exv10w5






EXECUTION COPY




PURCHASE AND SALE AGREEMENT



Dated as of August 10, 2005




between




COFINA FUNDING, LLC,

as Purchaser




and




COFINA FINANCIAL, LLC,

as Seller









 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page
	ARTICLE I CERTAIN DEFINITIONS
	 	 	1	 
	 
	1.01 Definitions
	 	 	1	 
	 
	1.02 Other Definitional Provisions
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II PURCHASE AND SALE OF THE CONVEYED PROPERTY
	 	 	3	 
	 
	2.01 Purchase and Sale of the Purchased Assets
	 	 	3	 
	 
	2.02 Payment for Purchased Assets
	 	 	4	 
	 
	2.03 The Closing
	 	 	5	 
	 
	2.04 Deliveries
	 	 	5	 
	 
	2.05 No Assumption of Liability
	 	 	5	 
	 
	2.06 [Reserved]
	 	 	6	 
	 
	2.07 Settlement as to Specific Receivables and Dilution
	 	 	6	 
	 
	2.08 Reconveyance of Receivables
	 	 	6	 
	 
	2.09 Substitution
	 	 	6	 
	 
	2.10 Purchase Termination Event
	 	 	7	 
	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES
	 	 	9	 
	 
	3.01 Representations and Warranties of the Purchaser
	 	 	9	 
	 
	3.02 Representations and Warranties of the Seller
	 	 	10	 
	 
	3.03 Representations and Warranties of the Seller Relating
to the Agreement
and the Receivables
	 	 	14	 
	 
	 	 	 	 
	ARTICLE IV CONDITIONS
	 	 	15	 
	 
	4.01 Conditions to Obligation of the Purchaser
	 	 	15	 
	 
	4.02 Conditions to Obligation of the Seller
	 	 	16	 
	 
	 	 	 	 
	ARTICLE V COVENANTS OF SELLER
	 	 	16	 
	 
	5.01 Covenants
	 	 	16	 
	 
	 	 	 	 
	ARTICLE VI MISCELLANEOUS PROVISIONS
	 	 	25	 
	 
	6.01 Obligations of Seller
	 	 	25	 
	 
	6.02 Counterparts
	 	 	25	 
	 
	6.03 Amendment
	 	 	25	 
	 
	6.04 Assignment; Third-Party Beneficiaries
	 	 	25	 
	 
	6.05 No Bankruptcy Petition
	 	 	25	 
	 
	6.06 No Recourse
	 	 	25	 






i









 




TABLE OF CONTENTS

(continued)



	 	 	 	 	 
	 	 	Page
	6.07 Waivers
	 	 	26	 
	 
	6.08 Notices
	 	 	26	 
	 
	6.09 Costs and Expenses
	 	 	26	 
	 
	6.10 Survival of Representations
	 	 	26	 
	 
	6.11 Headings and Cross-Reference
	 	 	26	 






	 	 	 
	SCHEDULE 1

	 	DESIGNATED LOAN AGREEMENTS
	SCHEDULE 2

	 	SELLER ORGANIZATIONAL INFORMATION
	 
	 	 
	EXHIBIT A

	 	FORM OF LOCKBOX AGREEMENT
	EXHIBIT B

	 	FORM OF MONTHLY FINANCIAL STATEMENTS
	EXHIBIT C

	 	FORM OF PURCHASE NOTICE






ii









 





          PURCHASE AND SALE AGREEMENT (“Agreement”) dated as of August 10, 2005, by and between
COFINA FINANCIAL, LLC, a Minnesota limited liability company, the “Seller”) and COFINA
FUNDING, LLC, a Delaware limited liability company (the “Purchaser”).




          WHEREAS, the Seller acquires secured loans to farm supply and marketing cooperatives from one
or more sellers pursuant to the Purchase and Contribution Agreement (as defined below); and




          WHEREAS, the Seller and the Purchaser wish to set forth the terms pursuant to which the
Receivables and certain related property acquired by the Seller under the Purchase and Contribution
Agreement may be sold, contributed or otherwise transferred by the Seller to the Purchaser
hereunder.




          NOW, THEREFORE, in consideration of the foregoing, other good and valuable consideration, and
the mutual terms and covenants contained herein, the parties hereto agree as follows:




ARTICLE I




CERTAIN DEFINITIONS.




     1.01 Definitions. Capitalized terms used but not defined herein shall have the
meanings given to such terms in the Indenture and, as applicable, the Series Supplement for each
Series.



     1.02 Other Definitional Provisions. As used in this Agreement, the following terms
shall, unless the context otherwise requires, have the following meanings (such meanings to be
equally applicable to the singular and plural forms of the terms defined):



     “Addition Date” shall have the meaning set forth in Section 2.01(b).



     “Additional Designated Loan Agreement” means a loan facility designated by the Seller
for addition to Schedule 1 after the Closing Date.



     “Cut-Off Date” means (i) with respect to the Receivables transferred on the Initial
Sale Date, the Initial Cut-Off Date and (ii) with respect to all other Receivables, the applicable
Subsequent Cut-Off Date.



     “Designated Loan Agreements” means (i) the Initial Designated Loan Agreements and
(ii) from and after the applicable Addition Date with respect thereto, each Additional Designated
Loan Agreement.



     “Indenture” means the Base Indenture, dated as of the date hereof, between Cofina
Funding, LLC, as issuer, and U.S. Bank National Association, as Trustee, together with one or more
supplements thereto, as amended, modified or otherwise supplemented from time to time.



     “Initial Cut-Off Date” means the close of business on August 9, 2005.



 









 





     “Initial Designated Loan Agreements” means the loan facilities identified on
Schedule 1 on the Closing Date.



     “Initial Sale Date” shall have the meaning set forth in Section 2.01(a).



     “Lockbox” means that certain lockbox maintained at M&I Marshall & Ilsley Bank pursuant
to a Lockbox Agreement for the purpose of receiving Collections.



     “Lockbox Agreement” means an agreement, in the form of Exhibit A hereto, to
which a Lockbox is subject, or any other lockbox agreement acceptable to the Required Persons for
each Series.



     “Officer’s Certificate” shall mean a certificate signed by the President or any Vice
President or a Treasurer or Assistant Treasurer (or an officer holding an office with equivalent or
more senior responsibilities) of the Seller.



     “Opinion of Counsel” shall mean a written opinion of counsel of the Seller in form and
substance and from counsel reasonably acceptable to the Required Persons for each Series.



     “Potential Purchase Termination Event” shall mean any occurrence that is, or with
notice or lapse of time or both would become, a Purchase Termination Event.



     “Purchase and Contribution Agreement” means the Purchase and Contribution Agreement,
dated as of the date hereof, among Cofina Financial, LLC, as purchaser, Cenex Finance Association,
Inc., as a seller, and the other Sellers from time to time party thereto, as amended, modified or
otherwise supplemented from time to time.



     “Purchase Notice” shall have the meaning set forth in Section 2.01(a).



     “Purchase Price” means, with respect to any acquisition of Purchased Assets from the
Seller on any date, an amount equal to the aggregate Receivable Balance of the Receivables included
in such Purchased Assets on the date of purchase (subject to adjustment pursuant to Section
2.07).



     “Purchase Termination Date” shall have the meaning set forth in Section 2.10.



     “Purchase Termination Event” shall have the meaning set forth in Section 2.10.



     “Purchased Assets” shall have the meaning set forth in Section 2.01(a).



     “Seller” shall have the meaning set forth in the preamble to this Agreement.



     “Subsequent Cut-Off Date” means, with respect to any Receivable transferred on a date
other than the Initial Sale Date, the date of transfer of such Receivable to the Purchaser
hereunder.



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     “Subsequent Transfer Date” shall mean the date (which shall be a Business Day) that
any Subsequently Transferred Receivables are transferred by any Seller to the Purchaser hereunder
(including, without limitation, any Receivable substituted in accordance with Section
2.09).



     “Subsequently Transferred Receivables” shall mean any Receivables transferred by the
Seller to the Purchaser hereunder after the Closing Date.



     “Transfer Date” shall mean each date on which Receivables are transferred hereunder
and shall include the Closing Date and each Subsequent Transfer Date.



ARTICLE II




PURCHASE AND SALE OF THE CONVEYED PROPERTY.




     2.01 Purchase and Sale of the Purchased Assets. (a) On the terms and subject to the
conditions set forth in this Agreement, and in consideration of the Purchase Price, the Seller
hereby agrees to sell, transfer, assign, set over, deliver, contribute and otherwise convey to the
Purchaser, without recourse (except as specifically provided herein), and the Purchaser agrees to
purchase and otherwise acquire, all of the Seller’s right, title and interest in, to and under:




     (i) each Receivable of the Seller that existed and was owing to the Seller under the
Initial Designated Loan Agreements as of the opening of the Seller’s business on the Closing
Date (the “Initial Sale Date”);




     (ii) each Receivable of the Seller that existed and was owing to the Seller under each
Additional Designated Loan Agreement as of the applicable Addition Date;




     (iii) each Receivable acquired by the Seller (A) under the Initial Designated Loan
Agreements from and after the Initial Sale Date to and including the Purchase Termination
Date, or (B) under the Additional Designated Loan Agreements from and after the applicable
Addition Date to and including the Purchase Termination Date;




     (iv) all Collections due or to become due or received with respect to such Receivables
on or after the Initial Sale Date or applicable Addition Date, as applicable;




     (v) all Related Security with respect to the foregoing;




     (vi) the Lockbox, the Lockbox Account and all amounts on deposit therein; and




     (vii) all present and future claims, demands, causes and choses in action and all
payments on or under and all proceeds of every kind and nature whatsoever in respect of any
and all of the foregoing, including all proceeds of all of the foregoing and the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds,
accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks,



3









 






deposit accounts, general intangibles, insurance proceeds, investment property, rights
to payment of any and every kind and other forms of obligations and receivables, instruments
and other property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing (all of the foregoing property described in clauses (i)
through (vii), the “Purchased Assets”). Each Receivable described in clause (iii)
above shall be sold, assigned or otherwise conveyed by the Seller to the Purchaser on the
date the Seller receives a purchase notice with respect thereto under the Purchase and
Contribution Agreement and on each date the Seller delivers a purchase notice in the form of
Exhibit C (each, a “Purchase Notice”) including such Receivables.



     (b) Prior to the Purchase Termination Date, the Seller may, but shall not be obligated to,
designate from time to time in its discretion additional loan facilities to be included as
Designated Loan Agreements as of an applicable date (the “Addition Date” with respect to
such Designated Loan Agreements) by providing written notice, on or before the Business Day prior
to the applicable Addition Date, to the Purchaser, the Trustee, and the Servicer that the
applicable Additional Designated Loan Agreements will be included as Designated Loan Agreements.



     2.02 Payment for Purchased Assets. (a) The Purchase Price for the initial
acquisition of Purchased Assets from the Seller on the Closing Date shall be payable in full by the
Purchaser to the Seller, and shall be paid to the Seller in the following manner: (i) the
Purchaser shall deliver, in immediately available funds, cash to the extent funds are made
available to the Purchaser under the Indenture from the sale of Notes on the Closing Date,
(ii) with respect to the remaining balance of the Purchase Price, on the Closing Date, the Seller
shall, and hereby does, contribute to the capital of the Purchaser Receivables and Related Security
with respect thereto in an amount equal to the excess of the Purchase Price for the initial
acquisition of Purchased Assets over the amount of cash delivered by the Purchaser pursuant to
clause (i) above, and (iii) the Purchase Price for each acquisition of Purchased Assets by the
Purchaser from the Seller after the Closing Date shall be payable as described in Section
2.02(b).



     (b) With respect to any purchase from the Seller hereunder after the Closing Date, the
Purchaser shall deliver, in immediately available funds, cash to the extent funds are made
available to the Purchaser under the Indenture from the sale of Notes (or the increase in the
outstanding principal amount thereof) or funds are otherwise available to the Purchaser in
accordance with the terms of the Indenture. To the extent on the date of any purchase hereunder
after the Closing Date the Purchase Price has not been paid in full in cash in accordance with the
preceding sentence, the Seller shall, and shall be deemed to, contribute Receivables and Related
Security with respect thereto to the capital of the Purchaser in an amount equal to the excess of
the Purchase Price for the applicable acquisition of Purchased Assets hereunder over the amount of
cash delivered by the Purchaser in accordance with the preceding sentence (which contributed
Purchased Assets shall be treated as purchased by Purchaser from the Seller for all purposes of
this Agreement).



4









 





     2.03 The Closing. The sale and purchase of the initial Purchased Assets hereunder
shall take place on the Closing Date, simultaneously with the closings of the Transaction
Documents.



     2.04 Deliveries. The Seller (i) has delivered to the Custodian within five (5)
Business Days after the Initial Sale Date or within two (2) Business Days after the applicable
Addition Date, as applicable, the Custodian File with respect to each Receivable transferred by it
to the Purchaser on such date and (ii) has recorded and filed and, in the case of Additional
Designated Loan Agreements, shall, prior to the applicable Addition Date, record and file, at its
own expense, any financing statements (and continuation statements with respect to such financing
statements when applicable) naming the Seller as debtor/transferor and the Purchaser as secured
party/purchaser covering the Receivables and Related Security then existing and thereafter created
or acquired meeting the requirements of applicable state law in such manner and in such
jurisdictions as are reasonably requested by the Purchaser or necessary to perfect the transfer and
assignment of the Receivables and Related Security from the Seller to the Purchaser. The Seller
shall provide the Custodian with an updated copy of Schedule I hereto concurrently with any update
thereto hereunder. The Seller has delivered a file-stamped copy of such financing statements or
other evidence of such filings to the Purchaser and the Custodian, and has taken, or shall take, at
the Seller’s own expense, all other steps as are necessary under applicable law to perfect such
transfers and assignments and has delivered, or shall deliver, confirmation of such steps as are
reasonably requested by the Purchaser or the Controlling Party.



          The Seller further covenants and agrees, at its own expense, on or prior to the Closing Date
or the applicable Subsequent Transfer Date, as applicable, with respect to the Receivables
transferred by it to the Purchaser hereunder, (a) to indicate on its computer files that such
Receivables have been conveyed to the Purchaser pursuant to this Agreement and (b) to maintain a
true and complete list of all such Receivables specifying for each such Receivable as of the
applicable Cut-Off Date its account number and aggregate Receivable Balance attributable thereto.




          It is the express intent of the parties hereto that the transfers of the Purchased Assets by
the Seller to the Purchaser, as contemplated by this Agreement, be, and be treated as, sales or
contributions and not as secured loans secured by the Purchased Assets. In addition, if for any
reason any transfer hereunder is deemed not to be a sale or contribution, the Seller hereby grants
to the Purchaser a security interest in all of the Seller’s right, title and interest in and to the
Purchased Assets transferred or purported to be transferred by it hereunder, including, without
limitation, in all Purchased Assets constituting “accounts,” “instruments,” “chattel paper,”
“payment intangibles,” “goods,” “investment property,” “deposit accounts,” “supporting obligations”
and “letter of credit rights” (as each of such terms is defined in the UCC), and this Agreement
shall constitute a security agreement and a grant by the Seller of a security interest in all
“accounts,” “instruments,” “chattel paper,” “payment intangibles” (as defined in the UCC) and other
property transferred hereunder.




     2.05 No Assumption of Liability. Any sale, transfer, assignment, grant or conveyance
of Purchased Assets made hereunder shall not constitute and is not intended to result in an



5









 







assumption by the Purchaser or any of its assigns of any obligation of the Seller (including
any commitment to fund loans under any Loan Documents) to the Obligors or any other Person in
connection with the Receivables, any Related Security or any agreement, document or instrument
related thereto.



     2.06 [Reserved].



     2.07 Settlement as to Specific Receivables and Dilution.



          (a) If, on the day of purchase or contribution of any Receivable from the Seller hereunder,
any of the representations or warranties set forth in Section 3.03 made by the Seller is
not true with respect to such Receivable or, as a result of any action or inaction of the Seller,
on any day any of the representations or warranties set forth in Section 3.03 is no longer
true with respect to such Receivable and such representation or warranty is not cured within ten
(10) Business Days, then, subject to Section 2.07(c) below, the Seller shall be required to
deposit an amount equal to the Outstanding Balance of such Receivable (plus accrued interest
thereon) into the Collection Account; provided, that if the Purchaser thereafter receives
payment with respect to such Receivable, the Purchaser promptly shall deliver such funds to the
Seller.




          (b) If, on any day, the Outstanding Balance of any Receivable purchased or contributed
hereunder is reduced or adjusted as a result of any adjustment made by a Seller or the Servicer
(other than as expressly permitted under the Servicing Agreement) or any setoff or dispute between
a Seller or the Servicer and an Obligor, then, subject to Section 2.07(c) below, the Seller
shall be required to deposit the amount of such reduction into the Collection Account within two
(2) Business Days thereof.




          (c) Prior to the occurrence of an Event of Default, Purchase Termination Event or Early
Amortization Event, any amount payable by the Seller pursuant to Section 2.07(a) or
(b) shall be applied as a credit for the account of the Purchaser against the Purchase
Price of Receivables next purchased by the Purchaser from the Seller hereunder; provided,
however, if there have been no purchases of Receivables (or insufficiently large purchases
of Receivables) to create a Purchase Price sufficient to so apply such credit against within two
(2) Business Days, the amount of such credit shall be deposited by the applicable Seller in the
Collection Account on such second (2nd) Business Day; provided, further,
the Seller may also satisfy its obligations under this Section 2.07 with respect to a
Receivable by substituting a substitute Receivable for such Receivable in accordance with
Section 2.09.




     2.08 Reconveyance of Receivables. In the event that the Seller has paid to the
Purchaser the full Outstanding Balance (and accrued interest) of any Receivable pursuant to
Section 2.07, the Purchaser shall promptly reconvey such Receivable to the Seller, without
representation or warranty, but free and clear of all liens created by the Purchaser.



     2.09 Substitution. If no Event of Default, Purchase Termination Event, Servicer
Default or Early Amortization Event has occurred, the Seller may substitute, in its discretion, a
Receivable for any Receivable (including any Receivable with respect to which the Seller may



6









 




have a settlement obligation under Section 2.07), provided that (i) the cumulative
aggregate Receivables Balance of all Receivables substituted pursuant to this Section 2.09
shall not exceed 10.0% of the largest outstanding aggregate Receivable Balance since the Closing
Date and (ii) each substitute Receivable meets the following conditions:





     (A) such substitute Receivable is an Eligible Receivable on the date of substitution;




     (B) the Receivable Balance of such substitute Receivable is at least equal to the
Receivable Balance of the Receivable being released; and




     (C) after giving effect to such substitution, no Borrowing Base Deficiency exists.



     Each substitute Receivable shall constitute a Subsequently Transferred Receivable hereunder
and the Seller shall deliver an updated Schedule I with respect thereto concurrently with the
substitution thereof. The Purchaser shall take any and all actions reasonably requested by the
Seller, at the expense of the Seller, to assign, without recourse, representation or warranty
(except that the transfer is made free of any liens created by, through or under the Purchaser), to
the Seller all of the Purchaser’s right, title and interest in and to the Receivable and related
assets being reacquired by the Seller in exchange for the substitute Receivables, such assignment
being an assignment outright and not for security; and the Seller shall thereupon own such
Receivable free of any further obligation to the Purchaser, the Trustee or the Noteholders with
respect thereto.



     2.10 Purchase Termination Event. The Seller and the Purchaser hereby covenant and
agree that in the event that any of the following has occurred:



     (a) an Event of Default or Early Amortization Event;



     (b) the Seller shall fail to make any payment, transfer or deposit required to be paid or made
by it under the terms the Transaction Documents, or, if applicable, shall fail to give instructions
or notice to the Trustee to make such payment, transfer or deposit, and, such failure shall remain
unremedied for two (2) Business Days after such payment, transfer or deposit was required to be
made;



     (c) from and after the date of issuance of the second Series of Notes, the Seller’s Total
Capital (as defined under GAAP and including the carrying value of Seller’s equity ownership in the
Purchaser) is less than $65,000,000 plus for each fiscal year ending after the date hereof, the
aggregate Net Savings not otherwise distributed to shareholders (via cash patronage distributions
or stock or patronage capital retirement) (such amounts to be added only after audited financial
statements are available and the patronage distribution is established);



     (d) any representation or warranty made or deemed to be made by the Seller, or any of its
officers, under or in connection with the Transaction Documents, or any report or other



7









 




information delivered pursuant thereto, shall prove to have been false or incorrect in any
material respect when made or deemed to have been made; provided, however, that a
Purchase Termination Event pursuant to this Section 2.10(c) shall not be deemed to have
occurred hereunder if such Purchase Termination Event is the result of a breach of a
representation, warranty, statement or certificate with respect to any Receivable and the Seller
has fulfilled its obligations with respect thereto in accordance with Section 2.07 or
Section 2.09;




     (e) the Seller shall fail to perform or observe in any material respect any other term,
covenant or agreement contained in any of the Transaction Documents on its part to be performed or
observed and any such failure shall remain unremedied for ten (10) Business Days after the Seller
has, or in the exercise of reasonable diligence should have had, knowledge thereof or after the
date on which written notice of such failure, requiring the same to be remedied, shall have been
given to the Seller; provided, that if such failure is capable of being cured and the
Seller is using commercially reasonable efforts to cure such failure, a Purchase Termination Event
shall not be deemed to have occurred until such failure continues for thirty (30) days;



     (f) (i) failure of the Seller or any of the Affiliates to pay any principal of or premium or
interest on any Indebtedness for which the Seller or any of the Affiliates is liable (whether as a
primary or secondary party) if the aggregate principal or notional amount of such Indebtedness is
at least $1,000,000, when the same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), or the Seller shall otherwise default in its
obligations thereunder or a default or an event of default shall occur thereunder and such failure,
default or event of default shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Indebtedness; or (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to any such Indebtedness and shall
continue after the applicable grace period, if any, specified in such agreement or instrument, if
the effect of such event or condition is to accelerate, or permit the acceleration of, the maturity
of such Indebtedness;



     (g) the Purchaser or the Seller or any of its Subsidiaries shall become the subject of any
Event of Bankruptcy or voluntarily suspend payment of its obligations; or the Purchaser shall
become unable for any reason (other than by reason of a determination by the Seller not to sell
Receivables to the Purchaser pursuant to this Agreement) to transfer Receivables and pledge them as
part of the Trust Estate; or



     (h) the Pension Benefit Guaranty Corporation or the Internal Revenue Service has filed a Lien
against any material portion of the assets of the Seller, or any material portion of such assets
have otherwise become subject to a Lien;


(any such event, a “Purchase Termination Event”), the Seller or the Purchaser, as the case
may be, shall immediately notify the other party, the Trustee and the Controlling Party of such
event and the Purchaser shall have the option to declare, and upon direction of the Controlling
Party shall declare, the “Purchase Termination Date” to have occurred as of the date
specified in such declaration notice, and upon any such declaration, the Seller shall cease to sell
to the Purchaser


8









 






and the Purchaser shall cease to purchase from the Seller any Receivables pursuant to
Section 2.01. Notwithstanding any provision of this Agreement to the contrary, upon the
occurrence of a Purchase Termination Event of the type described in clause (g) above, the
Purchase Termination Date shall occur automatically without any declaration or other action by any
party and the Seller shall cease to transfer to the Purchaser and the Purchaser shall cease to
acquire from Seller any Receivables pursuant to Section 2.01. The sale and purchase of
Receivables pursuant to Section 2.01 may be resumed only upon receipt by the Purchaser of
notice and evidence satisfactory to the Purchaser that such Purchase Termination Event has been
remedied to the satisfaction of the Purchaser and with the prior written consent of the Controlling
Party in its sole discretion.




ARTICLE III




REPRESENTATIONS AND WARRANTIES.




     3.01 Representations and Warranties of the Purchaser. The Purchaser hereby represents
and warrants to the Seller on the Closing Date and each Transfer Date that:



          (a) Organization and Good Standing. The Purchaser is duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has the full organizational power
and authority to own its property and conduct its business as such properties are presently owned
and as such business is presently conducted and to execute, deliver and perform its obligations
under this Agreement and the other Transaction Documents to which it is a party.




          (b) Due Qualification. The Purchaser is duly qualified to do business and is in good
standing and has obtained all necessary licenses and approvals in each jurisdiction in which the
purchase of the Purchased Assets in accordance with the Transaction Documents requires such
qualification, except where the failure to so qualify or to obtain such licenses or approvals would
not have a Material Adverse Effect.




          (c) Due Authorization. The execution, delivery, and performance of this Agreement and
each of the other Transaction Documents to which it is a party and the consummation of the
transactions contemplated by the Transaction Documents have been duly authorized by the Purchaser
by all necessary organizational action on the part of the Purchaser.




          (d) Due Execution and Delivery; Binding Obligation. This Agreement and each of the
other Transaction Documents to which it is a party has been duly executed and delivered on behalf
of the Purchaser and constitutes the valid, legal and binding obligation of the Purchaser,
enforceable in accordance with their respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability relating to or affecting
creditors’ rights.




          (e) No Violation. The execution and delivery of this Agreement by the Purchaser and
the performance by the Purchaser of its obligations under this Agreement and each




9









 




of the other Transaction Documents to which it is a party will not conflict with its
organizational documents or conflict with, violate, result in any breach of any of the terms and
provisions of, or constitute (with or without notice or lapse of time or both) a default under, any
other Requirements of Law applicable to the Purchaser or any contractual restriction contained in
any material indenture, loan, credit agreement, lease, security agreement, bond, note, contract,
agreement, mortgage, deed of trust, judgment, decree, order or other instrument to which the
Purchaser is a party or by which it is bound.




          (f) No Proceedings. No litigation or administrative proceeding is pending or, to the
best knowledge of the Purchaser, threatened against the Purchaser before any Official Body: (i)
asserting the invalidity of any of the Transaction Documents to which the Purchaser is a party;
(ii) seeking to prevent the consummation of any of the transactions contemplated by the Transaction
Documents; (iii) seeking any determination or ruling that, in the reasonable judgment of the
Purchaser, would adversely affect the performance by the Purchaser of its obligations under the
Transaction Documents to which the Purchaser is a party; (iv) seeking any determination or ruling
that would adversely affect the validity or enforceability of the Transaction Documents to which
the Purchaser is a party; or (v) seeking any determination or ruling that would, if adversely
determined, be reasonably likely to have a Material Adverse Effect.




          (g) Governmental and Other Consents. All approvals, authorizations, consents, orders
or other actions of, and all registration, qualification, designation, declaration, notice to or
filing with, any Person or of any Official Body required in connection with the execution and
delivery by the Purchaser of any of the Transaction Documents to which it is a party, the
consummation of the transactions contemplated thereby or the performance of and the compliance with
the terms thereof, have been obtained, except where the failure to take such action would not have
a Material Adverse Effect.




          (h) No Purchase Termination Event. To the Purchaser’s knowledge, no Purchase
Termination Event has occurred and is continuing.




     3.02 Representations and Warranties of the Seller. The Seller hereby represents and
warrants to the Purchaser on the Closing Date and each Transfer Date that:



          (a) Organization and Good Standing. The Seller is duly organized, validly existing
and in good standing under the laws of the State of Minnesota, and has the full organizational
power and authority to own its property and conduct its business as such properties are presently
owned and as such business is presently conducted and to execute, deliver and perform its
obligations under this Agreement and the other Transaction Documents to which it is a party.




          (b) Due Qualification. The Seller is duly qualified to do business and is in good
standing and has obtained all necessary licenses and approvals in each jurisdiction in which the
ownership or lease of its property, conduct of its business or transfer of the Purchased Assets in
accordance with the Transaction Documents requires such licensing or qualification, except



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where the failure to so qualify or to obtain such licenses or approvals would not have a
Material Adverse Effect.




          (c) Due Authorization. The execution, delivery, and performance of this Agreement and
each of the other Transaction Documents to which it is a party and the consummation of the
transactions contemplated by the Transaction Documents have been duly authorized by the Seller by
all necessary organizational action on the part of the Seller.




          (d) Due Execution and Delivery; Binding Obligation. This Agreement and each of the
other Transaction Documents to which it is a party has been duly executed and delivered on behalf
of the Seller and constitutes the valid, legal and binding obligation of the Seller, enforceable in
accordance with their respective terms, subject to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or affecting creditors’ rights.




          (e) No Violation. The execution and delivery of this Agreement by the Seller and the
performance by the Seller of its obligations under this Agreement and each of the other Transaction
Documents to which it is a party will not conflict with its organizational documents or conflict
with, violate, result in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, any other Requirements of Law applicable
to the Seller or any contractual restriction contained in any material indenture, loan, credit
agreement, lease, security agreement, bond, note, contract, agreement, mortgage, deed of trust,
judgment, decree, order or other instrument to which the Seller is a party or by which it is bound.




          (f) No Proceedings. No litigation or administrative proceeding is pending or, to the
best knowledge of the Seller, threatened against the Seller before any Official Body: (i) asserting
the invalidity of any of the Transaction Documents to which the Seller is a party; (ii) seeking to
prevent the consummation of any of the transactions contemplated by the Transaction Documents;
(iii) seeking any determination or ruling that, in the reasonable judgment of the Seller, would
adversely affect the performance by the Seller of its obligations under the Transaction Documents
to which the Seller is a party; (iv) seeking any determination or ruling that would adversely
affect the validity or enforceability of the Transaction Documents to which the Seller is a party;
or (v) seeking any determination or ruling that would, if adversely determined, be reasonably
likely to have a Material Adverse Effect.




          (g) Governmental and Other Consents. All approvals, authorizations, consents, orders
or other actions of, and all registration, qualification, designation, declaration, notice to or
filing with, any Person or of any Official Body required in connection with the execution and
delivery by the Seller of any of the Transaction Documents to which it is a party, the consummation
of the transactions contemplated thereby or the performance of and the compliance with the terms
thereof, have been obtained, except where the failure to take such action would not have a Material
Adverse Effect.




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     (h) Protection of Purchaser’s Rights. The Seller has not taken any action which would
materially impair, or omitted to take any action necessary to avoid material impairment of, the
rights of the Purchaser or the Trustee in the Receivables or Related Security, nor has it taken any
action to cause a Receivable to be evidenced by a promissory note or other instrument unless actual
possession thereof has been transferred to the Custodian.



     (i) No Purchase Termination Event. No Purchase Termination Event or Potential
Purchase Termination Event has occurred and is continuing.



     (j) Margin Regulations. No use of any funds acquired by the Seller under this
Agreement will conflict with or contravene any of Regulations T or U promulgated by the Board of
Governors of the Federal Reserve System from time to time.



     (k) Accuracy of Information. No factual written information furnished or to be
furnished in writing by the Seller, as seller, to the Purchaser, the Trustee or any Notice Person
for purposes of or in connection with any Transaction Document or any transaction contemplated
hereby or thereby is, and no other such factual written information hereafter furnished (and
prepared) by the Seller, as seller, to the Purchaser, the Trustee or any Notice Person pursuant to
or in connection with any Transaction Document, taken as a whole, will be inaccurate in any
material respect as of the date it was furnished or (except as otherwise disclosed at or prior to
such time) as of the date as of which such information is dated or certified, or shall contain any
untrue statement of a material fact or omitted or will omit to state any material fact necessary to
make such information, in the light of the circumstances under which any statement therein was
made, not misleading on the date as of which such information is dated or certified. The
information with respect to the Seller provided on Schedule 2 hereto is true, complete and
accurate as of the Closing Date and each Transfer Date.



     (l) Offices. The Seller’s principal place of business and chief executive office is
located at the address specified for the Seller in Section 6.08, and the offices where the
Seller keeps all its books, records and documents evidencing the Receivables, the related Loan
Documents and all other agreements related to such Receivables are located at the address set forth
under the Seller’s signature hereto.



     (m) Trade Names. The Seller does not use any trade name other than the name set forth
on the signature page hereto. From and after the date that fell six years before the date hereof,
the Seller has not been known by any legal name or trade name other than its name as of the date
hereof, nor has the Seller been the subject of any merger or other corporate reorganization within
the last six years.



     (n) Taxes. The Seller has filed all tax returns and reports required by law to have
been filed by it and has paid all taxes and governmental charges thereby shown to be owing, except
any such taxes which are not yet delinquent or are being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with generally accepted
accounting principles shall have been set aside on its books.



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          (o) Licenses and Labor Controversies.





               (i) The Seller has not failed to obtain any material licenses, permits, franchises or
other governmental authorizations necessary to the ownership of its properties or to the
conduct of its business; and




               (ii) There are no labor controversies pending against the Seller that have had (or are
reasonably likely to have) a Material Adverse Effect.



          (p) Compliance with Applicable Laws. The Seller is in compliance in all material
respects with the requirements of all applicable laws, rules, regulations, and orders of all
governmental authorities (including, without limitation, Regulation Z, laws, rules and regulations
relating to usury, truth in lending, fair credit billing, fair credit reporting, equal credit
opportunity, fair debt collection practices and privacy and all other consumer laws applicable to
the Receivables and related Loan Documents).




          (q) Reliance on Separate Legal Identity. The Seller is aware that the Purchaser, the
Trustee and the Noteholders are entering into the Transaction Documents to which they are parties
in reliance upon the Purchaser’s identity as a legal entity separate from the Seller.




          (r) Purchase Price. The purchase price payable by the Purchaser to the Seller
hereunder is intended by the Seller and Purchaser to be consistent with the terms that would be
obtained in an arm’s-length sale.




          (s) Perfection Representations. The perfection representations and warranties set
forth in paragraphs (2), (4), (6), (7), (8), (11), (12), (13) and (15) of
Schedule I of the Indenture shall be a part of this Agreement for all purposes and are
hereby made by the Seller with respect to the Purchased Assets transferred by the Seller as of the
date hereof and on each Subsequent Transfer Date.




          (t) Credit Manual. The Seller has complied in all material respects with the Credit
Manual with regard to each Designated Loan Agreement prior to the transfer hereunder of Receivables
arising thereunder.




          (u) Transaction Documents. The Seller has complied in all material respects with all
terms, covenants and agreements contained in this Agreement and the other Transaction Documents
applicable to it.




          (v) Investment Company Status. The Seller is not, and is not controlled by, an
“investment company” as such term is defined in the Investment Company Act of 1940, as amended.
The consummation of the transactions contemplated by this Agreement and the other Transaction
Documents to which the Seller is a party will not violate any provision of the Investment Company
Act of 1940, as amended, or any rule, regulation or order issued by the Securities and Exchange
Commission thereunder.




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          (w) Sale Treatment. The Seller agrees to treat the conveyance of the Receivables and
the Purchased Assets for all purposes as a sale or contribution by the Seller to the Purchaser on
all relevant books, records, tax returns (other than combined or consolidated tax returns),
financial statements and other applicable documents, provided, however, that the
foregoing shall not prevent the Purchaser from being included in the consolidated financial
statements or tax returns of the Seller pursuant to GAAP or applicable tax laws or regulations.




     3.03 Representations and Warranties of the Seller Relating to the Agreement and the
Receivables.



          (a) Representations and Warranties. The Seller hereby represents and warrants to the
Purchaser, as of the Closing Date and each Transfer Date, that:





               (i) each representation and warranty contained in Section 3.02 is true and
correct as of such Transfer Date, with the same effect as if made on such date (except to
the extent it relates solely to an earlier date, in which event it shall be true and correct
at and as of such earlier date);




               (ii) as of each Transfer Date, the Designated Loan Agreements identified on
Schedule 1 hereto will be an accurate and complete listing of all such Designated
Loan Agreements, and the information contained therein with respect to such Designated Loan
Agreements is and will be true and correct as of such date;




               (iii) this Agreement constitutes a valid sale, transfer and assignment to the Purchaser
of all right, title and interest of the Seller in the Receivables transferred by it to the
Purchaser hereunder, together with all Related Security, and any proceeds of the foregoing
which, in the case of such Receivables and the Related Security existing on the Closing
Date, will be enforceable against the Seller upon execution and delivery of this Agreement
and which, in the case of Subsequently Transferred Receivables and the Related Security,
will be enforceable against the Seller upon the applicable Subsequent Transfer Date in
accordance with Article II;




               (iv) immediately prior to, and after giving effect to, the transfer of the Receivables
on such date, (a) the fair saleable value of the assets of the Seller will exceed its
liabilities and (b) the Seller will be solvent, will be able to pay its debts generally as
they mature, will own property with a fair saleable value greater than the amount required
to pay its debts and will have capital sufficient to carry on its business as then
constituted;




               (v) each Receivable (together with all Related Security) which is to be sold or
contributed to the Purchaser hereunder is or shall be owned by the Seller, free and clear of
any Adverse Claim. Whenever the Purchaser makes a purchase or accepts a contribution
hereunder, it shall have acquired a valid and perfected ownership interest (free and clear
of any Adverse Claim) in the Receivables transferred hereunder by the Seller and in the
Related Security with respect thereto;



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               (vi) no effective financing statement or other instrument similar in effect covering
the Seller’s interest in any Receivable or any Related Security is on file in any recording
office except such as may be filed in favor of the Purchaser or the Seller, as the case may
be, in accordance with this Agreement or in favor of the Trustee in accordance with the
Indenture;




               (vii) no selection procedures adverse to the Purchaser or the Secured Parties were
utilized in selecting the Receivables to be transferred hereunder from those receivables
owned by the Seller which met the definition of “Eligible Receivable”;




               (viii) the Receivables File relating to each Receivable transferred hereunder contains
all Loan Documents existing with respect to such Receivable and the Custodian File relating
to each Receivable transferred hereunder contains the original related Obligor Note, loan
agreement, security agreements and any guaranty or letter of credit issued in connection
therewith; and




               (ix) pursuant to written notices mailed on or before the relevant Transfer Date, the
Obligors have been instructed to make all payments with respect to the Receivables
transferred hereunder solely to the Lockbox or the Lockbox Account.



          (b) Eligibility of Receivables. The Seller hereby represents and warrants to the
Purchaser with respect to each Receivable transferred by it to the Purchaser hereunder, as of the
applicable Transfer Date that (i) such Receivable is an Eligible Receivable, (ii) such Receivable,
and each other Receivable previously transferred by it hereunder and then existing is free and
clear of any Adverse Claim and has been conveyed to the Purchaser in compliance with all
Requirements of Law applicable to the Seller, (iii) with respect to such Receivable, all material
consents, approvals or authorizations of any Person or any governmental body or official required
to be obtained, effected or given by the Seller in connection with the conveyance of such
Receivable to the Purchaser have been duly obtained, effected or given and are in full force and
effect and (iv) the representations and warranties set forth in Section 3.03(a) are true
and correct in all material respects with respect to such Receivable as if made on such day.




ARTICLE IV




CONDITIONS.




     4.01 Conditions to Obligation of the Purchaser. The obligation of the Purchaser to
purchase the Receivables and any other Purchased Assets hereunder is subject to the satisfaction of
the following conditions:



          (a) Representations and Warranties True. The representations and warranties of the
Seller hereunder shall be true and correct in all material respects on the Closing Date and, in the
case of any Subsequently Transferred Receivables, as of the Subsequent Transfer Date, with the same
effect as if then made (except to the extent they relate solely to an earlier date in



15









 






which event, it shall be true and correct at and as of such earlier date), and the Seller
shall have performed all obligations required to be performed by it hereunder on or prior to such
date as of such date.




          (b) Computer Files Marked. In the case of the transfer of the Receivables and any
other Purchased Assets on the Closing Date, the Seller shall, at its own expense, on or prior to
the Closing Date, and on or prior to the applicable Subsequent Transfer Date, in the case of any
Subsequently Transferred Receivables, respectively, indicate in its computer files that the
transferred Receivables have been sold to the Purchaser pursuant to this Agreement and, on or prior
to each Addition Date, shall deliver to the Purchaser an updated Schedule 1 certified by a
Responsible Officer of the Seller to be true, correct and complete at and as of such date.




          (c) Other Transactions. In the case of the transfer of the Receivables and any other
Purchased Assets on the Closing Date, the transactions contemplated by the other Transaction
Documents shall be consummated on the Closing Date.




          (d) No Purchase Termination Event, Event of Default or Early Amortization Event. No
Purchase Termination Event, Event of Default or Early Amortization Event shall have occurred as of
the applicable Transfer Date.




     4.02 Conditions to Obligation of the Seller. The obligations of the Seller to sell
the Receivables, any Subsequently Transferred Receivables and any other Purchased Assets to the
Purchaser are subject to the satisfaction of the following conditions:



          (a) Representations and Warranties True. The representations and warranties of the
Purchaser hereunder shall be true and correct in all material respects on the Closing Date and, in
the case of any Subsequently Transferred Receivables, as of the Subsequent Transfer Date, with the
same effect as if then made, and the Purchaser shall have performed all obligations required to be
performed by it hereunder on or prior to such applicable date as of such date.




          (b) Payment of Purchase Price. The Purchaser shall have paid the consideration
therefor, if any, required by Article II.




ARTICLE V




COVENANTS OF SELLER.




     5.01 Covenants.



     The Seller agrees with the Purchaser as follows:



          (a) Protection of Right, Title and Interest. The Seller shall cause this Agreement,
all amendments hereto and/or all financing statements and continuation statements and any other
necessary documents covering the right, title and interest of the Purchaser in and to the



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Receivables and the other Purchased Assets transferred by it to the Purchaser hereunder to be
promptly recorded, registered and filed, and at all times to be kept recorded, registered and
filed, all in such manner and in such places as may be required by law fully to preserve and
protect the right, title and interest and perfected ownership and first priority security interest
of the Purchaser in and to such property. The Seller shall deliver to the Purchaser file-stamped
copies of, or filing receipts for, any document recorded, registered or filed as provided above, as
soon as available following such recording, registration or filing. In addition to the foregoing,
the Seller agrees that following the occurrence of a Purchase Termination Date, at the request of
the Purchaser or the Controlling Party, it shall cause notices of the transfer of the Receivables
and Related Security pursuant to this Agreement to be sent to the relevant Obligors. The Purchaser
shall cooperate fully with the Seller in connection with the obligations set forth above and, at
the expense of the Seller, will execute any and all documents reasonably required to fulfill the
intent of this Section. The Seller shall not take any action which would impair or omit to take
any action necessary to avoid impairment of the rights of the Purchaser or the Trustee in the
Receivables or the other Purchased Assets, nor shall it take any action to cause a Receivable to be
evidenced by a promissory note or other instrument unless actual possession thereof has been
transferred to the Custodian.




     (b) Changes in Name, Identity or Corporate Structure. Not less than fourteen (14)
days prior to the date on which the Seller makes any change in its name, identity or corporate
structure which would make any financing statement or continuation statement filed in accordance
with paragraph (a) above seriously misleading within the meaning of Section 9-503 or 9-507 of the
UCC, the Seller shall give the Purchaser notice of any such change and shall file such financing
statements or amendments to previously filed financing or continuation statements as may be
necessary to continue the ownership or perfection of the interest of the Purchaser in the
Receivables, the Related Security and the other Purchased Assets, and the proceeds of the
foregoing.



     (c) Changes in Jurisdiction of Organization or Relocation. The Seller will give the
Purchaser, the Trustee and the Controlling Party at least fourteen (14) days’ prior written notice
of any change in its jurisdiction of organization, any relocation of any office in which the Seller
keeps records concerning the Receivables or of the relocation of the Seller’s principal executive
offices and whether, as a result of such relocation, the applicable provisions of the UCC or any
other applicable law would require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement, or the delivery of any notice to any
Obligor, and shall, prior to or contemporaneously with the effectiveness of such change, file such
financing statements or amendments, or deliver any such notice, as may be necessary to perfect or
to continue the ownership or perfection of the interest of the Purchaser in the Receivables and the
other Purchased Assets. The Seller will at all times maintain its jurisdiction of organization and
its principal executive offices within the United States of America.



     (d) Security Interests. Except for the conveyances hereunder to the Purchaser, the
Seller will not sell, pledge, assign or transfer to any other Person, or grant, create, incur,
assume or suffer to exist any Lien on any Receivable or Related Security, whether now existing or



17









 




hereafter created, or any interest therein, and the Seller shall defend the right, title and
interest of the Purchaser in, to and under the Receivables, the Related Security and the other
Purchased Assets transferred by it to the Purchaser hereunder, whether now existing or hereafter
created or acquired, against all claims of third parties claiming through or under the Seller;
provided, however, that nothing in this Section 5.01(d) shall prevent or be
deemed to prohibit the Seller from suffering to exist upon any of the Receivables transferred by it
to the Purchaser hereunder any Permitted Encumbrances.




     (e) Compliance with Loan Documents and Credit Manual. The Seller, at its expense,
will timely and fully perform and comply in all material respects with all provisions, covenants
and other promises, if any, required to be observed by the Seller under the Receivables, Related
Security and related Loan Documents. The Seller shall comply with the policies and procedures in
the Credit Manual in regard to each Receivable, except insofar as any failure so to comply or
perform would not have a material adverse effect on the interest of the Purchaser in any Receivable
or materially impair the collectibility of any Receivable. Subject to compliance with all
Requirements of Law, the Seller shall not agree to any change in the terms and provisions of any
Loan Documents in any respect unless such change would not have a material adverse effect on the
interest of the Purchaser or any of its assigns in any Receivable or impair the collectibility of
any Receivable.



     (f) Delivery of Collections. The Seller agrees to direct all Obligors to pay all
amounts when due with respect to the Receivables directly to the Collection Account or to the
Lockbox or the Lockbox Account for deposit directly into the Collection Account. If any
Collections or other amounts with respect to the Receivables are received directly by the Seller,
the Seller agrees to hold in trust and deposit such Collections or other amounts directly into the
Collection Account not later than one (1) Business Day after identification by the Seller thereof
(but in no event later than two (2) Business Days after receipt).



     (g) Notice of Liens. The Seller shall notify the Purchaser immediately upon becoming
aware of any Lien on any Receivable or Related Security other than the conveyances hereunder.



     (h) Costs and Expenses. The Seller agrees to pay all reasonable costs and
disbursements in connection with the performance of its obligations hereunder and under the other
Transaction Documents to which it is a party.



     (i) Financial Reporting. The Seller will maintain a system of accounting established
and administered in accordance with GAAP, and furnish to the Trustee and the Notice Persons within
ninety (90) days after the close of each of the Seller’s fiscal years, audited financial statements
of the Seller, prepared in accordance with GAAP on a consolidated and consolidating basis
(consolidating statements need not be audited by such accountants) for the Seller and its
Subsidiaries, including balance sheets as of the end of such period, related statements of
operations, equity or capital and cash flows, accompanied by an unqualified audit report certified
by a firm of nationally recognized independent certified public accountants, prepared in accordance
with GAAP and any management letter prepared by said accountants.



18









 





     (j) Compliance with Laws. The Seller will comply in all material respects with all
Requirements of Law (including, without limitation, all licensing requirements) to which it or its
properties may be subject.



     (k) Keeping of Records and Books of Account. The Seller will maintain and implement
administrative and operating procedures (including, without limitation, an ability to recreate
records evidencing Receivables in the event of the destruction of the originals thereof), and keep
and maintain, all documents, books, records and other information reasonably necessary or advisable
for the collection of all Receivables (including, without limitation, records adequate to permit
the daily identification of each new Receivable and all Collections of and adjustments to each
existing Receivable). The Seller will give the Purchaser prompt notice of any material change in
the administrative and operating procedures of the Seller referred to in the previous sentence.



     (l) Notice of Breach. Upon discovery by the Seller of a breach of any of the
representations and warranties set forth in Sections 3.01, 3.02 or 3.03,
the Seller shall give prompt written notice to the Purchaser and the Notice Persons.



     (m) Separate Existence. The Seller shall at all times:




     (i) to the extent that it shares the same officers or other employees as the Purchaser,
the salaries of and the expenses related to providing benefits to such officers and other
employees shall be fairly allocated among such entities, and each such entity shall bear its
fair share of the salary and benefit costs associated with all such common officers and
employees;




     (ii) to the extent that it jointly contracts with the Purchaser to do business with
vendors or service providers or to share overhead expenses, the costs incurred in so doing
shall be allocated fairly among such entities, and each such entity shall bear its fair
share of such costs. To the extent that the Seller contracts or does business with vendors
or service providers where the goods and services provided are partially for the benefit of
the Purchaser, the costs incurred in so doing shall be fairly allocated to or among such
entities for whose benefit the goods or services are provided, and each such entity shall
bear its fair share of such costs;




     (iii) enter into all transactions between the Seller and the Purchaser, whether
currently existing or hereafter entered into, only on an arm’s-length basis;




     (iv) maintain office space separate from the office space of the Purchaser and, to the
extent that the Seller and the Purchaser have offices in the same location, there shall be a
fair and appropriate allocation of overhead costs among them, and each such entity shall
bear its fair share of such expenses;




     (v) issue separate financial statements prepared not less frequently than annually and
prepared in accordance with GAAP;



19









 






     (vi) conduct its affairs strictly in accordance with its organizational documents and
observe all necessary, appropriate and customary corporate formalities, including, but not
limited to, holding all regular and special stockholders’, members’, managers’ and
directors’ meetings (as applicable) appropriate to authorize all corporate action, keeping
separate and accurate minutes of its meetings, passing all resolutions or consents necessary
to authorize actions taken or to be taken, and maintaining accurate and separate books,
records and accounts, including, but not limited to, payroll and intercompany transaction
accounts;




     (vii) not assume or guarantee any of the liabilities of the Purchaser;




     (viii) take, or refrain from taking, as the case may be, all other actions that are
necessary to be taken or not to be taken in order to comply with this Section
8.6(m); and




     (ix) comply with all material assumptions of fact set forth in the opinion with respect
to certain bankruptcy matters delivered by Dorsey & Whitney LLP on the date hereof, relating
to the Seller, its obligations hereunder and under the other Transaction Documents to which
it is a party and the conduct of its business with the Purchaser or any other Person.



     (n) Rating Maintenance. For so long as the Notes of any Series are Outstanding, the
Seller shall use its best efforts to enable each Rating Agency to maintain its rating of the Notes
of each such Series.



     (o) Computer Files. The Seller will mark or cause to be marked each Receivable in its
computer files as described in Section 4.01.



     (p) Financial and Other Information. The Seller will provide to each Notice Person and
the Trustee the following:




     (i) As soon as available, and in any event not later than the 15th day of the month
following each monthly accounting period, a copy of monthly consolidated financial
statements in the form of Exhibit B; and




     (ii) promptly, notice of: (1) each action, suit or proceeding before any Governmental
Authority which may adversely affect its condition or operations, financial or otherwise;
and (2) any dispute or the commencement of any proceeding with respect to any of its
obligations under the Transaction Documents.



     (q) Changes to Credit Manual. The Seller shall not amend the Credit Manual in any
material respect without the prior written consent of the Required Persons for each Series and
prior notice to the Purchaser. The Seller shall provide each Notice Person with a copy of all
amendments to the Credit Manual not later than ten (10) days after the effectiveness thereof.



20









 





     (r) Conduct of Business and Maintenance of Existence. At all times from the date
hereof to the Indenture Termination Date, the Seller will keep in full effect its existence, rights
and franchises as a limited liability company under the laws of its jurisdiction of formation
(unless it becomes, or its successor hereunder is or becomes, organized under the laws of any other
state or of the United States of America, in which case the Seller will keep in full effect its
existence, rights and franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement and any other
Transaction Document to which it is a party.



     (s) Compliance with ERISA and Internal Revenue Code. The Seller will comply in all
material respects with the provisions of ERISA, the Internal Revenue Code, and all regulations and
interpretations thereunder. The Seller will not (a) engage in any prohibited transaction for which
an exemption is not available or has not previously been obtained from the United States Department
of Labor; (b) permit to exist any accumulated funding deficiency, as defined in Section 302(a) of
ERISA and Section 412(a) of the Code, or funding deficiency with respect to any Benefit Plan other
than a Multiemployer Plan; (c) fail to make any payments to an Multiemployer Plan or any law
pertaining thereto; (d) terminate any Benefit Plan so as to result in any liability; or (e) permit
to exist any occurrence of any reportable event described in Title IV of ERISA which represents a
material risk of a liability of the Seller under ERISA or the Code.



     (t) No Release. The Seller shall not take any action and shall use its best efforts
not to permit any action (other than in its capacity as Servicer in accordance with and to the
extent permitted by the Servicing Agreement) to be taken by others that would release any Person
from any of such Person’s covenants or obligations under any Loan Documents or other document,
instrument or agreement included in the Related Security, or which would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness
of, any such Loan Document or other document, instrument or agreement.



     (u) Taxes. The Seller will file, or cause to be filed, all federal, state and local
tax returns which are required to be filed by it.



     (v) Transaction Documents. The Seller will comply in all material respects with the
terms of this Agreement and each of the other Transaction Documents to which it is a party.



     (w) Indemnities by the Seller. (i) Without limiting any other rights which the
Purchaser (and its assigns) may have hereunder or under applicable law, the Seller hereby agrees to
indemnify the Purchaser (and its assigns), the Secured Parties and their respective officers,
directors, agents and employees (each, a “Purchase and Sale Indemnified Party”) from and
against any and all damages, losses, claims, liabilities, costs and expenses, including, without
limitation, reasonable attorneys’ fees and disbursements (all of the foregoing being collectively
referred to as “Purchase and Sale Indemnified Amounts”) awarded against or incurred by any
of them arising out of or as a result of this Agreement or any other Transaction Document, or
arising out of claims asserted against a Purchase and Sale Indemnified Party relating to the
transactions contemplated herein or therein or the use of proceeds thereof or therefrom,



21









 




excluding, however, (i) Purchase and Sale Indemnified Amounts to the extent
resulting from fraud, gross negligence or willful misconduct on the part of such Purchase and Sale
Indemnified Party or (ii) recourse (except as otherwise specifically provided in this Agreement)
for uncollectible Receivables. Without limiting the generality of the foregoing, and subject to
the exclusions set forth in the preceding sentence, the Seller shall indemnify each Purchase and
Sale Indemnified Party for Purchase and Sale Indemnified Amounts relating to or resulting from:




          (A) any representation or warranty made by the Seller or any Responsible Officer of the Seller
under this Agreement, any of the other Transaction Documents, any periodic report or any other
written information or report delivered by the Seller pursuant to the Transaction Documents, which
shall have been false or incorrect in any respect when made or deemed made;




          (B) the failure by the Seller to comply with any Requirements of Law with respect to any
Purchased Asset, or the nonconformity of any Purchased Asset with any such applicable Requirements
of Law;




          (C) any dispute, claim, offset or defense (other than discharge in bankruptcy) of an Obligor
to the payment of any Receivable (including, without limitation, a defense based on such Receivable
or the related Obligor Note not being the legal, valid and binding obligation of the relevant
Obligor enforceable against it in accordance with its terms);




          (D) the failure by the Seller to comply with any term, provision or covenant contained in this
Agreement or any of the other Transaction Documents to which it is a party or to perform any of its
respective duties under the Obligor Notes;




          (E) the failure of the Seller to pay when due any taxes, including sales, excise or personal
property taxes payable in connection with any of the Receivables;




          (F) the commingling by the Seller of Collections at any time with other funds;




          (G) any investigation, litigation or proceeding related to this Agreement, any of the other
Transaction Documents, the use of proceeds by the Seller or the ownership of any Receivable,
Related Security or Obligor Note;




          (H) any failure of the Seller to give reasonably equivalent value to any Person in connection
with the purchase by the Seller from such Person of any Receivable or portfolio of Receivables, or
any attempt by any Person to void, rescind or set aside any such transfer under statutory
provisions or common law or equitable action, including any provision of the Bankruptcy Code;




          (I) any action taken by the Seller in the enforcement or collection of any Receivable;




22









 








          (J) the failure of any Receivable transferred to the Purchaser hereunder on the Closing Date
or any Subsequent Transfer Date, as applicable, to be an Eligible Receivable on such date;




          (K) the failure to vest in the Purchaser a valid and enforceable first priority perfected
security interest in such Receivables, Related Security and other Purchased Assets in each case,
free and clear of any Adverse Claim;




          (L) the failure to have filed, or any delay in filing, financing statements or other similar
instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with
respect to the Receivables, Related Security and other Purchased Assets transferred or purported to
be transferred hereunder whether at the time of any purchase or at any subsequent time; or




          (M) the failure of the Seller (i) to be in compliance with any and all applicable foreign,
federal, state and local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”), (ii) to have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective businesses and
(iii) to be in compliance with all terms and conditions of any such permit, license or approval.





     (ii) The Seller will pay and defend, indemnify, and hold harmless the Purchaser (and
its assigns) and the Secured Parties from and against any taxes that may at any time be
asserted against such Person with respect to the transactions contemplated in this
Agreement, including any sales, gross receipts, general corporation, tangible or intangible
personal property, privilege, or license taxes (but, not including any taxes asserted with
respect to the sale, transfer and assignment of the Receivables or other Purchased Assets to
the Purchaser, or federal, state or other income taxes arising out of Collections on the
Receivables) and costs and expenses in defending against the same, arising by reason of the
acts to be performed by the Seller under this Agreement or imposed against Purchaser and its
assigns.



          Indemnification under this Section 5.01(w) shall include reasonable fees and expenses
of counsel and expenses of litigation and shall survive termination or revocation of this
Agreement. The indemnity obligations hereunder shall be in addition to any obligation that the
Seller may otherwise have.




     (x) Merger or Consolidation of, or Assumption of the Obligations of, the Seller. The
Seller shall not consolidate with or merge into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any Person unless:



          (i) the Required Persons for each Series have consented to such transaction;




23









 









     (ii) the entity formed by such consolidation or into which the Seller is merged or the
Person which acquires by conveyance or transfer the properties and assets of the Seller
substantially as an entirety shall be an entity organized and existing under the laws of the
United States of America or any State or the District of Columbia and, if the Seller is not
the surviving entity, such corporation (the “Surviving Entity”) shall expressly
assume, by an agreement supplemental hereto the performance of every covenant and obligation
of the Seller hereunder; and




     (iii) the Seller has delivered to the Purchaser and the Notice Persons an Opinion of
Counsel stating that such consolidation, merger, conveyance or transfer comply with this
Section 5.01(x) and that all conditions precedent herein provided for relating to
such transaction have been complied with (and if an agreement supplemental hereto has been
executed as contemplated by clause (i) above, such Opinion of Counsel shall state that such
supplemental agreement is a legal, valid and binding obligation of the Surviving Entity
enforceable against the Surviving Entity in accordance with its terms, subject to
bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles), and the
Required Persons for each Series shall have consented thereto, and the Seller has delivered
all such other opinions, documents and information and executed, delivered and filed all
such UCC financing statements and other documents and agreements as may be requested by the
Purchaser and the Notice Persons.



     (y) Furnishing of Information and Inspection of Records. The Seller will furnish to
the Purchaser and each Notice Person from time to time such information with respect to the
Receivables and the other Purchased Assets as the Purchaser or such Notice Person may reasonably
request, including listings identifying the Outstanding Balance attributable to each Receivable of
the Seller, together with an aging of such Receivables. The Seller will, at any time and from time
to time during regular business hours and upon reasonable notice, permit the Purchaser and each
Notice Person, or its agents or representatives, (i) to examine and make copies of and abstracts
from all Records and (ii) to visit the offices and properties of the Seller for the purpose of
examining such Records, and to discuss matters relating to Receivables or the Seller’s performance
hereunder and under the other Transaction Documents to which it is a party with any of the officers
or branch managers of the Seller having knowledge of such matters. Upon a Potential Purchase
Termination Event or Purchase Termination Event, the Purchaser and each Notice Person may have
without notice, immediate access to all Records and the offices and properties of the Seller.



     (z) Further Acts. The Seller agrees to execute and deliver such further documents and
do such further acts as the Purchaser or any Notice Person may reasonably request for the purpose
of further evidencing, confirming, recording, perfecting or otherwise documenting the transfer of
the Receivables and other Purchased Assets.



     (aa) UCS Score. Such Seller shall ensure that the UCS Score assigned to each
Receivable transferred by it to the Purchaser hereunder shall reflect the proper UCS Score
applicable to such Receivable in accordance with the Credit Manual as then currently in effect.



24









 





     (bb) No Pledges. The Seller shall not pledge or otherwise transfer its direct or
indirect ownership interest in the Purchaser.



ARTICLE VI




MISCELLANEOUS PROVISIONS.




     6.01 Obligations of Seller. The obligations of the Seller under this Agreement shall
not be affected by reason of any invalidity, illegality or irregularity of any portion of the
Purchased Assets.



     6.02 Counterparts. This Agreement may be executed in two or more counterparts and by
different parties on separate counterparts, each of which shall be an original, but all of which
together shall constitute one and the same instrument.



     6.03 Amendment. This Agreement may not be amended or any provision waived except by a
written amendment or waiver duly executed by each of the parties hereto and consented to by the
Required Persons for each Series.



     6.04 Assignment; Third-Party Beneficiaries. Notwithstanding anything to contrary
contained herein, except as expressly provided in Section 5.01(x) and as hereinafter
provided, this Agreement may not be assigned by the Seller without the prior written consent of the
Required Persons for each Series. Notwithstanding anything to the contrary contained herein, this
Agreement may not be assigned by the Purchaser or the Seller except as permitted by this
Section 6.04. Simultaneously with the execution and delivery of this Agreement, the
Purchaser shall assign all of its right, title and interest herein to the Trustee as agent for the
Secured Parties under the Indenture as provided in the Indenture, to which assignment the Seller
hereby expressly consents. The Seller agrees to perform its respective obligations hereunder for
the benefit of the Trustee, as agent for the Secured Parties, and the Trustee, as agent for the
Secured Parties, shall each be an express third party beneficiary hereof. The Trustee, as agent
for the Secured Parties, may enforce the provisions of this Agreement, exercise (and be the
beneficiary of) the rights of the Purchaser hereunder and enforce the obligations of the Seller
hereunder, in each case, as provided in the Indenture.



     6.05 No Bankruptcy Petition. The Seller covenants and agrees that prior to the date
which is one year and one day after the Indenture Termination Date, it will not institute against,
or join any other Person in instituting against, the Purchaser or any CP Conduit (as defined in the
relevant Series Supplement) any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy or similar law.



     6.06 No Recourse. Notwithstanding anything else set forth in this Agreement or any
other Transaction Document, the Seller agrees that the obligations of the Purchaser to the Seller
hereunder and under the other Transaction Documents shall be recourse to the Trust Estate only and
specifically shall not be recourse to any other assets of the Purchaser. No obligations of the



25









 




Purchaser hereunder shall constitute a “claim” (as defined in Section 101(5) of the Bankruptcy
Code) against the Purchaser in the event that amounts are not paid in accordance with the priority
of payments set forth in Section 5.4(c) of the Indenture. This Section will survive the
termination of this Agreement.




     6.07 Waivers. No failure or delay on the part any Person in exercising any power,
right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other or further exercise thereof
or the exercise of any other power, right or remedy.



     6.08 Notices. All communications and notices pursuant hereto to any party shall be in
writing or by facsimile and addressed or delivered to it at its address (or in case of facsimile,
at its facsimile number at such address) set forth below or at such other address as may be
designated by it by notice to the other party and, if mailed shall be deemed given when mailed or
transmitted by facsimile:



          (a) in the case of the Seller, to 5500 Cenex Drive, St. Paul, Minnesota 55077, Attention:
Sharon Barber, Facsimile: (651) 451-4917;




          (b) in the case of the Purchaser, to 5500 Cenex Drive, St. Paul, Minnesota 55077, Attention:
Sharon Barber, Facsimile: (651) 451-4917.




     6.09 Costs and Expenses. The Seller will pay all expenses incident to the performance
of its obligations under this Agreement and all reasonable out-of-pocket costs and expenses of the
Purchaser, including fees and expenses of counsel, in connection with the perfection as against
third parties of the Purchaser’s right, title and interest in and to the Receivables and the other
Purchased Assets transferred to it by the Seller hereunder and the enforcement of any obligation of
the Seller hereunder.



     6.10 Survival of Representations. The respective agreements, representations,
warranties and other statements by the Seller and the Purchaser set forth in or made pursuant to
this Agreement shall remain in full force and effect and will survive the sale, transfer and
assignment of any Receivable or other Purchased Assets hereunder and the grant of a security
interest therein to the Trustee by the Purchaser under the Indenture.



     6.11 Headings and Cross-Reference. The various headings in this Agreement are
included for convenience only and shall not affect the meaning or interpretation of any provision
of this Agreement. References in this Agreement to Section names or numbers are to such Sections
of this Agreement.



     6.12 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
EACH OF THE PARTIES TO



26









 




THIS AGREEMENT HEREBY AGREES TO THE NON-EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY APPELLATE COURT HAVING JURISDICTION TO REVIEW
THE JUDGMENT THEREOF. EACH OF THE PARTIES HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS
AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER IN ANY OF THE AFOREMENTIONED COURTS
AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT.




27









 








     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date and year first above written.



	 	 	 	 	 
	 	COFINA FINANCIAL, LLC, as Seller

 	 
	 	By:  	 	 
	 	 	Name: 	 
	 	 	Title: 	 	 
	 



	 	 	 	 	 
	 	COFINA FUNDING, LLC, as Purchaser

 	 
	 	By:  	 	 
	 	 	Name: 	 
	 	 	Title: 	 	 
	 



Purchase and Sale Agreement




 









 








SCHEDULE 1




DESIGNATED LOAN AGREEMENTS





 









 






SCHEDULE 2




SELLER ORGANIZATIONAL INFORMATION




	 	 	 	 	 	 	 
	 	 	 	 	 	 	Identification No. for
	 	 	 	 	Jurisdiction of	 	Jurisdiction of
	Entity Legal Name	 	Entity Type	 	Organization	 	Organization
	Cofina Financial, LLC
	 	Limited Liability Company
	 	Minnesota
	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 







 









 








EXHIBIT A




(FORM OF LOCKBOX AGREEMENT)




 









 





EXHIBIT B




(FORM OF MONTHLY FINANCIAL STATEMENTS)




 









 





EXHIBIT C




(FORM OF PURCHASE NOTICE)




Date: [___________] [__], 200[_]




Cofina Funding, LLC

5500 Cenex Drive

St. Paul, Minnesota 55077

Attention: Sharon Barber




U.S. Bank National Association

60 Livingston Avenue

St. Paul, Minnesota 55107

Attn: Structured Finance/Cofina Funding, LLC




Bank Hapoalim

1777 Avenue of the Americas

New York, New York 10036

Attn: Brian W. James




RE: Purchase Notice




Ladies and Gentlemen:




     Reference is made to that certain Purchase and Sale Agreement, dated as of August 10, 2005
(such agreement as amended, modified, supplemented or restated from time to time, the
“Agreement”), by and between Cofina Financial, LLC (the “Seller”) and Cofina
Funding, LLC (the “Purchaser”). The undersigned the Seller hereby gives notice pursuant to
Section 2.01(a)(vii) of the Agreement, that effective as of [___] [___], 200[_] (the
“Cut-Off Date”), it is transferring the Receivables listed on Schedule I hereto to
the Purchaser. Seller hereby represents and warrants that, for each such Receivable, as of the
applicable Cut-Off Date, its account number and aggregate Receivable Balance are accurately
reflected on Schedule I.





	 	 	 	 	 
	 	COFINA FINANCIAL, LLC

 	 
	 	By:  	 	 
	 	Name: 	 	 
	 	Title: 	 	 
	 



 









 






	 	 	 	 	 



Schedule I to Purchase Notice




(List of Receivables)