Prefinancing contract

this is a blank contract. for legal reasons, completed contracts are not available for posting. each cooperative’s page on fairtradeProof.com notes if a grower has a prefinance contract.

[Name of Borrower] Address

LENDER:
[Date] this is the lender that is

providing the loan based on the cooperative coffees purchase contract. we With reference to your credit application dated [month], [year], we are pleased to inform you that it was decided that we are prepared to provide a loan to [Name of group]., subject to the following partnered with root capital terms in 2002 to provide most of our and conditions: contract prefinancing.
Dear Mr/Mrs. [name], 1. Loan agreement: The loan agreement (hereinafter called “Loan Agreement”) is between Root Capital Inc. (formerly EcoLogic Finance Inc.) of the “Borrower” is the farmer United States of America (hereinafter called the “Lender”) and cooperative. [Name of group] (hereinafter called: the “Borrower”). A maximum of USD $X (X U.S. DOLLARS 00/100). Exchange rate risks, transfer risks and other costs associated with closing this loan shall be borne by the Borrower. Pre-finance the purchase of coffee for export. This is the only purpose to finance the costs of growing, for which the loan may be applied.

2. Loan amount: 3. Risks:

4. Purpose of the loan:

Specifies that the loan is intended harvesting, and processing the

RISKS:

5. Contracts:

throughout the world, coffee industry trade is conducted in US Dollar contracts Number and XXX payments - providing a standard XXX and reducing currency risk. electronic transfer of funds through the Swift system – rather than faxes and telephone instructions – has eliminated virtually all risk associated with wire transfers. international wire transfer fees are typically $30 per transfer.

The loan will be used to pre-finance the following coffee coffee beans that cooperative purchase contracts (hereinafter called “Contracts”) with buyer(s) buyer Y coffees has contracted to (hereinafter called: “Buyer(s)”):

purchase.

Dated Mm/dd/yyy Mm/dd/yyy

Shipment Mm/dd/yyy Mm/dd/yyy

Notes 250 bags of 69 kilos @ $X/lb. FT Org 250 bags of 69 kilos @ $X/lb. FT Org

The Lender will pre-finance a maximum of 60% of the total value of the Contracts. The Borrower can only submit additional contracts with this for the cooperative to apply Buyer(s) or with other U.S. or European-based buyers that will serve as a basis for this Loan Agreement. Upon the Lender’s approval for these of additional loans as they sign contracts, the Lender will inform both the Borrower and the export contracts with other Buyer(s) which of the existing Contracts can be replaced by newly submitted importers. contracts. For every newly submitted contract, new Repayment Instructions between the Lender, the Borrower and the Buyer must be signed.

this establishes a mechanism

675 Massachusetts Avenue, 8th Floor • Cambridge, Massachusetts 02139-3309 • t 617 661 5792 f 617 661 5796 • www.rootcapital.org