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

11119

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 doenments 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 agree ments listed on a particular letter of transmittal, it shall tender the purchas documents covering such cotton to CCC through an approved purchasing ageter (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. 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 reconcEDtrated) and the purchase documents must be tendered in accordance with thi above.

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

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

19__.

COMMODITY CREDIT CORPORATION,

day of __

SALES BY LOCAL SALES AGENCIES OF CHOICE (A) COTTON FOR UNRESTRICTED

USE

Effective August 1, 1960, Sales Announcement CN-A dated June 2, 1959, as amended, is hereby further amended to read as follows:

In order to encourage the movement of cotton in the normal channels of trade, Commodity Credit Corporation (hereinafter referred to as “CCC") will carry out, through local sales agencies, a sales program for 1960-crop Choice (A) upland cotton purchased by local purchasing agencies for CCC under the 1960 Cotton Purchase Program. Under the sales program, purchasing agencies which have also entered into Cotton Sales Agency Agreements with CCC (such agencies are hereinafter referred to as "sales agencies") will offer cotton for sale locally on behalf of CCC. This announcement contains the terms and conditions under which the cotton will be offered for sale and sold by such sales agencies for CCC on and after August 1, 1960. The cotton sold by such sales agencies will be available for unrestricted use. The program will be administered through the CSS Commodity Office, Wirth Building, 120 Marais Street, New Orleans 16, Louisiana (hereinafter referred to as the "New Orleans office").

1. Time and place of opening of offers.-Sales agencies will open offers not earlier than 11:00 a.m. and not later than 5:00 p.m., local time, on established workdays. The time and place for the opening of offers, and other information with respect to the submission and acceptance of offers, will be announced by the sales agencies in Notices of Sale, which will be posted in at least two conspicuous public places.

2. Groupings for sale.--Each sales agency will issue a list of all Choice (A) cotton available for sale by such agency (hereinafter referred to as the "catalog") and will post a copy of the catalog in at least one conspicuous public place. The cotton will be offered for sale:

(a) In the following categories, to be determined by the sales agency on the basis of the grade, staple, and "reduced from A/C or Wasty" (hereinafter referred to as "quality") assigned to the cotton by a Board of Cotton Examiners on which the Choice (A) support price was determined:

(1) Individual bale basis:

(2) The number of bales of each quality in each warehouse. If the entire lot is not sold, bales will be delivered in the order carried in sales agent's records (one quality-one warehouse lots): or

(3) Even-running lots of one quality consisting of a maximum of 100 bales (even-running lots-one quality); or

(b) In lots in one of the following categories, provided the sales agency has obtained prior approval from CCC:

(1) Mixed lots containing generally similar cotton as determined by the sales agency, but not necessarily all of the same quality, consisting of a maximum of 100 bales (mixed lots-similar); or

(2) Mixed lots containing various qualities of cotton consisting of a maximum of 25 bales (mixed lots).

All cotton offered for sale in one lot will be in the same warehouse. Under categories (a) (1) and (a) (2) above, the quality which was assigned to the cot

ton by the Board of Cotton Examiners and on which the Choice (A) support price was determined will be made available to prospective buyers by the sales agency, and if the sales agency has samples representing such cotton, they will be made available for inspection by prospective purchasers upon request. Under categories (a) (3), (b) (1), or (b) (2) above, cotton will be offered for sale on the basis of samples, and samples representing such cotton will be made available for inspection by prospective buyers upon request, and in addition, the sales agency will make available, at its option, either the quality which was assigned to the cotton by the Board of Cotton Examiners or the minimum acceptable sales price to prospective buyers who request such information. Any sales agency that offers cotton for sale on samples but stores the samples will have adequate facilities for displaying the samples and, at its option, will either (a) furnish workmen to locate samples representing lots of cotton of qualities in which prospective buyers are interested, or (b) indicate on the sample lot containers either (1) the official classification of the cotton or (2) the minimum acceptable price for the lot. If the sales agency has Micronaire and Pressley tests made on the cotton, the results will be made available to prospective purchasers upon request. Any cotton designated as Wasty or reduced in grade, other than cotton reduced not more than two grades, for preparation, must be offered for sale on samples.

3. Cataloging and offering cotton for sale.-Each catalog of cotton available for sale will contain all cotton represented by warehouse receipts which have been deposited with the custodian bank for at least 1 week. The catalog may also contain cotton for which warehouse receipts have been deposited with the custodian bank for less than 1 week. The agency's catalog will be posted at least 48 hours in advance of the time specified for opening of offers. Such 48 hours will be exclusive of nonworkdays, such as Saturdays, Sundays, and holidays. In addition to the local posting of the sales agency's catalog, the sales agency will also forward immediately a copy of such catalog to the offices of Boards of Cotton Examiners of the U.S. Department of Agriculture serving the warehouses in which the cotton is stored and to organized cotton exchanges within 100 miles of such warehouses. A copy of the sales agency's Notice of Sale will be attached to each copy of the catalog. The warehouse in which the cotton is stored will be shown in each catalog but need not be shown in the Notice of Sale. (a) The Cotton Belt is divided into four areas as follows:

Area I: The States of Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, and that part of the State of Tennessee east of the Tennessee River.

Area II: The States of Missouri, Illinois, Arkansas, Louisiana, Kentucky, Mississippi, and that part of the State of Tennessee west of the Tennessee River.

Area III: The States of Kansas, Oklahoma, and Texas, except for the counties west of Midland, Upton, Crockett, and Val Verde.

Area IV: The counties of Texas not included in Area III (Crop Reporting District 6) and the States of New Mexico, Arizona, Nevada, and California. Cotton stored in one of the areas listed above and offered for sale within such area or at any point outside such area not more than 100 miles from the warehouse in which the cotton is stored will not be subject to the provisions of paragraph (b) below.

(b) Any cotton offered for sale at a point which is outside the area (as listed in paragraph 3(a) above) in which it is stored and which is in excess of 100 miles from the warehouse in which it is stored will also be subject to the following provisions of this paragraph (b):

(1) All such cotton will be listed in a separate catalog from other cotton being offered for sale.

(2) The catalog will be issued at least six calendar days prior to date of opening of offers.

(3) A copy of the catalog and a copy of the sales agency's Notice of Sale, in addition to being posted locally, will be forwarded immediately after issuance to the offices of the Boards of Cotton Examiners of the U.S. Department of Agriculture serving the warehouses in which the cotton is stored and to organized cotton exchanges within 100 miles of such warehouses.

(4) Offers for such cotton will be received for opening on a date and at a time at which offers for other cotton are to be opened.

(5) All such cotton will be offered for sale only under groupings as provided in paragraphs 2(a) (1) and 2(a)(2). Thus, all such cotton will be sold on the basis of the classification assigned to it by Boards of Cotton Examiners of the U.S. Department of Agriculture.