individual bale basis or in lots, as the Agency determines will maximize the sales of and prices for the cotton being offered for sale.

3. The Agency shall prepare and post in at least two conspicuous public places and otherwise make available to prospective purchasers a typewritten or printed Notice of Sale specifying (a) that all Choice (A) cotton available for sale will be sold in accordance with the provisions of Sales Announcement CN-A and that a copy thereof will be made available by the Agency upon request, (b) that all offers to purchase such cotton shall be on an offer form for Choice (A) cotton, CCC Cotton Form 81, (c) that all offers shall be submitted in duplicate in a sealed envelope addressed to the custodian bank and identified as an offer for Choice (A) cotton being offered for sale by the Agency, (d) the date, time, and place of the opening of such offers, (e) the name and address of the custodian bank, (f) where the Agency's catalog is available for examination, (g) whether samples of the cotton are available for inspection and, if so, where located, (h) whether offers at identical prices on the same lot(s) of cotton will be allocated on the basis of the quantity covered by each offer or awarded to the first offer received, (i) that the custodian bank will receive and open offers as directed by CCC, and (j) that the Agency will consider and accept or reject on behalf of CCC the offers received by the custodian bank within the time specified in the Notice and will notify each successful offerer which of his offers are accepted.

4. CCC will enter into a Cotton Custodian Agreement with custodian bank providing that all offers will be opened by the custodian bank at the time designated in the Notice of Sale, that the offers opened at each opening of bids will be identified by the custodian bank as instructed by CCC, that the original of each offer, the envelope in which it was received, and a listing of all offers received will be forwarded to the New Orleans CSS Commodity Office (hereinafter called the New Orleans Office) by the custodian bank immediately upon opening of offers, and that the duplicate of each offer and a copy of the listing of all offers received will be furnished to the Agency immediately upon the opening of offers. The Agency shall consider the offers, determine acceptable offers in accordance with the provisions of Sales Announcement CN-A and any other instructions issued by CCC, and notify each offerer which of his offers are accepted and which are not accepted. A list showing the successful offerers shall be released by the Agency to the public immediately after each sale, and a copy of such list shall be forwarded to the New Orleans Office. The list shall be prepared in accordance with instructions from the New Orleans Office.

5. The Agency may obtain one sample from each bale of cotton being offered for sale from the warehouseman storing the cotton. Any charges made in connection with obtaining the samples will be for the Agency's account. If the Agency has samples which represent the cotton, it must make such samples available for inspection by prospective purchasers upon request.

6. When an offer for cotton is accepted, the Agency shall deliver to the custodian bank (a) three copies of an invoice, prepared in accordance with instructions from CCC, covering the sale, (b) three copies of a tag list of the cotton sold, and (c) a sight draft drawn on the purchaser payable to CCC for the amount of the invoice. The sight draft shall be drawn for payment at the bank designated by the purchaser in his offer. The custodian bank will attach to the sight draft the warehouse receipts indicated on the tag list received from the Agency and will release the sight draft, with invoice, tag list, and warehouse receipts attached, to the purchaser upon payment of the invoice amount or forward the draft with documents attached to the other bank specified by the purchaser for collection.

7. If the sales proceeds received by CCC for cotton sold by the Agency are deficient because of failure of the Agency to accept the highest offer, because the Agency sold the cotton at less than the minimum sales price, because of understatement of the sales value on the invoice prepared by the Agency, or because of any other failure of the Agency to carry out properly its responsibilities under this agreement, the Agency shall pay the amount of such deficiency to CCC upon demand.

8. On April 30 of the calendar year following the year in which the cotton was produced, unless such date is extended by CCC, the Agency shall discontinue sales of cotton hereunder, and the warehouse receipts held in custody repre senting unsold cotton will be delivered to CCC by the custodian bank upon receipt of a tag list covering such cotton. The custodian bank will, at any time prior to such date, also deliver to CCC any warehouse receipts designated by Agency or CCC and covered by a tag list furnished to the custodian bank,

and the cotton represented by such warehouse receipts shall not thereafter be offered for sale by the Agency.

9. Upon notice from CCC, the Agency shall discontinue sales hereunder for such period of time as CCC shall specify or with respect to such cotton as CCC shall specify.

10. CCC shall have the right to prescribe additional or specific terms and conditions of sale of its cotton by the Agency under this agreement in order to maximize the sales of and prices for the cotton being offered for sale or as otherwise determined by CCC to be desirable.

SECTION II. COMPENSATION

1. The compensation to be paid the Agency for the sale of cotton for CCC pursuant to this agreement shall be a fee computed at the rate of $1 for each bale of cotton sold under this agreement. Such fees will be paid monthly by CCC.

2. The compensation accruing to the Agency under this section II shall constitute full payment for all services performed and expenses incurred hereunder by the Agency, and the Agency shall not make any other charge of any kind to CCC or purchasers of cotton for any services rendered by it in connection with the sale of Choice (A) cotton for CCC under this agreement.

SECTION III. PERFORMANCE GUARANTEE

Prior to making any sales of cotton hereunder, the Agency shall furnish CCC (1) a cash deposit, (2) a bond in form and with sureties satisfactory to CCC, or (3) a performance type letter of credit satisfactory to CCC. The deposit, bond, or letter of credit shall be in such amount as determined by CCC to be necessary to fully protect the interests of CCC in connection with this agreement, and CCC may require an increase in the amount of such deposit, bond, or letter of credit at any time it determines that such increase is necessary to protect the interests of CCC.

SECTION IV. MISCELLANEOUS

1. Any instruction, direction, request, consent, authorization, approval, demand, or notice required or given under this agreement must be in writing. 2. No member of or Delegate to Congress, or Resident Commissioner, shall be admitted to any share or part of this agreement or to any benefit that may arise therefrom, but this provision shall not be construed to extend to such persons in their capacity as cotton producers nor to this agreement if made with a corporation for its general benefit.

3. The Agency warrants that it has not employed any person to solicit or secure this contract upon any agreement for a commission, percentage, brokerage, or contingent fee, and that no such consideration or payment has been or will be made. Breach of this warranty shall give CCC the right to annul the contract, or at its discretion, to deduct from the contract consideration the amount of such commission, percentage, brokerage, or contingent fees. This warranty shall not apply to commissions payable by the Agency upon contracts secured or made through bona fide employees or bona fide established commercial or selling agencies utilized by the Agency for the purpose of securing business. 4. The Agency shall maintain such files, records, and controls and shall furnish such information and reports in connection with transactions relating to this agreement as may be requested by CCC. Such files and records shall, at all reasonable times, be open to audit and inspection by authorized representatives of CCC.

5. Nothing contained in this agreement shall be construed as limiting the right of CCC to amend the Cotton Custodian Agreement.

SECTION V. TERMINATION

Either CCC or the Agency shall have the right to terminate this agreement by giving the other 24 hours' prior notice of its intention so to do, but such termination shall not affect the obligations of the parties hereto with respect to the cotton sold by the Agency for CCC prior to the effective date of such termination. Upon and after the effective date of such termination, the Agency shall cease to sell cotton for CCC pursuant to this agreement.

In Witness Whereof, the parties hereto have executed this agreement in duplicate, as of the

day of

COTTON PURCHASING AGENCY AGREEMENT

This Agreement made and entered into by and between Commodity Credit Corporation, an agency of the United States (hereinafter called "CCC"), and (Purchasing Agency)

(hereinafter called "the Agency”): WITNESSETH:

(Address)

Whereas CCC will from time to time undertake programs to purchase upland cotton produced in the United States from producers who have complied with the provisions of the applicable Choice (A) allotment program in accordance with the terms and conditions of the applicable Cotton Purchase Program Regulations (Cotton Bulletin 2 and any amendments thereto, hereinafter called "the Bulletin") issued by CCC; and

Whereas CCC desires to utilize purchasing agencies which have entered into Cotton Purchasing Agency Agreements with CCC (hereinafter called "approved purchasing agencies") in carrying out such purchase programs; and

Whereas the Agency desires to make its facilities available to CCC in connection with such programs;

Now, therefore, in consideration of the premises and of the mutual covenants and agreements herein contained, the parties hereto agree as follows:

SECTION I. PURCHASE AND REIMBURSEMENT PROCEDURE

1. The Agency is authorized, subject to the terms and conditions hereinafter set forth and the provisions of the Bulletin and other program regulations and instructions, to act as the agent of CCC in the purchase of Choice (A) cotton for CCC from producers and to handle purchase documents representing cotton purchased for CCC by another approved purchasing agency. Title to all cotton purchased hereunder shall be taken in the name of CCC. The Agency shall not purchase cotton or accept purchase documents from other approved purchasing agencies pursuant to this agreement if to its knowledge (a) there is any defect or irregularity in the (1) Cotton Producer's Sales Agreement (hereinafter called "sales agreement"), (2) warehouse receipts or bills of lading, or (3) Cotton Classification Memorandums (hereinafter called "class cards") covering the cotton offered for purchase or purchased (these three documents are hereinafter called "purchase documents"), (b) the seller is not an eligible producer under the provisions of the Bulletin, or (c) the cotton is damaged, destroyed, or impaired, he is subject to any prior lien or encumbrance (except the warehouseman's lien allowed in the Bulletin), or is for any other reason ineligible for purchase under the provisions of the Bulletin. The Agency shall be liable to CCC for any loss incurred by CCC in connection with any purchases made or documents accepted in violation of these provisions. CCC shall be obligated to accept purchase documents pursuant to this agreement regardless of the nature of any defect or irregularity in the purchase documents or in the cotton if the agency had no knowledge of the defect or irregularity at the time the purchase proceeds were disbursed or the purchase documents were acquired.

95910-63-pt. 3-54

2. The Agency shall, upon tender by a producer of the warehouse receipts (or bills of lading) and class cards covering eligible Choice (A) cotton, assist the producer in the preparation of a sales agreement, execute the Purchasing Agency Certificate on the sales agreement, and as agent for CCC, purchase such cotton from such producer at the purchase rate per pound at the location of the cotton for cotton of the weight and quality (grade, staple, and reduced from A/C) being purchased as set out in the Bulletin. Full disbursement of the sales proceeds shall be made by the Agency as directed by the producer in the space provided therefor in the sales agreement.

3. Cotton shall not be purchased by the Agency hereunder if the purchase documents are tendered after April 30 of the calendar year folowing the year in which the cotton was produced.

4. To obtain reimbursement for the purchase price of the cotton and payment for the fees earned in accordance with Section III hereof, the Agency shall tender all purchase documents evidencing purchases made in accordance with this agreement to CCC as prescribed by instructions issued by CCC within 15 days of the dates of execution of the Producer's Sales Agreements. All purchase documents evidencing purchases made by another approved purchasing agency which are tendered through the Agency shall be forwarded to CCC as prescribed by instructions issued by CCC within 15 days of the dates of exectuion of the Producer's Sales Agreements. When purchase documents are tendered to CCC, the sales agreements shall be listed on a Purchasing Agency's Letter of Transmittal (hereinafter called "letter of transmittal"), prepared and distributed in accordance with the Instructions to Purchasing Agency on the letter of transmittal and any other instructions issued by CCC, and signed by the approved purchasing agency which purchased the cotton from the producer. All cotton listed on one letter of transmittal shall be tendered to CCC in the same manner. Purchase documents shall be tendered as follows:

(a) If the Agency has not entered into a Cotton Sales Agency Agreement with CCC, such tender may be made directly to the New Orleans CSS Commodity Office (hereinafter called the "New Orleans Office") or through another approved purchasing agency (including a banking institution which has been approved to obtain immediate payment by drawing drafts on CCC as provided in Section II hereof, or a cotton sales agency aproved by CCC) to which it has sold, assigned, negotiated, or delivered its interest in the purchase documents and the purchase fees, in whole or in part.

(b) If the Agency has entered into a Cotton Sales Agency Agreement with CCC, but does not desire to retain for sale the cotton covered by the sales agreements listed on a particular letter of transmittal, it shall tender the purchase documents covering such cotton directly to the New Orleans Office or through another approved purchasing agency as set forth in (a) above.

(c) If the Agency has entered into a Cotton Sales Agency Agreement with CCC and desires to retain, for sale locally, the cotton covered by the sales agreements listed on a particular letter of transmittal, it shall tender the purchase documents covering such cotton to CCC through an approved purchasing agency (which is also a custodian bank selected by the Agency and approved by CCC) which will retain the warehouse receipts representing such cotton. In this case, the Agency shall prepare and submit to such purchasing agency a tag list, in duplicate (on a form prescribed by CCC), of the warehouse receipts covered by the sales agreements listed on the letter of transmittal. If a reconcentration order number has been entered on a sales agreement, the cotton covered by such sales agreement cannot be retained for sale locally (since it will be reconcentrated) and the purchase documents must be tendered in accordance with (b) above.

When documents are tendered or forwarded by mail, the envelope must be postmarked within 15 days of the dates of execution of the Producer's Sales Agreements. Purchase documents tendered hereunder shall be examined by CCC, and those found acceptable will be settled for in accordance with sections II and III hereof. Purchase documents found to be unacceptable will be returned. Purchase documents returned shall be accepted if retendered in acceptable form.

5. The distribution of the sales agreement shall be as follows: The CCC copy with county office copy attached shall be tendered to CCC with the other required purchase documents. The producer's copy shall be furnished to the producer by the Agency, which will retain the purchasing agency's copy. The sales agency's copy will be retained by the sales agency (if any) which retains the cotton for sale.

SECTION II. PAYMENTS TO THE AGENCY

If the Agency tenders to CCC acceptable purchase documents evidencing purchases made pursuant to this agreement, it is further agreed as follows: 1. Any approved purchasing agency may be designated on the letter of transmittal to receive the proceeds from the purchase documents.

2. The proceeds from the purchase documents shall be equal to the purchase price paid to the producers for the cotton covered by the purchase documents or the correct purchase price determined in accordance with the Bulletin, whichever is less, plus compensation as provided in Section III hereof.

3. If the Agency is a banking institution, the Agency may, upon approval by the New Orleans Office, obtain immediate payment of the proceeds from the purchase documents tendered directly to the New Orleans Office (or from documents evidencing purchases made by another approved purchasing agency which are tendered to CCC through the Agency, if the Agency has been designated by the other approved purchasing agency to receive the proceeds) by drawing drafts on CCC payable at a Federal Reserve Bank or Branch designated by CCC: Provided, That the Agency shall promptly reimburse CCC upon demand for any excess payment and for any payment received for purchase documents found unacceptable and returned to the Agency by CCC.

4. If payment is not obtained by draft, payment will be made by the New Orleans Office after examination and acceptance of the purchase documents.

SECTION III. COMPENSATION

1. In addition to the reimbursement for the purchase price of the cotton, CCC will pay a purchase fee computed at the rate of 75 cents for each bale of cotton covered by acceptable purchase documents. The amount of such fee shall be paid to the approved purchasing agency designated on the letter of transmittal to receive the proceeds.

2. The fees paid by CCC under this agreement shall constitute full payment for all services performed and expenses incurred by the Agency hereunder and interest on the Agency's money while invested in the cotton, and the Agency shall not make any other charge to CCC or producers in connection with the purchase of cotton or handling of the purchase documents under this agreement.

SECTION IV. MISCELLANEOUS

1. Any instruction, direction, request, consent, authorization, approval, demand, or notice required or given under this agreement must be in writing.

2. No Member of or Delegate to Congress, or Resident Commissioner, shall be admitted to any share or part of this agreement or to any benefit that may arise therefrom, but this provision shall not be construed to extend to such persons in their capacity as cotton producers nor to this agreement if made with a corporation for its general benefit.

3. The Agency warrants that it has not employed any person to solicit or secure this contract upon any agreement for a commission, percentage, brokerage, or contingent fee, and that no such consideration or payment has been or will be made. Breach of this warranty shall give CCC the right to annul the contract or, at its discretion, to deduct from the contract consideration the amount of such commission, percentage, brokerage, or contingent fees. This warranty shall not apply to commissions payable by the Agency upon contracts secured or made through bona fide employees or bona fide established commercial or selling agencies utilized by the Agency for the purpose of securing business.

SECTION V. TERMINATION

CCC shall have the right to terminate this agreement by giving the Agency 24 hours' prior notice of its intention so to do, but such termination shall not affect the obligation of the parties hereto with respect to documents held by, tendered by, or received from the Agency prior to the effective date of such termination.

Upon and after the effective date of such termination, the Agency shall cease to acquire cotton for CCC pursuant to this agreement.