Document:

exv10w26

EXECUTION VERSION

NOTE PURCHASE AGREEMENT

among

COFINA FUNDING, LLC,

as Issuer,

VICTORY RECEIVABLES CORPORATION,

as the Conduit Purchaser,

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH,

as Funding Agent for the Purchasers,

and

THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO,

as Committed Purchasers

dated as of November 21, 2008

 

 

     NOTE PURCHASE AGREEMENT (“Note Purchase Agreement”) dated as of November 21, 2008,
among COFINA FUNDING, LLC (the “Issuer”), VICTORY RECEIVABLES CORPORATION (the “Conduit
Purchaser”), THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as Funding Agent (the
“Funding Agent”) and the Committed Purchasers from time to time party hereto.

     The parties hereto agree as follows:

RECITALS

     WHEREAS, the Issuer will issue the variable funding notes pursuant to a Base Indenture, dated
as of August 10, 2005 (as amended, supplemented or otherwise modified from time to time, the
“Base Indenture”), between the Issuer and U.S. Bank National Association, as trustee (in
such capacity, together with its successors and assigns in such capacity, the “Trustee”),
as supplemented by the Series 2008-A Supplement, dated as of the date hereof, between the Issuer
and the Trustee (as amended, supplemented or otherwise modified from time to time, the “Series
Supplement,” and together with the Base Indenture, the “Indenture”); and

     WHEREAS, the Conduit Purchaser desires to acquire such variable funding notes and to make
advances from time to time hereunder in its discretion, and the Committed Purchasers desire to
acquire the variable funding notes and make advances from time to time hereunder.

     NOW, THEREFORE, for full and fair consideration, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

          SECTION 1.01 Certain Defined Terms. Capitalized terms used herein without definition
shall have the meanings set forth in the Indenture. Additionally, the following terms shall have
the following meanings:

          “Accrual Period” has the meaning specified in the Series Supplement.

          “Additional Amounts” means all amounts owed by the Issuer pursuant to
Section 2.11 and Article VIII, plus Breakage Amounts.

          “Affected Party” has the meaning specified in Section 8.02.

          “Aggregate Purchaser Funded Amount” means, on any date of determination, an amount
equal to (a) the Initial Purchase Price, plus (b) the aggregate amount of all Increases
made prior to such date of determination, minus (c) the aggregate amount of principal
payments in respect of the VFN made to and received by or on behalf of the Purchasers prior to such
date.

          “Allocated Commercial Paper” means Commercial Paper issued by the Conduit Purchaser
that is identified in the records of its program administrator as funding a particular Funding
Tranche during a particular Fixed Period with respect to such Funding Tranche.

 

 

          “Applicable Margin” shall have the meaning specified in the Fee Letter.

          “Asset Purchase Agreement” shall mean the asset purchase agreement, liquidity asset
purchase agreement, or other similar agreement pursuant to which any bank or group of banks or
financial institutions agrees to purchase or make loans secured by (or otherwise advance funds
against) all or any portion of the Conduit Purchaser’s interest in the VFN in order to support the
Conduit Purchaser’s repayment of the Commercial Paper issued to fund or maintain such interest.

          “Assignment and Acceptance” means an assignment and acceptance agreement entered into
by a Purchaser, a permitted assignee thereof and the Funding Agent pursuant to which such assignee
may become a party to this Note Purchase Agreement.

          “Base Rate” shall mean, with respect to any Funding Tranche funded or maintained by
any Purchaser other than by reference to the LIBOR Rate or through the issuance of Commercial
Paper, a rate per annum equal to the sum of (x) the greater of (i) the prime rate of interest
announced by the Funding Agent from time to time, changing when and as said prime rate changes
(such rate not necessarily being the lowest or best rate charged by the Funding Agent) and (ii) the
rate equal to the weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by the Funding Agent from
three (3) federal funds brokers of recognized standing selected by it and (y) the Applicable
Margin.

          “Blended Rate” shall mean, with respect to any Funding Tranche funded or maintained
through the issuance of Commercial Paper, the rate equivalent to the sum of (a) the weighted
average of (i) the weighted average of the discount rates on all of the Commercial Paper issued at
a discount and outstanding during the related Fixed Period, converted to an annual yield-equivalent
rate on the basis of a 360-day year, which rates shall include dealer fees and commissions and
(ii) the weighted average of the annual interest rates payable on all interest-bearing Commercial
Paper outstanding during the related Fixed Period, on the basis of a 360-day year, which rates
shall include dealer fees and commissions, (b) certain documentation and transaction costs
associated with the issuance of such Commercial Paper and (c) any other incremental carrying costs
incurred with respect to the issuance of such Commercial Paper; provided, that to the
extent that the VFN (or any portion thereof) is funded by a specific issuance of Commercial Paper,
clause (a) above shall equal the rate or weighted average of the rates applicable to such issuance.

          “Breakage Amount” has the meaning specified in Section 2.08.

          “Closing” has the meaning specified in Section 3.01.

          “Closing Date” has the meaning specified in Section 3.01.

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          “Cofina Entity” means the Issuer, any Seller, the Servicer and any other Person party
to the Transaction Documents that is an Affiliate of the Issuer, any Seller or Cofina Financial,
LLC.

          “Commercial Paper” shall mean the short-term promissory notes of the Conduit Purchaser
issued by the Conduit Purchaser in the United States commercial paper market.

          “Committed Purchasers” means The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch,
and each of its assigns (with respect to its commitment to make Increases) that shall become a
party to this Note Purchase Agreement pursuant to Section 10.04.

          “Commitment” means, with respect to any Committed Purchaser, an amount equal to such
Purchaser’s Purchaser Percentage multiplied by the Maximum Funded Amount.

          “Conduit Assignee” shall mean any special-purpose vehicle issuing indebtedness in the
commercial paper market sponsored by The Bank of Tokyo-Mitsubishi UFJ, Ltd.

          “Conduit Purchaser” means Victory Receivables Corporation and each of its permitted
assigns that is a Conduit Assignee.

          “CP Rate” means, for any Fixed Period for any Funding Tranche, to the extent the
Conduit Purchaser funds such Funding Tranche for such Fixed Period by issuing Commercial Paper,
either the Match-Funding Rate or the Blended Rate, as determined by the program administrator of
the applicable Conduit Purchaser in its sole discretion plus the Applicable Margin.

          “Eurodollar Rate” shall mean, with respect to any Funding Tranche funded or maintained
by any Purchaser (or by any liquidity or credit support provider of the Conduit Purchaser), by
reference to the LIBOR Rate, the Applicable Margin plus a rate per annum equal to the sum (rounded
upwards, if necessary, to the next higher 1/100 of 1%) of (i) the rate obtained by dividing (A) the
applicable LIBOR Rate by (B) a percentage equal to 100% minus the reserve percentage used
for determining the maximum reserve requirement as specified in Regulation D (including, without
limitation, any marginal, emergency, supplemental, special or other reserves) that is applicable to
the Funding Agent during the related Fixed Period in respect of eurocurrency or eurodollar funding,
lending or liabilities (or, if more than one percentage shall be so applicable, the daily average
of such percentage for those days in such Fixed Period during which any such percentage shall be
applicable) plus (ii) the then daily net annual assessment rate (rounded upwards, if
necessary, to the nearest 1/100 of 1%) as estimated by the Funding Agent for determining the
current annual assessment payable by the Funding Agent to the Federal Deposit Insurance Corporation
in respect of eurocurrency or eurodollar funding, lending or liabilities.

          “Federal Bankruptcy Code” means the bankruptcy code of the United States of America
codified in Title 11 of the United States Code.

          “Federal Reserve Board” means the Board of Governors of the Federal Reserve System, or
any entity succeeding to any of its principal functions.

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          “Fee Letter” means the letter or letters dated as of the Closing Date between the
Issuer and the Funding Agent setting forth certain fees payable by the Issuer in connection with
the purchase of the VFN by the Funding Agent for the benefit of the Purchasers.

          “Fixed Period” means, (i) with respect to a new Funding Tranche, a period beginning on
and including the date of funding and ending on and excluding the immediately succeeding Settlement
Date (or such other date requested by the Issuer (or the Servicer on its behalf) and agreed to by
the applicable Purchaser) and (ii) with respect to any existing Funding Tranche to the extent not
paid in full on a given Settlement Date, a period beginning on and including such Settlement Date
and ending on and excluding the immediately succeeding Settlement Date (or such other date
requested by the Issuer (or the Servicer on its behalf) and agreed to by the applicable Purchaser);
provided, that

     (i) any Fixed Period with respect to any Funding Tranche not funded by the
issuance of Commercial Paper which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day;
provided, however, if interest in respect of such Fixed Period is
computed by reference to the Eurodollar Rate, and such Fixed Period would otherwise
end on a day which is not a Business Day, and there is no subsequent Business Day in
the same calendar month as such day, such Fixed Period shall end on the next
preceding Business Day;

     (ii) any Fixed Period with respect to any Funding Tranche not funded by the
issuance of Commercial Paper will not be for a term of more than 31 days; and

     (iii) any Fixed Period in respect of which interest is computed by reference to
the CP Rate may be terminated at the election of, and upon notice thereof to the
Issuer by, the Conduit Purchaser (or its program administrator on its behalf) at any
time, in which case the Funding Tranche allocated to such terminated Fixed Period
shall be allocated to a new Fixed Period and shall accrue interest at the Base Rate.

          “Funding Agent” means The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, in its
capacity as Funding Agent for the Purchasers.

          “Funding Tranche” means one or more portions of the Aggregate Purchaser Funded Amount
used to fund or maintain the VFN that accrue interest by reference to different interest rates.

          “Governmental Actions” means any and all consents, approvals, permits, orders,
authorizations, waivers, exceptions, variances, exemptions or licenses of, or registrations,
declarations or filings with, any Official Body required under any Governmental Rules.

          “Governmental Rules” means any and all laws, statutes, codes, rules, regulations,
ordinances, orders, writs, decrees and injunctions of any Official Body and any and all legally
binding conditions, standards, prohibitions, requirements and judgments of any Official Body.

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          “Increase” shall have the meaning assigned to such term in the Series Supplement.

          “Increase Amount” means the amount requested by the Issuer to be funded by the
Purchasers on an Increase Date.

          “Increase Date” means the date on which an Increase occurs.

          “Indemnified Party” means any Purchaser, each entity providing credit or liquidity
support to any Purchaser in connection with the VFN, the Funding Agent or any of their officers,
directors, employees, agents, representatives, assignees or Affiliates.

          “Initial Purchase Price” has the meaning specified in Section 2.02.

          “Issuer Indemnified Amounts” has the meaning specified in Section 8.01(a).

          “LIBOR Rate” shall mean, with respect to any Funding Tranche, the rate at which
deposits in dollars are offered to the Funding Agent, in the London interbank market at
approximately 11:00 A.M. (London time) two (2) Business Days before the first day of the related
Fixed Period in an amount approximately equal to the applicable Funding Tranche to which the
Eurodollar Rate is to apply and for a period of time approximately equal to the applicable Fixed
Period, as determined by the Funding Agent in its reasonable discretion.

          “Liquidity Purchasers” means each of the purchasers party to the Asset Purchase
Agreement.

          “Match-Funding Rate” means, with respect to a Funding Tranche and a Fixed Period, the
per annum rate equal to the “weighted average of the rates” (as defined below) related to the
issuance of the Allocated Commercial Paper for such Funding Tranche. If such rate is a discount
rate, the Match-Funding Rate shall be the rate resulting from converting such discount rate to an
interest bearing equivalent rate. As used in this definition, the “weighted average of the
rates” shall consist of (w) the actual interest rate (or discount) paid to purchasers of the
Conduit Purchaser’s Commercial Paper, together with the commissions of placement agents and dealers
in respect of such Commercial Paper, (x) certain documentation and transaction costs associated
with the issuance of such Commercial Paper, (y) any incremental carrying costs incurred with
respect to Commercial Paper maturing on dates other than those on which corresponding funds are
received by the Conduit Purchaser minus any income (net of such carrying costs) received from
temporary reinvestment of funds received in respect of Funding Tranches funded with Allocated
Commercial Paper pending their application to obligations of a Purchaser, and (z) the costs of
other borrowings by the Conduit Purchaser, including borrowings to fund small or odd dollar amounts
that are not easily accommodated in the commercial paper market.

          “Maximum Funded Amount” means $100,000,000.

          “Notice of Increase” means a written notice of an Increase in the form of
Exhibit A.

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          “Purchase Expiration Date” means the date which is 364 days from the date of this Note
Purchase Agreement (as such date may be extended from time to time pursuant to
Section 2.04).

          “Purchaser Percentage” of any Committed Purchaser means (a) the percentage set forth
on the signature page to this Note Purchase Agreement as changed by each Assignment and Acceptance
entered into with an assignor or assignee, as the case may be, or (b) with respect to a Committed
Purchaser that has entered into an Assignment and Acceptance, the percentage set forth therein as
such Purchaser’s Purchaser Percentage, or such percentage as changed by each Assignment and
Acceptance entered into between such Committed Purchaser and an assignor or assignee.

          “Purchasers” means the Conduit Purchaser and the Committed Purchasers.

          “Reduction” has the meaning specified in Section 2.05.

          “Required VFN Series Holders” means each “Conduit Purchaser” and each “Committed
Purchaser” under all VFN Series whose aggregate commitment amounts under each such series equals at
least 662/3% of the aggregate of the commitment amounts under all of the VFN Series.

          “Transfer Supplement” has the meaning specified in Section 10.04(b).

          “Unexpired Co-Purchase Facility” means a group of Unexpired Series composed of all
Unexpired Series with respect to which the “Funding Agent” under (and as defined in) each of such
Unexpired Series is the same financial institution.

          “Unexpired Series” means a Series with respect to which the “Purchase Expiration Date”
under (and as defined in) such Series has not occurred.

          “Unexpired Series Aggregate Funded Amount” means the aggregate of the “Aggregate
Purchaser Funded Amounts” under (and as defined in) all Unexpired Series.

          “Unexpired Series True-Up” has the meaning specified in Section 2.03(f).

          “Variable Noteholders” means each holder of a variable funding note relating to any
VFN Series issued from time to time pursuant to the terms of the Indenture.

          “VFN” means the Cofina Variable Funding Asset-Backed Note Series 2008-A in the maximum
aggregate principal amount of $100,000,000 to be issued by the Issuer pursuant to the Indenture in
the name of the Funding Agent on behalf of the Purchasers.

          “VFN Financing Costs” or “Series 2008-A Financing Costs” means, with respect to any
Accrual Period, the VFN Interest Component for such Accrual Period.

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          “VFN Interest Component” means, with respect to any Accrual Period, the result
obtained by multiplying:

     (x) the weighted average of the rates applicable to all Funding Tranches
outstanding during all or part of such Accrual Period (determined as of each day in
such Accrual Period but estimated by the Funding Agent for the period from the
Determination Date related to the applicable Settlement Date through such Settlement
Date, with any adjustments to be made with respect to the VFN Interest Component for
the next Accrual Period), each such rate being (a) to the extent the Conduit
Purchaser is funding such Funding Tranche during such period through the issuance of
Commercial Paper, the CP Rate, and (b) to the extent any Purchaser is not funding
such Funding Tranche during such period through the issuance of Commercial Paper, a
rate per annum (expressed as a percentage and an interest yield
equivalent and calculated on the basis of a 360-day year and the actual days
elapsed) equal to the Eurodollar Rate or Base Rate, as applicable with respect to
such Funding Tranche (as determined in the sole discretion of the Funding Agent);
provided, however, that interest for any Funding Tranche shall not
be considered paid by any distribution to the extent that all or a portion of such
distribution is rescinded or must otherwise be returned for any reason;
times

     (y) the average daily Aggregate Purchaser Funded Amount for such Accrual
Period; times

     (z) a fraction, the numerator of which is the number of days in such Accrual
Period and the denominator of which is 360 (or, if such VFN Interest Component is
calculated by reference to the Base Rate, 365 or 366, as applicable).

          SECTION 1.02 Other Definitional Provisions. (a) Capitalized terms used but not
defined herein shall have the meanings given to such terms in the Indenture. All terms defined in
this Note Purchase Agreement shall have the meanings given herein when used in any certificate or
other document made or delivered pursuant hereto unless otherwise defined therein.

          (b) As used herein and in any certificate or other document made or delivered pursuant hereto
or thereto, accounting terms not defined in Section 1.01, and accounting terms partially
defined in Section 1.01 to the extent not defined, shall have the respective meanings given
to them under GAAP. To the extent that the definitions of accounting terms herein are inconsistent
with the meanings of such terms under generally accepted accounting principles, the definitions
contained herein shall control.

          (c) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this
Note Purchase Agreement shall refer to this Note Purchase Agreement as a whole and not to any
particular provision of this Note Purchase Agreement; and Section, subsection, Schedule and Exhibit
references contained in this Note Purchase Agreement are references to Sections, subsections, the
Schedules and Exhibits in or to this Note Purchase Agreement unless otherwise specified.

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ARTICLE II

PURCHASE AND SALE

          SECTION 2.01 Purchase and Sale of the VFN. On the terms and subject to the conditions
set forth in this Note Purchase Agreement, and in reliance on the covenants, representations,
warranties and agreements herein set forth, the Issuer hereby offers to sell to the Funding Agent,
on behalf of the Purchasers, and the Funding Agent (i) may on behalf of the Conduit Purchaser or
(ii) if the Conduit Purchaser elects not to make the purchase thereof at such time, shall, on
behalf of the Committed Purchasers, purchase at the Closing the VFN in an initial outstanding
principal amount equal to the Initial Note Principal.

          SECTION 2.02 Initial Purchase Price. The VFN is to be purchased at a price (the
“Initial Purchase Price”) equal to 100% of the Initial Note Principal.

          SECTION 2.03 Increases. (a) Subject to the terms and conditions of this Note
Purchase Agreement and the Series Supplement, from time to time prior to the Purchase Expiration
Date but no more frequently than once per week, upon receipt by the Trustee and the Funding Agent
of a Notice of Increase, (i) the Funding Agent, on behalf of the Conduit Purchaser, and in the sole
and absolute discretion of the Conduit Purchaser, may make Increases and (ii) if the Conduit
Purchaser elects not to make an Increase, each Committed Purchaser severally agrees to fund its
respective Purchaser Percentages of such Increase; provided, however, that no
Committed Purchaser shall be required to fund a portion of any Increase if, after giving effect
thereto, the portion of the Aggregate Purchaser Funded Amount funded by such Committed Purchaser
hereunder plus the aggregate amount funded by such Committed Purchaser as a Liquidity Purchaser
under the Asset Purchase Agreement would exceed its Purchaser Percentage times the Maximum Funded
Amount.

          (b) Each Increase hereunder shall be subject to the further conditions precedent that:

     (i) The Funding Agent and the applicable Notice Persons shall have received copies of
the Monthly Noteholders’ Statement most recently required to have been delivered under the
Indenture;

     (ii) Each of the representations and warranties of each Cofina Entity made in the
Transaction Documents to which it is a party shall be true and correct in all material
respects as of the applicable Increase Date (except to the extent they expressly relate to
an earlier or later time);

     (iii) Each Cofina Entity shall be in compliance in all material respects with all of
its respective covenants contained in the Transaction Documents to which it is a party;

     (iv) No Early Amortization Event, Potential Early Amortization Event, Default, Event of
Default or Servicer Default shall have occurred and be continuing;

     (v) The Purchase Expiration Date shall not have occurred;

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     (vi) After giving effect to such Increase, no Borrowing Base Deficiency shall exist;

     (vii) The Funding Agent and the applicable Notice Persons shall have received a
completed Notice of Increase with respect to such proposed Increase, not later than 2:00
p.m. (New York time) on the date which is two (2) Business Days prior to the proposed date
of such Increase; and

     (viii) On or before December 31, 2008, the Funding Agent shall have received a
favorable opinion from counsel to the Seller(s), the Servicer and the Issuer reasonably
satisfactory in form and substance to the Funding Agent and its counsel, as to UCC matters
with respect to the Perfection Representations.

          (c) Each Increase of the VFN shall be requested in an aggregate principal amount of $250,000
and integral multiples of $1,000 in excess thereof; provided, that an Increase may be
requested in the entire remaining Maximum Funded Amount.

          (d) The purchase price of each Increase shall be equal to 100% of the Increase Amount, and
shall be paid not later than 3:00 p.m. New York City time on the Increase Date by wire transfer of
immediately available funds to such account as may from time to time be specified by the Issuer in
a notice to the Funding Agent and the applicable Notice Persons.

          (e) All conditions set forth in Section 3.1(b) of the Series Supplement, to the extent
applicable, shall have been satisfied at such time.

          (f) Each “Increase” under (and as defined in) an Unexpired Series (including each Increase
hereunder) shall be followed, on a weekly basis, by one or more “Increases” under (and as defined
in) such other Unexpired Series and in such amounts as are necessary to cause the Unexpired Series
Aggregate Funded Amount to be ratably allocated among all Unexpired Co-Purchase Facilities
according to the aggregate of the “Maximum Funded Amounts” under (and as defined in) their
respective Unexpired Series (each such weekly “Increase”, an “Unexpired Series True-Up”).
For the avoidance of doubt, the foregoing shall not be deemed to require that Unexpired Series
True-Ups be ratably allocated among the Unexpired Series included in each Unexpired Co-Purchase
Facility.

          SECTION 2.04 Extension of Purchase Expiration Date. The Issuer may advise the Funding
Agent in writing of its desire to extend the Purchase Expiration Date for an additional 364 days;
provided such request is made not more than 90 days prior to, and not less than 60 days
prior to, the then current Purchase Expiration Date. The Funding Agent shall notify the Issuer in
writing, within 30 days after its receipt of such request by the Issuer, whether the Purchasers or
any of them intend to agree to such extension (it being understood that (i) such notification of
intent shall neither constitute an express nor an implicit agreement by any Purchaser to extend the
then current Purchase Expiration Date and (ii) the Purchasers may accept or decline such a request
in their sole discretion and on such terms as they may elect and, if the Purchasers so agree, the
Issuer, the Funding Agent and the Purchasers shall enter into such documents as the Purchasers may
deem necessary or appropriate to reflect such extension, and all reasonable costs and expenses
incurred by the Purchasers and the Funding Agent in

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connection therewith (including reasonable attorneys’ fees and expenses) shall be paid by the
Issuer); it being understood that the failure of the Funding Agent to so notify the Issuer as set
forth above shall not be deemed to be a consent to such request for extension.

          SECTION 2.05 Reduction of Maximum Funded Amount. On any Settlement Date prior to the
Rapid Amortization Commencement Date, upon the written request of the Issuer, the Maximum Funded
Amount may be permanently reduced (a “Reduction”) by the Issuer; provided that the
Issuer shall have given the Funding Agent irrevocable written notice (effective upon receipt) of
the amount of such Reduction prior to 10:00 a.m., New York time on a Business Day that is at least
thirty (30) days prior to such Reduction; provided, further, that any such
Reduction shall be in an amount equal to $10,000,000, or integral multiples of $5,000,000 in excess
thereof; and provided, further, that no Reduction may cause the Maximum Funded
Amount to be lower than $50,000,000.

          SECTION 2.05 Calculation of Monthly Interest. (a) On the Business Day prior to each
Determination Date, the Funding Agent shall calculate (with respect to the CP Rate, based solely on
such information provided by the Conduit Purchaser or its program administrator), for the
applicable Accrual Period, the aggregate Monthly Interest for each Funding Tranche.

          (b) The Issuer agrees to pay, and the Issuer agrees to instruct the Servicer and the Trustee
to pay, all amounts payable by it with respect to the VFN, this Note Purchase Agreement and the
Series Supplement (including, without limitation, VFN Financing Costs determined pursuant to
Section 5.12 of the Series Supplement) to the account designated by the applicable
Purchaser. All such amounts shall be paid no later than 12:00 noon, New York City time, on the day
when due as determined in accordance with this Note Purchase Agreement, the Indenture and the other
Transaction Documents, in Dollars in immediately available funds.

          SECTION 2.06 Benefits of Indenture. The Issuer hereby acknowledges and confirms that
each representation, warranty, covenant and agreement made pursuant to the Indenture by the Issuer
to the Trustee is (unless such representation, warranty, covenant or agreement specifically states
otherwise) also made herein for the benefit and security of the Purchasers and the Funding Agent.

          SECTION 2.07 Broken Funding. In the event of (i) the payment of any principal of any
Funding Tranche (other than a Funding Tranche on which the interest is computed by reference to the
Base Rate) other than on the last day of the Fixed Period applicable thereto (including as a result
of the occurrence of the Rapid Amortization Commencement Date or an optional prepayment of a
Funding Tranche), or (ii) any failure to borrow, continue or prepay any Funding Tranche on the date
specified in any notice delivered pursuant hereto, then, in any such event, the Issuer shall
compensate the applicable Purchaser for the loss, cost and expense attributable to such event.
Such loss, cost or expense to any such Purchaser shall be deemed to include an amount (the
“Breakage Amount”) determined by such Purchaser (or the Funding Agent) to be the excess, if
any, of (i) the amount of interest which would have accrued on the principal amount of such Funding
Tranche had such event not occurred, at the interest rate that would have been applicable to such
Funding Tranche, for the period from the date of such event to the last day of the applicable Fixed
Period (or, in the case of a failure to borrow for the period

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that would have been the related Fixed Period), over (ii) the amount of interest which would
be obtainable upon redeployment or reinvestment of an amount of funds equal to such Funding Tranche
for such period. A certificate of any Purchaser incurring any loss, cost or expense as a result of
any of the events specified in this Section 2.08 and setting forth any amount or amounts
that such Purchaser is entitled to receive pursuant to this Section 2.08 and the reasons
therefor shall be delivered to the Issuer by the Funding Agent and shall include reasonably
detailed calculations and shall be conclusive absent manifest error. The Issuer shall pay to the
related Funding Agent on behalf of each such Purchaser the amount shown as due on any such
certificate on the first Settlement Date which is not less than three (3) Business Days after
receipt of notice thereof.

          SECTION 2.08 Illegality. Notwithstanding anything in this Note Purchase Agreement or
any other Transaction Document to the contrary, if, after the Closing Date, the adoption of any Law
or bank regulatory guideline or any amendment or change in the interpretation of any existing or
future Law or bank regulatory guideline by any Official Body charged with the administration,
interpretation or application thereof, or the compliance with any directive of any Official Body
(in the case of any bank regulatory guideline, whether or not having the force of Law), shall make
it unlawful for any Purchaser (or its liquidity and credit support providers, if applicable) to
acquire or maintain a Funding Tranche by reference to the Eurodollar Rate as contemplated by this
Note Purchase Agreement (or the applicable Asset Purchase Agreement), (i) the Funding Agent on
behalf of such Purchaser (or any liquidity and/or credit support provider of any such Purchaser, as
the case may be) shall, within forty-five (45) days after receiving actual knowledge thereof,
deliver a certificate to the Issuer (with a copy to the applicable Funding Agent) setting forth the
basis for such illegality, which certificate shall be conclusive absent manifest error, and (ii)
such Purchaser’s portion of any Funding Tranche maintained by reference to the Eurodollar Rate then
outstanding shall be converted automatically to a Funding Tranche maintained by reference to the
Base Rate.

          SECTION 2.09 Inability to Determine Eurodollar Rate. If, prior to the first day of
any Fixed Period relating to any Funding Tranche maintained by reference to the Eurodollar Rate:

     (1) the Funding Agent shall have determined (which determination in the absence
of manifest error shall be conclusive and binding upon the Issuer) that, by reason
of circumstances affecting the relevant market, adequate and reasonable means do not
exist for ascertaining the Eurodollar Rate for such Fixed Period; or

     (2) the Funding Agent shall have received notice from one or more Purchasers
(or any liquidity and/or credit support provider of any such Purchaser, as the case
may be) that the Eurodollar Rate determined or to be determined for such Fixed
Period will not adequately and fairly reflect the cost to such Purchasers (or any
liquidity and/or credit support provider of any such Purchaser, as the case may be)
(as conclusively certified by such Person) of purchasing or maintaining their
affected portions of such Funding Tranches during such Fixed Period;

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then, in either such event, the Funding Agent shall give telecopy or telephonic notice thereof
(confirmed in writing) to the Issuer as soon as practicable (but, in any event, within thirty (30)
days after such determination or notice, as applicable) thereafter. Until such notice has been
withdrawn by the Funding Agent, no further Funding Tranches shall be funded or maintained at the
Eurodollar Rate. The Funding Agent agrees to withdraw any such notice as soon as reasonably
practicable after the Funding Agent is notified of a change in circumstances which makes such
notice inapplicable.

          SECTION 2.10 Fees. The Issuer shall pay to the Funding Agent for the benefit of the
applicable Purchasers as and when due and in accordance with the provisions for payment set forth
in Article 5 of the Series Supplement, each of the fees specified in the Fee Letter.

ARTICLE III

CLOSING

          SECTION 3.01 Closing. The closing (the “Closing”) of the purchase and sale of
the VFN shall take place on or about 10:00 a.m. on November 21, 2008, or if the conditions to
closing set forth in Article IV of this Note Purchase Agreement shall not have been
satisfied or waived by such date, as soon as practicable after such conditions shall have been
satisfied or waived, or at such other time, date and place as the parties shall agree upon (the
date of the Closing being referred to herein as the “Closing Date”).

          SECTION 3.02 Transactions to be Effected at the Closing. At the Closing (a) the
Funding Agent will (to the extent received from the Purchasers) deliver to the Issuer funds in an
amount equal to the Initial Purchase Price by wire transfer of immediately available funds to a
bank account designated by the Issuer to the Funding Agent at least two (2) Business Days prior to
the Closing Date; and (b) the Issuer shall deliver the VFN to the Funding Agent in satisfaction of
the Issuer’s obligation to the Funding Agent hereunder.

ARTICLE IV

CONDITIONS PRECEDENT TO

PURCHASE ON THE CLOSING DATE

          The purchase by the Funding Agent on behalf of the Purchasers of the VFN is subject to the
satisfaction at the time of the Closing of the following conditions (any or all of which may be
waived by the Funding Agent in its sole discretion):

          SECTION 4.01 Performance by Cofina Entities. All the terms, covenants, agreements and
conditions of the Transaction Documents to which each Cofina Entity is a party to be complied with
and performed by the Cofina Entities at or before the Closing shall have been complied with and
performed in all material respects.

          SECTION 4.02 Representations and Warranties. Each of the representations and
warranties of each Cofina Entity made in the Transaction Documents to which it is a party shall be
true and correct in all material respects as of the time of the Closing (except to the extent they
expressly relate to an earlier or later time).

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          SECTION 4.03 Corporate Documents. The Funding Agent shall have received copies of the
(i) certificate of incorporation or certificate of formation, as applicable, good standing
certificate and by-laws or limited liability company agreement, as applicable, of each Cofina
Entity, (ii) board of directors resolutions or resolutions of the managing member, as applicable,
of each Cofina Entity with respect to the Transaction Documents to which it is a party, and
(iii) incumbency certificate of each Cofina Entity, each certified by appropriate corporate or
limited liability company authorities, as applicable.

          SECTION 4.04 Opinions of Counsel. The Funding Agent shall have received favorable
opinions from counsel to the Seller(s), the Servicer and the Issuer dated as of the Closing Date
and reasonably satisfactory in form and substance to the Funding Agent and its counsel, as to such
matters as the Funding Agent and its counsel may reasonably request.

          SECTION 4.05 Reports. The Funding Agent shall have received a copy of the most recent
Monthly Servicer Report prior to Closing.

          SECTION 4.06 Financing Statements. The Funding Agent shall have received evidence
satisfactory to it of the completion of all recordings, registrations, notices and filings as may
be necessary or, in the opinion of the Funding Agent, desirable to perfect or evidence the sale and
assignment by each Seller to the Issuer of their respective ownership interests in the Receivables,
Related Security and other collateral in the Trust Estate and the proceeds thereof and the security
interest granted to the Trustee for the benefit of the Secured Parties pursuant to the granting
clauses of the Indenture:

          SECTION 4.07 Documents. The Funding Agent shall have received a duly executed
counterpart of each of the Transaction Documents and each and every document or certification
delivered by any party in connection with any of such agreements, and each such document shall be
in full force and effect.

          SECTION 4.08 VFN. The Funding Agent shall have received an executed VFN being
purchased by the Purchasers, registered in the name of the Funding Agent, as agent for the
Purchasers.

          SECTION 4.09 No Actions or Proceedings. No action, suit, proceeding or investigation
by or before any Official Body shall have been instituted to restrain or prohibit the consummation
of, or to invalidate, the transactions contemplated by the Transaction Documents and the documents
related thereto in any material respect.

          SECTION 4.10 Approvals and Consents. All Governmental Actions of all Official Bodies
required with respect to the transactions contemplated by the Transaction Documents and the other
documents related thereto shall have been obtained or made.

          SECTION 4.11 Officer’s Certificates. The Funding Agent shall have received a
certificate of a Responsible Officer from each Cofina Entity (each, an “Officer’s
Certificate”) in form and substance reasonably satisfactory to the Funding Agent and its
counsel, dated as of the Closing Date, certifying as to the satisfaction of the conditions set
forth in Sections 4.01 and 4.02 with respect to such Cofina Entity.

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          SECTION 4.12 Accounts. The Funding Agent shall have received evidence that the
Collection Account, Series 2008-A Settlement Account and the Spread Maintenance Account have been
established in accordance with the terms of the Indenture.

          SECTION 4.13 Expenses. Costs and expenses of the Funding Agent and the Purchasers
accrued and payable under Section 8.04, including all accrued attorneys’ fees and expenses
shall have been paid.

          SECTION 4.14 Liens. The Funding Agent shall have received UCC search reports showing
that no Liens exist on the Receivables, Related Security or any other assets or collateral in the
Trust Estate, other than (i) Liens in favor of (or appropriately assigned to) the Trustee,
(ii) Permitted Encumbrances, and (iii) Liens for which releases or acceptable assignments or other
amendments have been delivered to the Trustee.

          SECTION 4.15 Other Documents. The Cofina Entities shall have furnished to the Funding
Agent such other information, certificates and documents as the Funding Agent may reasonably
request.

          SECTION 4.16 Payment of Fees. The fees due on the Closing Date (as specified in the
Fee Letter) shall have been paid.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF THE ISSUER

          SECTION 5.01 Representations and Warranties of the Issuer. The representations and
warranties made by the Issuer in the other Transaction Documents are hereby remade by the Issuer on
each date to which they are made in such Transaction Documents as if such representations and
warranties were set forth herein. For purposes of this Section 5.01, such representations
and warranties are incorporated by reference herein in their entirety.

          SECTION 5.02 Reaffirmation of Representations and Warranties by the Issuer. On the
Closing Date, on the date of each Monthly Report and on each day that an Increase is made
hereunder, the Issuer, by accepting the proceeds thereof, shall be deemed to have certified that
all of its representations and warranties contained in the Transaction Documents are true and
correct in all material respects on and as of such day as though made on and as of such day (except
to the extent they relate to an earlier date or later time, and then as of such earlier date or
later time).

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

WITH RESPECT TO THE FUNDING AGENT AND THE PURCHASERS

          The Funding Agent and each Purchaser hereby makes with respect to itself the following
representations and warranties to the Issuer on which the Issuer shall rely in entering into this
Note Purchase Agreement:

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          SECTION 6.01 Securities Laws; Transfer Restrictions. The Funding Agent and each of
the Purchasers represents and warrants to the Issuer, as of the date hereof (or as of a subsequent
date on which a successor or assign of any Purchaser shall become a party hereto), and agrees that:

          (a) it is an “accredited investor” within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act and has sufficient knowledge and experience in financial and
business matters to be capable of evaluating the merits and risks of investing in, and it is able
and prepared to bear the economic risk of investing in, the VFN;

          (b) it is purchasing the VFN for its own account, or for the account of one or more
“accredited investors” within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under
the Securities Act that meet the criteria described in subsection (a) and for which it is
acting with complete investment discretion, for investment purposes only and not with a view to
distribution;

          (c) it understands that (i) the VFN has not been and will not be registered or qualified under
the Securities Act or any applicable state securities laws or the securities laws of any other
jurisdiction and is being offered only in a transaction not involving any public offering within
the meaning of the Securities Act, (ii) the Issuer is not required to so register or qualify the
VFN, and (iii) the VFN may be resold, pledged or otherwise transferred only (A) to the Issuer,
(B) to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) in a
transaction meeting the requirements of Rule 144A under the Securities Act, or (C) in a transaction
otherwise exempt from the registration requirements of the Securities Act, in each case in
accordance with the provisions of the Indenture and any applicable securities laws of any state of
the United States or any other jurisdiction;

          (d) it understands that upon original issuance thereof, and until such time as the same may no
longer be required under the applicable requirements of the Securities Act, the certificate
evidencing the VFN (and all securities issued in exchange therefor or substitution thereof) shall
bear a restrictive legend substantially in the form set forth in the form of VFN included as an
exhibit to the Series Supplement; and

          (e) it will obtain from any transferee of the VFN (or any interest therein) substantially the
same representations, warranties and agreements contained in this Section 6.01.

          SECTION 6.02 Enforceability. This Note Purchase Agreement has been duly authorized,
executed and delivered by each Purchaser and the Funding Agent, and is the valid and legally
binding obligation of such Person, enforceable against such Person in accordance with its terms,
subject as to enforcement to bankruptcy, insolvency, reorganization, moratorium and other similar
laws of general applicability relating to or affecting creditors’ rights and to general principles
of equity.

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ARTICLE VII

COVENANTS

          SECTION 7.01 Covenants. The Issuer hereby covenants that, until the termination of
the Transaction Documents, unless the Purchasers shall otherwise consent in writing:

          (a) Monthly Noteholders’ Statement; Notice of Adverse Effect. The Issuer will cause
each Monthly Noteholders’ Statement pertaining to the Series Supplement to be delivered to each
Purchaser, contemporaneously with the delivery thereof to the Trustee.

          (b) Notice of Default. As soon as possible, and in any event within one (1) day after
(i) the occurrence thereof, the Issuer shall (or shall cause the Servicer to) give each Purchaser
written notice of each Early Amortization Event, Default, Event of Default or Servicer Default and
(ii) the Issuer or the Servicer has or reasonably should have knowledge thereof, the Issuer shall
(or shall cause the Servicer to) give each Purchaser written notice of each Potential Early
Amortization Event.

          (c) Further Assurances. The Issuer agrees to take any and all acts and to create any
and all further instruments necessary or reasonably requested by the Funding Agent to fully effect
the purposes of this Note Purchase Agreement.

          (d) Notice of Modifications to Transaction Documents and Credit Manual. The Issuer
shall (or shall cause the Servicer to) give the Funding Agent and each Purchaser written notice of
any proposed amendment, modification or waiver of any provision of the Transaction Documents. In
addition, the Issuer shall not amend (or consent to the amendment of) the Credit Manual in any
material respect without the prior written consent of the Funding Agent.

          (e) Expenses. Whether or not the Closing takes place, except as otherwise expressly
provided herein or in the Fee Letter, all reasonable costs and expenses incurred by the Purchasers
or the Funding Agent in connection with this Note Purchase Agreement and the transactions
contemplated hereby shall be paid by the Issuer.

          SECTION 7.02 Incorporation. The covenants of the Issuer in the other Transaction
Documents are hereby incorporated herein in their entirety and the Issuer hereby covenants and
agrees to perform such covenants as though such covenants were set forth in full herein.

ARTICLE VIII

INDEMNIFICATION

          SECTION 8.01 Indemnification. Without limiting any other rights which the Funding
Agent or the Purchasers may have hereunder or under applicable law, the Issuer hereby agrees to
indemnify each 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 “Issuer Indemnified Amounts”)
awarded against or incurred by any of them arising out of or as a result of this Note Purchase
Agreement, the other Transaction Documents, the ownership, either directly or indirectly, of any
interest in the VFN or any of the other transactions contemplated hereby or

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thereby, excluding, however, Indemnified Amounts to the extent resulting from gross negligence
or willful misconduct on the part of such Indemnified Party. Without limiting the generality of
the foregoing, and subject to the exclusions set forth in the preceding sentence, the Issuer shall
indemnify each Indemnified Party for Issuer Indemnified Amounts relating to or resulting from:

          (a) any representation or warranty made by the Issuer under this Note Purchase Agreement, in
any of the other Transaction Documents, in any Monthly Servicer Report or in any other written
information or report delivered by the Issuer pursuant hereto or thereto, which shall have been
false or incorrect in any respect when made or deemed made;

          (b) the failure by the Issuer to comply with any applicable Requirement of Law with respect to
any portion of the Trust Estate, or the nonconformity of any portion of the Trust Estate with any
applicable Requirement 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 Loan not being the legal, valid and binding obligation of such Obligor enforceable
against it in accordance with its terms);

          (d) the failure by the Issuer to comply with any term, provision or covenant contained in this
Note Purchase Agreement or any of the other Transaction Documents to which it is a party or to
perform any of its respective duties under the Trust Estate;

          (e) the failure of the Issuer to pay when due any taxes, including without limitation, sales,
excise or personal property taxes payable in connection with any portion of the Trust Estate;

          (f) any reduction in the aggregate outstanding principal balance of the VFN or any Funding
Tranche with respect to any Purchaser as a result of the distribution of Collections pursuant to
Article V of the Indenture and/or the Series Supplement, if all or a portion of such distributions
shall thereafter be rescinded or otherwise must be returned for any reason;

          (g) the commingling by the Issuer of Collections at any time with other funds;

          (h) any investigation, litigation or proceeding related to this Note Purchase Agreement, any
of the other Transaction Documents, the use of proceeds by the Issuer, the ownership directly or
indirectly of the VFN or any interest in the Trust Estate;

          (i) any failure of the Issuer to give reasonably equivalent value to any Seller in
consideration of the purchase by the Issuer from such Seller of any Receivable, 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, without limitation, any provision of the Bankruptcy Code;

          (j) any action taken by the Issuer in the enforcement or collection of any portion of the
Trust Estate;

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          (k) the failure of any Receivable included in any Monthly Servicer Report or other periodic
report as an Eligible Receivable for purposes of any calculation based on Eligible Receivables or
otherwise to be an Eligible Receivable at the time of such calculation;

          (l) the failure to vest in the Trustee (for the benefit of the Purchasers and the other
Secured Parties) (i) to the extent the perfection of a security interest in such property is
governed by the UCC, a valid and enforceable first priority perfected security interest in such
Receivables, Related Security and other related rights or (ii) if the perfection of such security
interest is not governed by the UCC, a valid and enforceable lien or security interest in such
Receivables, Related Security and other related rights, in each case, free and clear of any Adverse
Claim; or

          (m) 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 related rights transferred or purported to
be transferred hereunder whether at the time of any purchase or at any subsequent time.

     If for any reason the indemnification provided in this Section 8.01 is unavailable to
an Indemnified Party or is insufficient to hold an Indemnified Party harmless for the Issuer
Indemnified Amounts, then the indemnifying party shall (subject to the exclusions set forth in the
first sentence of this Section 8.01) contribute to the maximum amount payable or paid to
such Indemnified Party as a result of the applicable claim, damage, expense, loss or liability in
such proportion as is appropriate to reflect not only the relative benefits received by such
Indemnified Party on the one hand and the indemnifying party on the other hand, but also the
relative fault of such Indemnified Party (if any) and the indemnifying party and any other relevant
equitable considerations. The parties hereto acknowledge and agree that all amounts payable under
this Section 8.01 shall be payable by the Issuer solely to the extent funds are available
therefor in accordance with the priority of payments set forth in Article V of the Base Indenture.

          SECTION 8.02 Indemnity for Reserves and Expenses. (a)  If after the date hereof, the
adoption of any law or bank regulatory guideline or any amendment or change in the interpretation
of any existing or future law or bank regulatory guideline by any Official Body charged with the
administration, interpretation or application thereof, or the compliance with any directive of any
Official Body (whether or not having the force of law), other than laws, interpretations,
guidelines or directives relating to Taxes:

     (i) shall impose, modify or deem applicable any reserve, special deposit or similar
requirement (including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System) against assets of, deposits with or for the account
of, or credit extended by, the Funding Agent, any Purchaser or any other liquidity and/or
credit support provider of the Conduit Purchaser (each, an “Affected Party”) or
shall impose on any Affected Party or on the United States market for certificates of
deposit or the London interbank market any other condition affecting this Note Purchase
Agreement, the other Transaction Documents, the ownership, maintenance or financing of the
VFN, the Receivables, the Trust Estate or

18

 

payments of amounts due hereunder or its obligation to advance funds hereunder or under
the other Transaction Documents; or

     (ii) imposes upon any Affected Party any other expense deemed by such Affected Party to
be material (including, without limitation, reasonable attorneys’ fees and expenses, and
expenses of litigation or preparation therefor in contesting any of the foregoing) with
respect to this Note Purchase Agreement, the other Transaction Documents, the ownership,
maintenance or financing of the VFN, the Receivables, the Trust Estate, or payments of
amounts due hereunder or its obligation to advance funds hereunder or otherwise in respect
of this Note Purchase Agreement or the other Transaction Documents,

 and the result of any of the foregoing is to increase the cost to such Affected Party with respect
to this Note Purchase Agreement, the other Transaction Documents, the ownership, maintenance or
financing of the VFN, the Receivables, the Trust Estate, the obligations hereunder or the funding
of any Increases hereunder or under the other Transaction Documents, by an amount reasonably deemed
by such Affected Party to be material, then, on the first Settlement Date which is not less than
ten (10) Business Days after demand by such Affected Party through the Funding Agent, the Issuer
shall pay to such Affected Party such additional amount or amounts as will compensate such Affected
Party for such increased cost or reduction. In making demand hereunder, the applicable Affected
Party shall submit to the Issuer a certificate as to such increased costs incurred which shall
provide in detail the basis for such claim which certificate shall be conclusive and binding for
all purposes absent manifest error; provided, however, that no such Affected Party
shall be required to disclose any confidential or tax planning information in any such certificate.
The parties hereto acknowledge and agree that all amounts payable under this Section
8.02(a) shall be payable by the Issuer solely to the extent funds are available therefor in
accordance with the priority of payments set forth in Article V of the Base Indenture.

          (b) If any Affected Party shall have determined that after the Closing Date, the adoption of
any applicable law or bank regulatory guideline regarding capital adequacy, or any change therein,
or any change in the interpretation thereof by any Official Body, or any directive regarding
capital adequacy (in the case of any bank regulatory guideline, whether or not having the force of
law) of any such Official Body, has or would have, due to an increase in the amount of capital
required to be maintained by such Affected Party, the effect of reducing the rate of return on
capital of such Affected Party as a consequence of such Affected Party’s obligations hereunder or
with respect hereto to a level below that which such Affected Party could have achieved but for
such adoption, change, request or directive (taking into consideration its policies with respect to
capital adequacy) by an amount reasonably deemed by such Affected Party to be material, then from
time to time, on the first Settlement Date which is not less than ten (10) Business Days after
demand by such Affected Party through the Funding Agent, the Issuer shall pay to such Affected
Party such additional amount or amounts as will compensate such Affected Party for such reduction.
For avoidance of doubt, any interpretation of Accounting Research Bulletin No. 51 by the Financial
Accounting Standards Board shall constitute an adoption, change, request or directive subject to
this Section 8.02(b). In making demand hereunder, the applicable Affected Party shall
submit to the Issuer a certificate as to such increased costs incurred which shall provide in
detail the basis for such claim which certificate shall be conclusive and binding for all purposes
absent manifest error; provided, however, that

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no such Affected Party shall be required to disclose any confidential or tax planning
information in any such certificate. The parties hereto acknowledge and agree that all amounts
payable under this Section 8.02(b) shall be payable by the Issuer solely to the extent
funds are available therefor in accordance with the priority of payments set forth in Article V of
the Base Indenture.

          SECTION 8.03 Indemnity for Taxes. (a)  All payments made by the Issuer to the Funding
Agent for the benefit of the Purchasers under this Note Purchase Agreement or any other Transaction
Document shall be made free and clear of, and without deduction or withholding for or on account
of, any present or future stamp or similar taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by
any Official Body, excluding (i) taxes that would not have been imposed if the Affected Party had
timely complied with the requirements of Section 8.03(b), and (ii) taxes imposed on the net
income of the Funding Agent or any other Affected Party, in each case imposed by any jurisdiction
under the laws of which the Funding Agent or such Affected Party is organized or any political
subdivision or taxing authority thereof or therein (all such nonexcluded taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, collectively or individually, “Taxes”).
If any such Taxes are required to be withheld from any amounts payable to the Funding Agent or any
Affected Party hereunder, the amounts so payable to the Funding Agent or such Affected Party shall
be increased to the extent necessary to yield to the Funding Agent or such Affected Party (after
payment of all Taxes) all amounts payable hereunder at the rates or in the amounts specified in
this Note Purchase Agreement and the other Transaction Documents. The Issuer shall indemnify the
Funding Agent or any such Affected Party for the full amount of any such Taxes on the first
Settlement Date which is not less than ten (10) days after the date of written demand therefor by
the Funding Agent.

          (b) Each Affected Party that is a Non-United States Person shall:

     (i) deliver to the Issuer and the Funding Agent two duly completed copies of IRS Form
W-8 BEN or Form W-8 ECI, or successor applicable form, as the case may be;

     (ii) deliver to the Issuer and the Funding Agent two (2) further copies of any such
form or certification on or before the date that any such form or certification expires or
becomes obsolete and after the occurrence of any event requiring a change in the most recent
form previously delivered by it to the Issuer; and

     (iii) obtain such extensions of time for filing and complete such forms or
certifications as may reasonably be requested by the Issuer or the Funding Agent;

unless, in any such case, an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would otherwise be required
which, regardless of the identity of the Affected Party, renders all such forms inapplicable or
which, regardless of the identity of the Affected Party, would prevent such Affected Party from
duly completing and delivering any such form with respect to it, and such Affected Party so advises
the Issuer and the Funding Agent. Each such Affected Party so organized shall certify in the case
of an IRS Form W-8 BEN or IRS Form W-8 ECI (or successor applicable form), that it is entitled to
receive payments under this Note Purchase Agreement and

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the other Transaction Documents without deduction or withholding of any United States federal
income taxes. Each Affected Party which is a Non-United States Person represents and warrants to
the Issuer and the Funding Agent that, as of the date of this Note Purchase Agreement (or the date
such Person otherwise becomes an Affected Party, as the case may be), (i) it is entitled to receive
all payments hereunder without deduction or withholding for or on account of any United States
federal Taxes and (ii) it is permitted to take the actions described in the preceding sentence
under the laws and any applicable double taxation treaties of the jurisdiction of its head office
or any booking office used in connection with this Note Purchase Agreement. Each Affected Party
which is a Non-United States Person further agrees that, to the extent any form claiming complete
or partial exemption from withholding and deduction of United States federal Taxes delivered under
this clause (b) is found to be incomplete or incorrect in any material respect, such
Affected Party shall (to the extent it is permitted to do so under the laws and any double taxation
treaties of the United States, the jurisdiction of its organization and the jurisdictions in which
its relevant booking offices are located) execute and deliver to each of the Funding Agent and the
Issuer a complete and correct replacement form.

          (c) Limitations. Each Affected Party agrees to use reasonable efforts to mitigate the
imposition of any Taxes referred to in this Section 8.03, including changing the office of
such Affected Party from which any Funding Tranche (or portion thereof) funded or maintained by
such Affected Party or this Note Purchase Agreement is booked; provided that such
reasonable efforts would not be disadvantageous to such Affected Party or result in the imposition
of any additional Taxes upon such Affected Party or cause such Affected Party, in its good faith
judgment, to violate one or more of its policies in order to avoid such imposition of Taxes. The
parties hereto acknowledge and agree that all amounts payable under this Section 8.03 shall
be payable by the Issuer solely to the extent funds are available therefor in accordance with the
priority of payments set forth in Article V of the Base Indenture.

          SECTION 8.04 Other Costs, Expenses and Related Matters. (a)  The Issuer agrees, upon
receipt of a written invoice, to pay or cause to be paid, and to hold the Funding Agent and the
Purchasers harmless against liability for the payment of, all reasonable out-of-pocket expenses
(including, without limitation, reasonable attorneys’, accountants’ and other third parties’ fees
and expenses, any filing fees and expenses incurred by officers or employees of the Funding Agent
and/or the Purchasers) or intangible, documentary or recording taxes incurred by or on behalf of
the Funding Agent and the Purchasers (i) in connection with the negotiation, execution, delivery
and preparation of this Note Purchase Agreement, the other Transaction Documents and any documents
or instruments delivered pursuant hereto and thereto and the transactions contemplated hereby or
thereby (including, without limitation, the perfection or protection of the Purchasers’ interest in
the Trust Estate) and (ii) (A) relating to any amendments, waivers or consents under this Note
Purchase Agreement, any Asset Purchase Agreement and the other Transaction Documents, (B) arising
in connection with the Funding Agent’s or such Purchaser’s enforcement or preservation of rights
(including the perfection and protection of the Purchasers’ interest in the Trust Estate under this
Note Purchase Agreement and the other Transaction Documents), or (C) arising in connection with any
audit, dispute, disagreement, litigation or preparation for litigation involving this Note Purchase
Agreement or any of the other Transaction Documents. The parties hereto acknowledge and agree that
all amounts payable under this Section 8.04 shall be payable by the Issuer solely to the
extent funds

21

 

are available therefor in accordance with the priority of payments set forth in Article V of
the Base Indenture.

          (b) The Funding Agent will notify the Issuer and the Servicer in writing of any event
occurring after the date hereof which will entitle an Indemnified Party or Affected Party to
compensation pursuant to this Article VIII. Any notice by the Funding Agent claiming
compensation under this Article VIII and setting forth the additional amount or amounts to
be paid to it hereunder shall be conclusive in the absence of manifest error. In determining such
amount, the Funding Agent or any applicable Indemnified Party or Affected Party may use any
reasonable averaging and attributing methods.

          (c) If the Issuer is required to pay any additional amount to any Purchaser pursuant to
Section 8.02 or 8.03, then such Purchaser shall use reasonable efforts (which shall
not require such Purchaser to incur an unreimbursed loss or unreimbursed cost or expense or
otherwise take any action inconsistent with its internal policies or legal or regulatory
restrictions or suffer any disadvantage or burden reasonably deemed by it to be significant) to
assign its rights and delegate and transfer its obligations hereunder to another of its offices,
branches or affiliates, if such filing or assignment would reduce amounts payable pursuant to
Section 8.02 or Section 8.03, as the case may be, in the future.

ARTICLE IX

THE FUNDING AGENT

          SECTION 9.01 Authorization and Action. Each Purchaser hereby accepts the appointment
of and authorizes the Funding Agent to take such action as agent on its behalf and to exercise such
powers as are delegated to the Funding Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. The Purchasers hereby authorize the Funding Agent, in its sole
discretion, to take any actions and exercise any rights or remedies under this Note Purchase
Agreement and any permitted related agreements and documents. Except for actions which the Funding
Agent is expressly required to take pursuant to this Note Purchase Agreement or the applicable
Asset Purchase Agreement, the Funding Agent shall not be required to take any action which exposes
the Funding Agent to personal liability or which is contrary to applicable law unless the Funding
Agent shall receive further assurances to its satisfaction from the Purchasers of the
indemnification obligations under Section 9.04 against any and all liability and expense
which may be incurred in taking or continuing to take such action. The Funding Agent agrees to
give to the Purchasers prompt notice of each notice and determination given to it by the Issuer,
the Servicer or the Trustee, pursuant to the terms of this Note Purchase Agreement or the other
Transaction Documents. Subject to Section 9.06, the appointment and authority of the
Funding Agent hereunder shall terminate upon the later of (i) the payment to (a) the Purchasers of
all amounts owing to the Purchasers hereunder and (b) the Funding Agent of all amounts due
hereunder and (ii) the Series 2008-A Termination Date.

          SECTION 9.02 Funding Agent’s Reliance, Etc. Neither the Funding Agent nor any of its
directors, officers, agents who are natural persons or employees shall be liable for any action
taken or omitted to be taken by it or them as Funding Agent under or in connection with this Note
Purchase Agreement or any related agreement or document, except for its or their own

22

 

gross negligence or willful misconduct. Without limiting the foregoing, the Funding Agent:
(i) may consult with legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (ii) makes no warranty or
representation to the Purchasers and shall not be responsible to the Purchasers for any statements,
warranties or representations made by any other Person in connection with any Transaction Document;
(iii) shall not have any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of any Transaction Document on the part of any Person or to
inspect the property (including the books and records) of any Person; (iv) shall not be responsible
to any Purchaser for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Transaction Document or any other instrument or document furnished
pursuant hereto or thereto; and (v) shall incur no liability under or in respect of any Transaction
Document by acting upon any notice (including notice by telephone), consent, certificate or other
instrument or writing (which may be by facsimile) believed by it in good faith to be genuine and
signed or sent by the proper party or parties.

          SECTION 9.03 Funding Agent and Affiliates. The Funding Agent and its respective
Affiliates may generally engage in any kind of business with the Issuer, the Servicer, any Obligor,
any of their respective Affiliates and any Person who may do business with or own securities of the
Issuer, any Seller, the Servicer, any Obligor or any of their respective Affiliates, all as if such
entities were not the Funding Agent and without any duty to account therefor to the Purchasers.

          SECTION 9.04 Indemnification. Each Purchaser (other than the Conduit Purchaser)
severally agrees to indemnify the Funding Agent (to the extent not reimbursed by any Cofina
Entity), from and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by, or asserted against the Funding Agent in any way relating to or
arising out of any Transaction Document or any action taken or omitted by the Funding Agent under
any Transaction Document; provided, that (i) no Purchaser shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting or arising from the Funding Agent’s gross negligence or willful
misconduct and (ii) no Purchaser shall be liable for any amount in respect of any compromise or
settlement or any of the foregoing unless such compromise or settlement is approved by the majority
of the Purchasers (other than the Conduit Purchaser) (based on Purchaser Percentages). Without
limitation of the generality of the foregoing, each Purchaser (other than the Conduit Purchaser),
agrees to reimburse the Funding Agent, promptly upon demand, for any reasonable out-of-pocket
expenses (including reasonable counsel fees) incurred by the Funding Agent in connection with the
administration, modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, any
Transaction Document; provided, that no Purchaser shall be responsible for the costs and
expenses of the Funding Agent in defending itself against any claim alleging the gross negligence
or willful misconduct of the Funding Agent to the extent such gross negligence or willful
misconduct is determined by a court of competent jurisdiction in a final and non-appealable
decision.

23

 

          SECTION 9.05 Purchase Decision. Each Purchaser acknowledges that it has,
independently and without reliance upon the Funding Agent, and based on such documents and
information as it has deemed appropriate, made its own evaluation and decision to enter into this
Note Purchase Agreement and to purchase an interest in the VFN. Each Purchaser also acknowledges
that it will, independently and without reliance upon the Funding Agent or any of its Affiliates,
and based on such documents and information as it shall deem appropriate at the time, continue to
make its own decisions in taking or not taking action under this Note Purchase Agreement or any
related agreement, instrument or other document.

          SECTION 9.06 Successor Funding Agent. The Funding Agent may resign at any time by
giving thirty (30) days’ written notice thereof to the Purchasers, the Issuer and the Trustee.
Upon any such resignation, the Purchasers shall have the right to appoint a successor Funding
Agent. If no successor Funding Agent shall have been so appointed and shall have accepted such
appointment, within thirty days after the retiring Funding Agent’s giving of notice of resignation,
then the retiring Funding Agent may, on behalf of the Purchasers, appoint a successor Funding
Agent. Upon the acceptance of any appointment as Funding Agent hereunder by a successor Funding
Agent, such successor Funding Agent shall thereupon succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring Funding Agent, and the retiring Funding Agent
shall be discharged from its duties and obligations under this Note Purchase Agreement and the
other Transaction Documents (other than obligations arising or to have been performed prior to such
retirement). After any retiring Funding Agent’s resignation hereunder as Funding Agent, the
provisions of this Article IX shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was the Funding Agent under this Note Purchase Agreement and the other
Transaction Documents.

ARTICLE X

MISCELLANEOUS

          SECTION 10.01 Amendments. No amendment or waiver of any provision of this Note
Purchase Agreement shall in any event be effective unless the same shall be signed by each of the
parties hereto, and then such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.

          SECTION 10.02 Notices. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing and mailed, telefaxed (receipt confirmed) or
hand delivered, as to each party hereto, at its address set forth in Schedule I hereto or
at such other address as shall be designated by such party in a written notice to the other party
hereto. All such notices and communications shall be effective upon receipt by the addressee.

          SECTION 10.03 No Waiver; Remedies. No failure on the part of any party hereto to
exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

24

 

          SECTION 10.04 Binding Effect; Assignability. (a) This Note Purchase Agreement shall
be binding on the parties hereto and their respective successors and assigns; provided,
however, that the Issuer may not assign any of its rights or delegate any of its duties
hereunder or under any of the other Transaction Documents to which it is a party without the prior
written consent of the Funding Agent. No provision of this Note Purchase Agreement or any other
Transaction Document shall in any manner restrict the ability of any Purchaser to assign,
participate, grant security interests in, or otherwise transfer any portion of its interest in the
VFN (and its rights to receive any payments in respect thereof, including in connection with any
collateral securing payment with respect to such VFN); provided, that any such transfer,
participation or assignment shall only be made in compliance with the transfer restrictions set
forth herein and in the Indenture; provided, further, that unless otherwise
consented to by the Issuer, such transferee, participant or assignee shall have executed and
delivered to the Issuer, the Trustee and the Funding Agent a Transfer Supplement (as defined in
subsection (b) below), with such changes as shall be reasonably acceptable to the Issuer. Without
limiting the foregoing, the Conduit Purchaser may, in one or a series of transactions, transfer all
or any portion of its interest in the VFN, and its rights and obligations under the Transaction
Documents to a Conduit Assignee, a Committed Purchaser or any bank or other financial institution
providing liquidity or credit support to the Conduit Purchaser under the Asset Purchase Agreement.

          (b) Each Committed Purchaser may assign to one or more Persons (each an “Assignee
Committed Purchaser”), reasonably acceptable to the Issuer and the Funding Agent a portion of
such Purchaser’s commitment in respect of its Purchaser Percentage of the Maximum Funded Amount
(for each such Purchaser, the “Commitment”) pursuant to a supplement hereto, substantially
in the form of Exhibit C with any changes as have been approved by the parties thereto (a
“Transfer Supplement”), executed by each such Assignee Committed Purchaser, the assignor
Committed Purchaser, and the Funding Agent; provided, that any such transfer, participation
or assignment shall only be made in compliance with the transfer restrictions set forth herein and
in the Indenture. Any such assignment by a Committed Purchaser pursuant to this paragraph cannot
be for an amount less than $10,000,000. Upon (i) the execution of the Transfer Supplement, (ii)
delivery of an executed copy thereof to the Issuer and the Funding Agent and (iii) solely to the
extent such assignor Committed Purchaser has any portion of the Aggregate Purchaser Funded Amount
outstanding, payment by the Assignee Committed Purchaser to the assignor Committed Purchaser of the
agreed purchase price, such assignor Committed Purchaser shall be released from its obligations
hereunder to the extent of such assignment and such Assignee Committed Purchaser shall for all
purposes herein be a Committed Purchaser party hereto and shall have all the rights and obligations
of a Committed Purchaser hereunder to the same extent as if it were an original party hereto. The
amount of the Commitment of the assignor Committed Purchaser allocable to such Assignee Committed
Purchaser shall be equal to the amount of the portion of the Commitment of the assignor Committed
Purchaser transferred, regardless of the purchase price paid therefor. The Transfer Supplement
shall be an amendment hereof only to the extent necessary to reflect the addition of such Assignee
Committed Purchaser as an “Committed Purchaser” and any resulting adjustment of the assignor
Committed Purchaser’s Commitment.

          (c) Any Purchaser may, in the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more Persons (each, a “Participant”)

25

 

participating interests in all or a portion of its rights and obligations under this Note
Purchase Agreements; provided, that any such transfer, participation or assignment shall
only be made in compliance with the transfer restrictions set forth herein and in the Indenture.
Notwithstanding any such sale by a Purchaser of participating interests to a Participant, such
Purchaser’s rights and obligations under this Note Purchase Agreement shall remain unchanged, such
Purchaser shall remain solely responsible for the performance thereof, and the other parties hereto
shall continue to deal solely and directly with such Purchaser in connection with such Purchaser’s
rights and obligations under this Note Purchase Agreement. Each Participant shall be entitled to
the benefits of Article VIII; provided, however, that all amounts payable
to any such Participant shall be limited to the amounts which would have been payable to the
Purchaser selling such participating interest had such interest not been sold.

          (d) This Note Purchase Agreement shall create and constitute the continuing obligation of the
parties hereto in accordance with its terms, and shall remain in full force and effect until such
time as all amounts payable with respect to the VFN or hereunder shall have been paid in full.

          SECTION 10.05 Confidentiality. The Issuer shall maintain, and shall cause each
officer, employee and agent of itself and its Affiliates to maintain, the confidentiality of the
Transaction Documents and all other confidential proprietary information with respect to the
Funding Agent and the Purchasers and each of their respective businesses obtained by them in
connection with the structuring, negotiation and execution of the transactions contemplated herein
and in the other Transaction Documents, except for information that has become publicly available
or information disclosed (i) to legal counsel, accountants and other professional advisors to the
Issuer and its Affiliates, (ii) as required by law, regulation, the requirements of the any
self-regulating organization such as a stock exchange or legal process or (iii) in connection with
any legal or regulatory proceeding to which the Issuer or any of its Affiliates is subject; it
being understood, that solely with respect to the Base Indenture, the Issuer may distribute such
Base Indenture to the holders of any Notes issued pursuant thereto from time to time. The Issuer
hereby consents to the disclosure of any nonpublic information with respect to it received by the
Funding Agent or any Purchaser from the Issuer or the Servicer to (i) any of the Purchasers or the
Funding Agent, (ii) legal counsel, accountants and other professional advisors to the Funding
Agent, the Purchasers or their Affiliates, (iii) as required by law, regulation or legal process,
(iv) in connection with any legal or regulatory proceeding to which the Funding Agent, any
Purchaser or any of their Affiliates is subject, (v) any nationally recognized rating agency
providing a rating or proposing to provide a rating to the Conduit Purchaser’s Commercial Paper or
the VFN, (vi) any placement agent which proposes herein to offer and sell the Conduit Purchasers’
Commercial Paper, (vii) any provider of the Conduit Purchaser’s program-wide liquidity or credit
support facilities, (viii) any potential Committed Purchaser or (ix) any participant or potential
participant of the Commitment of any Committed Purchaser, the Trustee, any Enhancement Provider,
any Secured Party, or any liquidity or credit support provider of the Conduit Purchaser;
provided, that the Funding Agent and the Purchasers, as the case may be, shall advise any
such recipient of information that the information they receive is nonpublic information and may
not be disclosed or used for any other purposes other than that for which it is disclosed to such
recipient without the prior written consent of the Issuer.

26

 

          SECTION 10.06 GOVERNING LAW; JURISDICTION. THIS NOTE PURCHASE AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. EACH OF THE
PARTIES TO THIS NOTE PURCHASE 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 JUDGMENTS 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.

          SECTION 10.07 Wavier of Trial by Jury. To the extent permitted by applicable law,
each of the parties hereto irrevocably waives all right of trial by jury in any action, proceeding
or counterclaim arising out of or in connection with this Note Purchase Agreement or any matter
arising hereunder.

          SECTION 10.08 No Proceedings. The Issuer agrees that so long as any indebtedness of
the Conduit Purchaser shall be outstanding or there shall not have elapsed one year plus one day
since the last day on which any indebtedness of the Conduit Purchaser shall have been outstanding,
it shall not file, or join in the filing of, a petition against such Conduit Purchaser under the
Federal Bankruptcy Code, or join in the commencement of any bankruptcy, reorganization,
arrangement, insolvency, liquidation or other similar proceeding against the Conduit Purchaser.

          SECTION 10.09 Execution in Counterparts. This Note Purchase Agreement may be executed
in any number of counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which when taken together shall
constitute one and the same agreement.

          SECTION 10.10 No Recourse. Notwithstanding anything to the contrary contained herein,
the obligations of the Purchasers under this Note Purchase Agreement are solely the corporate
obligations of the Purchasers and, in the case of obligations of the Conduit Purchaser other than
Commercial Paper, shall be payable at such time as funds are actually received by, or are available
to, the Conduit Purchaser in excess of funds necessary to pay in full all outstanding Commercial
Paper and, to the extent funds are not available to pay such obligations, the claims relating
thereto shall not constitute a claim against the Conduit Purchaser but shall continue to accrue.
Each party hereto agrees that the payment of any claim (as defined in Section 101 of the Bankruptcy
Code) of any such party shall be subordinated to the payment in full of all Commercial Paper.

     No recourse under any obligation, covenant or agreement of the Conduit Purchaser contained in
this Note Purchase Agreement shall be had against any incorporator, stockholder, officer, director,
member, manager, employee or agent of the Conduit Purchaser (solely by virtue of such capacity) by
the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute
or otherwise; it being expressly agreed and understood that this Note Purchase Agreement is solely
a corporate obligation of the Conduit Purchaser, and that no

27

 

personal liability whatever shall attach to or be incurred by any incorporator, stockholder,
officer, director, member, manager, employee or agent of the Conduit Purchaser (solely by virtue of
such capacity) or any of them under or by reason of any of the obligations, covenants or agreements
of the Conduit Purchaser contained in this Note Purchase Agreement, or implied therefrom, and that
any and all personal liability for breaches by the Conduit Purchaser of any of such obligations,
covenants or agreements, either at common law or at equity, or by statute, rule or regulation, of
every such incorporator, stockholder, officer, director, member, manager, employee or agent is
hereby expressly waived as a condition of and in consideration for the execution of this Note
Purchase Agreement; provided that the foregoing shall not relieve any such Person from any
liability it might otherwise have as a result of fraudulent actions taken by them.

     SECTION 10.11 Survival. All representations, warranties, covenants, guaranties and
indemnifications contained in this Note Purchase Agreement, and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive the sale, transfer or
repayment of the VFN.

[Remainder of this page intentionally left blank.]

28

 

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

	 	 	 	 	 
	 	COFINA FUNDING, LLC,

as Issuer

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

[Signatures continue on the following page.]

	 	 	 	 	 
	 

	 	S-1
	 	Series 2008-A Note Purchase Agreement

 

 

	 	 	 	 	 
	 	VICTORY RECEIVABLES CORPORATION,

as Conduit Purchaser

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

NEW YORK BRANCH,

as Funding Agent

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

NEW YORK BRANCH,

as a Committed Purchaser

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Purchaser Percentage: 100% 	 

	 	 	 	 	 
	 

	 	S-2
	 	Series 2008-A Note Purchase Agreement

 

 

EXHIBIT A

Form of Notice of

Increase

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	1.

	 	Proposed Increase Date:                    	 	 	 	 
	 
	 	 	 	 	 	 
	2.

	 	Amount of requested Increase
(lesser of minimum amount of
$                     or remaining
Maximum Funded Amount)
	 	$                    	 	 
	 
	 	 	 	 	 	 
	3.

	 	Purchase Price
	 	$                    	 	 
	 
	 	 	 	 	 	 
	4.

	 	Remaining Maximum Funded
Amount (after giving effect
to the requested Increase)
	 	$                    	 	 
	 
	 	 	 	 	 	 
	5.

	 	Certifications:	 	 	 	 

	 	(a)	 	The representations and
warranties of Cofina Funding,
LLC (the “Issuer”) contained
in the Base Indenture dated
as of August 10, 2005 (as
amended) between the Issuer
and U.S. Bank National
Association, as trustee (the
“Trustee”); the Series
2008-A Supplement, dated as
of November 21, 2008, between
the Issuer and the Trustee;
and the Note Purchase
Agreement dated as of
November 21, 2008 (the “Note
Purchase Agreement”), among
the Issuer, the Conduit
Purchaser, the Funding Agent
and the Committed Purchasers
named therein, are true and
correct in all material
respects on the date hereof
(except to the extent they
expressly relate to an
earlier or later time and
then as of such earlier or
later time).
	 
	 	(b)	 	The conditions to the
Increase specified in Section
2.03 of the Note Purchase
Agreement have been satisfied
and will be satisfied as of
the applicable Increase Date.

	 	 	 	 	 
	 	COFINA FUNDING, LLC, as Issuer

 	 
	 	By  	 	 
	 	 	Authorized Officer 	 
	 	 	 	 
	 

Date of Notice:                       

 

 

EXHIBIT B

Series 2008-A Officer’s Certificate

     Cofina Funding, LLC (the “Issuer”), pursuant to Section 4.12 of the Note Purchase
Agreement dated as of November 21, 2008 (the “Note Purchase Agreement”), among the Issuer,
Victory Receivables Corporation, as the Conduit Purchaser, The Bank of Tokyo-Mitsubishi UFJ, Ltd.,
New York Branch, as Funding Agent, and the financial institutions from time to time party thereto
as Purchasers, the Issuer hereby certifies that, to the best of its knowledge, after reasonable
investigation: (a) all of the terms, covenants, agreements and conditions of the Transaction
Documents to be complied with and performed by Issuer on or before the date hereof have been
complied with and performed in all material respects; and (b) the representations and warranties of
Issuer made in the Transaction Documents to which it is a party are true and correct in all
material respects on and as of the date hereof (except to the extent they expressly relate to an
earlier or later time and then as of such earlier or later time).

     Capitalized terms used and not defined herein shall have the meanings ascribed to them in the
Note Purchase Agreement.

     IN WITNESS WHEREOF, I have hereunto set my hand as
 of this                     
day of                                         , 20                    .

	 	 	 	 	 
	 	COFINA FUNDING, LLC,

as Issuer

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

 

 

SCHEDULE I

Addresses for Notices

If to:

Issuer:

Cofina Funding, LLC

5500 Cenex Drive

St. Paul, Minnesota 55077

Attention: James M. Grafing, Chief Financial Officer

Telephone: (651) 355-6974

Facsimile: (651) 451-4917

Funding Agent:

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

1251 Avenue of the Americas

New York, New York 10020

Attention: Securitization Group

Telephone: (212) 782-4908

Facsimile: (212) 782-6448

Committed Purchaser:

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

1251 Avenue of the Americas

New York, New York 10020

Attention: Hermina Batson

Telephone: (212) 782-4908

Facsimile: (212) 782-6998

Conduit Purchaser:

Victory Receivables Corporation

c/o J. H. Management Corporation

One International Place

Boston, Massachusetts 02110

Attention: R. Douglas Donaldson

Telephone: (617) 951-7690

Facsimile: (617) 951-7050

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	SECTION 1.01 Certain Defined Terms
	 	 	1	 
	 
	 	 	 	 
	SECTION 1.02 Other Definitional Provisions
	 	 	7	 
	 
	 	 	 	 
	ARTICLE II PURCHASE AND SALE
	 	 	8	 
	 
	 	 	 	 
	SECTION 2.01 Purchase and Sale of the VFN
	 	 	8	 
	 
	 	 	 	 
	SECTION 2.02 Initial Purchase Price
	 	 	8	 
	 
	 	 	 	 
	SECTION 2.03 Increases
	 	 	8	 
	 
	 	 	 	 
	SECTION 2.04 Extension of Purchase Expiration Date
	 	 	9	 
	 
	 	 	 	 
	SECTION 2.06 Calculation of Monthly Interest
	 	 	10	 
	 
	 	 	 	 
	SECTION 2.07 Benefits of Indenture
	 	 	10	 
	 
	 	 	 	 
	SECTION 2.08 Broken Funding
	 	 	10	 
	 
	 	 	 	 
	SECTION 2.09 Illegality
	 	 	11	 
	 
	 	 	 	 
	SECTION 2.10 Inability to Determine Eurodollar Rate
	 	 	11	 
	 
	 	 	 	 
	SECTION 2.11 Fees
	 	 	12	 
	 
	 	 	 	 
	ARTICLE III CLOSING
	 	 	12	 
	 
	 	 	 	 
	SECTION 3.01 Closing
	 	 	12	 
	 
	 	 	 	 
	SECTION 3.02 Transactions to be Effected at the Closing
	 	 	12	 
	 
	 	 	 	 
	ARTICLE IV CONDITIONS PRECEDENT TO PURCHASE ON THE CLOSING DATE
	 	 	12	 
	 
	 	 	 	 
	SECTION 4.01 Performance by Cofina Entities
	 	 	12	 
	 
	 	 	 	 
	SECTION 4.02 Representations and Warranties
	 	 	12	 
	 
	 	 	 	 
	SECTION 4.03 Corporate Documents
	 	 	13	 
	 
	 	 	 	 
	SECTION 4.04 Opinions of Counsel
	 	 	13	 
	 
	 	 	 	 
	SECTION 4.05 Reports
	 	 	13	 
	 
	 	 	 	 
	SECTION 4.06 Financing Statements
	 	 	13	 
	 
	 	 	 	 
	SECTION 4.07 Documents
	 	 	13	 
	 
	 	 	 	 
	SECTION 4.08 VFN
	 	 	13	 
	 
	 	 	 	 
	SECTION 4.09 No Actions or Proceedings
	 	 	13	 
	 
	 	 	 	 
	SECTION 4.10 Approvals and Consents
	 	 	13	 
	 
	 	 	 	 
	SECTION 4.11 Officer’s Certificates
	 	 	13	 
	 
	 	 	 	 
	SECTION 4.12 Accounts
	 	 	14	 
	 
	 	 	 	 
	SECTION 4.13 Expenses
	 	 	14	 
	 
	 	 	 	 

i

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	SECTION 4.14 Liens
	 	 	14	 
	 
	 	 	 	 
	SECTION 4.15 Other Documents
	 	 	14	 
	 
	 	 	 	 
	SECTION 4.16 Payment of Fees
	 	 	14	 
	 
	 	 	 	 
	ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE ISSUER
	 	 	14	 
	 
	 	 	 	 
	SECTION 5.01 Representations and Warranties of the Issuer
	 	 	14	 
	 
	 	 	 	 
	SECTION 5.02 Reaffirmation of Representations and Warranties by the Issuer
	 	 	14	 
	 
	 	 	 	 
	ARTICLE VI REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE FUNDING AGENT AND THE PURCHASERS
	 	 	14	 
	 
	 	 	 	 
	SECTION 6.01 Securities Laws; Transfer Restrictions
	 	 	15	 
	 
	 	 	 	 
	SECTION 6.02 Enforceability
	 	 	15	 
	 
	 	 	 	 
	ARTICLE VII COVENANTS
	 	 	16	 
	 
	 	 	 	 
	SECTION 7.01 Covenants
	 	 	16	 
	 
	 	 	 	 
	SECTION 7.02 Incorporation
	 	 	16	 
	 
	 	 	 	 
	ARTICLE VIII INDEMNIFICATION
	 	 	16	 
	 
	 	 	 	 
	SECTION 8.01 Indemnification
	 	 	16	 
	 
	 	 	 	 
	SECTION 8.02 Indemnity for Reserves and Expenses
	 	 	18	 
	 
	 	 	 	 
	SECTION 8.03 Indemnity for Taxes
	 	 	20	 
	 
	 	 	 	 
	SECTION 8.04 Other Costs, Expenses and Related Matters
	 	 	21	 
	 
	 	 	 	 
	ARTICLE IX THE FUNDING AGENT
	 	 	22	 
	 
	 	 	 	 
	SECTION 9.01 Authorization and Action
	 	 	22	 
	 
	 	 	 	 
	SECTION 9.02 Funding Agent’s Reliance, Etc.
	 	 	22	 
	 
	 	 	 	 
	SECTION 9.03 Funding Agent and Affiliates
	 	 	23	 
	 
	 	 	 	 
	SECTION 9.04 Indemnification
	 	 	23	 
	 
	 	 	 	 
	SECTION 9.05 Purchase Decision
	 	 	24	 
	 
	 	 	 	 
	SECTION 9.06 Successor Funding Agent
	 	 	24	 
	 
	 	 	 	 
	ARTICLE X MISCELLANEOUS
	 	 	24	 
	 
	 	 	 	 
	SECTION 10.01 Amendments
	 	 	24	 
	 
	 	 	 	 
	SECTION 10.02 Notices
	 	 	24	 
	 
	 	 	 	 
	SECTION 10.03 No Waiver; Remedies
	 	 	24	 
	 
	 	 	 	 
	SECTION 10.04 Binding Effect; Assignability
	 	 	25	 
	 
	 	 	 	 
	SECTION 10.05 Confidentiality
	 	 	26	 
	 
	 	 	 	 

ii

 

TABLE OF CONTENTS

(continued)

	 	 	 	 	 
	 	 	Page	 
	SECTION 10.06 GOVERNING LAW; JURISDICTION
	 	 	27	 
	 
	 	 	 	 
	SECTION 10.07 Wavier of Trial by Jury
	 	 	27	 
	 
	 	 	 	 
	SECTION 10.08 No Proceedings
	 	 	27	 
	 
	 	 	 	 
	SECTION 10.09 Execution in Counterparts
	 	 	27	 
	 
	 	 	 	 
	SECTION 10.10 No Recourse
	 	 	27	 
	 
	 	 	 	 
	SECTION 10.11 Survival
	 	 	28	 
	 
	 	 	 	 
	SECTION 10.12 Funding Instructions
	 	 	 	 
	 
	 	 	 	 

EXHIBIT A                 Form of Notice of Increase

EXHIBIT B                 Series 2008-A Officer’s Certificate

EXHIBIT C                 Form of Transfer Supplement

SCHEDULE I              Addresses for Notices

iiiexv10w27

AMENDED AND RESTATED

LOAN ORIGINATION AND PARTICIPATION AGREEMENT

          THIS AMENDED AND RESTATED LOAN ORIGINATION AND PARTICIPATION AGREEMENT
(“Agreement”) is made and entered into as of the 31 day of October,
2006, by and among AgStar Financial Services, PCA, d/b/a ProPartners
Financial (hereafter referred to as “ProPartners”); CHS Inc. (hereafter
referred to as “CHS”) and Cofina Financial, LLC (hereafter referred to as
“Cofina”).

RECITALS:

	A.	 	Cofina has organized an agricultural production and processing financing program to
provide financing to farmers and agricultural producers for agricultural production or
processing (the “Program”).
	 
	B.	 	The parties hereto wish to enter into a transaction whereby Cofina will originate and
participate to ProPartners certain loans under the Program based on the terms and
conditions of the Farm Credit Act of 1971, as amended, the regulations of the Farm
Credit Administration, this Agreement, the Loan Underwriting Criteria and the policies,
requirements and procedures of ProPartners, all as amended from time to time subject to
the terms hereof (each, a “Loan” and collectively, the “Loans”).
	 
	C.	 	The Loans will be made in the name of Cofina and ProPartners will purchase a
100%participation interest in the Loans as provided herein.
	 
	D.	 	ProPartners, Cofina and CHS are parties to a Loan Origination and Participation
Agreement dated as of April 1, 2006 (the “Prior Agreement”).
	 
	E.	 	ProPartners previously purchased a 100% participation interest in the loans
referenced under the Prior Agreement (the “Existing Loans”).
	 
	F.	 	The parties agree that ProPartners’ participation interest in the Existing Loans will
be governed by the terms of this Agreement and that this Agreement will amend and
restate the Prior Agreement in its entirety.
	 
	G.	 	To induce ProPartners to purchase participation interests in the Loans, CHS and
Cofina have agreed to provide ProPartners with certain guarantees in accordance with the
terns of this Agreement.

          NOW, THEREFORE, in consideration of the parties’ respective
undertakings and obligations and of the agreements hereinafter set forth,
ProPartners, CHS and Cofina agree as follows:

I. DEFINITIONS

Unless otherwise defined herein, the capitalized terms used in this
Agreement shall have the following, meanings (whether in singular or plural
form):

 

 

	1.01	 	“Borrower” means collectively with respect to a Participated Luan, each and
every. Person signing, making or co-making, endorsing, guaranteeing or acting as surety
on such Participated Loan (other than CHS and Cofina).
	 
	1.02	 	“CHS 15% Recourse Loans” means, collectively, all of the Existing Loans that
were placed in the CHS 15% Recourse Pool under the Prior Agreement and are subject to
CHS’ guarantee pursuant to Article V hereof, subject to the limitations described in
Section 5.01(b).
	 
	1.03	 	“CHS 15% Recourse Pool” has the meaning given in Section 3.04.
	 
	1.04	 	“Commitment” means with respect to a Borrower, the aggregate principal amount of
any funds Cofina is committed to advance to any Borrower under a Participated Loan
(without prejudice to normal conditions to any such advance), computed without
reduction for any advances theretofore made which are outstanding but which in fact
reduces the level of future borrowings thereunder. If there shall be more than one
Borrower with respect to a Participated Loan, for purposes hereof Cofina shall be deemed
to have made a Commitment to each such Borrower with respect to 100% of the aggregate
principal amount of any funds with respect to which such Commitment relates.
	 
	1.05	 	“Cooperative Guarantee” means the written agreement by a cooperative affiliate of
Cofina to guarantee the payment of certain Participated Loans under such terms and
documents that are approved by ProPartners, including, without limitation, the terms and
documents governing the assignment of all rights and interests under such Cooperative
Guarantee from Cofina to ProPartners.
	 
	1.06	 	“Default” means with respect to any Participated Loan, any event or
circumstances which under its Loan Documents permits the indebtedness evidenced thereby
to be accelerated, collateral to be foreclosed upon or other remedies taken.
	 
	1.07	 	“Defaulted Loan” has the meaning given in Section 2.02.
	 
	1.08	 	“Event of Default” shall have the meaning given in Article VII hereof.
	 
	1.09	 	“Existing Loans” has the meaning given in the Recitals to this Agreement.
	 
	1.10	 	“15% Recourse Loans” means, collectively, all of the Participated Loans that
are placed in the 15% Recourse Pool and are subject to Cofina’s guarantee pursuant to
Article V hereof, subject to the limitations described in Section 5.02(c).
	 
	1.11	 	“15% Recourse Pool” has the meaning given in Section 3.04.
	 
	1.12	 	“50%, Recourse Loans” means, collectively, all of the Participated Loans that are
placed in the 50% Recourse Pool and are subject to CHS’ guarantee pursuant to Article V
hereof, subject to the limitations described in Section 5.01(b).
	 
	1.13	 	“50% Recourse Pool” has the meaning given in Section 3.04.

2

 

	1.14	 	“5% Recourse Loans” means, collectively, all of the Participated Loans that
are placed in the 5% Recourse Pool and are subject to Cofina’s guarantee pursuant to
Article V hereof, subject to the limitations described in Section 5.02(a).
	 
	1.15	 	“5% Recourse Pool” has the meaning given in Section 3.04.
	 
	1.16	 	“Full Recourse Loans” mean, collectively, all of the Participated Loans that
are placed in the Full Recourse Pool and are subject to CHS’ guarantee pursuant to
Article V hereof.
	 
	1.17	 	“Full Recourse Pool” has the meaning given in Section 3.04.
	 
	1.18	 	“GAAP” means generally accepted accounting principles in the United States in
effect from time to time, consistently applied.
	 
	1.19	 	“Jumbo Loan” means with respect to each Loan, a Loan which if it became a
Participated Loan would, alone or in combination with any other Participated Loan(s) of
the same type under which Commitments then exist in favor of the same Borrower,
evidence an aggregate total Commitment in relation to all such Participated Loans in
excess of $250,000. Borrowers with common management and/or ownership shall be
considered a single Borrower for purposes of determining whether one or more
Participated Loans collectively evidence a Jumbo Loan.
	 
	1.20	 	“Loan” has the meaning given in the Recitals to this Agreement.
	 
	1.21	 	“Loan Approval” shall have the meaning given in Section 2.01.
	 
	1.22	 	“Loan Documents” include, but are not limited to, a promissory note, all related
loan agreements, amendments to such promissory note or loan agreements, financing
statements, security agreements, mortgages, trust deeds, guaranties or other security
documents which evidence any Borrower’s obligations to Cofina in relation to a
Participated Loan or Commitment to such Borrower.
	 
	1.23	 	“Loan Underwriting Criteria” means the Underwriting Standards set forth on the
attached Exhibit A, as amended from time to time upon the mutual agreement of
ProPartners and Cofina.
	 
	1.24	 	“Near Default” means with respect to any Participated Loan any event or
circumstances which with the passage of time, the giving of notice or both would be a
Default.
	 
	1.25	 	“Net Realizable Value” means, with respect to any collateral securing a
Participated Loan, the fair market value of such collateral less, as applicable, any (i)
prior liens. (ii) reasonable foreclosure or liquidation expenses and (iii) distressed
sale discounts.
	 
	1.26	 	“Participants” shall have the meaning given in Section 10.02.
	 
	1.27	 	“Participated Loan(s)” shall have the meaning given in Section 2.01.
	 
	1.28	 	“Participation Interest” shall have the meaning given in Section 2.01.

3

 

	1.29	 	“Payments” shall mean, with respect to any Participated loan, all funds received
under such Participated Loan, including, without limitation, principal and interest
payments, prepayments received from a Borrower or proceeds received from the disposition
of collateral securing such Participated Loan.
	 
	1.30	 	“Person” shall mean an individual, corporation, partnership, association, joint
venture, limited liability company, government (or any agency or political subdivision
thereof), unincorporated organization, trust or other entity, including, without
limitation, an employee pension, profit sharing or other benefit plan or trust.
	 
	1.31	 	“Prime Rate” means, as of the date of determination, the rate of interest per
annum most recently published in the Midwest Edition of The Wall Street Journal as the
“prime” rate.
	 
	1.32	 	“Program” has the meaning given in the Recitals to this Agreement.
	 
	1.33	 	“Repurchase Option” shall have the meaning given in Section 3.07.
	 
	1.34	 	“10% Recourse Loans” means, collectively, all of the Participated Loans that
are placed in the 10% Recourse Pool and are subject to Cofina’s guarantee pursuant to
Article V hereof, subject to the limitations described in Section 5.02(b).
	 
	1.35	 	“10% Recourse Pool” has the meaning given in Section 3.04.
	 
	1.36	 	“Term” has the meaning given in Section 11.01.
	 
	1.37	 	“Total Capital” means, at any date, the amount of Cofina’s “total capital” as
determined in accordance with GAAP and including the carrying value of Cofina’s equity
ownership in Cofina Funding, LLC.
	 
	1.38	 	“Trademark” means the Cofina Country Business Partners Program (whether or not
registered).
	 
	1.39	 	“Underwriting Fee” has the meaning given in Section 2.11.

II. LOAN ADMINISTRATION

	2.01	 	Cofina shall originate the Loans to Borrowers in accordance with the Loan
Underwriting Criteria, the proceeds of which will be used to finance the Borrowers’
agricultural production or processing activities in accordance with the terms designated
by ProPartners in the applicable Loan Approval (“Loan Approval”). ProPartners shall use
commercially reasonable efforts to promptly notify Cofina in writing of its approval or
declination of a Loan; provided, however, that any approval pertaining to a Jumbo Loan
shall require the written consent of Cofina. ProPartners shall purchase a 100%
participation interest from Cofina (a “Participation Interest”), as provided in Section
3.01, in each Loan made by Cofina in accordance with the terms of the applicable Loan
Approval (including the Existing Loans, each, a “Participated Loan” and collectively, the
“Participated Loans”).

4

 

	2.02	 	Until such time that a Participated Loan has been subject to a Default for 30
consecutive days (a “Defaulted Loan”), ProPartners shall be responsible for all
servicing activities associated with the Participated Loans, including the exclusive
right to pursue servicing or collection activities with regard to the Participated
Loans; provided that Cofina shall work with the agricultural producers and processors
who are Borrowers to provide substantial information gathering, initial loan analysis
and on-going loan servicing. In the case of each Defaulted Loan, unless Cofina
exercises its Repurchase Option, as described in Section 3.07, with respect to such
Defaulted Loan, ProPartners shall work with Cofina to take such actions as they agree
are appropriate with respect to such Defaulted Loan, including acceleration of the
indebtedness evidenced thereby, refusing to make additional advances, foreclosing upon
collateral, initiating litigation and agreeing to settlements and taking all other
remedial actions, and Cofina hereby agrees to pay to ProPartners the costs of such
specialized collection activities involving such Defaulted Loan pursuant to a fee
schedule provided by ProPartners to Cofina from time to time; provided, however, that
if ProPartners and Cofina do not agree on a plan of action with respect to a Defaulted
Loan, then ProPartners shall take such actions as it determines are appropriate,
subject to Cofina’s right to exercise its Repurchase Option.
	 
	2.03	 	The Loan Documents required by ProPartners with respect to each Participated Loan
shall be prepared by ProPartners and delivered to the applicable cooperative affiliate
for execution by the Borrower. Each Loan shall be made in the name of Cofina.
ProPartners shall maintain possession of all originals of the Loan Documents and any
related materials.
	 
	2.04	 	At ProPartners’ direction, Cofina shall use commercially reasonable efforts to cause
Cofina’s cooperative affiliates to perform such tasks as are reasonably requested by
ProPartners in connection with its servicing of the Loans, including, but not limited to,
periodically visiting a Borrower’s place of business to inspect the collateral and
records.
	 
	2.05	 	ProPartners shall receive directly from the Borrower at an address
and/or account designated by ProPartners all Payments related to the
Participated Loans. All Payments received by Cofina from Borrowers in
connection with the Participated Loans shall be held in trust for
ProPartners until paid over to ProPartners.
	 
	2.06	 	Cofina hereby grants to ProPartners a terminable,
nonexclusive, nontransferable license to use the Trademark in
connection with its relationship to the Program, including its loan
servicing activities associated with the Participated Loans, e.g.,
servicing or collection activities with regard to the Participated
Loans, and in the event a Default exists under a Participated Loan,
taking such action as it determines appropriate by reason thereof, all
in accordance with the terms and provisions of this Agreement and
consistent with Cofina’s standards, rules, and procedures communicated
to ProPartners in writing from time to time. ProPartners acknowledges
and agrees that Cofina is the sole and exclusive owner of the
Trademark and will not do anything inconsistent with such ownership or
directly or indirectly challenge or impair the validity thereof
ProPartners shall only use the Trademark in connection with the
Program. ProPartners agrees that it will not attack the title of
Cofina to the Trademark, or the validity of any application for
registration thereof, in any jurisdiction. ProPartners may use the
Trademark provided such use strictly abides

5

 

	 	 	by the terns of this Agreement and is subject to the quality
control of Cofina, and shall comply at all times with the current
standards of use provided to ProPartners by Cofina in writing. Any
violation of this Section 2.06 by ProPartners shall constitute an Event
of Default under this Agreement if ProPartners receives written notice
of such violation and such violation is not cured within 30 days of such
written notice.
	 
	2.07	 	ProPartners shall perform and maintain all the accounting and reporting tasks
associated with the Borrowers and the Participated Loan activities noted within this
Agreement. ProPartners will maintain accounting information in accordance with GAAP and
provide financial reports for specified periods, both noted and agreed to under
Exhibit B of this Agreement. In addition, ProPartners shall maintain and monitor
accounting systems and internal controls sufficient to adequately provide accurate and
timely information and safeguard the assets and information related to the activities
within this Agreement. As partial response to ProPartners monitoring of their internal
control system, ProPartners will provide to Cofina any available SAS 70 Type II reports
or other reports used to evaluate and test their internal control systems contracted for
by ProPartners or their assigned servicing agent(s). ProPartners shall account for the
Participated Loan pool placement and related accrual interest, shall apply all funds
received to the appropriate purchase pools and shall provide notice to Cofina of all such
actions in accordance with the terms of this Agreement. Cofina shall have the right, at
its own expense and upon prior written notice to ProPartners, to audit ProPartners’
accounting and associated documents in connection with the Participated Loans and may
audit or review any associated services or activities performed by ProPartners, provided
that such audit is performed during reasonable business hours and in a manner that is not
significantly disruptive of ProPartners’ business.
	 
	2.08	 	Cofina and ProPartners agree that there shall be timely and thorough communication
of pertinent general and credit information between the parties and cooperation between
each party’s personnel with respect to the terms of this Agreement. This includes,
without limitation, furnishing and exchanging pertinent correspondence, memoranda,
quarterly Borrower status reports and loan servicing documentation (such as periodic
balance sheets, operating statements, audit reports (if available) and collateral
position reports) relating to a Borrower.
	 
	2.09	 	This Agreement shall not be deemed to appoint either Cofina or ProPartners as agent
of the other, except as ProPartners may be deemed the agent of Cofina for administering,
servicing and collecting under the Participated Loans. This Agreement shall not be
construed to create a partnership, joint venture or any like arrangement between Cofina
and ProPartners.
	 
	2.10	 	In consideration for the origination and servicing activities performed by
ProPartners tinder the terms of this Agreement, at all times during the Term, Cofina
shall pay to ProPartners a monthly underwriting fee equal to the sum of $25,000 plus $45
for each Participated Loan that is outstanding as of the last day of the previous month
(“Underwriting Fee”). All Underwriting Fees shall be payable no later than close of
business on the tenth day following the end of each month. The parties agree to review
the terns of the Underwriting Fee after one year.

6

 

	2.11	 	All of Cofina’s agricultural producer, processor, and other customer data, and any
other agricultural producer, processor, and other customer data obtained pursuant to this
Agreement shall be owned by Cofina and shall not be used by ProPartners for any purpose
other than fulfilling the requirements of this Agreement.

III. SALE AND PURCHASE OF PARTICIPATION INTERESTS

	3.01	 	ProPartners shall purchase a participation interest in all of the Loans equal to
100% of the indebtedness under each Loan as approved and issued in accordance herewith;
provided, however, that the aggregate principal amount of all such Participated Loans
shall not exceed $120,000,000, of which the aggregate principal amount of the
Participated Loans contained in the 50% Recourse Pool and the Full Recourse Pool cannot
exceed $60,000,000. ProPartners’ obligation to purchase a Participation Interest in a
Loan is conditioned upon such Loan meeting the following requirements:

	 	(a)	 	Such Loan is subject to the guarantee of CHS or Cofina pursuant to Article V
hereof or to a Cooperative Guarantee, as designated by ProPartners in the
applicable Loan Approval;
	 
	 	(b)	 	In the case of a Loan designated by ProPartners in the applicable Loan
Approval for placement in the Full Recourse Pool or the 50% Recourse Pool, CHS has
provided its written consent to such placement; and
	 
	 	(c)	 	In the case of a Loan designated by ProPartners in the applicable Loan Approval
to be subject to a Cooperative Guarantee, such cooperative affiliate of Cofina has
executed such documentation as requested by ProPartners evidencing the Cooperative
Guarantee.

	 	 	ProPartners shall be deemed to have purchased a Participation
Interest in a Loan only after such Loan has been approved by
ProPartners in accordance with Section 2.01 and made under such terms
and conditions as ProPartners has specified in the applicable Loan
Approval. ProPartners shall have no obligation to purchase a Loan if
the documentation for such Loan was not prepared and administered by
ProPartners pursuant to this Agreement. After ProPartners’ purchase
of a Participation Interest in a Loan hereunder, ProPartners shall
fund all advances under such Participated Loan in accordance with the
terms and provisions of such Participated Loan and the related Loan
Documents.
	 
	3.02	 	Subject to the terms and provisions of this Agreement, Cofina hereby
grants to ProPartners a power of attorney to exercise in accordance kith the
terms of this Agreement, to the exclusion of Cofina, all of the rights of
Cofina under each Participated Loan, including, but not limited to, the right
(1) to perform all loan origination, servicing, administration and collection
actions with respect to the Participated Loans, including, without
limitation, those actions specified in Article 11. (ii) to exercise any power
or authority granted to Cofina pursuant to the Loan Documents, (iii) to
endorse and cash checks and other instruments made payable to Cot-ma with
respect to Payments under the Participated Loans. (iv) to execute all Loan
Documents related to the Participated Loans

7

 

on behalf of, Cofina, and (v) to otherwise exercise all rights of
Cofina established pursuant to each such Participated Loan; provided,
however, that Cofina shall have the right to work with the
agricultural producers and processors who are Borrowers for
information gathering, initial loan analysis and on-going loan
servicing purposes. The powers of attorney granted by Cofina to
ProPartners hereunder are irrevocable and coupled with an interest.

	3.03	 	Each Participated Loan will be placed into one of six purchase pools in accordance
with the Loan Underwriting Criteria and the terms of this Agreement. The six purchase
pools shall be grouped as follows: (i) 5% Recourse Loans (the “5% Recourse Pool”); (ii)
10% Recourse Loans (the “10% Recourse Pool”); (iii) 15% Recourse Loans (the “15% Recourse
Pool”); (iv) 50% Recourse Loans (the “50% Recourse Pool”); (v) Full Recourse Loans (the
“Full Recourse Pool”) and (vi) CHS 15% Recourse Loans (the “CHS 15% Recourse Pool”).
ProPartners and Cofina may also agree that certain Participated Loans that are not
placed in one of the six above-referenced pools be instead subject to a Cooperative
Guarantee. All of the Existing Loans will be placed in either the 15% Recourse Pool or
the CHS 15% Recourse Pool unless (a) CHS has consented in writing to the placement of an
Existing Loan in the Full Recourse Pool, (b) CHS and ProPartners have consented in
writing to the placement of an Existing Loan in the 50% Recourse Pool or (c) ProPartners
has consented in writing that an Existing Loan be subject to a Cooperative Guarantee.
All Participated Loans originated after the date of this Agreement will be placed in
either the 5% Recourse Pool, the 10% Recourse Pool or the 15% Recourse Pool unless (y)
CHS has consented in writing to the placement of a Participated Loan in the 50% Recourse
Pool or the Full Recourse Pool or (z) the Loan Approval for such Participated Loan
provides that the Participated Loan will be subject to a Cooperative Guarantee. Each
Existing Loan contained in the CHS 15% Recourse Pool that is renewed or extended past
such Existing Loan’s current maturity date will be transferred from the CHS 15% Recourse
Pool to another pool or become subject to a Cooperative Guarantee, in accordance with the
applicable Loan Approval.
	 
	3.04	 	ProPartners’ portion of the interest collected with
respect to each Participated Loan shall be equal to the following: (i)
the Prime Rate less 185 basis points for each Participated Loan placed
in the 5% Recourse Pool; (ii) the Prime Rate less 165 basis points for
each Participated Loan placed in the 10% Recourse Pool; (iii) the
Prime Rate less 115 basis points for each Participated Loan placed in
the 15% Recourse Pool or the CHS 15% Recourse Pool; (iv) the Prime
Rate less 165 basis points for each Participated Loan placed in the
50% Recourse Pool or the Full Recourse Pool; and (v) the Prime Rate
less 165 basis points for each Participated Loan that is subject to a
Cooperative Guarantee (the “Retained Interest”); provided, however,
that any Participated Loan that is a fixed-rate loan shall bear
interest at such fixed rate of interest and at such Retained Interest
as agreed by the parties on a case by case basis. Cofina shall not
reduce or lower the interest rate or interest rate parameters on a
Participated Loan without the prior written consent of ProPartners.
All interest collected in each [month], less the Retained Interest,
shall be paid to Cofina by ProPartners no later than the tenth day
following the end of each [month].

8

 

	3.05	 	The Participated Loans III ay he Secured by it perfected III-St
priority’ Security interest in acceptable collateral with Net Realizable Value
sufficient to repay the obligations under such Participated Loans. As security for
the payment and performance of all the Participated Loans, Cofina hereby assigns
to ProPartners any and all security interests and other liens obtained by Cofina
as collateral securing the Participated Loans, and as and when requested in
writing by ProPartners, shall promptly file such UCC-3 financing statements or
other forms as ProPartners shall request evidencing such assignment.

	3.06	 	If ProPartners at any time holds a Participation Interest
in a Participated Loan of a Borrower and Cofina extends additional
credit to the same Borrower, Cofina agrees to offer ProPartners the
opportunity to purchase a Participation Interest in such Loan in
accordance with the terms of this Agreement. Borrowers with common
management and/or ownership shall be considered a single Borrower for
purposes of the foregoing.

	3.07	 	Cofina shall have the option to repurchase ProPartners’
Participation Interest in a Participated Loan if (i) such Participated
Loan is a Defaulted Loan or (ii) ProPartners determines that it will
not consent to the renewal or extension of such Participated Loan for a
subsequent term or that ProPartners will only consent to the renewal or
extension of such Participated Loan hereunder at a lower classification
or under less favorable economic terms (in each case, a “Repurchase
Option”); provided, however, that Cofina’s exercise of a Repurchase
Option shall not he considered a payment under the guarantee
obligations of either CHS or Cofina pursuant to Article V. The
Repurchase Option shall be exercisable with respect to (i) above,
during the 30-day period following notification by ProPartners to
Cofina that a Participated Loan has become a Defaulted Loan, and with
respect to (ii) above, during the 30-day period following notification
by ProPartners to Cofina of ProPartners’ determination not to consent
to the renewal or extension of a Participated Loan or to consent to
such renewal or extension of a Participated Loan only at a lower
classification or under less favorable economic terms. In addition to
the above, in cases involving Participated Loans that are subject to
the guarantee of CHS, if such a Participated Loan is subject to a
Default or a Near Default and the parties agree, for a period of up to
60 days, to comply with a collection plan regarding the collection of
and remedies under such Participated Loan (subject to ProPartners’
right to discontinue such collection efforts and demand payment of CHS’
guaranty prior to the end of such 60-day period if the parties mutually
agree or if ProPartners determines in good faith that a delay is likely
to have a material adverse effect on ProPartners), CHS shall have the
right to purchase ProPartners’ Participation Interest in such
Participated Loan at any time prior to the end of such 60-day period
(also a “Repurchase Option”). With respect to each Repurchase Option
exercised by Cofina or CHS, Cofina or CHS, as the case may he, will pay
to ProPartners a repurchase price equal to the suns of all outstanding
principal, interest and fees then existing under such Participated
Loan, plus any other reasonable third party attorney fees or other
collection costs incurred by ProPartners with respect to such
Participated Loan. Upon ProPartners’ receipt of payment in full with
regard to it Repurchase Option. ProPartners shall (a) forward to Cofina
or CHS. as applicable, all Loan Documents pertaining to such
Participated Loan in ProPartners’ possession, (b) assign to Cofina or
CHS, as applicable, all of its right, title and interest in such
Participated Loan and the related Loan Documents. (c) cease and he
discharged from all activities and responsibilities regarding

9

 

	 	 	such Participated Loan and (d) prepare documentation to assign
applicable collateral to CHS or Cofina, as applicable, and, if
applicable, file UCC-3 financing statements.
	 
	3.08	 	ProPartners’ purchase of Participation Interests in the
Participated Loans pursuant to Section 3.01 hereof shall constitute a
sale of all of the beneficial ownership interest in such Participated
Loans, and the collateral securing the Participated Loan’s
indebtedness, and shall not be construed as an extension of credit by
ProPartners to Cofina. In the event that the transactions
contemplated by this Agreement are nevertheless characterized as
extensions of credit, Cofina hereby grants ProPartners a security
interest in all of the Participated Loans and in all of the Loan
Documents related thereto, whether now in existence or hereafter
created. The security interest granted hereby shall secure payment of
all extensions of credit by ProPartners to Cofina and the performance
of all obligations of Cofina to ProPartners of every type and
description for such extensions of credit, whether now existing or
hereafter arising. Upon an Event of Default by Cofina and anytime
thereafter, ProPartners may declare any obligations outstanding
between Cofina and ProPartners to be immediately due and payable and
may exercise any and all rights of a secured party in the enforcement
of its security interest under the Uniform Commercial Code or any
other applicable law.

IV. REPRESENTATIONS, WARRANTIES AND COVENANTS

	4.01	 	Cofina represents, warrants and covenants that it has all requisite power and
authority to execute and deliver this Agreement and the other documents required and to
perform all of the obligations under this Agreement, and the existence of the arrangement
contemplated by this Agreement and Cofina’s participation in such arrangement and the
execution, delivery and performance under this Agreement by Cofina does not violate any
applicable law in any material respect. Cofina further represents, warrants and covenants
that there are no creditors of Cofina who have a security interest in any of the
Participated Loans and Cofina will not grant a security interest in any of the
Participated Loans to any creditor during the term of this Agreement.
	 
	4.02	 	CHS represents and warrants that it has all requisite power and authority to execute
and deliver this Agreement and other documents required and to perform all of the
obligations under this Agreement, and such execution, delivery and performance does not
violate any applicable law in any material respect.
	 
	4.03	 	ProPartners represents and warrants that it has all requisite power and authority to
execute and deliver this Agreement and other documents required and to perform all of
the obligations under this Agreement, and such execution, delivery and performance does
not violate any applicable law in any material respect.

V. GUARANTEE

	5.01	 	CHS hereby:

	 	(a)	 	absolutely and unconditionally guarantees the full payment of each Participated
Loan placed in the Full Recourse Pool; provided, however, that a Participated

10

 

	 	 	 	Loan will not be placed in the Full Recourse Pool
without the written consent of CHS; and
	 
	 	(b)	 	absolutely and unconditionally guarantees the payment of the Participated
Loans placed in the 50% Recourse Pool and the CHS 15% Recourse Pool; provided,
however, that for each calendar year, CHS’ guarantee under this Section 5.01(b)
shall be limited to the greater of (i) the sum of 50% of the aggregate total
Commitments in favor of all Borrowers with respect to the outstanding
Participated Loans contained in the 50% Recourse Pool as of the business day
preceding the date of payment, plus 15% of the aggregate outstanding and unfunded
Commitments in favor of all Borrowers with respect to the outstanding
Participated Loans contained in the CHS 15% Recourse Pool as of the business day
preceding the date of payment, plus any accrued interest, minus any guaranty
payments previously made by CHS under this Section 5.01(b), or (ii) $4,000,000;
provided, further, that any guarantee payment made by CHS towards such limitation
must be acknowledged as such in writing by ProPartners and CHS.

	5.02	 	Cofina hereby absolutely and unconditionally guarantees the payment of the
Participated Loans placed in the 5% Recourse Pool, the 10% Recourse Pool and the 15%
Recourse Pool; provided, however, that for each calendar year, Cofina’s guarantee under
this Section 5.02 with respect to each pool shall be limited as follows:

	 	(a)	 	with regard to the 5% Recourse Pool, to the greater of (1) the stun of 5% of
the aggregate outstanding and unfunded Commitments in favor of all Borrowers with
respect to the outstanding Participated Loans contained in the 5% Recourse Pool as
of the business day preceding the date of payment, plus any accrued interest,
minus any guaranty payments previously made by Cofina under this Section 5.02(a),
or (ii) $1,000,000;
	 
	 	(b)	 	with regard to the 10% Recourse Pool, to the
greater of (i) the sum of 10% of the aggregate outstanding and
Unfunded Commitments ill favor of all Borrowers with respect to
the outstanding Participated Loans contained in the 10% Recourse
Pool as of the business day preceding the date of payment, plus
any accrued interest, minus any guaranty payments previously made
by Cofina under this Section 5.02(b), or (ii) $2,500,000; and
	 
	 	(c)	 	with regard to the 15% Recourse Pool, to the
greater of (i) the sum of 15% of the aggregate outstanding and
unfunded Commitments in favor of all Borrowers with respect to
the outstanding Participated Loans contained in the 15°4,
Recourse Pool as of the business day preceding the date of
payment, plus any accrued interest. minus any guaranty payments
previouslN’ made by Cofina Under this Section 5.02(c), or (ii)
54,000,000;

provided, that Cofina’s aggregate liability under the guarantees set
forth in this Section 5.02 shall be limited to the suns of
$7,500,000, notwithstanding any other provision of this Agreement.
Any guarantee payment made by Cofina towards any of the above
limitations must be acknowledged as such in writing by ProPartners
and Cofina.

11

 

	5.03	 	ProPartners may make a call by written notice by certitied mail, return receipt
requested, to CHS or Cofina under any of the foregoing guarantees with respect to any
Participated Loan under which a Default by reason of the failure to timely pay principal
or interest exists, and the guaranty payment once a call is made shall be paid on the
tenth business day after confirmed receipt of such notice by Cofina or CHS, as
applicable.
	 
	5.04	 	ProPartners shall provide CHS with a detailed summary at the end of each month
identifying the Participated Loans and dollars outstanding under the 50% Recourse Pool
and the Full Recourse Pool. The failure by ProPartners to provide such notice to CHS
shall in no way reduce CHS’ guarantee obligations to ProPartners hereunder. Furthermore,
CHS waives notice from ProPartners of ProPartners’ purchase of Participation Interests in
the Participated Loans hereunder.
	 
	5.05	 	Upon the written consent of ProPartners (except as otherwise provided in Sections
3.07 or 11.01), which ProPartners may withhold at its reasonable discretion or
conditioned upon such requirements as prior liquidation and application of collateral,
the guarantee obligations of CHS or Cofina may be fulfilled by providing funds, as
necessary, for the repurchase of any Participated Loan (whether partially or totally
unpaid) that is in excess of 90 days past due or that does not comply with ProPartners’
credit standards, procedures, or loan documentation requirements. The repurchase price
of any Participated Loan shall equal the outstanding principal balance, plus accrued
interest, plus reasonable expenses incurred by ProPartners in any collection activity,
plus all related pre-payment and funding make-whole premium.
	 
	5.06	 	CHS and Cofina shall have subrogation rights only with respect to Participated Loans
repurchased in connection with their guarantee obligations hereunder and CHS and Cofina
hereby agree that they will not exercise or enforce any right of contribution,
reimbursement, recourse or subrogation against any Borrower under a Participated Loan or
any collateral securing a Participated Loan unless and until all obligations under such
Participated Loan have been paid in full by CHS or Cofina, as the case may be, pursuant
to Sections 5.01 or 5.02.
	 
	5.07	 	CHS and Cofina agree that ProPartners and/or Cofina may, at any time, extend payment
of any Participated Loan in whole or in part, otherwise change the terms of payment
(including interest rate), accept partial payments, release or impair any collateral
security, release or agree not to sue any party liable on said Participated Loan and/or
take any other actions with respect to any Participated Loan or parties thereto, all
without releasing or diminishing any liability of CHS or Cofina pursuant to this Article
V.
	 
	5.08	 	The guarantees of CHS and Cofina herein are promises of payment, and not of
collection, and Cofina and CHS waive any right to require ProPartners to bring any action
against a Borrower under the Participated Loans or against any other Person or to require
that resort be had to any security or credit on the books of ProPartners in favor of a
Borrower. prior to the fulfillment by CHS or Cofina of its guarantee obligations
hereunder.
	 
	5.09	 	No delay on the part of ProPartners in exercising any rights hereunder or failure
to exercise the same shall operate as a waiver of such rights. In no event shall any

12

 

	 	 	modification or waiver of the provisions of the guarantees of
CHS and Cofrna
hereunder be affected unless in writing nor shall any such waiver be applicable
except in the specific instance for which given.
	 
	5.10	 	The guarantees of CHS and Cofina hereunder shall constitute continuing and
irrevocable agreements of guarantee. The guarantees of CHS and Cofina shall continue
until all amounts owed to ProPartners under the Participated Loans have been fully and
completely discharged.

VI. COVENANTS OF COFINA

	6.01	 	During the Tenn, Cofina shall maintain at all times, measured as of the end of each
calendar quarter, Total Capital of not less than $65,000,000.
	 
	6.02	 	During the Term, Cofina shall maintain as of the last day of each month a ratio of
(i) its total debt to (ii) its Total Capital plus its loan loss reserve, of not more
than 8.00 to 1.00. For this purpose, (a) Cofina’s “total debt” means all of Cofina’s
indebtedness incurred or assumed for borrowed money and all of Cofina’s lease
obligations if, in either case, categorized as debt according to GAAP, together with all
indebtedness of any indebtedness of any other Person if categorized as debt according to
GAAP, and (b) Cofina’s “loan loss reserve” means the amount identified on Cofina’s
balance sheet as loan loss reserves as of the last day of the appropriate month.

VII. EVENTS OF DEFAULT AND REMEDIES

	7.01	 	The occurrence of any one or more of the following events will constitute an “Event
of Default” hereunder:

	 	(a)	 	Cofina, CHS or ProPartners materially breach any covenant or term, or fail to
perform in any material respect, any obligations under this Agreement;
	 
	 	(b)	 	Any warranty, representation, or statement now or hereafter furnished by or on
behalf of Cofina to ProPartners in connection with this Agreement proves to be
false or misleading in any material respect when furnished;
	 
	 	(c)	 	Failure by Cofina to remit to ProPartners, within ten days of its receipt
thereof, ProPartners’ share of Payments received with regard to any Participated Loan; or
	 
	 	(d)	 	Cofina, CHS or ProPartners become insolvent, or declare bankruptcy.

	7.02	 	Upon the occurrence of any Event of Default, the non-defaulting party may, at its
sole option and discretion and upon prior written notice to the defaulting party, suspend
or terminate its obligations hereunder, or exercise any rights contained in this
Agreement. In addition, or in the alternative, the non-defaulting party may exercise any
rights available to it at last or equity, which rights are hereby expressly preserved.
Such rights and remedies will be cumulative and not exclusive to the fullest extent
necessary in order to provide the Non-defaulting party with its benefit of the bargain
under this Agreement.

13

 

VIII. INDEMNIFICATION

	8.01	 	Cofina, by executing this Agreement, agrees to indemnify ProPartners, its agents and
employees, for any losses suffered by ProPartners or such agents and employees when such
losses are caused by the gross negligence of Cofina or any of its employees or agents or
by the willful, wanton, or criminal conduct of Cofina or any of its employees or agents.
	 
	8.02	 	CHS, by executing this Agreement, agrees to indemnify ProPartners, its agents and
employees, for any losses suffered by ProPartners or such agents and employees when such
losses are caused by the gross negligence of CHS or any of its employees or agents or by
the willful, wanton, or criminal conduct of CHS or any of its employees or agents.
	 
	8.03	 	ProPartners, by executing this Agreement, agrees to indemnify Cofina and CHS, their
respective agents and employees, for any losses suffered by Cofina and CHS when such
losses are caused by the gross negligence of ProPartners or any of its employees or
agents or by the willful, wanton, or criminal conduct of ProPartners or any of its
employees or agents.
	 
	8.04	 	The failure of ProPartners to properly file or continue UCC financing statements
shall be considered to be gross negligence.

IX. FINANCIAL INFORMATION AND REPORTING

	9.01	 	Cofina shall furnish ProPartners with Cofina’s monthly financial statements prepared
in accordance with GAAP within 30 days after the end of each month. Cofina shall also
furnish ProPartners with Cofina’s individual fiscal year-end financials, president’s
reports and internal reviews and audits to within 120 days of each such fiscal year-end
or, if earlier, within 30 days of completion thereof.
	 
	9.02	 	CHS shall furnish ProPartners with CHS’ consolidated fiscal year-end financials,
president’s reports and internal reviews and audits to within 90 days of each such fiscal
year-end or, if earlier, within 30 days of completion thereof. The delivery of the CHS
annual report on Form 10-K, as prepared and filed in accordance with the requirements of
the Securities and Exchange Commission, shall be deemed to satisfy the requirement of
delivering such information of CHS.
	 
	9.03	 	ProPartners shall furnish Cofina with those reports set forth on Exhibit B,
as well as any additional reports requested by Cofina and agreed to by ProPartners, which
agreement shall not be unreasonably withheld.

X. SUCCESSORS AND PARTICIPANTS

	10.01	 	This Agreement shall bind and Inure to the benefit of ProPartners, CHS and Cofina
and their respective successors and assigns, but may be assigned only with the consent of
the other parties.

14

 

	10.02	 	ProPartners may sell participation ownership interests in the Participation
Interests to other institutions within what is known as the Farm Credit System, the name
commonly used to refer to the entities and activities authorized by the terms of the
Farm Credit Act of 1971 and the regulations thereunder (collectively, the
“Participants”). Cofina and CHS consent to the grant of such subparticipations, as well
as any other participation or subparticipation which ProPartners or any Participant may
elect to grant in any or all of the Participated Loans.

XI. EXPIRATION AND TERMINATION

	11.01	 	This Agreement shall continue in effect until December 31, 2008 (“Term”), which
Term will automatically renew for additional one-year increments unless a written
termination notice is given to the other parties at least 90 days prior to the end of
the current Term; provided, however, that either party may terminate this Agreement
upon written notice to the other in the event that the other party is in breach in any
material respect of its obligations hereunder and such breach remains uncured for ten
business days following written notice thereof to such party. In the event this
Agreement is expired, terminated or suspended, the respective rights and obligations of
the parties shall continue with respect to any outstanding Participated Loans until all
indebtedness and other obligations under all such Participated Loans and related Loan
Documents have been fully and completely discharged. This Agreement shall terminate upon
full payment of all indebtedness and other obligations under all such Participated Loans
and related Loan Documents and the closing of all of the purchase pools.

XII. MISCELLINIOUS

	12.01	 	No provision of this Agreement or any other related agreement among ProPartners,
Cofina and/or CHS regarding the Participated Loans can be waived, modified, amended,
supplemented, or terminated, except by a writing executed by ProPartners, CHS and
Cofina. The failure of any party to enforce at any time any of the provisions of this
Agreement shall in no way be construed to waive any such provision, nor in any way to
affect the validity of this Agreement or any part thereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of this
Agreement shall be held to be a waiver of any other or subsequent breach.
	 
	12.02	 	This Agreement and any other agreements among the parties associated with the
Participated Loans shall be governed by and construed under the laws of the State of
Minnesota, without giving effect to conflict of law principles thereof.
	 
	12.03	 	ProPartners, CHS and Cofina agree to execute other agreements, documents or
instruments as requested by the other party in connection with this Agreement as may be
deemed necessary to carry out the puilose hereof.
	 
	12.04	 	Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when delivered, (b)
when transmitted via facsimile to the number set out below, (c) the business day
following the day on which the same has been delivered prepaid (or pursuant to an
invoice

15

 

	 	 	arrangement) to a reputable national overnight air courier service, or (d) the
third business day following the day on which the same is sent by certified or
registered mail, postage prepaid, in each case to the respective parties at the
address set forth below, or at such other address as such party may specify by
written notice to the other parties hereto:
	 
	 	 	If to Cofina:
	 
	 	 	Cofina Financial, LLC

5500 Cenex Drive

Inver Grove Heights, Minnesota 55077

Attention: Sharon Barber

Fax: (651) 451-4917
	 
	 	 	If to CHS:
	 
	 	 	CHS Inc.

P.O. Box 64089

St. Paul, Minnesota 55164-0089

Attention: John Sclunitz

Fax: (651) 355-4554
	 
	 	 	If to ProPartners:
	 
	 	 	ProPartners Financial

375 Jackson Street

St. Paul, Minnesota 55101-1810

Attention: Chris Mueller

Fax: (651) 282-7861
	 
	12.05	 	All payments made by the appropriate party under this Agreement shall be made in
the lawful currency of the United States by wire transfer or other electronic method
(i.e., ACH) of immediately available funds to the appropriate party, in accordance with
the wire transfer instructions specified in a written notice delivered to the other party
from time to time.
	 
	12.06	 	This Agreement constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof, and supersedes all previous and contemporaneous
negotiations, promises, covenants, agreements, understandings, and representations on
such subjects, all of which have become merged and finally integrated into this
Agreement. The parties agree that this Agreement amends and restates the Prior Agreement
and that this Agreement supersedes and replaces the Prior Agreement in its entirety.
	 
	12.07	 	Wherever possible, each provision of this Agreement shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.

16

 

	12.08	 	This Agreement may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original and all
of which counterparts, taken together, shall constitute one and the same
instrument.

[signature page follows]

17

 

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

	 	 	 	 	 	 	 
	 	 	AGSTAR FINANCIAL SERVICES, PCA, 

D/B/A PROPARTNERS FINANCIAL	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	COFINA FINANCIAL, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	CHS INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 

18

 

EXHIBIT A

Loan Underwriting Criteria 

[attached]

 

 

EXHIBIT B

Reports 

Cofina Financial Reports

Daily 

Interest Accrual by Loan Pool

Principal by Loan Pool

Principal Payments

Principal Disbursements

Interest Payments

Fee Payments & Disbursements

All other transactions/corrections

Wire Transfer Charges

Loan Payable

Interest Payable

All of the above daily reports are by loan pool and will also have a
running month-to-date balance on a pool basis

Weekly

Past due loan list

Country Loan Officer Trial Balance

Monthly 

Individual loan listing within each pool to include at a minimum:

Commitment and outstanding loan balance

Interest receivable

Classification and date changed

ADB

Guarantee (recourse)

Monthly Customer Statements and transaction history (provided through website access)

Income by State Report

Past Due Summary

Future Maturities & Payments

Loans Approved during the month

Loans paid off during the month

Asset Classification Summary by Loan Pool

Interest buy-downs and add-ons ADB

Country Business Partners ADB

Ex. A-1

 

 

			
	
	 	Section 4

Loan Underwriting Standards

Producer Lending

Loan Underwriting Standards

This policy establishes the loan underwriting standards governing Cofina Financial’s producer
lending programs. These programs are transactional financing which primarily support the
applicant’s purchase of inputs necessary to raise crops or produce livestock. Repayment is
expected upon the sale of the corresponding crops or livestock financed. Credit requests are
thoroughly, yet differentially analyzed to help ensure quality credit decisions. Credit staff’s
analysis, documentation and recommendations are the keys to a successful, high quality loan
program.

Loan Limits

Loan commitments are generally limited to:

     Crop

	 	 	 	 	 
	 

	 	-
	 	65% of the value of all crops produced
	 
	 

	 	-
	 	60% of the value of all crops produced when the producer feeds 25% or more of growing crops
	 
	 

	 	-
	 	100% total net worth

     Livestock

	 	 	 	 	 
	 

	 	-
	 	$150/hd equity position for price protected feeder livestock
	 
	 

	 	-
	 	$200/hd equity position for open priced feeder livestock
	 
	 

	 	-
	 	$550/hd breeder livestock
	 
	 

	 	-
	 	$700/cow-calf pair
	 
	 

	 	-
	 	150% total net worth

Credit Analysis Standards

Differential credit analysis and verification is employed in the underwriting process based on the
applicant’s total loan exposure and purpose of request. All loans are credit scored to provide a
baseline credit rating. Loan commitments of $100,000 or less are underwritten based on the credit
scoring system. Loan commitments between $100,000 and $250,000 require additional credit
verification to support the credit decision. Larger loans typically exceeding $250,000 require
more traditional trend analysis to support credit decisions. All credit decisions and
corresponding loan conditions are documented in the Trade Credit Application and credit file
supporting the loan request.

Loan Quality Tiers

Loans are rated and placed in one of five loan quality tiers. The Tier rating impacts risk pool
placement, pricing, collateral needs and guaranty requirements. The general definitions include:

			
	A1	 	High quality loans with sufficient strength to support timely and full repayment
performance even with average or greater adversity. A1 loans will generally require no
guaranty by the partner and support the best interest rates.

			
	A2	 	High quality loans that may have weaknesses, but contain offsetting strengths to support
timely and full repayment performance, even with average adversity.

			
	B	 	Loans with weaknesses. Offsetting strengths are marginal and could delay timely and full
repayment of the loan request with average adversity.

			
	C	 	Weak loans with very limited offsetting strengths and a high probability that timely and
full repayment of the loan request would be delayed or fail with average adversity.

			
	D	 	Materially weak loans with very limited to no offsetting strengths and a high degree of certainty
that timely and full repayment of the loan request would not occur with any adversity. These loans
are generally declined to protect the interests of both Cofina Financial and the Country Business
Partner (“CBP or Partner”) and if approved by the Partner, shall require 100% guaranty and Partner
payout 30 days after maturity.

9/06

Page 1 of 8

 

 

Section 4

Loan Underwriting Standards

Producer Lending

Country Business Partner Guaranty

Cofina Financial’s relationship with each CBP shall be documented in a partner agreement. The
partner agreements define the terms of the relationship as well as the Partner guaranty options
available to support producer loans. Each Partner shall be approved for a specified level of
guaranty prior to accepting producer loans on a guaranty basis. Maximum guaranty levels shall be
approved by both the Partner and Cofina Financial and its funding source, as required. Credit
shall be responsible for monitoring and reporting guaranty utilization relative to the maximum
approved.

The Partner has the option of providing a guaranty for certain classified loans on a pro-rata
basis. The terms of the guaranty relationship are documented in a Country Business Partner Master
Guaranty Agreement and applied on a portfolio basis with the Partner. Guaranty requirements are
established based on the producer loan tier rating and compliance with standard loan conditions.
Guaranty requirements by loan tier and pool are as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Tier	 	A1	 	A2	 	B	 	B	 	C	 	D
	Pool	 	5%	 	10%	 	15%	 	50%	 	15%/100%	 	100%*
	 
	CBP — Pro-rata Guaranty
	 	 	0	%	 	 	0	%	 	 	0, 25, 50, 75	%	 	na	 	 	100	%	 	 	100	%*
	 
	CHS — CO Pool Guaranty
	 	 	0	%	 	 	0	%	 	 	0	%	 	 	50	%	 	 	100	%	 	 	100	%
	 

Standard Loan Conditions

1st Crop Lien — Cofina Financial requires a 1st lien on crops
with the exception of small, tier A1 or A2 loans. The applicant must clearly meet the FICO,
credit score, and LTV maximum to qualify for a 2nd lien position.

Crop Insurance — Cofina Financial requires crop insurance on all loan applications.
Crop loans shall require a minimum of 65% multi-peril crop insurance or CRC coverage assuming
the loan is equal to or exceeds 65% of crop value. In general, the level of insurance should be
in an amount equal to or greater than the loan amount. If crop insurance is below the loan
amount or not obtained, the loan amount may be reduced for lower tier quality loans or require a
guaranty, if not already a condition of approval. An assignment of insurance is also required
with the exception of small tier A1 or A2 loans. Refer to crop loan conditions for further
specifications.

Joint Checks — Cofina Financial requires joint checks (EFS, CNS, or Notice to Buyer
filings) on all applications with the exception of small, tier A1 or A2 crop loans. Joint
checks may also be waived if the customer has a solid repayment history, adequate working
capital, and/or the Partner provides a guaranty, if not already a condition of the loan.

FSA Assignment — Cofina Financial requires an assignment of government payments with
the exception of small, tier A1 or A2 loans. Refer to crop loan conditions for further
specifications.

Secondary Collateral — Cofina Financial requires an Ag blanket filing/junior lien on
machinery and equipment on all loans with the exception of small tier A1 and A2 loans. Refer to
crop loan conditions for further specifications.

1st Lien on Livestock Financed — Cofina Financial requires a 1st
lien on all livestock financed. A 1st lien on feed crops is also required if
contributed as equity.

Livestock Insurance — Cofina Financial requires catastrophic loss insurance on
livestock financed with Cofina Financial named as loss payee.

			
	 	 	 
	 
	 	9/06
	
	 	Page 2 of 8

 

 

Section 4

Loan Underwriting Standards

Producer Lending

Total Loan Commitment: < $100,000

Information Requirements

Loan Application

Legal Entity Documents (if other than sole proprietor)

Cropland Legal Descriptions

Credit Analysis & Documentation Criteria

Loan commitments of $100,000 or less are underwritten using a credit scoring model which
incorporates the applicant’s basic financial information with information from the credit bureau
report. All related parties shall be evaluated in the credit scoring process and weak credit
scores shall be reflected in the final credit approval decision. Credit approval is documented in
the Trade Credit Application. A copy of the approved loan conditions is maintained in the credit
file.

Underwriting Standards/Tier Rating

Loan pool placement and tier ratings are based on the resulting FICO Score, CB score and report
notations, loan to net worth, owner equity, payment experience, debt exposure, and loan to crop
value. If the borrower has no crop insurance, significant judgments, bankruptcy or other major
derogatory factors on the CB report, the loan request may warrant a reduction in Tier or may be
declined.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Tier	 	A1	 	A2	 	B	 	C	 	D
	Pool	 	5%	 	10%	 	15% / 50%	 	15%***/100%	 	100%*
	 
	FICO
	 	 	220	+ 	 	 	190-219	 	 	 	165-189	 	 	 	130-164	 	 	 	<130	 
	 
	CB Score
	 	 	3 730	 	 	 	3 700	 	 	 	3 650	 	 	 	3 600	 	 	 	< 600	 
	 
	Owner’s Equity
	 	 	> 40	%	 	 	> 40	%	 	 	> 30	%	 	 	< 30	%	 	 	< 20	%
	 
	Debt Exposure
	 	 	> 50	%	 	 	> 50	%	 	 	> 30	%	 	 	> 30	%	 	 	< 30	%
	 
	Payment Experience **
	 	 	£ 2	 	 	 	£ 2	 	 	 	£ 3	 	 	 	£ 3	 	 	 	3 4	 
	 
	Loan to Crop Value
	 	 	£ 65	%	 	 	£ 65	%	 	 	£ 65	%	 	 	£ 65	%	 	 	> 65	%
	 
	Loan to Net Worth
	 	 	£ 100	%	 	 	£ 100	%	 	 	£ 100	%	 	 	£ 100	%	 	 	> 100	%
	 

 

			
	*	 	Recommend decline or 100% guaranty with 30 day payout.
	 
	**	 	Repayment definitions:
	 
	 	 	      1 — Always pays within 30 days; 2 — Usually pays within 30 days of due date; 3 —
Occasionally 30 — 60 days late
	 
	***	 	Partner loans with a 100% guaranty shall be placed in the 15% Pool and priced
consistent with the 10% Pool cost.

Loan Conditions & Collateral Requirements

The
following table outlines loan conditions and collateral requirements
for crop input loans £
$100,000. This is a general outline, each individual loan is reviewed individually and conditions
may be added or removed based on each producer’s unique situation.

	 	 	 	 	 
	Tier	 	A1 & A2	 	B & C
	Pool	 	5% & 10%	 	15%, 50% & 100%
	 
	$10,000 — $75,000

Two hour turnaround
on complete
applications

	 	Straight line of credit
2nd UCC lien on crop
MPCI
	 	Straight line of credit
1st UCC lien on crop
MPCI

Insurance Assignment

	$75,001 — $100,000

	 	Straight line of credit
1st UCC lien on crop
MPCI

Insurance Assignment
Ag Blanket UCC	 	FSA Assignment

Crop Contract Assignment

Ag Blanket UCC w/CNS-EFS filings

			
	 	 	 
	 
	 	10/06
	
	 	Page 3 of 8

 

 

Section 4

Loan Underwriting Standards

Producer Lending

Total Loan Commitment: $100,001 — $250,000

Information Requirements

Loan Application

Current Balance Sheet and Supporting Schedules from all Related
Parties (dated within 90 days of application)

Legal Entity Documents (if other than sole proprietor)

Cropland Legal Descriptions

Credit Analysis & Documentation Criteria

Loan commitments between $100,000 and $250,000 require additional credit information and
verification to support the credit score and approval decision. Credit references and major
balance sheet items shall be verified for each applicant and related party. Any material credit
weaknesses shall be documented and addressed with mitigating factors to support the credit
decision. A brief overview of the credit decision shall be documented in the Trade Credit
Application. A copy of the approved loan conditions is maintained in the credit file.

Underwriting Standards/Tier Rating

The core standards for approval are in the Tier A category. As ratios improve, a loan can be moved
into Tier A1. As ratios decline, then Tier B or Tier C standards are applied. The ratios shown in
the A1, B and C are provided as guidelines to help provide consistency for Tier ratings.

Loans can be placed in a Tier without meeting all the ratios if other ratios are strong or there
are other mitigating factors such as equity available to be financed, co-signer, etc. These factors
must be identified. The credit score has less impact on the credit decision and more weight is
given to the financial analysis and other credit factors. In addition, if the applicant does not
meet all loan conditions e.g. no crop insurance, the loan request may warrant a reduction in Tier
or credit decline.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Tier	 	A1	 	A2	 	B	 	C	 	D
	Pool	 	5%	 	10%	 	15%/50%	 	15%***/100%	 	100%*
	 
	FICO
	 	 	220	+ 	 	 	190-219	 	 	 	165-189	 	 	 	130-164	 	 	 	<130	 
	 
	CB Score
	 	 	3 730	 	 	 	3 700	 	 	 	3 650	 	 	 	3600	 	 	 	< 600	 
	 
	Owner Equity %
	 	 	> 45	%	 	 	> 40	%	 	 	> 35	%	 	 	> 30	%	 	 	< 30	%
	 
	Working Capital / AGI
	 	 	> 20	%	 	 	> 15	%	 	 	0	 	 	Negative	 	Negative
	 
	Interest / AGI
	 	 	< 12	%	 	 	< 15	%	 	 	< 18	%	 	 	< 21	%	 	 	> 21	%
	 
	Repayment History **
	 	 	1	 	 	 	£ 2	 	 	 	£ 3	 	 	 	£ 3	 	 	 	3 4	 
	 
	Loan / Net Worth**
	 	 	< 100	%	 	 	< 100	%	 	 	< 100	%	 	 	< 100	%	 	 	> 100	%
	 
	Collateral- Loan / EMV
	 	 	£ 65	%	 	 	£ 65	%	 	 	£ 65	%	 	 	£ 65	%	 	 	> 65	%
	 

 

			
	*	 	Recommend decline or 100% guaranty with 30 day payout.

	 
	**	 	Repayment definitions:
	 	 	1 —  Always pays within 30 days; 2 — Usually pays within 30 days of due date; 3 -
Occasionally 30 — 60 days late 

	 
	***	 	Partner loans with a 100% guaranty shall be placed in the 15% Pool and priced
consistent with the 10% Pool cost.

			
	 	 	 
	
	 	10/06

Page 4 of 8

 

 

Section 4

Loan Underwriting Standards

Producer Lending

Loan Conditions & Collateral Requirements

The table on the following page provides a general outline of loan conditions and collateral
requirements for crop input loan commitments between $100,000 and $250,000. Each individual loan
is reviewed individually and conditions may be added or removed based on the applicant’s unique
situation.

	 	 	 	 	 
	Tier	 	A1 & A2	 	B & C
	Pool	 	5% & 10%	 	15%, 50% & 100%
	$100,001 — $250,000

2 day turnaround
with complete
application for
sole proprietorship

3 day turnaround
with complete
application for
entities

	 	Straight line of credit
1st UCC lien on crop
65% MPCI (minimum)
Insurance Assignment
Ag Blanket UCC
	 	Straight line of credit

1st UCC lien on crop

65% MPCI (minimum)

Insurance Assignment

FSA Assignment

Crop Contract Assignment

Ag Blanket UCC w/CNS-EFS filings

			
	 	 	 
	
	 	10/06

Page 4 of 8

 

 

Section 4

Loan Underwriting Standards

Producer Lending

Total Loan Commitment: > $250,000

Information Requirements

Loan Application

Current & Prior Year Balance Sheet and Supporting Schedules from all Related Parties (dated within 90 days of application)

3 years Tax Forms 1040 and Schedule F

Legal Entity Documents (if other than sole proprietor)

Cropland Legal Descriptions

Credit Analysis & Documentation Criteria

Loan commitments exceeding $250,000 require more traditional credit analysis and documentation to
support the credit score and approval decision. In addition to verifying major balance sheet items
and credit reference, the credit decision shall consider key balance sheet trends and earnings
performance. Key credit factors and any material credit weaknesses shall be documented and
addressed in a credit narrative. Loans exceeding $500,000 require a detailed credit report
addressing all credit factors and loan conditions. A copy of the credit narrative and supporting
loan conditions shall be maintained in the credit file.

Underwriting Standards/Tier Rating

The core standards for approval are in the Tier A category. As ratios improve, a loan can be moved
into Tier A1. As ratios decline, then Tier B or Tier C standards are applied. The ratios shown in
the A1, B and C are provided as guidelines to help provide consistency for Tier ratings.

Loans can be placed in a Tier without meeting all the ratios if other ratios are strong or there
are other mitigating factors such as equity available to be financed, co-signer, etc. These factors
must be identified. The credit score has less impact on the credit decision and more weight is
given to the financial analysis and other credit factors. In addition, if the applicant does not
meet all loan conditions e.g. no crop insurance, the loan request may warrant a reduction in Tier
or credit decline.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Tier	 	A1	 	A2	 	B	 	C	 	D
	Pool	 	5%	 	10%	 	15%/50%	 	15%***/100%	 	100%*
	 
	FICO
	 	 	220	+ 	 	 	190-219	 	 	 	165-189	 	 	 	130-164	 	 	 	<130	 
	 
	CB Score
	 	 	> 730	 	 	 	> 700	 	 	 	> 650	 	 	 	> 600	 	 	 	< 600	 
	 
	Owner Equity %
	 	 	> 45	%	 	 	> 40	%	 	 	> 35	%	 	 	> 30	%	 	 	< 30	%
	 
	Working Capital / AGI
	 	 	> 20	%	 	 	> 15	%	 	 	0	 	 	Negative	 	Negative
	 
	Interest / AGI
	 	 	< 12	%	 	 	< 15	%	 	 	< 18	%	 	 	< 21	%	 	 	> 21	%
	 
	CDRC
	 	 	> 120	%	 	 	> 110	%	 	 	> 110	%	 	 	> 100	%	 	 	< 100	%
	 
	Repayment History **
	 	 	1	 	 	 	< 2	 	 	 	< 3	 	 	 	< 3	 	 	 	> 4	 
	 
	Loan / Net Worth**
	 	 	< 100	%	 	 	< 100	%	 	 	< 100	%	 	 	< 100	%	 	 	> 100	%
	 
	Collateral- Loan / EMV
	 	 	< 65	%	 	 	< 65	%	 	 	< 65	%	 	 	< 65	%	 	 	> 65	%
	 

 

			
	*	 	Recommend decline or 100% guaranty with 30 day payout.

	 
	**	 	Repayment definitions:
	 	 	1 – Always pays within 30 days; 2 – Usually pays within 30 days of due date; 3 –
Occasionally 30 – 60 days late 

	 
	***	 	Partner loans with a 100% guaranty shall be placed in the 15% Pool and priced
consistent with the 10% Pool cost.

			
	 	 	 
	
	 	10/06

Page 6 of 8

 

 

Section 4

Loan Underwriting Standards

Producer Lending

Loan Conditions & Collateral Requirements

The table on the following page provides a general outline of loan conditions and collateral
requirements for crop input loan commitments exceeding $250,000. Each loan request is reviewed
individually and conditions may be added or removed based on the applicant’s unique situation.

	 	 	 	 	 
	Tier	 	A1 & A2	 	B & C
	Pool	 	5% & 10%	 	15%, 50% & 100%
	$250,000 — $500,000

5 day turnaround
with complete
application

	 	Straight line of credit
Revolving line of credit option (A1
only)
1st UCC lien on crop
65% MPCI (minimum)
Insurance Assignment
Ag Blanket UCC
	 	Straight line of credit
1st UCC lien on crop
65% MPCI (minimum)
Insurance Assignment
FSA Assignment
Crop Contract Assignment
Ag Blanket UCC w/CNS-EFS filings
	 
	 	 	 	 
	> $500,000

10 day turnaround
with complete
application

	 	CLO Direct Customer Call
Straight line of credit
Revolving line of credit option
(A1only)
1st UCC lien on crop
65% MPCI (minimum)
Insurance Assignment
Ag Blanket UCC
	 	CLO Direct Customer Call
Straight line of credit
1st UCC lien on crop
65% MPCI (minimum)
Insurance Assignment
FSA Assignment
Crop Contract Assignment
Ag Blanket UCC w/CNS-EFS filings

			
	 	 	 
	
	 	10/06

Page 7 of 8

 

 

Section 4

Loan Underwriting Standards

Producer Lending

Livestock Loans – Supplemental Underwriting Standards

Information requirements and credit analysis & documentation criteria are the same for crop and
livestock loans.

Underwriting Standards/Tier Rating

The core standards for approval are in the Tier A category. As ratios improve, a loan can be moved
into Tier A1. As ratios decline, then Tier B or Tier C standards are applied. The ratios shown in
the A1, B and C are provided as guidelines to help provide consistency for Tier ratings.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Tier	 	A1	 	A2	 	B	 	C
	Pool	 	5%	 	10%	 	15%	 	15%***/50%/100%*
	 
	FICO
	 	 	220+	 	 	 	190-219	 	 	 	165-189	 	 	 	130-164	 
	 
	CB Score
	 	 	> 730	 	 	 	> 700	 	 	 	> 650	 	 	 	> 600	 
	 
	Owner Equity %
	 	 	> 45	%	 	 	> 40	%	 	 	> 35	%	 	 	> 30	%
	 
	Working Capital / AGI
	 	 	> 20	%	 	 	> 15	%	 	 	0	 	 	Negative
	 
	Interest / AGI
	 	 	< 12	%	 	 	< 15	%	 	 	< 18	%	 	 	< 21	%
	 
	CDRC
	 	 	> 120	%	 	 	> 110	%	 	 	> 110	%	 	 	> 100	%
	 
	Repayment History **
	 	 	1	 	 	 	< 2	 	 	 	< 3	 	 	 	< 3	 
	 
	Loan / Net Worth**
	 	 	< 200	%	 	 	< 150	%	 	 	< 100	%	 	 	< 100	%
	 
	Equity — Feeder Cattle
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Contracted/Hedged
	 	15% of  MV	 	15% of  MV	 	15% of  MV	 	15% of  MV
	 
	 	($100 min)	 	($100 min)	 	($100 min)	 	($100 min)
	Open
	 	20% of  MV	 	20% of  MV	 	20% of  MV	 	20% of  MV
	 
	 	($150 min)	 	($150 min)	 	($150 min)	 	($150 min)
	 
	Equity — Breeding Cattle
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Equity / Cow
	 	$	100	 	 	$	100	 	 	$	100	 	 	$	100	 
	Max. Loan / Cow
	 	$	550	 	 	$	550	 	 	$	550	 	 	$	550	 
	Max. Loan / Cow-Calf pr
	 	$	700	 	 	$	700	 	 	$	700	 	 	$	700	 

 

			
	*	 	Recommend decline or 50% or 100% guaranty from CHS or CBP if available.
	 
	**	 	Repayment definitions:

1 – Always pays within 30 days; 2 – Usually pays within 30 days of due date; 3 –
Occasionally 30 – 60 days late 

	 
	***	 	Partner loans with a 100% guaranty shall be placed in the 15% Pool and priced
consistent with the 10% Pool cost.

Loan Conditions & Collateral Requirements

The table below provides a general outline of loan conditions and collateral requirements for
livestock loans. Each loan request is reviewed individually and conditions may be added or removed
based on the applicant’s unique situation.

	 	 	 	 	 
	Tier	 	A1 & A2	 	B & C
	Pool	 	5% & 10%	 	15%, 50% & 100%
	 
	All Livestock Loans

	 	Revolving line of credit	 	 
	 

	 	1st UCC lien on all livestock	 	 
	 

	 	1st UCC lien on feed crop on hand (if included as equity)	 	 
	 

	 	Ag Blanket UCC	 	 
	 

	 	Custom Feedlot Agreement and Custodial Agreement (custom fed) (over $250,000)	 	 
	 

	 	Identifiable Brand and/or Ear tags (over $250,000)	 	 
	 

	 	List of Prospective Buyers attached to Security Agreement	 	 
	 

	 	Project Feasibility Plan (over $250,000)	 	 
	 

	 	Market Contract Assignment	 	 
	 

	 	Catastrophic loss insurance with Cofina Financial loss payee	 	 

	 	 	 
	

	 	10/06
	 

	 	Page 8 of 8

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