260
          ATTENTION:  MR. JOHN C. FROMAN

or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section 11.07. All such notices and communications shall, when mailed,
be effective when deposited addressed as aforesaid.

     SECTION 11.08.  SEVERABILITY OF PROVISIONS.  Any provision of this
                     --------------------------
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.

     SECTION 11.09.  HEADINGS.  Article and Section headings in this Agreement
                     --------
are included in such Agreement for the convenience of reference only and shall
not constitute a part of the Agreement for any other purpose.

                                       40
<PAGE>

     SECTION 11.10.  GOVERNING LAW.  This Agreement shall be construed in
                     -------------
accordance with and governed by the laws of the Commonwealth of Virginia.

     SECTION 11.11.  SURVIVAL.  All warranties, representations and covenants
                     --------
made by the Cooperative herein, or in any agreement referred to herein or on any
certificate, document or other instrument delivered by it or on its behalf under
this Agreement, shall be considered to have been relied upon by Statesman and
shall survive the delivery to Statesman of the Receivables, Purchased Contracts,
Purchased Wholesale Accounts and Purchased Notes purchased pursuant hereto
regardless of any investigation made by Statesman or on its behalf. All
statements in any such certificate or other instrument shall constitute
warranties and representations by the Cooperative hereunder. Except as otherwise
expressly provided herein, all covenants made by the Cooperative hereunder or
under any other agreement or instrument shall be deemed continuing until the
Purchased Contracts, Purchased Receivables, Purchased Wholesale Accounts and
Purchased Notes and all other liabilities and obligations of the Cooperative to
Statesman are satisfied in full.

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


                                   SOUTHERN STATES COOPERATIVE,
                                      INCORPORATED

ATTEST:                            By: /s/
                                       ----------------------
/s/                                Title: ___________________
-----------------------

                                   STATESMAN FINANCIAL CORPORATION

ATTEST:                            By: /s/
                                       ----------------------
/s/
-----------------------            Title: ___________________

                                       41