Jody James Farms, JV v. the Altman Group, Inc. and Laurie Diaz

• Court: Court of Appeals of Texas
• Decided: June 4, 2015
• Docket: 07-15-00060-CV
• Status: Published

Opinion

ACCEPTED 07-15-00060-CV SEVENTH COURT OF APPEALS AMARILLO, TEXAS 6/4/2015 5:34:23 PM Vivian Long, Clerk

NO. 07-15-00060-CV

FILED IN 7th COURT OF APPEALS IN THE AMARILLO, TEXAS SEVENTH COURT OF 6/4/2015 5:34:23 PM VIVIAN LONG APPEALS CLERK AMARILLO, TEXAS

JODY JAMES FARMS, JV, Appellant, V. THE ALTMAN GROUP, INC. AND LAURIE DIAZ, Appellees. _ _ Appeal from the 110th District Court of Floyd County, Texas Cause Number 10,422 APPELLANT’S BRIEF June 4, 2015

Respectfully submitted, JENKINS, WAGNON & YOUNG, P.C. P.O. Box 420 Lubbock, TX 79408 (806) 796-7351 Fax: (806) 771-8755 Jody D. Jenkins State Bar No. 24029634 jjenkins@jwylaw.com ATTORNEYS FOR APPELLANT

ORAL ARGUMENT IS REQUESTED IDENTITY OF PARTIES AND COUNSEL

Judge Presiding at Trial: The Honorable William P. Smith

Plaintiff and Appellant: Jody James Farms, JV

Plaintiff’s Trial and Appellate Counsel: Jody Jenkins Jenkins, Wagnon & Young, P.C. P.O. Box 420 Lubbock, Texas 79408

Defendants and Appellees: The Altman Group, Inc. and Laurie Diaz

Defendants’ Trial and Appellate Counsels: J. Paul Manning Anna McKim Field, Manning, Stone, Hawthorne & Aycock, P.C. 2112 Indiana Avenue Lubbock, Texas 79410

ii TABLE OF CONTENTS PAGE IDENTITY OF PARTIES AND COUNSEL ................................................ ii

INDEX OF AUTHORITIES ..................................................................................iv

STATEMENT OF THE CASE................................................................... 1

ORAL ARGUMENT ...............................................................................................1

ISSUES PRESENTED ON APPEAL ........................................................ 2

STATEMENT OF FACTS ......................................................................................2

SUMMARY OF THE ARGUMENTS ................................................................... 4

ARGUMENTS AND AUTHORITIES................................................................... 6

ISSUE NUMBER 1

Whether a non-party to an arbitration agreement can compel arbitration of claims that are not within the scope of the arbitration agreement ...................................................................................6

CONCLUSION.......................................................................................................19

PRAYER .................................................................................................................19

SIGNATURE ..........................................................................................................20

CERTIFICATE OF SERVICE ............................................................................20

CERTIFICATE OF COMPLIANCE...................................................................21

APPENDIX .............................................................................................................23

iii INDEX OF AUTHORITIES

Cases: Page

All-Tex Roofing, Inc. v. Greenwood Ins. Group, Inc., 73 S.W.3d 412 (Tex. App.—Houston [1st Dist.] 2002, pet. denied) .........................................................17

Blumberg v. USAA Casualty Ins. Co., 790 So. 2d. 1061 (Fla. 2001) ......................16

Bosscorp, Inc. v. Donegal, Inc., 370 S.W.3d 68 (Tex. App.—Houston [14th Dist.] 2012, no pet.) .................................................................................................13

Centex/Vestal v. Friendship W. Baptist Church, 314 S.W.3d 677 (Tex. App.— Dallas 2010) .............................................................................................................18

Delfingen US-Texas, L.P. v. Valenzuela, 407 S.W.3d 791 (Tex. App.—El Paso 2013) ........................................................................................................7, 8, 12

DeWitt Cnty. Elec. Coop., Inc. v. Parks, 1 S.W.3d 96 (Tex. 1999) ........................10

Ellman v. JC Gen. Contractors, 419 S.W.3d 516 (Tex. App. -- El Paso 2013, no pet.)....................................................................................................................6, 7

Frost Nat'l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310 (Tex. 2005) (per curiam) .....................................................................................................................14

Great Am. Assur. Co. v. Sanchuck, LLC No. 8:10-CV-2568 –T-33AEP, 2012 U.S. Dist. LEXIS 7477 at * 20 (M.D. Fla. Jan. 23, 2012) .......................................16

G.T. Leach Builders, LLC v. Sapphire VP, LP, 2015 Tex. LEXIS 273 (Tex. 2015) ..............................................................................................................9, 10, 12

Gulf Oil Corp. v. Guidry, 327 S.W.2d 406 (Tex. 1959) ..........................................18

In re Dillard Dep't Stores, Inc., 186 S.W.3d 514 (Tex. 2006) .................................. 7

In re Kellogg & Root, Inc., 166 S.W.3d 732 (Tex. 2005) .................................12, 13

In re Labatt Food Serv., L.P., 279 S.W.3d 640 (Tex. 2009). .................................... 6

iv In re Poly-America, L.P., 262 S.W.3d 337 (Tex. 2008) ............................................ 8

In re Weekley Homes, 180 S.W.3d 127 (Tex. 2005) ...........................................9, 10

In re Wells Fargo Bank, N.A., 300 S.W.3d 818 (Tex. App.—San Antonio 2009) ..........................................................................................................................7

J.M. Davidson, Inc. v. Webster, 128 S.W.3d 223 (Tex. 2003) ......................7, 12, 14

Landmark Am. Ins. Co. v. Moulton Props., No. 3:05cv401/LAC, 2006 U.S. Dist. LEXIS 73478 (N.D. Fla. July 19, 2006) .........................................................17

MCI Telecomms. Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647 (Tex.1999)........ 12

Nafta Traders, Inc. v. Quinn, 339 S.W.3d 84 (Tex. 2011) ......................................19

Perry Homes v. Cull, 258 S.W.3d 580 (Tex. 2008)................................................... 7

Rice v. Louis A. Williams & Assocs., 86 S.W.3d 329 (Tex. App.—Texarkana, 2002, pet. denied) ...............................................................................................16, 17

South Texas Water Authority v. Lomas, 223 S.W.3d 304 (Tex. 2007)....................12

Stolt–Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (2010)......................19

Surplus, Inc. v. Home State Cnty. Mut. Ins. Co., No. 05-95-00007-CV, 1995 Tex. App. LEXIS 3305 at *13 (Tex. App.—Dallas Dec. 21, 1995, writ denied) ......................................................................................................................14

Trinity Universal Ins. Co. v. Burnette, 560 S.W.2d 440 (Tex. App.— Beaumont 1977) .......................................................................................................11

United Protective Servs., Inc. v. West Village Ltd. P'ship, 180 S.W.3d 430 (Tex. App.—Dallas 2005, no pet.)...........................................................................14

Statutes and Rules

9 U.S.C. § 10(a)(4) (2015) ................................................................................. 18, 19

Tex. Bus. & Com. Code Ann. §17.42(a) (West 2015) ............................................18

v Tex. Bus. & Com. Code Ann. § 17.565 (West 2015) ........................................ 17, 18

Tex. Civ. Prac. & Rem. Code Ann. § 16.003 (West 2015) ..................................... 17

Tex. Civ. Prac. & Rem. Code Ann. §16.070 (West 2015) ......................................18

Tex. Civ. Prac. & Rem. Code Ann. § 171.021(a)(1) (West 2015) ............................ 7

Tex. Civ. Prac. & Rem. Code Ann. § 171.088 (West 2015) ............................. 18, 19

Tex. Const. Art. I, § 13 ............................................................................................19

vi STATEMENT OF THE CASE

James filed suit against Altman and Diaz for breach of fiduciary duty and

violations of the Texas Deceptive Trade Practices Act. CR 3-6. After Altman and

Diaz answered with a general denial, they filed their Motion to Compel Arbitration.

CR 9-17. James filed its Response to Motion to Compel Arbitration denying that

an agreement to arbitrate existed and attached evidence. CR Supp. 4-76. After the

trial court granted the Motion to Compel Arbitration, CR 27, James asked the trial

court to reconsider or clarify its ruling to compel arbitration. CR 28-36. The trial

court ultimately denied the motion to reconsider and the case proceeded to

arbitration. CR 41.

After arbitration, Altman and Diaz filed their Petition to Confirm and Enforce

Final Arbitration Award and for Attorney Fees and Costs. CR 42-54. James

objected to the Petition to Confirm and Enforce Final Arbitration Award and filed

its Motion to Vacate and to Set Aside Arbitration Award. CR 57-73. The trial

court entered its Final Judgment on January 20, 2015. CR 125-126. James

subsequently filed its notice of appeal on February 17, 2015. CR 128.

ORAL ARGUMENT

Oral argument is requested in this matter.

1 ISSUE PRESENTED

ISSUE NUMBER 1:

Whether a non-party to an arbitration agreement can compel arbitration of claims that are not within the scope of the arbitration agreement.

STATEMENT OF FACTS

Altman is an independent insurance agency who markets for Rain and Hail,

L.L.C. (Rain and Hail); Rain and Hail is owned and controlled by ACE Property

and Casualty Insurance Company; ACE Property and Casualty Insurance Company

issues crop insurance policies. CR Supp. 21 (stating in the caption of the Multiple

Peril Crop Insurance Application and reporting form that Rain and Hail services

ACE’s policies; the document also bears the signature of Barry Altman in his

capacity as “Licensed Agent”); see also CR Supp. 56 (Diaz testifying that Rain and

Hail hired the insurance adjuster). Altman has been James’s agent for crop

insurance since approximately 2008. CR Supp. 51-58. Diaz is a registered

insurance agent employed by Altman where she also serves as Altman’s

Operations Manager; she has been employed with Altman for the entire time that

Altman has been James’s agent. CR Supp. 52. At some point before James

incurred a loss, Diaz became involved with James’s 2010 crop insurance policy.

CR Supp. 53. Sometime thereafter, James incurred a loss on its insured crop during

the policy period. CR Supp. 55. 2 James purchased a Crop Revenue Coverage Insurance Policy (the “Policy”

attached as Exhibit 4 to the Appendix of this Brief) from Rain and Hail via his

agent Altman to indemnify against loss on its 2010 milo crop. See CR Supp. 21;

25-50. The Crop Revenue Coverage Insurance Policy required Rain and Hail to

indemnify James for any loss that arose under the Policy. CR Supp. 25-50. The

arbitration clause contained in the Policy with Rain and Hail stated as follows at

paragraph 20:

If you and we fail to agree on any determination made by us except those specified in Section 20(d), the disagreement may be resolved through mediation in accordance with Section 20(g). If resolution cannot be reached through mediation, or you and we do not agree to mediation, the disagreement must be resolved through arbitration.

CR Supp. 44.

In November of 2010, James incurred a loss on an insured milo crop. CR

Supp. 23. After the loss was incurred, Diaz was notified by telephone of the loss.

CR Supp. 23. Based on James’s relationship and prior dealings with Altman and

Diaz, James did not follow up his claim in writing. CR Supp. 54-55 (Diaz explains

that it is common for clients to call in a claim without confirming it in writing).

After receiving evidence of the loss, Diaz delayed turning in the claim. CR Supp.

56 (Diaz explained that she didn’t turn in the claim and send it to Rain and Hail

until later).

3 Eventually, Rain and Hail denied James’s claim alleging it was untimely

submitted. CR Supp. 64-68. Rain and Hail explained that because the claim was

untimely filed, it was unable “to make the necessary and required loss

determinations.” CR Supp. 64.

With no other recourse for his injury, James subsequently filed suit against

Altman and Diaz for their inaction in submitting the claim. CR 3-6. Against the

objection of James, the trial court compelled arbitration between James and

Altman and Diaz. CR 27; CR 41. The trial court based its decision on James’s

previous agreement with Rain and Hail to arbitrate disputes over determinations

made by Rain and Hail. CR 27; CR 41. Ultimately, James unwillingly participated

in the compelled arbitration and the arbitrator ruled against James. CR 52-54.

James now appeals the trial court’s order compelling arbitration and later enforcing

the arbitration award.

SUMMARY OF ARGUMENT

The trial court’s decision to compel arbitration and subsequently enforce the

arbitration award should be reversed and this case remanded for trial.

First, there was no agreement to arbitrate between James and Altman and

Diaz. The only arbitration agreement that James entered into was with Rain and

Hail. Further, James did not agree to arbitrate with parties outside of its contract

4 with Rain and Hail. Altman and Diaz could not possibly be a party to the

arbitration agreement because Altman and Diaz could not make a determination

under the Policy, and are not agents of Rain and Hail for the purposes of making

determinations under the Policy.

Second, James is not estopped from denying the enforceability of the

arbitration agreement. James never sought a direct benefit under the Policy from

Altman and Diaz. Instead, James filed the instant claims based on a breach of

Altman and Diaz’s fiduciary duty and under the Texas Deceptive Trade Practices

Act.

Third, Altman and Diaz are not third-party-beneficiaries who can enforce the

arbitration agreement. Altman and Diaz were only incidental third-party-

beneficiaries to the contract between James and Rain and Hail. There was never

any intent on behalf of James or Rain and Hail to directly benefit Altman and Diaz

through the Policy.

Fourth, James’s claims arose outside the scope of the otherwise

unenforceable arbitration agreement. The arbitration agreement to which James

agreed covered only determinations made by the insurance company providing

insurance. The whole basis of James’s claims is that a determination was never

made due to Altman and Diaz’s breach of their duties.

5 Fifth, the trial court could not rewrite the arbitration agreement to bring

James’s claims within its scope. The arbitration clause at issue contemplated

review by the Federal Crop Insurance Corporation, which could not review

determinations by private insurance contractors; and set a one year limitation

period in violation of Texas law.

Last, the trial court erred by enforcing an arbitration award which the

arbitrator had no authority to issue under either the Federal Arbitration Act or the

Texas Arbitration Act.

ARGUMENTS & AUTHORITIES

Whether a non-party to an arbitration agreement can compel arbitration of claims that are not within the scope of the arbitration agreement.

1. Standard of Review

A court reviewing a trial court's decision to grant a motion to compel

arbitration reviews the trial court’s decision under an abuse of discretion standard.

Ellman v. JC Gen. Contractors, 419 S.W.3d 516, 520 (Tex. App. -- El Paso 2013,

no pet.). Under this standard, the reviewing court must defer to a trial court's

factual determinations if they are supported by evidence, and must review a trial

court's legal determinations de novo. In re Labatt Food Serv., L.P., 279 S.W.3d

6 640, 643 (Tex. 2009). Ellman, 419 S.W.3d at 520.

2. The trial court erred by granting Appellees’ Motion to Compel Arbitration because there was not an agreement to arbitrate between James and Altman and Diaz.

A party seeking to compel arbitration must establish the existence of a valid

arbitration agreement. Tex. Civ. Prac. & Rem. Code Ann. § 171.021(a)(1) (West

2015). “The burden of establishing the existence of a valid and enforceable

arbitration agreement includes proving that the party seeking to compel arbitration

was a party to the agreement or had the right to enforce the arbitration agreement.”

In re Wells Fargo Bank, N.A., 300 S.W.3d 818, 824 (Tex. App.—San Antonio

2009).

Under both the Federal Arbitration Act and the Texas Arbitration Act, state

contract law principles determine whether a valid arbitration agreement exists. J.M.

Davidson, Inc. v. Webster, 128 S.W.3d 223, 227 (Tex. 2003); Delfingen US-Texas,

L.P. v. Valenzuela, 407 S.W.3d 791, 797 (Tex. App.—El Paso 2013). The

determination of whether the parties agreed to submit the claims to arbitration

depends on an interpretation of the parties’ contracts, which is reviewed de novo.

See Id. (citing In re Dillard Dep't Stores, Inc., 186 S.W.3d 514, 515 (Tex. 2006);

J.M. Davidson, 128 S.W.3d at 227).

Arbitration agreements are not more enforceable than other contracts. Perry

7 Homes v. Cull, 258 S.W.3d 580, 597 (Tex. 2008). No presumption in favor of

arbitration exists when a state court assesses whether a valid and enforceable

arbitration agreement exists under Texas law. In re Poly-America, L.P., 262

S.W.3d 337, 347 (Tex. 2008). In fact, a party seeking to compel arbitration is not

entitled to a presumption favoring arbitration until they prove that a valid

arbitration agreement exists. Delfingen, 407 S.W.3d at 797.

In the case at bar, no valid and enforceable arbitration agreement exists

between the parties. In fact, the only agreement James entered into on the subject

matter at issue was with Rain and Hail. See CR Supp. 25-50. The Policy expressly

states that the words “you” and “your” refer to the named insured, which is James;

and the words “we,” “us,” and “our” refer to the “insurance company providing

insurance,” which is Rain and Hail. CR Supp. 25.

The only mention of “insurance agent” within the Policy is in the beginning

paragraph and under “Your Duties:” “All notices required in this section that must

be received by us within 72 hours may be made by telephone or in person to your

crop insurance agent but must be confirmed in writing within 15 days,” with

“your” referring to the named insured under the Policy. CR Supp. 25, 38-39.

Because the insurance agent is not defined as a party under the Policy and is only

referenced in passing, the trial court’s conclusion that a non-party to the arbitration

8 agreement in the Policy could enforce it is erroneous.

Furthermore, the arbitration clause in the Policy could not possibly cover

Altman and Diaz, because Altman and Diaz could not, by their own admission,

make a determination. CR Supp. 56 (Diaz stated that, “Once the claim is turned in,

Federal crop rules says that the agent can no longer be involved.”). The arbitration

clause specifically and unambiguously covered only “any determination made by

us,” with “us” being defined by the Policy as “the insurance company providing

insurance.” CR Supp. 25, 44. Therefore, because Altman and Diaz were neither an

“insurance company providing insurance” nor a person with the capability of

making a determination, there was no valid and enforceable agreement between

James and Altman and Diaz.

3. The arbitration agreement cannot be enforced by Altman and Diaz through estoppel.

James did not seek a direct benefit from Altman and Diaz through the

Policy. Although a party that seeks a direct benefit under a contract which includes

an arbitration clause cannot deny that the arbitration clause applies to a non-

signatory, independent claims are not subject to this defense. G.T. Leach Builders,

LLC v. Sapphire VP, LP, 2015 Tex. LEXIS 273 *54 (Tex. 2015). “Whether a claim

seeks a direct benefit from a contract containing an arbitration clause turns on the

substance of the claim.” Id. (quoting In re Weekley Homes, 180 S.W.3d 127, 131- 9 32 (Tex. 2005)).

It is not enough, however, that the party's claim ‘relates to’ the contract that contains the arbitration agreement. Instead, the party must seek “to derive a direct benefit”—that is, a benefit that “stems directly”—from that contract. The claim must “depend on the existence” of the contract, and be unable to “stand independently” without the contract. The alleged liability must “arise[] solely from the contract or must be determined by reference to it.”

G.T. Leach Builders, LLC, at *55 (internal citations omitted).

“[T]he fact that the claims would not have arisen but for the existence of the

. . . contract is not enough to establish equitable estoppel.” Id. at *59. “‘[W]hen the

substance of the claim arises from general obligations imposed by state law,

including statutes, torts and other common law duties, or federal law,’” rather than

from the contract, ‘direct benefits’ estoppel does not apply, even if the claim refers

to or relates to the contract.” Id. at *55 (emphasis added) (internal citations

omitted); see also Weekley Homes, 180 S.W.3d at 132; DeWitt Cnty. Elec. Coop.,

Inc. v. Parks, 1 S.W.3d 96, 105 (Tex. 1999) (“The measure of damages, standing

alone, is not always determinative of whether a tort claim can co-exist with a

breach of contract claim).

Here, the substance of James’s claim arises under Texas common law and

the Deceptive Trade Practices Act. “‘A local agent . . . owes his clients the greatest

possible duty. He is the one the insured looks to and relies upon. Most people do

10 not know what company they are insured with.’” Trinity Universal Ins. Co. v.

Burnette, 560 S.W.2d 440, 442 (Tex. App.—Beaumont 1977) (emphasis added).

The substance of James’s claim is the breach of this duty, which James has

characterized as a “fiduciary duty,” and the breach of the duty imposed by the

Deceptive Trade Practices Act. See CR 4-5.

James specifically claimed that Altman and Diaz “breached their fiduciary

duty to Plaintiff by failing to timely submit the crop loss claim to Rain and Hail,

LLC.” CR 4. Altman and Diaz’s fiduciary duty is based on their relationship and

prior dealings with James, where Altman and Diaz would submit James’s claims

based on a notification of the claim by telephone without a confirmation by

writing. CR Supp. 54-55. It is the breach of this duty, upon which James based part

of its claims. Such duties are independent of the Policy and apply to James’s

relationship with its insurance agent and not to the Policy.

Because Altman and Diaz’s liability does not arise from the Policy, estoppel

does not mandate arbitration of the claims asserted by James. In fact, the only

duties under the Policy are referred to as “Your Duties,” which refer to the “named

insured,” and “Our Duties,” which refer to the “insurance company providing

insurance.” CR Supp. 25, 38-39. There are no duties allocated by the Policy to

Altman and Diaz, as an insurance agency and James has not sued for any breach of

11 the Policy.

4. Altman and Diaz are not third party beneficiaries that can enforce the arbitration clause.

Under certain circumstances, which are not present here, third party

beneficiaries can enforce an arbitration agreement even though they are not parties

to the agreement. See In re Kellogg & Root, Inc., 166 S.W.3d 732, 739 (Tex.

2005); see also G.T. Leach Builders, LLC at *43. However, the third party

beneficiary must be able to enforce the contract through state contract law

principles. See J.M. Davidson, 128 S.W.3d at 227; Delfingen, 407 S.W.3d at 797.

To do so, the third party beneficiary must overcome the “presumption against

conferring third-party-beneficiary status on noncontracting parties.” South Texas

Water Authority v. Lomas, 223 S.W.3d 304, 306 (Tex. 2007).

Under Texas law, incidental third-party-beneficiaries are unable to enforce

contract provisions. Id. “A third party may only enforce a contract when the

contracting parties themselves intend to secure some benefit for the third party and

entered into the contract directly for the third party's benefit.” Id. “The intent to

confer a direct benefit upon a third party ‘must be clearly and fully spelled out or

enforcement by the third party must be denied.’” Id. (quoting MCI Telecomms.

Corp. v. Tex. Utils. Elec. Co., 995 S.W.2d 647, 651 (Tex.1999)).

Here, Altman and Diaz are at most incidental third-party-beneficiaries. 12 There was no intent to confer a direct benefit upon Altman and Diaz by either

James or Rain and Hail. James entered into the contract with Rain and Hail only to

benefit itself via insurance for a crop, and Rain and Hail sought only to sale its

insurance products. CR Supp. 21, 25-50. The fact that Altman and Diaz might have

received a commission for facilitating the sale does not show a “clear and fully

spelled out” intent to directly benefit Altman and Diaz. In fact, Altman and Diaz

are not mentioned by name anywhere in the Crop Revenue Coverage Insurance

Policy. See CR Supp. 25-50. Thus, Altman and Diaz as incidental third-party-

beneficiaries are unable to enforce the arbitration provision between James and

Rain and Hail.

5. Even if there was an agreement between the parties to arbitrate, the trial court erred in compelling arbitration because James’s claims arose outside the scope of the arbitration clause.

The determination of whether a claim is within the scope of the arbitration

clause is based on an interpretation of the parties’ contracts, which courts review

de novo. Bosscorp, Inc. v. Donegal, Inc., 370 S.W.3d 68, 75-76 (Tex. App.—

Houston [14th Dist.] 2012, no pet.). Disputes concerning the scope of an

arbitration agreement are generally resolved in favor of arbitration. In re Kellogg &

Root, Inc., 166 S.W.3d at 737. However, when construing a written contract, the

court’s primary concern is to ascertain the true intentions of the parties as 13 expressed in the instrument. See J.M. Davidson, 128 S.W.3d at 229.

Courts consider the entire writing and attempt to harmonize and give effect

to all the provisions of the contract by analyzing the provisions with reference to

the whole agreement. Frost Nat'l Bank v. L & F Distribs., Ltd., 165 S.W.3d 310,

312 (Tex. 2005) (per curiam); J.M. Davidson, 128 S.W.3d at 229. Courts should

assume the parties intended every provision to have some effect. See United

Protective Servs., Inc. v. West Village Ltd. P'ship, 180 S.W.3d 430, 432 (Tex.

App.—Dallas 2005, no pet.). And, only when the provisions of a contract appear to

conflict, should courts attempt to harmonize the provisions. See Id. However,

courts cannot rewrite an arbitration agreement to bring claims within its scope,

even if those claims are intertwined with issues covered by the arbitration

agreement. See Surplus, Inc. v. Home State Cnty. Mut. Ins. Co., No. 05-95-00007-

CV, 1995 Tex. App. LEXIS 3305 at *13 (Tex. App.—Dallas Dec. 21, 1995, writ

denied).

The arbitration clause in the case at bar solely covered “determinations.” CR

Supp. 44-45. Specifically, the arbitration clause obligated the parties to arbitrate

disputes arising out of “determinations made by us,” defining “us” as “the

insurance company providing insurance.” CR Supp. 25, 44-45. The breach of duty

by James’s agents, Altman and Diaz, was not a determination under the Policy and

14 falls outside the scope of the arbitration agreement. No provisions in the Policy

even discuss the duties of Altman and Diaz to James.

Further, evidence of the inapplicability of the arbitration clause to the

dispute at hand are the provisions of the arbitration agreement that cannot apply as

written. Section 20(a)(1) of the insurance contract states that if there is a “dispute

[which] in any way involves a policy or procedure interpretation. . . you or we

must obtain an interpretation from [the Federal Crop Insurance Corporation

“FCIC”] in accordance with 7 CFR part 400. CR Supp. 45. However, review by

the FCIC is not allowed for determinations made by private insurance contractors

such as Altman and Diaz. 7 CFR 400.91.

In the instant suit, James has alleged that Altman and Diaz breached a duty

to it by failing to report a claim. CR 4. If Section 20(a)(1) is applied, Altman and

Diaz’s alleged conduct could be subject to review by the FCIC, which, by law,

cannot review the decisions made by private insurance contractors such as Altman

and Diaz.

Another example of the error created by the application of the Rain and Hail

Arbitration Clause is that Section 20(b) requires arbitration to occur within 1 year

of the date “we denied your claim or rendered the determination with which you

disagree.” CR Supp. 44. Altman and Diaz did not deny James’s claims or render a

15 determination with which he disagreed. CR Supp. 56 (Diaz stated that, “Once the

claim is turned in, Federal crop rules says that the agent can no longer be

involved.”). The denial of coverage was made by Rain and Hail prior to this suit

being initiated. CR Supp. 60-62. It was not until this dispute was resolved through

the first arbitration that James’s damages could be ascertained against Altman and

Diaz. See Great Am. Assur. Co. v. Sanchuck, LLC No. 8:10-CV-2568 –T-33AEP,

2012 U.S. Dist. LEXIS 7477 at * 20 (M.D. Fla. Jan. 23, 2012); Rice v. Louis A.

Williams & Assocs., 86 S.W.3d 329, 337 (Tex. App.—Texarkana, 2002, pet.

Negligence claims maintained by first-party insureds against insurance

agents do not ripen until the Plaintiff’s interests are confronted with a specific and

concrete risk of harm. Rice v. Louis A. Williams & Assocs., 86 S.W.3d 329, 337

(Tex. App.—Texarkana 2002, pet denied). See also Great Am. Assur. Co. v.

Sanchuk, LLC, No. 8:10-cv-2568-T-33AEP, 2012 U.S. Dist. LEXIS 7477 at *20

(M.D. Fla. Jan. 23, 2012) (finding that a negligence cause of action against an

insurance agent accrues at the conclusion of a related or underlying proceeding

because a plaintiff cannot make a claim against an insurance agent for negligence

while simultaneously claiming policy coverage) (emphasis added); citing Blumberg

v. USAA Casualty Insurance Co., 790 So. 2d. 1061, 1065 (Fla. 2001) and

16 Landmark Am. Ins. Co. v. Moulton Props., No. 3:05cv401/LAC, 2006 U.S. Dist.

LEXIS 73478 (N.D. Fla. July 19, 2006).

Although the issues in the case at bar do not revolve around a limitations

issue like the cases cited above, James had at least a two year period in which to

file suit under Texas law for the claims in the instant suit. Tex. Bus. & Com. Code

Ann. § 17.565 (West 2015); Tex. Civ. Prac. & Rem. Code Ann. § 16.003 (West

2015). The arbitration agreement conflicts with that law. See CR Supp. 60-62

(denying James’s arbitration claim due to Diaz’s negligence in failing to timely file

James’s crop loss claim on April 10, 2012). See CR Supp. 63-68 (letter denying

coverage on April 26, 2011). It would be impractical for James to be required to

file suit before the determination was made because there was always a chance, no

matter how remote, that the arbitrator would find for James. Rice v. Louis A.

Williams & Assocs., 86 S.W.3d, at 339 (citing All- Tex Roofing, Inc. v. Greenwood

Ins. Group, Inc., 73 S.W.3d 412 (Tex. App.—Houston [1st Dist.] 2002, pet.

denied). In any event, limitations was not held to preclude James’s recovery in the

second arbitration and the clause had to be rewritten by the arbitrator or the court to

avoid that improper result.

Specifically, Section 20(b)(1) provides that arbitration must be instituted

within one year of denial of the claim or the rendering of a determination. See CR

17 Supp. 44. The DTPA specifically provides a two year statute of limitations period

for DTPA claims, Tex. Bus. & Com. Code Ann. § 17.565 (West 2015), and waiver

of any subsection under the DTPA is against public policy. Id. at 17.42(a); see also

Tex. Civ. Prac. & Rem. Code Ann. §16.070 (West 2015) (precluding a contract

which limits the statute of limitations to less than 2 years). Although not asserted

by the parties as a defense, enforcement of the arbitration clause as written required

a re-writing of its terms which cannot be done, and which would be against public

policy. Therefore, the only way the James’s claims could be within the scope of the

arbitration clause, was for the court or arbitrator to rewrite the arbitration clause

itself.

6. The arbitrator had no authority to enter an award relating to this case. Thus, the trial court abused its discretion in enforcing the arbitration award.

Under both the Texas Arbitration Act and the Federal Arbitration Act, an

arbitrator cannot issue a decision on matters outside the scope of the arbitration

agreement. See Tex. Civ. Prac. & Rem. Code Ann. § 171.088 (West 2015); 9

U.S.C. § 10(a)(4) (2015). An arbitrator has no authority to issue a decision when

parties have not agreed to arbitrate claims because an arbitrator derives their power

from the arbitration agreement itself. Centex/Vestal v. Friendship W. Baptist

Church, 314 S.W.3d 677, 684 (Tex. App.—Dallas 2010) (citing Gulf Oil Corp. v.

18 Guidry, 327 S.W.2d 406, 408 (Tex. 1959)); Nafta Traders, Inc. v. Quinn, 339

S.W.3d 84, 90 (Tex. 2011) (quoting Stolt–Nielsen S.A. v. AnimalFeeds Int’l Corp.,

559 U.S. 662, 682 (2010)). Both Texas law and federal law require vacatur of an

arbitration award when an arbitrator exceeds their authority. Tex. Civ. Prac. &

Rem. Code Ann. § 171.088 (West 2015); 9 U.S.C. § 10(a)(4) (2015).

Here, the arbitrator exceeded his authority by entering an award where no

agreement to arbitrate existed and the scope of the arbitration agreement did not

cover the disputes. See infra Part I.A-E. Thus, because the arbitrator exceeded his

authority in entering an award, the trial court abused its discretion when it enforced

CONCLUSION

The right to open access to the courts is a fundamental right in Texas. See

Tex. Const. Art. I, § 13. Here, that right was violated when the trial court

erroneously compelled James to arbitrate and when the trial court enforced the

arbitration award against James. Justice requires that this Court reverse the trial

court’s order enforcing the arbitration award and remand of this case for trial.

PRAYER

WHEREFORE, Appellant, Jody James Farms, J.V., prays that the Court

reverse the trial court’s decision to compel arbitration and enforce the arbitration

19 award, and remand this case for a new trial.

Respectfully submitted,

JENKINS, WAGNON & YOUNG, P.C.

/s/ Jody D. Jenkins JODY JENKINS State Bar No. 24029634 P.O. Box 420 Lubbock, Texas 79408 (806) 796-7351 Fax: (806) 771-8755 jjenkins@jwylaw.com ATTORNEYS FOR APPELLANT

CERTIFICATE OF SERVICE

The undersigned certifies that a true and correct copy of the foregoing instrument has been served via the Court’s Electronic Filing System on this 4th day of June, 2015.

J. Paul Manning Anna McKim Field, Manning, Stone, Hawthorne & Aycock, P.C. 2112 Indiana Ave. Lubbock, Texas79410 /s/ Jody D. Jenkins Jody D. Jenkins

20 CERTIFICATE OF COMPLIANCE

I hereby certify that the word count in Appellant’s Brief is 3,532 words.

/s/ Jody D. Jenkins Jody D. Jenkins

21 APPENDIX TO APPELLANT’S BRIEF

22 APPENDIX TABLE OF CONTENTS

EXHIBIT Order Granting Motion to Arbitrate (CR 27)....................................................... 1

Final Judgment (CR 125-127) ............................................................. 2

Notice of Appeal (CR 128) .......................................................................................3

Crop Revenue Coverage (CRC) Insurance Policy (CR Supp. 25-50) ................. 4

9 U.S.C. § 10(a)(4) (2015).........................................................................................5

Tex. Bus. & Com. Code Ann. §17.42(a) (West 2015) ............................................ 6

Tex. Bus. & Com. Code Ann. § 17.565 (West 2015) ............................................. 7

Tex. Civ. Prac. & Rem. Code Ann. § 16.003 (West 2015) .................................... 8

Tex. Civ. Prac. & Rem. Code Ann. §16.070 (West 2015) ..................................... 9

Tex. Civ. Prac. & Rem. Code Ann. § 171.021(a)(1) (West 2015).......................10

Tex. Civ. Prac. & Rem. Code Ann. § 171.088 (West 2015) ................................11

Tex. Const. Art. I, § 13...........................................................................................12

23 806-792-1048 10:38:35a.m. 06-27-2013 3/3

No.l0,422

JODY JAMES FARMS, JV § IN THE II om DISTRICT COURT § v. § OF § THE ALTMAN GROUP, INC. AND § LAURIEDIAZ § FLOYD COUNTY, TEXAS

ORDER GRANTING MOTION TO ARBITRATE

ON TIDS the 20'11 day ofMay, 2013, the Court considered the Motion of Defendants, THE

ALTMAN GROUP, INC. AND LAURIE DIAZ, to Compel Arbitration and, after considering the

pleadings, affidavit, evidence, and the argument of counsel, the Court hereby grants said motion.

IT IS THEREFORE ORDERED that the Motion of Defendants, THE ALTMAN GROUP,

INC. AND LAURIE DIAZ to arbitrate this matter is hereby in all things GRANTED.

SIGNED this..$-y of c,LY~-t · . June, 2013. . ·

.. ~:~ FILED JUDGE PRESIDING Pcdfg~ District Clerk, Floyd Co1.1nty, 'f.9xa8

By '-22-WE . L;/~ -.

EXHIBIT 1 27 8067921048 12:38:02 p.m. 01-16-2015 2/3

No. 10,422

JODY JAMES FARMS, N § IN THE llOTH DISTRICT COURT § v. § OF § THE ALTMAN GROUP, INC. AND § LAURIEDIAZ § FLOYD COUNTY, TEXAS

FINAL JUDGMENT

On this day came on to be heard the above-entitled and numbered cause wherein JODY JAMES FARMS, JV is Plaintiff and THE ALTMAN GROUP, INC. and LAURIE DIAZ, are the Defendants in the above entitled and numbered cause. The Court has read the pleadings and the papers on file, has considered the announcement of the parties and determined that it ·had jurisdiction over the subject matter and the parties to this proceeding. The Court is of the opinion that upon consideration of Defendants' Petition to Confirm and Enforce Final Arbitration Award and Plaintiff, JODY JAMES FARMS, JV.'s, Motion to Vacate Arbitration Award and all responses, briefs in support, exhibits and replies, if any, respectively thereto, it is hereby ORDERED and DECREED that Defendants' Petition to Confirm and Enforce Final Arbitration Award is GRANTED and the clerk is ordered to enter a judgment in favor of Defendants and against Plaintiff, JODY JAMES FARMS, JV and that Plaintiff, JODY JAMES FARMS, JV take nothing and all court costs are assessed against Plaintiff, JODY JAMES FARMS, JV. The judgment is to accrue interest at the rate of 5.00% per annum from the date of judgment until paid, plus all costs of court.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Plaintiff's Motion to Vacate the Arbitration Award is DENIED.

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Defendants request for attorney's fees is DENIED.

Final Judgment Page 1

EXHIBIT 2 125 . 8067921048 12:38:26 p.m. 01-16-2015 3/3

IT IS, THEREFORE, ORDERED, ADJUDGED, AND DECREED that Defendants, THE ALTMAN GROUP, INC. and LAURIE DIAZ have judgment against Plaintiff, JODY JAMES FARMS, JV, as follows:

1. Plaintiff take nothing; 2. All costs of court are taxed against Plaintiff, JODY JAMES FARMS,JV;and 3. Post judgment interest on all costs and fees incurred at five percent (5%) per year from the date of this judgment.

IT IS, FURTHER ORDERED, ADJUDGED, AND DECREED that Defendant shall have all writs and processes as may be necessary to enforce this Judgment.

All relief not expressly granted herein is denied. This judgment is final, disposes of all claims and all parties, and is appealable.

The court orders execution to issue for this judgment. /L SIGNED on this diJ- day of January, 2015.

Final Judgment Page 2

EXHIBIT 2 126 8067921048 08:47: 13 a.m. 01-15-2015 2/4

January 15, 2015 Page2

Very truly yours,

FJELD, MANNlNG, STONE, HAWTHORNE & AYCOCK, P.C.

~."?~N\~ J.PaulManning ~~ JPM:slm

Enclosure

Fax: 771-8755 E-Mail jjenkins@jwvlaw.com pc: JODY JENKINS JENKlNS, WAGNON & YOUNG, P.C. P.O. Box420 Lubbock, TX 79408 FILED ~~· District C~rk, Flo)O County, Thxae ay /-;I/J-c2LJ/5 ~/LI~,;n_, u~

EXHIBIT 2 127 No.10,422

JODY JAMES FARMS, JV § IN THE llOTH DISTRICT COURT § v. § OF § THE ALTMAN GROUP, INC. AND § LAURIEDIAZ § FLOYD COUNTY, TEXAS

NOTICE OF APPEAL

TO THE HONORABLE JUDGE OF SAID COURT:

~ Plaintiff, ~--_....- "':: Jody }ame~f(lrms, .---=--~ - •. ---- - ~---· JY,~desiresJo- app~alJrom -.,.- ·- - __ . . __.. . . ~-- -.-.__.. the- FinaU!!4gme11t~gl!ed.by -- .. ~ this_.:;__ ---~

Court on January 16,2015.

Plaintiff, Jody James Farms, JV, appeals to the Seventh Court of Appeals, Amarillo, Texas.

zctfully submitted,

YJENKINS SBN: 24029634 Jenkins, Wagnon & Young, P.C. P.O. Box420 Lubbock, Texas79408-0420 (806) 796-73 51 FAX (806) 771-8755 jjenkins@jwylaw.com ATTORNEYS FOR PLAINTIFF

CERTIFICATE OF SERVICE .-:--::-..: _,- ·---·---,.-...·- :~- . . . ---~.,...._......,..,..,.~...,........-~~-~=-__;._ " ____ _) This is to certify that a true and correct copy of the above and foregoing instrument has been served upon the following via facsimile this 13th day ofFebruary, 2015.

J. Paul Manning Field, Manning, Stone, Hawthorne & Aycock, P.C. 2112 Indiana A venue Lubbock, Texas79410 Fax: (806)792-9148

J,_Jenkins

FILED Poiit; .o,/IYJI-i~ (( ' OiS1r1tl Lie. •, Flutu Cour~y, T~

{) ~11 ·;)OJ;) i r. 11 ~ EXHIBIT 3 128 .. CROP REVENUE COVERAGE (CRC) INSURANCE POUCY 2005-NCIS 7008-CRC (This Is a continuous policy. Refer to section 3.)

This Insurance policy Is reinsured by the Federal Crop Insurance Corporation (FCIC) under the authority of section 50B(h) of the )9deral Crop Insurance Act (Act), as amended (7 U.S.C. 1508(h)). All provisions of the policy and rights and responsibUities of the ,...arties are specifically subject to the Act. The provisions of the policy may not be waived or varied in any way by us, our Insurance agent or any other contractor or employee of ours or any employee of USDA unless the policy specificaHy authorizes a waiver or modification by written agreement. We will use the procedures (handbooks, manuals, memoranda and bulletins), as Issued by FCIC and published on the RMA website at htto:l/nna.usda.gov/ or a successor website, in the administration of this policy, including the adjustment of any loss or claim submitted hereunder. In the event that we cannot pay your loss because we are Insolvent or are otherwise unable to perfonn our duties under our reinsurance agreement with FCIC. your claim will be settled In accordance with the provisions of this policy and FCIC will be responsible for any amounts owed. No state guarantee fund will be liable for your loss.

Throughout the policy, "you" and "your" refer to the named insured shown on the accepted application and "we," •us; and •our" refer to the insurance company providing insurance. Unless the context Indicates otherwise, use of the plural fonn of a word includes the singular and use of the singular form of the word includes the plural.

AGREEMENT TO INSURE: In return for the payment of the premium, and subject to all of the provisions of this policy, we agree with you to provide the insurance as stated In this policy. If there Is a conflict between the Act, the regulations pubHshed at 7 CFR chapter IV, and the procedures as Issued by FCIC, the order of priority Is as follows: {1) the Act: (2) the regulations: and (3) the procedures as Issued by FCIC, with (1) controlling (2), etc. If there is a conflict between the policy provisions and the administrative regulations published at 7 CFR part 400, the policy provisions control. If a conflict exists among the policy provisions, the order of priority is: (1) the Catastrophic Risk Protection Endorsement, as applicable; (2) the Special Provisions: (3) the Crop Provisions; and (4} these Basic Provisions, with (1) controlling (2), etc.

BASIC PROVISIONS Terms and Conditions

1. Definitions at 100 percent of the Base Price, or a comparable Abandon - Failure to continue to care for the crop, coverage. providing care so Insignificant as to provide no benefit to Administrative fee • An amount you must pay for the crop, or failure to harvest In a timely manner, unless additional coverage for each crop year as specified in an Insured cause of loss prevents you from property caring section B. for or harvesting the crop or causes damage to It to the Agricultural commodity - Any crop or other commodity extent that most producers of the crop on acreage with produced, regardless of whether or not it is Insurable. similar characteristics In the area would not normally Agricultural experts - Persons who are employed by the further care for or harvest it Cooperative State Research, Education and Extension Acreage report - A report required by section 7 of these Service or the agricultural departments of universities, or Basic Provisions that contains, In addition to other other persons approved by FCIC, whose research or required Information, your report of your share of an occupation is related to the specific crop or practice for acreage of an insured crop In the county, whether which such expertise is sought. Insurable or not Insurable. Annual crop • An agricultural commodity that normally Acreage reporting date - The date contained In the must be planted each year. Special Provisions or as provided In section 7 by which Application - The form required to be completed by you you are required to submit your acreage report. and accepted by us before insurance coverage will Act - The Federal Crop Insurance Act (7 U.S.C. 1501 et commence. This form must be completed and filed in your seq.). agent's offiCe not later than the sales closing date of the Actual Production History (APH) - A process used to initial Insurance year for each crop for which Insurance determine production guarantees In accordance with 7 coverage Is requested. If cancellation or termination of CFR part 400, subpart (G). insurance coverage occurs for any reason, Including but Actual Yield - The yield per acre for a crop year not limited to Indebtedness, suspension, debarment, calculated from the production records or claims for disqualification, cancellation by you or us, or violation of indemnities. The actual yield Is determined by dividing the controlled substance provisions of the Food Security total production (which Includes harvested and appraised Act of 1985, a new application must be ffled for the crop. production) by planted acres. Insurance coverage will not be provided if you are Actuarial documents - The material for the crop year ineligible under the contract or under any Federal statute which Is available for public Inspection In your agent's or regulation. offiCe and published on RMA's website at Approved yield - The actual production history (APH) htto:/fwww.rma.uscla.gov/ or a successor website, and yield, calculated and approved by the verifier, used to which shows available coverage levels, Information determine the Final Guarantee by summing the yearly needed to determine amounts of insurance, premium actual, assigned, adjusted or unadjusted transitional yields rates, premium adjustment percentages, practices, and dividing the sum by the number of yields contained in particular types or varieties of the Insurable crop, Insurable the database, which will always contain at least four ~creage, and other related information regarding crop yields. The database may contain up to 10 consecutive Insurance In the county. crop years of actual or assigned yields. The approved Additional coverage - A level of coverage equal to or yield may have yield adjustments elected under section greater than 50 percent of the approved yield Indemnified 35, revisions according to sectl~o~l.iiW·~~~~~~ PLAINTIFF'S C 2004 National Crop Insurance Services, Inc. Page 1 of26 EXHIBIT EXHIBIT 4 I 25 s .. according to FCIC approved procedures applied when full text of the CFR is available in electronic fonnat a calculating the approved yield. This yield is established for hHo:/fwww.access.Qoo.gov/ or a successor website. basic or optional units. The approved yield for each basic Consent - Approval in writing by us allowing you to take f or optional unit comprising an enterprise unit Is retained specific action. " for premium and Anal Guarantee purposes under an Contract- (see •Polley".) 1 enterprise unit Contract change date - The calendar date by whict Area - Land surrounding the insured acreage with changes to the policy, if any, wiU be made available lr geographic characteristics, topography, soil types and accordance with section 5 of these Basic Provisions. climatic conditions similar to the Insured acreage. Conventional farming practice - A system or process fo1 Assignment of Indemnity - A transfer of policy rights, producing an agricultural commodity, excluding organic made on our form, and effective when approved by us. It farming practices, that Is necessary to produce the crop Is the arrangement whereby you assign your right to an that may be, but is not required to be, generally Indemnity payment to any party of your choice for the crop recognized by agricultural experts for the area to conserve year. or enhance natural resources and the environment. Average yield • The yield, calculated by summing the County - Any county, parish, or other political subdivision yearly actual, assigned, adjusted or unadjusted transitional of a state shown on your accepted appUcatlon, Including yields and dividing the sum by the number of yields acreage In a field that extends Into an adjoining county If contained In the database, prior to any adjustments, the county boundary Is not readily discernible. Including those elected under section 35, revisions Coverage - The insurance provided by this policy, against according to section 4, or other limitations according to insured loss of revenue by unit as shown on your FCIC approved procedures. summary of coverage. Base premium rate - A premium rate used to calculate Cover crop - A crop generally recognized by agricultural the risk associated with yield. experts as agronomically sound for the area for erosion Base Price - The Initial price determined in accordance control or other purposes related to conservation or soil with the Commodity Exchange Endorsement and used to Improvement. A cover crop may be considered to be a calculate your premium and Minimum Guarantee. second crop (see the definition of •second crop•). Buffer zone - A parcel of land, as designated In your Coverage begins, date - The calendar date Insurance organic plan, that separates agricultural commodities begins on the Insured crop, as contained In the Crop grown under organic practices from agricultural Provisions, or the date planting begins on the unit (see commodities grown under non-organic practices, and used section 12 of these Basic Provisions for specific provisions to minimize the possibility of unintended contact by relating to prevented planting). prohibited substances or organisms. Crop Provisions - The part of the policy that contains the CertJffed organic acreage - Acreage In the certified specific provisions of insurance for each Insured crop. organic farming operation that has been certified by a Crop year - The period within which the Insured crop Is certifying agent as conforming to organic standards in normally grown, regardless of whether or not It Is actually accordance with 7 CFR part 205. grown, and designated by the calendar year In whlch the Certifying agent - A private or governmental entity Insured crop Is normally harvested, unless otherwise accredited by the USDA Secretary of Agriculture for the specified In the Crop Provisions. purpose of certifying a production, processing or handling Damage - InJury, deterioration, or loss of revenue of the operation as organic. Insured crop due to Insured or uninsured causes. CRC base rate- The premium rate used to calculate the Days - Calendar days. risk associated with revenue. Deductible - The amount determined by subtracting the CRC high price factor· A premium factor, as set forth In coverage level percentage you choose from 100 percent. the actuarial documents, used to calculate the risk For example, If you elected a 65 percent coverage level, associated with an Increase In the Harvest Price relative to = your deductible would be 35 percent (1 00% - 65% 35%). the Base Price. Delinquent debt - Any administrative fees or premiums CRC low price factor - A premium factor, as set forth in for insurance issued under the authority of the Act, and the the actuarial documents, used to calculate the risk Interest on those amounts, If applicable, that are not associated with a decrease In the Harvest Price relative to postmarked or received by us or our agent on or before the Base Price. the termination date unless you have entered into an Calculated Revenue - The production to count for the agreement acceptable to us to pay such amounts or have insured crop multiplied by the Harvest Price. filed for bankruptcy on or before the termination date; any Cancellation date • The calendar date specified In the other amounts due us for Insurance issued under the Crop Provisions on which coverage for the crop will authority of the Act (Including, but not limited to, automatically renew unless canceled in writing by either Indemnities, prevented planting payments or replanting you or us, or terminated In accordance with the policy payments found not to have been earned or that were terms. overpaid), and the Interest on such amounts, If applicable, Claim for Indemnity - A claim made on our form by you which are not postmarked or received by us or our agent for damage or loss to an insured crop and submitted to us by the due date specified In the notice to you of the not later than 60 days after the Harvest Price is released amount due; or any amounts due under an agreement (see section 15). with you to pay the debt, which are not postmarked or Code of Federal Regulations (CFR) - The codification of received by us or our agent by the due dates specified In general and permanent rules published In the Federal such agreement. Register by the Executive departments and agencies of Disinterested third party - A person that does not have the Federal Government. Rules published In the Federal any familial relationship (parents, brothers, sisters, ) children, spouse, grandchildren, aunts, uncles, nieces, Register by FCIC are contained in 7 CFR chapter IV. The nephews, first cousins, or grandparents, related by blood,

C 2004 National Crop Insurance Services, Inc. Page2of26

EXHIBIT 4 26 .. adoption or marriage, are considered to have a famHial or contained In the organic plan. We may, or you rna~ relationship) with you or who will not benefit financially request us to, contact FCIC to determine whether or no from the sale of the Insured crop. Persons who are production methods will be considered to be "good farmln~ authorized to conduct quality analysis In accordance with practices.· the Crop Provisions are considered disinterested third Harvest Price - The final price determined In accordancE parties unless there Is a familial relationship. with the Commodity Exchange Endorsement and used t< Double crop - Producing two or more crops for harvest on calculate your Calculated Revenue and the Harves the same acreage In the same crop year. Guarantee. Earliest planting date - The initial planting date contained Household - A domestic establishment Including thE In the Special Provisions, which is the earliest date you members of a family (parents, brothers, sisters, children may plant an Insured agricultural commodity and qualify spouse, grandchildren, aunts, uncles, nieces, nephews for a replanting payment If such payments are authorized first cousins, or grandparents, related by blood, adoptior by the Crop Provisions. or marriage, are considered to be family members) anc End of Insurance period, date of - The date upon which others who live under the same roof. your crop Insurance coverage ceases for the crop year Insurable loss - Damage for which coverage is providec (see Crop Provisions and section 12). under the terms of your policy, and for which you accep FCIC - The Federal Crop Insurance Corporation, a wholly an Indemnity payment. owned government corporation within USDA. Insured - The named person shown on the applicatlor Field - AU acreage of liftable land within a natural or accepted by us. This term does not extend to any othe artificial boundary (e.g., roads, waterways, fences, etc.). person having a share or interest In the crop (for example Different planting patterns or planting different crops do a partnership, landlord, or any other person) unle~ not create separate fields. specifically indicated on the accepted application. Final Guarantee - The number of dollars guaranteed per Insured crop - The crop in the county for which coverage acre determined to be the higher of the Minimum is available under your policy as shown on the applicatior Guarantee or the Harvest Guarantee, where: accepted by us. (1) Minimum Guarantee - The approved yield per acre lnterplanted - Acreage on which two or more crops are multiplied by the Base Price multiplied by the planted In a manner that does not permit separate coverage level percentage you elect. agronomic maintenance or harvest of the Insured crop. (2) Harvest Guarantee - The approved yield per acre Irrigated practice - A method of producing a crop b} multiplied by the Harvest Price, multiplied by the which water Is artificially applied during the growin~ coverage level percentage you elect. season by appropriate systems and at the proper times If you elect enterprise unit coverage, the basic units or with the Intention of providing the quantity of water needec optional units comprising the enteJprise unit will retain to produce at least the yield used to establish the Rna separate Anal Guarantees. Guarantee on the irrigated acreage planted to the lnsurec Final planting date - The date contained in the Special crop. Provisions for the Insured crop by which the crop must Late planted - Acreage initially planted to the insured CI'OJ= Initially be planted in order to be Insured for the full Anal after the final planting date. Guarantee. Late planting period - The period that begins the da~ First Insured crop -With respect to a single crop year and after the final planting date for the insured crop and ends any speclfic crop acreage, the first Instance that an 25 days after the final planting date, unless otherwise agricultural commodity Is planted for harvest or prevented specified in the Crop Provisions or Special Provisions. from being planted and is insured under the authority of Liability - The dollar amount of insurance coverage use

0 2004 National Crop Insurance Services, Inc. Page3of26 c

EXHIBIT 4 27 .. a public or private right-of-way, waterway, or an irrigation crop due to an insured cause of loss that Is general in the canal will be considered as contiguous. surrounding area and that prevents other producers from Offset - The act of deducting one amount from another planting acreage with similar characteristics. amount. Production report • A written record showing your annual Organic agricultural Industry • Persons who are production and used by us to determine your yield for employed by the following organizations: Appropriate insurance purposes (see section 4). The report contains Technology Transfer for Rural Areas, Sustainable yield information for previous years, including planted Agriculture Research and Education or the Cooperative acreage and harvested production. This report must be State Research, Education and Extension SeiVice, the supported by written verifiable records from a agricultural departments of universities, or other persons warehouseman or buyer of the Insured crop, by approved by FCIC, whose research or occupation Is measurement of farm-stored production, or by other related to the specific organic crop or practice for which records of production approved by us on an Individual such expertise Is sought. case basis. Organic farming practice • A system of plant production Prohibited substance • Any biological, chemical, or other practices approved by a certifying agent In accordance agent that is prohibited from use or Is not Included In the with 7 CFR part 205. organic standards for use on any certified organic, Organic plan - A written plan, In accordance with the transitional or buffer zone acreage. Usts of such National Organic Program published In 7 CFA part 205, substances are contained at 7 CFR part 205. that describes the organic farming practices that you and a Replanted crop - The same agricultural commodity certifying agent agree upon annually or at such other replanted on the same acreage as the first insured crop for times as prescribed by the certifying agent. harvest In the same crop year If the replanting is Organic standards - Standards in accordance with the specifically made optional by the policy and you elect to Organic Foods Production Act of 1990 (7 U.S.C. 6501 et replant the crop and Insure it under the policy covering the seq.) and 7 CFR part 205. first Insured crop, or replanting is required by the policy. Perennial crop- A plant. bush, tree, or vine crop that has Replanting - Performing the cultural practices necessary a life span of more than one year. to prepare the land to replace the seed or plants of the Person • An Individual, partnership, association, damaged or destroyed Insured crop and then replacing the corporation, estate, trust, or other legal entity, and seed or plants of the same crop In the same insured wherever applicable, a State or a political subdivision or acreage. The same crop does not necessarily mean the agency of a State. MPerson• does not Include the United same type or variety of the crop unless different types or States Government or any agency thereof. varieties constitute separate crops or it Is otherwise Planted acreage - land In which seed, plants, or trees specified in the policy. have been placed appropriate for the Insured crop and Representative sample • Portions of the insured crop that planting method, at the correct depth, into a seedbed that must remain in the field for examination and review by our has been properly prepared for the planting method and loss adjuster when making a crop appraisal, as specified production practice. in the Crop Provisions. In certain instances we may allow Polley - The agreement between you and us to Insure an you to harvest the crop and require only that samples of agricultural commodity and consisting of the accepted the crop residue be left in the field. application, these Basic Provisions, the Crop Provisions, Sales closing date - A date contained In the Special the Special Provisions, other applicable endorsements or Provisions by which an application must be filed. The last options, the actuarial documents for the Insured date by which you may change your crop insurance agricultural commodity, and the applicable regulations coverage for a crop year. published in 7 CFA chapter IV. Insurance for each Second crop -With respect to a single crop year, the next agricultural commodity in each county wiD constitute a occurrence of planting any agricultural commodity for separate policy. harvest following a first insured crop on the same acreage. Practical to replant • Our detennination, after loss or The second crop may be the same or a different damage to the Insured crop, based on ali factors, agricultural commodity as the first Insured crop, except the including, but not limited to moisture availability, marketing term does not Include a replanted crop. A cover crop, window, condftion of the field, and time to crop maturity, planted after a first insured crop and planted for the that replanting the insured crop will allow the crop to attain purpose of haying, grazing or otherwise harvesting In any maturity prior to the calendar date for the end of the manner or that Is hayed or grazed during the crop year, or Insurance period. It will be considered to be practical to that Is otherwise harvested is considered to be a second replant regardless of availability of seed or plants, or the crop. A cover crop that is covered by FSA's noninsured input costs necessary to produce the insured crop such as crop disaster assistance program (NAP) or receives other those that would be Incurred for seed or plants, Irrigation USDA benefits associated with forage crops will be water, etc. considered as planted for the purpose of haying, grazing, Premium billing date • The earliest date upon which you or otherwise harvesting. A crop meeting the concfltions will be billed for insurance coverage based on your stated herein will be considered to be a second crop acreage report. The premium billing date Is contained In regardless of whether or not It Is Insured. Notwithstanding the Special Provisions. the references to haying and grazing as harvesting In Prevented planting • Failure to plant the insured crop these Basic Provisions, for the purpose of determining the with proper equipment by the final planting date end of the insurance period, harvest of the crop will be as designated in the Special Provisions for the Insured crop defined in the applicable Crop Provisions. in the county. You may also be eligible for a prevented Section (for the purposes of unit structure) - A unit of planting payment if you failed to plant the insured crop measure under a rectangular survey system describing a • with the proper equipment within the late planting period. tract of land usually one mtle square and usually You must have been prevented from planting the insured containing approximately 640 acres.

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EXHIBIT 4 28 ... .. Share- Your percentage of Interest in the Insured crop as Void - When the policy Is considered not to have existet an owner, operator, or tenant at the time insurance for a crop year as a result of concealment, fraud, o attaches. However, only for the purpose of determining the misrepresentation (see section 27). amount of Indemnity, your share will not exceed your Written Agreement - A document that alters designate1 share at the earlier of the time of loss, or the beginning of terms of a policy as authorized under these Bash harvest. Provisions (see section 34). Special Provisions - The part of the policy that contains 2. Unit Structure specific provisions of insurance for each insured crop that (a) Basic unit - All Insurable acreage of the Insured cro1 may vary by geographic area. In the county on the date coverage begins for the cro1 State - The state shown on your accepted application. year: Substantial beneficial Interest - An Interest held by any (1) In which you have 1 00 percent crop share; or person of at least 10 percent in you. The spouse of any (2) Which Is owned by one person and operated b~ Individual applicant or individual Insured will be considered another person on a share basis. (Example: If, ir to have a substantial beneficial Interest in the applicant or addition to the land you own, you rent land fron Insured unless the spouses can prove they are legally five landlords, three on a crop share basis am separated or otheJWise legally separate under state law. two on a cash basis, you would be entitled to fou Any child of an Individual applicant or Individual insured units; one for each crop share lease and one tha will not be considered to have a substantial beneficial combines the two cash leases and the land yot Interest In the applicant or Insured unless the child has a own.) Land rented for cash, a fixed commodil) separate legal interest In such person. For example, there payment, or a consideration other than a share lr are two partnerships that each have a 50 percent Interest the Insured crop, or proceeds from the sale of thE in you and each partnership is made up of two Individuals, Insured crop, on such land will be considered a! each with a 50 percent share in the partnership. In this owned by the lessee (see definition of •share' case, each Individual would be considered to have a 25 above). percent interest in you, and both the partnerships and the (b) Optional unit- Unless limited by the Crop Provisiom Individuals would have a substantial beneficial Interest In or Special Provisions, a basic unit as defined ir you (The spouses of the Individuals would not be section 2(a) may be divided into optional units if, fo1 considered to have a substantial beneficial Interest unless each optional unit: the spouse was one of the individuals that made up the (1) You meet the following: partnership). However, If each partnership Is made up of (i) You have records, that are acceptable to us six Individuals with equal Interests, then each would only for at least the previous crop year for al have an 8.33 percent Interest in you and although the optional units that you will report In the partnership would still have a substantial beneficial current crop year (You may be required tc Interest In you, the individuals would not for the purposes produce the records for all optional units for of reporting In section 3. the previous crop year); Summary of coverage - Our statement to you, based (ii) You must plant the crop In a manner that upon your acreage report, specifying the Insured crop and results In a clear and dlscemable break In the Final Guarantee provided by unit. the planting pattern at the boundaries ol Sustainable farming practice - A system or process for each optional unit; producing an agricultural commodity, excluding organic (Iii) All optional units you select for the crop year farming practices, that is necessary to produce the crop are Identified on the acreage report for that and is generally recognized by agricultural experts for the crop year (Units will be determined when the area to conserve or enhance natural resources and the acreage Is reported but may be adjusted or environment. combined to reftect the actual unit structure Tenant - A person who rents land from another person for when adjusting a loss. No further unit a share of the crop or a share of the proceeds of the crop division may be made after the acreage (see the definition of "shareR above). reporting date for any reason); and Termination date - The calendar dale contained In the (iv) You have records of marketed or stored Crop Provisions upon which your insurance ceases to be production from each optional unit in effect because of nonpayment of any amount due us maintained In such a manner that permits us under the policy, Including premium. to verify the production from each optional Timely planted - Planted on or before the final planting unit, or the production from each optional date designated In the Special Provisions for the insured unit Is kept separate until loss adjustment is crop In the county. completed by us. Transitional acreage - Acreage on which organic farming (2) It meets one or more of the following, unless practices are being followed that does not yet qualify to be otherwise specified In the Crop Provisions or designated as organic acreage. allowed by written agreement (Note: No written Unlt- agreement Is allowed for optional units created (a) Basic unH - A unit established In accordance with across section lines or In oversized sections if the section 2(a). acreage Is located In a high risk area): (b) Optional unit • A unit established from basic units in (i) Optional units may be established if each accordance with section 2(b). optional unit is located in a separate section. (c) Enterprise unit - A unit established from basic units In the absence of sections, we may consider or optional units In accordance with section 2(c). parcels of land legally Identified by other USDA - United States Department of Agriculture. methods of measure such as Spanish grants, as the equivalents of sections for unit purposes. In areas which have not been

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EXHIBIT 4 29 surveyed using sections, section equivalents are located in two or more separate sections, or In areas where boundaries are not readily section equivalents, FSA farm serial discernible, each optional unit must be numbers, or unlts established by written located In a separate FSA farm serial agreement, with at least some planted number; acreage In two or more separate sections, (li) In addition to, or Instead of, establishing section equivalents, FSA farm serial optional units by section, section equivalent numbers, or two or more separate units as or FSA farm serial number, optional units established by written agreement; or may be based on Irrigated and non-Irrigated (II) For two or more optional units of the same acreage. To qualify as separate Irrigated and insured crop established by separate non-irrigated optional units, the non-irrigated sections, section equivalents, FSA farm acreage may not continue into the Irrigated serial numbers, or as established by wriUen acreage in the same rows or planting agreement, with at least two optional units paUem. The irrigated acreage may not containing some planted acreage, as defined extend beyond the point at which the In section 2(b)(2)(1). Irrigation system can deliver the quantity of (3) These basic units or optional units that comprise water needed to produce the yield on which the enterprise unit must each have Insurable the Anal Guarantee is based, except the planted acreage of the same crop In the crop comers of a field In which a center-pivot year Insured; Irrigation system Is used may be considered (4) You must comply with all reporting requirements as Irrigated acreage If the corners of a field for the enterprise unit (You must maintain In which a center-pivot Irrigation system is required production records on a basic or used do not qualify as a separate non- optional unit basis If you wish to change your unit Irrigated optional unit. In this case, structure for any subsequent crop year); production from both practices will be used (5) The qualifying basic units or optional units may to determine your approved yield; and not be combined Into an enterprise unit on any (Iii) In addition to, or instead of, establishing basis other than as described herein; and optional units by section, section equivalent (6) At any time we discover you do not comply with or FSA farm serial number, or Irrigated and the reporting provisions for the enterprise unit, non-Irrigated acreage, separate optional your yield for the enterprise unit will be units may be established for acreage of the determined In accordance with section 4. Insured crop grown and Insured under an (d) Selection of unit structure- Basic or optional units will organic farming practice. Certified organic, be determined when the acreage Is reported but may transitional and buffer zone acreages do not be adjusted, combined, or separated to reflect the Individually qualify as separate units. (See actual unit structure when adjusting a loss. If you ) section 37 for additional provisions regarding select an enterprise unit structure, you must make acreage Insured under an organic farming such election by the sales closing date for the Insured practice). crops and report such unit structure to us in writing. (3) If you do not comply fully with the provisions In Your enterprise unit structure selection will remain In this section, we will combine all optional units that effect from year to year unless you notify us in writing are not in compliance with these provisions Into by the sales closing date for the crop and year for the basic unit from which they were formed. We which you wish to change this election. Eligibility for will combine the optional units at any time we enterprise units will be determined when the acreage discover that you have failed to comply with Is reported. At any time we discover you do not qualify these provisions. If failure to comply with these for an enterprise unit, we wm assign the basic unit provisions is determined by us to be Inadvertent, structure. and the optional units are combined Into a basic All applicable unit structures must be stated on the unit, that portion of the additional premium paid acreage report for each crop year. for the optional units that have been combined 3. Life of Polley, Cancellation, and Tennlnatfon wUI be refunded to you for the units combined. (a) This Is a continuous poUcy and wiH remain in effect for (c) Enterprise unit - A unit that consists of aU insurable each crop year foRowlng the acceptance of the planted acreage of the insured crop In the county In original application until canceled by you In which you have a share on the date coverage begins accordance with the terms of the policy or terminated for the crop year. If you select and qualify for an by operation of the terms of the policy, or by us. enterprise unit, you will qualify for a premium discount (b) Your application for Insurance must contain your based on the Insured crop and number of acres In the social security number (SSN) If you are an Individual enterprise unit. The discount contained In the or employer Identification number (EIN) if you are a actuarial documents will only apply to acreage In the person other than an Individual, and all SSNs and enterprise unit that has been planted. The following EINs, as applicable, of all persons with a substantial requirements must be met to qualify for an enterprise beneficial interest In you, the coverage level, crop, unit: type, variety, or class, plan of Insurance, and any ( 1) The enterprise unit must contain 50 or more other material information required on the application acres; to Insure the crop. If you or someone with a (2) The acreage that comprises the enterprise unit substantial beneficlallnterest Is not legally required to must also qualify: have a SSN or EIN, you must request and receive an ) (I) For two or more basic units of the same Identification number for the purposes of this policy insured crop as defined in section 2(a) that from us or the lntemal Revenue Service (IRS) if such

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EXHIBIT 4 30 Identification number is available from the IRS. If any planting payment due you for this or any other cro1= of the information regarding persons with a insured with us under the authority of the Act. substantial beneficial interest changes during the crop (1) Even if your claim has not yet been paid, you year, you must revise your application by the next must stili pay the premium and administrative fee ' sales closing date applicable under your policy to on or before the termination date for you tc I reflect the correct information. remain eligible for Insurance. (1) Applications that do not contain your SSN, EIN or (2) If we offset any amount due us from an indemnity Identification number, or any of the other or prevented planting payment owed to you, the Information required in section 3(b) are not date of payment for the purpose of determining acceptable and Insurance will not be provided whether you have a delinquent debt will be the (Except If you fall to report the SSNs, EINs or date that you submit the claim for Indemnity in Identification numbers of persons with a accordance with section 15(c) (Your Duties). substantial beneficial interest in you, the (f) A delinquent debt for any policy will make you provisions in section 3(b)(2) will apply); ineligible to obtain crop insurance authorized under (2) If the application does not contain the SSNs, the Act for any subsequent crop year and result In EINs, or Identification numbers of all persons with termination of all policies in accordance with section a substantial beneficial interest in you, you fall to 3(f)(2). revise your application in accordance with section (1) With respect to ineligibility: 3(b), or the reported SSNs, EINs, or identification (I) Ineligibility for crop Insurance will be effective numbers are incorrect and the incorrect SSN, on: EIN, or identification number has not been (A) The date that a policy was terminated in corrected by the acreage reporting date, and: accordance with section 3(f)(2) for the (I) Such persons are eligible for insurance, the crop for which you failed to pay amount of coverage for all crops included on premium, an administrative fee, or any this application will be reduced related interest owed, as applicable; proportionately by the percentage interest in (B) The payment due date contained in any you of such persons, you must repay the notification of indebtedness for any amount of indemnity, prevented planting overpaid indemnity, prevented planting payment or replanting payment that is payment or replanting payment, if you proportionate to the interest of the persons fall to pay the amount owed, including whose SSN, EIN, or identification number any related interest owed, as applicable, was unreported or incorrect for such crops, by such due date; and your premium will be reduced (C) The termination date for the crop year commensurately; or prior to the crop year in which a (ii) Such persons are not eligible for insurance, scheduled payment is due under a except as provided in section 3(b)(3), the payment agreement if you fail to pay the policy is void and no indemnity, prevented amount owed by any payment date in planting payment or replanting payment will any agreement to pay the debt; or be owed for any crop included on this (D) The termination date the policy was or application, and you must repay any would have been terminated under indemnity, prevented planting payment or sections 3(f)(2)(i)(A), (B), or (C) if your replanting payment that may have been paid bankruptcy petition is dismissed before for such crops. If previously paid, the discharge. balance of any premium and any (ii) If you are ineligible and a policy has been administrative fees will be returned to you, terminated In accordance with section less twenty percent of the premium that 3(f)(2), you will not receive any Indemnity, would otherwise be due from you for such prevented planting payment or replanting crops. If not previously paid, no premium or payment, if applicable, and such ineligibility administrative fees will be due for such and termination of the policy may affect your crops. eligibility for benefits under other USDA (3) The consequences described in section 3(b)(2)(ii) programs. Any Indemnity, prevented planting will not apply If you have included an ineligible payment or replanting payment that may be person's SSN, EIN, or identification number on owed for the policy before it has been your application and do not include the ineligible terminated will remain owed to you, but may person's share on the acreage report. be offset in accordance with section 3(e), (c) After acceptance of the application, you may not unless your policy was terminated in cancel this policy for the initial crop year. Thereafter, accordance with sections 3(f)(2)(i)(D) or (E). the policy will continue in force for each succeeding (2) With respect to termination: crop year unless canceled or terminated as provided (I) Termination will be effective on: below. (A) For a policy with unpaid administrative (d) Either you or we may cancel this policy after the initial fees or premiums, the termination date crop year by providing written notice to the other on or immediately subsequent to the billing before the cancellation date shown in the Crop date for the crop year; Provisions. (B) For a policy with other amounts due, the I (e) Any amount due to us for any policy authorized under termination date immediately following the Act will be offset from any indemnity or prevented the date you have a delinquent debt;

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EXHIBIT 4 31 .. .. (C) For each policy for which insurance has closing date. If you fail to make a payment that attached before you become Ineligible, was scheduled to be made on April 1, 2005, your the termination date immediately policy will tennlnate as of October 31, 2004, for following the date you become ineftgible; crop A, and March 15, 2005, for crop 8, and no (D) For execution of an agreement to pay Indemnity, prevented planting payment or any amounts owed and failure to make replanting payment will be due for that crop year any scheduled payment, the termination for either crop. You will not be eligible to apply for date for the crop year prior to the crop crop Insurance for any crop until after the year In which you failed to make the amounts owed are paid In full or you file a petition scheduled payment; or to discharge the debt In bankruptcy. (E) For dismissal of a bankruptcy petition (6) If you are determined to be ineligible under before discharge, the termination date section 3(f), persons with a substantial beneficial the policy was or would have been Interest In you may also be Ineligible until you terminated under sections 3{f)(2XI)(A), become eligible again. (B) or(C). (g) If you die, disappear, or are judicially declared (il) For all policies terminated under sections Incompetent, or If you are an entity other than an 3(f)(2)(i)(D) and (E), any indemnities, individual and such entity Is dissolved, the policy will prevented planting payments or replanting tennlnate as of the date of death, judicial declaration, payments paid subsequent to the termination or dissolution. If such event occurs after coverage date must be repaid. begins for any crop year, the policy will continue In (iii) Once the policy Is terminated, It cannot be force through the crop year and terminate at the end reinstated for the current crop year unless of the insurance period and any Indemnity will be paid the termination was in error. Failure to timely to the person or persons determined to be beneficially pay because of illness, bad weather, or other entitled to the Indemnity. The premium will be such extenuating circumstances Is not deducted from the indemnity or collected from the grounds for reinstatement in the current estate. Death of a partner In a partnership will year. dissolve the partnership unless the partnership (3) To regain eligibility, you must: agreement provides otherwise. If two or more persons (i) Repay the delinquent debt in full; having a joint Interest are insured jointly, death of one (ii) Execute an agreement to pay any amounts of the persons will dissolve the joint entity. owed and make payments in accordance (h) We may cancel your policy if no premium is earned with the agreement (We will not enter Into an for 3 consecutive years. agreement with you to pay the amounts (I) The cancellation and termination dates are contained owed if you have previously failed to make a In the Crop Provisions. scheduled payment under the terms of any 0) When obtaining coverage, you must provide ) other agreement to pay with us or any other information regarding crop Insurance coverage on any Insurance provider); or crop previously obtained from an approved insurance (iii) File a petition to have your debts discharged provider, Including the date such insurance was in bankruptcy (Dismissal of the bankruptcy obtained and the amount of the administrative fee. petition before discharge will terminate all (k) Any person may sign any document relative to crop policies In effect retroactive to the date your insurance coverage on behalf of any other person policy would have been terminated In covered by such a policy, provided that the person accordance with section 3(f)(2)(i)); has a properly executed power of attorney or such (4) After you become eligible for crop Insurance, If other legaHy sufficient document authorizing such a you want to obtain coverage for your crops, you person to sign. You are still responsible for the must submit a new application on or before the accuracy of all information provided on your behalf sales closing date for the crop (Since applications and may be subject to the consequences In section for crop insurance cannot be accepted after the 7(g), and any applicable consequences, if any sales closing date, if you make any payment after information has been misreported. the sales closing date, you cannot apply for (I) You are not eligible to participate In the Crop insurance until the next crop year); Revenue Coverage program If you have elected the (5) For example, for the 2003 crop year, if crop A, MPCI Catastrophic Risk Protection Endorsement with a termination date of October 31, 2003, and except if you execute a High Risk Land Exclusion crop 8, with a termination date of March 15, Option for a Crop Revenue Coverage Policy, you may 2004, are Insured and you do not pay the elect to insure the "high risk lancr under an MPCI premium for crop A by the termination date, you Catastrophic Risk Protection Endorsement, provided are ineligible for crop Insurance as of October 31, the Catastrophic Risk Protection Endorsement Is 2003, and crop A's policy is terminated as of that obtained from us. If both policies are in force, the date. Crop B's policy does not terminate until acreage of the crop covered under the Crop Revenue March 15, 2004, and an Indemnity for the 2003 Coverage policy and the acreage covered under an crop year may still be owed. If you enter an MPCI Catastrophic Risk Protection Endorsement will agreement to repay amounts owed on be considered as separate crops for Insurance September 25, 2004, the earliest date by which purposes, Including the payment of administrative you can obtain crop insurance for crop A Is to fees. apply for crop insurance by the October 31, 2004, ) sales closing date and for crop 8 Is to apply for crop insurance by the March 1S, 2005, sales

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EXHIBIT 4 32 4. Coverage Level, and Approved Yield For Detennlnlng because the incorrect information was It Final Guarantee and Indemnity result of our error or the error of someor (a) Unless adjusted or fimited in accordance with your from USDA. policy, the Anal Guarantee, coverage level, and (f) In addition to any consequences in section 4(e), approved yields at which an Indemnity will be any time the circumstances described below a ) determined for each unit will be those used to discovered, your approved yield will be adjusted: calculate your summary of coverage for each crop (1) By including an assigned yield determined year. accordance with section 4(d)(1) and 7 CFR pe (b) You may select only one coverage level from among 400, subpart G, If the actual yield reported In tt those offered by us for all acreage of the crop In the database is excessive for any crop year, ~ county. You may change the coverage level for the determined by FCIC under its procedures, ar following crop year by giving written notice to us not you do not provide verifiable records to suppc later than the sales closing date for the Insured crop. the yield In the database (If there are verifiab If you do not change the coverage level for the records for the yield In your database, the yield succeeding crop year you will be assigned the same significantly different from the other yields in tt coverage level that was in effect the previous crop county or your other yields for the crop and yc year. cannot prove there Is a valid basis to support th (c) This policy Is an alternative to the MPCI program and differences In the yields, the yield win be th satisfies the requirements of section 508 (b)(7) of the average of the yields for the crop or th Act. applicable county transitional yield if you have n (d) You must report production to us for the previous crop other yields for the crop, and you may be subjec year by the earlier of the acreage reporting date or 45 to provisions of section 27); days after the cancellation date unless otherwise (2) By reducing It to an amount consistent with th stated in the Special Provisions. average of the approved yields for othE (1) If you do not provide the required production databases for your farming operation with th report, we will assign a yield for the previous crop same crop, type, and practice or the count year. The yield assigned by us will not be more transitional yield, as applicable, if: than 75 percent of the yield used by us to (i) The approved APH yield is greater than 11 determine your coverage for the previous crop percent of the average of the approve year. The production report or assigned yield will yields of all applicable databases for yot be used to compute your Approved Yield for the farming operation that have actual yields i purpose of determining your Final Guarantee for them or it Is greater than 115 percent of ttl- the current crop year. county transitional yield if no applicabl (2) If you have filed a claim for any crop year, the databases exist for comparison; and ) documents signed by you which state the amount (II) The current year's Insured acreagt of production used to complete the claim for (Including applicable prevented plantin! Indemnity wUI be the production report for that acreage) is greater than 400 percent of th1 year unless otherwise specified by FCIC. average number of acres in the database o (3) Production and acreage for the prior crop year the acres contained in two or more ind'IVldua must be reported for each proposed optional unit years In the database are each less than 11 by the production reporting date. If you do not percent of the current year's insurabl• provide the information stated above, the optional acreage In the unit (Including applicabh units will be combined Into the basic unit. prevented planting acreage); or (4) Appraisals obtained from only a portion of the (3) To an amount consistent with the productior acreage in the field that remains unharvested methods actually carried out for the crop year I after the remainder of the crop within a field has you use a different production method than wa! been destroyed or put to another use will not be previously used and the production metho( used to establish your actual yield unless actually carried out Is likely to result in a yielt representative samples are required to be left by lower than the average of your previous actua you In accordance with the Crop Provisions. yields. The yield will be adjusted based on you (e) It Is your responsibility to accurately report all other units where such production methods werE Information that is used to determine your approved carried out or to the applicable county transitions yield. You must certify to the accuracy of this yield for the production methods if other suet information on your production report. units do not exist. You must notify us of change! (1) If you do not have written verifiable records to in your production methods by the acteagE support the Information on your production report, reporting date. If you fall to notify us, in additlor you will receive an assigned yield in accordance to the reduction of your approved yield describec with section 4(d)(1) and 7 CFR part 400, subpart herein, you will be considered to have G for those crop years for which you do not have misreported information and you will be subject tc such records: the consequences in section 7(g). For example (2) If you misreport any material Information used to for a non-Irrigated unit, your yield Is based upon determine your approved yield: acreage of the crop that is watered once prior tc (i) We will correct the unit structure, if planting, and the crop Is not watered prior tc necessary; and planting for the current crop year. Your approved ) (il) You will be subject to the provisions APH yield will be reduced to an amounl regarding mlsreporting contained in section consistent with the actual production history of 7(g), unless we correct the information your other non-Irrigated units where the crop has

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EXHIBIT 4 33 ... not been watered prior to planting or limited to before August 15, you must submit an acreage the non-Irrigated transitional yield for the unit if report for all such crops on or before the latest other such units do not exist. applicable acreage reporting date for such crops. (g) Unless you meet the double cropping requirements (3) Notwithstanding the provisions in sections 7(a){1) contained In section 18{f){4), if you elect to plant a and (2): ) second crop on acreage where the first insured crop (I) If the Special Provisions designate separate was prevented from being planted, you will receive a planting periods for a crop, you must submit yield equal to 60 percent of the approved yield for the an acreage report for each planting period first insured crop to calculate your average yield for on or before the acreage reporting date subsequent crop years {Not applicable to crops If the contained In the Special Provisions for the APH is not the basis for the Insurance guarantee). If planting period; and the unit contains both prevented planting and planted (II) If planting of the Insured crop continues after acreage of the same crop, the yield for the unit will be the final planting date or you are prevented determined by: from planting during the late planting period, (1) Multiplying the number of Insured prevented the acreage reporting date wtn be the later planting acres by 60 percent of the approved of: yield for the first Insured crop; (A) The acreage reporting date contained In (2) Adding the totals from section 4(g)(1) to the the Special Provisions; amount of appraised or harvested production for (B) The date determined In accordance with all of the insured planted acreage; and sections 7(a)(1) or (2); or (3) Dividing the totals in section 4(g)(2} by the total (C) FIVe (5) days after the end of the late number of acres in the unit. planting period for the Insured crop, if {h) The applicable premium rate, or formula to calculate applicable. the premium rate, and transitional yield will be those (b) If you do not have a share In an Insured crop in the contained in the actuarial documents except, In the county for the crop year, you must submit an acreage case of high risk land, a written agreement may be report on or before the acreage reporting date, so requested to change such transitional yield or Indicating. premium rate. (c) Your acreage report must Include the following 5. Contract Changes Information, If applicable: (a) We may change the terms of your coverage under (1) All acreage of the crop In the county (Insurable this policy from year to year. and not Insurable) in which you have a share; (b) Any changes In policy provisions, premium rates, and (2) Your share at the time coverage begins; program dates (except as allowed herein or as {3) The practice; specified In section 4) can be viewed on the RMA (4) The type; and website at hHD;/(Www.rma.ussfa.QOV/ or a successor (5) The date the insured crop was planted. ) website not later than the contract change date (d) Regarding the ability to revise an acreage report you contained In the Crop Provisions. We may only revise have submitted to us: this Information after the contract change date to (1) For planted acreage, you cannot revise any correct clear errors (For example, the price for com Information pertaining to the planted acreage was announced at $25.00 per bushel instead of $2.50 after the acreage reporting date without our per bushel or the final planting date should be May 1 0 consent (Consent may only be provided when no but the final planting date In the Special Provisions cause of loss has occurred; our appraisal has states August 10). determined that the Insured crop will produce at (c) After the contract change date, all changes specified least 90 percent of the yield used to determine In section 5(b) will also be available upon request your Fmal Guarantee for the unit ('mctuding from your crop insurance agent. You will be provided, reported and unreported acreage), except when in writing, a copy of the changes to the Basic there are unreported units (see section 7(f)); the Provisions and Crop Provisions and a copy of the Information on the acreage report Is clearly Special Provisions not later than 30 days prior to the transposed; you provide adequate evidence that cancellation date for the Insured crop. Acceptance of we or someone from USDA have committed an the changes win be conclusively presumed In the error regarding the lnfonnation on your acreage absence of notice from you to change or cancel your report; or If expressly permitted by the policy); insurance coverage. (2) For prevented planting acreage reported on the 6. [Reserved] acreage report, you cannot revise any 7. Report of Acreage Information pertaining to the prevented planting (a) An annual acreage report must be submitted to us on acreage after the report Is lnltlafty submitted to us our form for each Insured crop in the county on or without our consent (Consent may only be before the acreage reporting date contained in the provided when information on the acreage report Special Provisions, except as follows: is clearly transposed or you provide adequate (1) If you Insure multiple crops with us that have final evidence that we or someone from USDA have planting dates on or after August 15 but before committed an error regarding the information on December 31, you must submit an acreage your acreage report); report for all such crops on or before the latest {3) For prevented planting acreage not reported on applicable acreage reporting date for such crops; the acreage report, you cannot revise your and acreage report to add prevented planting (2) If you insure multiple crops with us that have final acreage; planting dates on or after December 31 but

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EXHIBIT 4 34 . .,. (4) If you request an acreage measurement prior to (2) In addition to the other adjustments specified h the acreage reporting date and submit section 7(g)(1), If you misreport any lnformatiot documentation of such request and an acreage that results in liabl&ty greater than 11 0.0 percen report with estimated acreage by the acreage or lower than 90.0 percent of the actual fiabilit reporting date, you must provide the determined for the unit, any Indemnity, preventet measurement to us, we will revise your acreage planting payment, or replanting payment will bt report if there Is a discrepancy, and no Indemnity, based on the amount of liability detennlned 11 prevented planting payment or replant payment accordance with section 7(g){1 )(I) or (II) and wi will be paid until the acreage measurement has be reduced In an amount proportionate with tht been received by us (Failure to provide the amount of liability that Is misreported In excess o measurement to us will result In the application of the tolerances stated In this section (Fo section 7(g) if the estimated acreage Is not example, If the actual liability Is determined to bt correct and estimated acreage under this section $100.00, but you reported liability of $120.00, an~ will no longer be accepted for any subsequent Indemnity, prevented planting payment o acreage report); replanting payment will be reduced by 10.( (5) If there Is an Irreconcilable difference between: percent ($120.00 I $100.00 = 1.20, and 1.20 - (I) The acreage measured by FSA or a = 1.10 0.10}). measuring service and our on-farm (h) If we discover you have Incorrectly reported anl measurement, our on-farm measurement will Information on the acreage report for any crop year be used; or you may be required to provide documentation lr (U} The acreage measured by a measuring subsequent crop years substantiating your report o service, other than our on-farm acreage for those crop years, including, but no measurement, and FSA, the FSA limited to, an acreage measurement service at you measurement will be used; and own expense. If the correction of any misreportec (6) If the acreage report has been revised In information would affect an Indemnity, preventec accordance with section 7(d)(1), (2), (4), or (5), planting payment or replant payment that was paid ir the Information on the initial acreage report will a prior crop year, such claim will be adjusted and yol not be considered mlsreported for the purposes will be required to repay any overpaid amounts. of section 7(g). (I) Errors in reporting units may be corrected by us at thE (e) We may elect to determine all premiums and time of adjusting a loss to reduce our liability and tc indemnities based on the information you submit on conform to applicable unit division guidelines. the acreage report or upon the factual circumstances 8. Annual Premium and Administrative Fees we determine to have existed, subject to the (a) The annual premium is eamed and payable at the provisions contained In section 7(g). time coverage begins. You will be billed for the (f) If you do not submit an acreage report by the acreage premium and administrative fee not earlier than the reporting date, or If you fall to report all units, we may premium bWing date specified in the Specia elect to determine by unit the insurable crop acreage, Provisions. share, type and practice, or to deny liability on such (b) Premium or administrative fees owed by you will bE units. If we deny JiabUity for the unreported units, your offset from an Indemnity or prevented plantin~ share of any production from the unreported units will payment due you In accordance with section 3(e). be allocated, for loss purposes only, as production to (c) Your annual premium amount Is determined by: count to the reported units In proportion to the liability (1) Multiplying the Approved Yield times the on each reported unit. However, such production will Coverage Level, times the Base Premium Rate, not be allocated to prevented planting acreage or and times the Base Price as defined in the otherwise affect any prevented planting payment. Commodity Exchange Endorsement; (g) You must provide all required reports and you are (2) Multiplying the Approved Yield times the responsible for the accuracy of all Information Coverage Level, times the CRC Base Rate, and contained In those reports. You should verify the times the CRC Low Price Factor specified in the information on all such reports prior to submitting actuarial documents; them to us. (3) Multiplying the Approved Yield times the (1} If you submit information on any report that is Coverage Level, times the Base Premium Rate, different than what is determined to be correct and times the CRC High Price Factor specified in and such Information results In: the actuarial documents; (I) A lower liability than the actual liability (4) Adding sections 8(c)(1), (2), and (3); determined, the Final Guarantee on the unit (5) Multiplying the result of section 8(c)(4) times the will be reduced to an amount consistent with Acres Insured, times your Share at the time the reported Information (In the event the coverage begins, and as applicable, times any Insurable acreage Is under-reported for any CRC Unit Option Factor; Y~eld Adjustment unit, all production or value from Insurable Surcharge; and/or CRC Enterprise Option Factor; acreage in that unit will be considered (6) Multiplying the result of section 8(c)(5) times the production or value to count In determining applicable producer subsidy percentage to the Indemnity); or calculate the appropriate amount of subsidy. The (II) A higher liability than the actual liability producer subsidy percentage is based upon the determined, the information contained In the coverage level and is contained in the actuarial ) acreage report will be revised to be documents; and consistent with the correct Information. (7) Subtracting section B(c)(6) from section B(c)(5).

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EXHIBIT 4 35 - (d) The information needed to determine the premium if grain sorghum had already been planted ano rate and any premium adjustment percentages that harvested on the same acreage during the crop may apply are contained In the actuarial documents year); or an approved written agreement. (5) That is planted for the development or production (e) In addition to the premium charged: of hybrid seed or for experimental purposes, (1) You, unless otherwise authorized In 7 CFR part unless pennitted by the Crop Provisions; or 400, must pay an administrative fee each crop (6) That Is used solely for wildlife protection or year of $30 per crop per county. management. If the lease states that specific (2) The administrative fee must be paid no later than acreage must remain unharvested, only that the time that premium is due. acreage Is uninsurable. If the lease specifies that (3) Payment of an administrative fee will not be a percentage of the crop must be left required if you file a bona fide zero acreage unharvested, your share will be reduced by such report on or before the acreage reporting date for percentage. the crop. If you falsely file a zero acreage report, (c) Although certain pollcy documents may state that a you may be subject to criminal and administrative crop type, class, variety or practice Is not Insurable, It sanctions. does not mean all other crop types, classes, varieties (4) The administrative fee will be waived If you or practices are Insurable. To be insurable the crop request It and: type, class, variety or practice must meet all the (I) You qualify as a limited resource farmer, or conditions In this section. (II) You were Insured prior to the 2005 crop year 10. Insurable Acreage or for the 2005 crop year and your (a) Acreage planted to the Insured crop In which you administrative fee was waived for one or have a share Is insurable except acreage: more of those crop years because you (1) That has not been planted and harvested or qualified as a limited resource farmer under insured (Including Insured acreage that was a policy definition previously In effect, and prevented from being planted) In at least one of you remain qualified as a limited resource the three previous crop years unless you can farmer under the definition that was In effect show that: at the time the administrative fee was (I) Such acreage was not planted: waived. (A) In at least two of the previous three crop (5) Failure to pay the administrative fees when due years to comply with any other USDA may make you ineligible for certain other USDA program; benefits. (B) Because of crop rotation (e.g., com, (f) If the amount of premium (gross premium less soybeans, alfalfa; and the alfalfa premium subsidy paid on your behalf by FCIC) and remained for four years before the administrative fee you are required to pay for any acreage was planted to com again); or acreage exceeds the liability for the acreage, (C) Because a perennial tree, vine, or bush coverage for those acres will not be provided (no crop was grown on the acreage; premium or administrative fee wiU be due and no (II) The Crop Provisions or a written agreement Indemnity will be paid for such acreage). specifically allow Insurance for such 9. Insured Crop acreage; or (a) The insured crop will be that shown on your accepted (Iii) Such acreage constitutes five percent or less application and as specified in the Crop Provisions or of the Insured planted acreage In the unit; Special Provisions and must be grown on insurable (2) That has been strip-mined, unless otherwise acreage. approved by written agreement, or unless an (b) A crop which will NOT be Insured will include, but will agricultural commodity other than a cover, hay, or not be limited to, any crop: forage crop (except com silage), has been (1) That is not grown on planted acreage (except for harvested from the acreage for at least five crop the purposes of prevented planting coverage), or years after the strip·mlned land was reclaimed; that Is a type, class or variety or where the (3) For which the actuarial documents do not provide conditions under which the crop is planted are the Information necessary to determine the not generally recognized for the area (For premium rate, unless Insurance is allowed by a example, where agricultural experts determine written agreement; that planting a non-Irrigated com crop after a (4) On which the insured crop Is damaged and It Is failed small grain crop on the same acreage In practical to replant the Insured crop, but the the same crop year Is not appropriate for the Insured crop Is not replanted; area); (5) That is lnterplanted, unless allowed by the Crop (2) For which the Information necessary for Provisions; Insurance (premium rate, etc.) Is not included In (6) That Is otherwise restricted by the Crop the actuarial documents, unless such Information Provisions or Special Provisions; is provided by a written agreement; (7) That Is planted In any manner other than as (3) That Is a volunteer crop; specified In the policy provisions for the crop; (4) Planted following the same crop on the same (8) Of a second crop, if you elect not to insure such acreage and the first planting of the crop has acreage when an indemnity for a first Insured been harvested in the same crop year unless crop may be subject to reduction in accordance specifically permitted by the Crop Provisions or with the provisions of section 16 and you intend the Special Provisions (For example, the second to collect an Indemnity payment that Is equal to planting of grain sorghum would not be Insurable 100 percent of the insurable loss for the first

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EXHIBIT 4 36 Insured crop acreage. This election must be the reasonable expectation of recetvmg adequate made on a first Insured crop unit basis. For water at the time coverage begins, to carry out a gooc example, if the first insured ctop unit contains 40 irrigation practice. If you knew or had reason to knov. planted acres that may be subject to an that your water may be reduced before coverage indemnity reduction, then no second crop can be begins, no reasonable expectation exists. Insured on any of the 40 acres. In this case: (c) Notwithstanding the provisions in section 9{b)(2), r (i) If the first insured crop is Insured under this acreage is Irrigated and we do not provide a premlurr policy, you must provide written notice to us rate for an irrigated practice, you may either repon of your election not to Insure acreage of a and insure the irrigated acreage as "non-irrigated.~ ot second crop at the time the first Insured crop report the Irrigated acreage as not Insured. acreage Is released by us {if no acreage In (d) We may restrict the amount of acreage that we will the first Insured crop unit Is released, this Insure to the amount allowed under any acreage election must be made by the earlier of the limitation program established by the USDA If we acreage reporting date for the second crop notify you of that restriction prfor to the sales closing or when you sign the claim for Indemnity for date. the first Insured crop) or, if the first Insured 11. Share Insured crop Is Insured under the Group Risk (a) Insurance will attach only to the share of the person Protection Plan of Insurance (7 CFR part completing the appfteation and wUI not extend to any 407), this election must be made before the other person having a share in the crop unless the second crop insured under this policy Is application clearly states that: planted, and if you fail to provide such (1) The insurance is requested for an entity such as notice, the second crop acreage will be a partnership or a joint venture; or Insured In accordance with the applicable (2) You as landlord will insure your tenanrs share, or policy provisions and you must repay any you as tenant will insure your landlord's share. In overpaid Indemnity for the first Insured crop; this event, you must provide evidence of the (li) In the event a second crop is planted and other party's approval (lease, power of attorney, insured with a different Insurance provider, etc.). Such evidence will be retained by us. You or planted and insured by a different person, also must clearly set forth the percentage shares you must provide written notice to each of each person on the acreage report. For each insurance provider that a second crop was landlord or tenant that is an Individual, you must planted on acreage on which you had a first report the landlord's or tenant's social security insured crop; and number. For each landlord or tenant that is a (Iii) You must report the crop acreage that will person other than an Individual or for a trust not be Insured on the applicable acreage administered by the Bureau of Indian Affairs, you ) report; or must report each landlord's or tenanrs social (9) Of a crop planted following a second crop or security number, employer Identification number, following an insured crop that Is prevented from or other Identification number assigned for the being planted after a first Insured crop, unless it purposes of this policy. Is a practice that is generally recognized by {b) We may consider any acreage or interest reported by agricultural experts or the organic agricultural or for your spouse, child or any member of your industry for the area to plant three or more crops household to be included in your share. for harvest on the same acreage in the same (c) Acreage rented for a percentage of the crop, or a crop year, and additional coverage insurance lease containing provisions for BOTH a minimum provided under the authority of the Act is offered payment (such as a specified amount of cash, for the third or subsequent crop in the same crop bushels, pounds, etc.) AND a crop share will be year. Insurance will only be provided for a third or considered a crop share lease. subsequent crop as follows: (d) Acreage rented for cash, or a lease containing (I) You must provide records acceptable to us provisions for EITHER a minimum payment OR a that show: crop share (such as a 50/50 share or $100.00 per (A) You have produced and harvested the acre, whichever is greater) will be considered a cash Insured crop following two other crops lease. harvested on the same acreage In the 12. Insurance Period same crop year In at least two of the last (a) Except for prevented planting coverage (see section four years in which you produced the 1B), coverage begins on each unit or part of a unit at Insured crop; or the later of: (B) The applicable acreage has had three or {1) The date we accept your application (For the more crops produced and harvested on purposes of this paragraph, the date of it In at least two of the last four years in acceptance is the date that you submit a properly which the insured crop was grown on it; executed application in accordance wHh section and 3); (II) The amount of Insurable acreage will not {2) The date the insured crop is planted; or exceed 100 percent of the greatest number (3) The calendar date contained in the Crop of acres for which you provide the records Provisions for the beginning of the Insurance required in section 1O(a)(9)(1)(A) or (B). period. (b) If Insurance Is provided for an irrigated practice, you (b) Coverage ends at the earliest of: must report as Irrigated only that acreage for which (1) Total destruction of the insured crop on the unit; you have adequate facilities and adequate water, or (2) Harvest of the unH;

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EXHIBIT 4 37 •' (3) Final adjustment of a Joss on a unit; (2) Initially planted prior to the earliest planting date (4) The calendar date contained In the Crop established by the Special Provisions; or Provisions for the end of the insurance period; (3) On which one replanting payment has already (5) Abandonment of the crop on the unit; or been allowed for the crop year. (6) As otheJWise specified In the Crop Provisions. (c) The replanting payment per acre will be your actual f 3. Causes of Loss cost for replanting, but will not exceed the amount The insurance provided Is against only unavoidable Joss determined In accordance with the Crop Provisions. directly caused by specific causes of loss contained In the (d) No replanting payment will be paid If we detennlne it Crop Provisions. All specified causes of Joss, except Is not practical to replant. where the Crop Provisions specifically cover loss of 15. Duties In the Event of Damage, Loss, Abandonment, revenue due to a reduced price In the marketplace, must Destruction, or Alternative Use of Crop or Acreage. be due to a naturally occurring event. All other causes of Your Duties - loss, Including but not limited to the following, are NOT (a) In case of damage to any Insured crop you must covered: (1) Protect the crop from further damage by (a) Negligence, mismanagement, or wrongdoing by you, providing sufficient care; any member of your family or household, your (2) Give us notice within 72 hours of your Initial tenants, or employees; discovery of damage (but not later than 15 days (b) Failure to follow recognized good farming practices after the end of the insurance period), by unit, for for the Insured crop; each Insured crop; (c) Water that is contained by or within structures that are (3) If representative samples are required by the designed to contain a specific amount of water, such Crop Provisions, leave representative samples as dams, locks or reservoir projects, etc., on any Intact of the unharvested crop if you report acreage when such water stays within the designed damage less than 15 days before the time you limits (For example, a dam is designed to contain begin harvest or during harvest of the damaged water to an elevation of 1,200 feet but you plant a unit (The samples must be left Intact until we crop on acreage at an elevation of 1,1 00 feet. A storm Inspect them or until 15 days after completion of causes the water behind the dam to rise to an harvest on the unit, whichever Is earlier. Unless elevation of 1,200 feet. Under such circumstances, otheJWise specified In the Crop Provisions or the resulting damage would not be caused by an Special Provisions, the samples of the crop In insurable cause of loss. However, if you planted on each field in the unit must be 10 feet wide and acreage that was above 1,200 feet elevation, any extend the entire length of the row, if the crop Is damage caused by water that exceeded that elevation planted in rows, or if the crop Is not planted in would be caused by an insurable cause of loss); rows, the longest dimension of the field. The (d) Failure or breakdown of the Irrigation equipment or period to retain representative samples may be facilities unless the failure or breakdown is due to a extended if it Is necessary to accurately ) cause of Joss specified In the Crop Provisions (If detennlne the Joss. You will be notified in writing damage is due to an Insured cause, you must make of any such extension); and all reasonable efforts to restore the equipment or (4) Cooperate with us in the investigation or facilities to proper working order within a reasonable settlement of the claim, and, as often as we amount of time unless we determine ills not practical reasonably require: to do so. Cost will not be considered when (I) Show us the damaged crop; determining whether it is practical to restore the (li) Allow us to remove samples of the insured equipment or facilities); crop; and (e) Failure to cany out a good irrigation practice for the (iii) Provide us with records and documents we insured crop, If applicable; or request and permit us to make copies; and (f) Any cause of loss that results in damage that is not (5) Give us notice of your expected revenue loss not evident or would not have been evident during the later than 45 days after the date the Harvest insurance period, Including, but not limited to, damage Price Is released. that only becomes evident after the end of the (b) You must obtain consent from us before, and notify us insurance period unless expressly authorized in the after you: Crop Provisions. Even though we may not Inspect the (1) Destroy any of the insured crop that is not damaged crop until after the end of the insurance harvested; period, damage due to insured causes that would (2) Put the Insured crop to an alternative use; have been evident during the insurance period will be (3) Put the acreage to another use; or covered. (4) Abandon any portion of the Insured crop. We will 14. Replanting Payment not give consent for any of the actions in sections (a) If allowed by the Crop Provisions, a replanting 15(b)(1) through (4) if it is practical to replant the payment may be made on an Insured crop replanted crop or until we have made an appraisal of the after we have given consent and the acreage potential production of the crop. replanted Is at least the lesser of 20 acres or 20 (c) In addition to complying with the notice requirements, percent of the insured planted acreage for the unit (as you must submit a claim for Indemnity declaring the determined on the final planting date or within the late amount of your loss not later than 60 days after the planting period If a late planting period Is applicable). Harvest Price Is released unless you request an (b) No replanting payment will be made on acreage: extension in writing and we agree to such extension. (1) On which our appraisal establishes that Extensions will only be granted if the amount of the ) production will exceed the level set by the Crop loss cannot be determined within such time period Provisions; because the lnfonnation needed to determine the

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EXHIBIT 4 38 amount of the loss Is not available. The claim for indemnity or other payment is due, you will sti indemnity must include all information we require to be required to pay the premium due under th settle the claim. Failure to submit a claim or provide policy for the unit); and the required information will result In no indemnity, (2) Failure to comply with other sections of the pollc prevented planting payment or replant payment (Even will subject you to the consequences specified i though no indemnity or other payment is due, you will those sections. still be required to pay the premium due under the Our Duties- policy for the unit). (a) If you have complied with all the policy provisions, W• (d) You must: will pay your loss within 30 days after the later of: (1) Provide a complete harvesting and marketing (1) We reach agreement with you; record of each insured crop by unit Including (2) Completion of arbitration, reconsideration c separate records showing the same information determinations regarding good farming practice: for production from any acreage not insured. In or any other appeal that results In an award II addition, If you Insure any acreage that may be your favor, unless we exercise our right to appec subject to an Indemnity reduction as specified In such decision; section 16(e)(2) (for example, you planted a (3) Completion of any investigation by USDA, i second crop on acreage where a first Insured applicable, of your current or any past claim fa crop had an insurable loss and you do not qualify indemnity if no evidence of wrongdoing has beer for the double cropping exemption), you must found (If any evidence of wrongdoing has beer provide separate records of production from such discovered, the amount of any Indemnity acreage for all Insured crops planted on the prevented planting or replant overpayment as 1 acreage. For example, if you have an Insurable result of such wrongdoing may be offset from an~ loss on 10 acres of wheat and subsequently plant Indemnity or prevented planting payment owed t1 cotton on the same 1 0 acres, you must provide you); or records of the wheat and cotton production on (4) The entry of a final judgment by a court o the 10 acres separate from any other wheat and competent jurisdiction. cotton production that may be planted In the (b) In the event we are unable to pay your loss within 3( same unit. If you fall to provide such separate days, we will give you notice of our Intentions withir records, we will allocate the production of each the 30-day period. crop to the acreage In proportion to our liability (c) We may defer the adjustment of a loss until thE for the acreage; and amount of loss can be accurately determined. We wil (2) Upon our request, or that of any USDA employee not pay for additional damage resulting from you authorized to conduct Investigations of the crop failure to provide sufficient care for the crop during thE insurance program, submit to an examination deferral period. under oath. (d) We recognize and apply the loss adjustmen (e) You must establish the total production or value procedures established or approved by FCIC. received for the insured crop on the unit, that any loss 16. Production Included In Determining an Indemnity anc of production or value occurred during the Insurance Pa~ntReducUons period, and that the Joss of production or value was (a) The total production to be counted for a unit wil directly caused by one or more of the Insured causes include all production determined In accordance witt specified In the Crop Provisions. the policy. (f) In the event you are prevented from planting an (b) Appraised production will be used to calculate your Insured crop which has prevented planting coverage, claim if you are not going to harvest your acreage you must notify us within 72 hours after: Such appraisals may be conducted after the end 01 (1) The final planting date, If you do not intend to the Insurance period. If you harvest the crop after the plant the Insured crop during the late planting crop has been appraised: period or If a late planting period is not (1) You must provide us with the amount ol applicable; or harvested production; and (2) You determine you will not be able to plant the (2} If the harvested production exceeds the insured crop within any applicable late planting appraised production, claims will be adjusted period. using the harvested production, and you will be (g) All notices required In this section that must be required to repay any overpaid indemnity; or received by us within 72 hours may be made by (3) If the harvested production is less than the telephone or in person to your crop insurance agent appraised production, and: but must be confirmed in writing within 15 days. (I) You harvest after the end of the Insurance (h) It Is your duty to prove you have complied with all period, your appraised production will be provisions of this policy. used to adjust the loss unless you can prove (1) Failure to comply with the requirements of that no additional causes of loss or section 15(c) (Your Duties) will result In denial of deterioration of the crop occurred after the your claim for indemnity or prevented planting or end of the insurance period; or replant payment for the acreage for which failure (ii) You harvest before the end of the insurance occurred. Failure to comply with all other period, your harvested production will be requirements of this section will result In denial of used to adjust the loss. your claim for Indemnity or prevented planting or (c) The amount of an indemnity that may be determined ) replant payment for the acreage for which the under the applicable provisions of your policy may be failure occurred, unless we still have the ability to reduced by an amount, determined in accordance accurately adjust the loss (Even though no with the Crop Provisions or Special Provisions. to

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EXHIBIT 4 39 •• reflect out.of-pocket expenses that were not incurred (f) The reduction in the amount of indemnity or by you as a result of not planting, caring for, or prevented planting payment and premium specified In harvesting the crop. Indemnities paid for acreage sections 16(d) and 16(e), as applicable, will apply: prevented from being planted will be based on a (1) Notwithstanding the priority contained In the reduced Final Guarantee as provided for In the policy Agreement to Insure section, which states that and will not be further reduced to reflect expenses not the Crop Provisions have priority over the Basic Incurred. Provisions when a conflict exists, to any premium (d) With respect to acreage where you have suffered an owed or Indemnity or prevented planting payment Insurable loss to planted acreage of your first Insured made in accordance with the Crop Provisions, crop In the crop year, except In the case of double and any applicable endorsement. cropping described In section 16(g): (2) Even If another person plants the second crop on (1) You may elect to not plant or to plant and not any acreage where the first Insured crop was Insure a second crop on the same acreage for planted or was prevented from being planted, as harvest In the same crop year and collect an applicable. Indemnity payment that Is equal to 100 percent of (3) For prevented planting only: the insurable loss for the first insured crop; or (I) If a volunteer crop or cover crop Is hayed or (2) You may elect to plant and Insure a second crop grazed from the same acreage, after the late on the same acreage for harvest In the same planting period (or after the final planting crop year (you will pay the full premium and, If date if a late planting period Is not there Is an Insurable loss to the second crop, applicable) for the first Insured crop in the receive the full amount of Indemnity that may be same crop year, or Is otherwise harvested due for the second crop, regardless of whether anytime after the late planting period (or after there Is a subsequent crop planted on the same the final planting date if a late planting period acreage) and: Is not applicable); or (i) Collect an Indemnity payment that is 35 (II) If you receive cash rent for any acreage on percent of the Insurable loss for the first which you were prevented from planting. Insured crop; (g) You may receive a tun indemnity, or a fuH prevented (II) Be responsible for premium that Is 35 planting payment for a first insured crop when a percent of the premium that you would second crop is planted on the same acreage in the otherwise owe for the first Insured crop; and same crop year, regardless of whether or not the (iii) If the second crop does not suffer an second crop Is Insured or sustains an insurable loss, if Insurable loss: each of the following conditions are met (A) Collect an indemnity payment for the (1) It Is a practice that Is generally recognized by other 65 percent of Insurable loss that agricultural experts or the organic agricultural was not previously paid under section Industry for the area to plant two or more crops ) 16(d)(2)(1); and for harvest in the same crop year; (B) Be responsible for the remainder of the (2) The second or more crops are customarily premium for the first Insured crop that planted after the first insured crop for harvest on you did not pay under section the same acreage In the same crop year in the 16(d)(2)(ii). area; (e) With respect to acreage where you were prevented (3) Additional coverage Insurance offered under the from planting the first Insured crop in the crop year, authority of the Act Is avaNable In the county on except in the case of double cropping described in the two or more crops that are double cropped; section 16(g): (4) You provide records acceptable to us of acreage (1) If a second crop Is not planted on the same and production that show you have double acreage for harvest In the same crop year, you cropped acreage in at least two of the last four may collect a prevented planting payment that is crop years In which the first Insured crop was equal to 100 percent of the prevented planting planted, or that show the applicable acreage was payment for the acreage for the first insured crop; double cropped In at least two of the last four or crop years in which the first Insured crop was (2) If a second crop Is planted on the same acreage grown on It; and for harvest In the same crop year (you will pay (5) In the case of prevented planting, the second the full premium and, If there Is an insurable loss crop Is not planted on or prior to the final planting to the second crop, receive the full amount of date or, If applicable, prior to the end of the late Indemnity that may be due for the second crop, planting period for the first insured crop. regardless of whether there is a subsequent crop (h) The receipt of a full indemnity or prevented planting planted on the same acreage) and: payment on both crops that are double cropped is (I) Provided the second crop Is not planted on limited to the number of acres for which you can or before the final planting date or during the demonstrate you have double cropped or that have late planting period (as applicable) for the been historically double cropped as specified In first Insured crop, you may collect a section 16(g). prevented planting payment that Is 35 (i) If any Federal or State agency requires destruction of percent of the prevented planting payment any Insured crop or crop production, as applicable, for the first insured crop; and because it contains levels of a substance, or has a (II) Be responsible for premium that is 35 condition, that Is Injurious to human or animal health ) percent of the premium that you would In excess of the maximum amounts allowed by the otherwise owe for the first Insured crop. Food and Drug Administration, other public health

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EXHIBIT 4 40 •• organizations of the United States or an agency of the year for the insured crop In the county applicable State, you must destroy the insured crop or provided insurance has been in force crop production, as applicable, and certify that such continuously since that date. Cancellation fo1 insured crop or crop production has been destroyed the purpose of transferring the policy to a prior to receiving an indemnity payment. Failure to different Insurance provider for the destroy the insured crop or crop production, as subsequent crop year will not be conslderec applicable, will result ln you having to repay any a break in continuity for the purpose of the indemnity paid and you may be subject to preceding sentence; administrative sanctions in accordance with section (2) You Include any acreage of the Insured crop thai 515(h) of the Act and 7 CFR part 400, subpart A, and was prevented from being planted on yoUI any applicable civil or criminal sanctions. acreage report; and 17. Late Planting (3) You did not plant the Insured crop during or after Unless limited by the Crop Provisions, Insurance will be the late planting period. If such acreage was provided for acreage planted to the Insured crop after the planted to the insured crop during or after the late final planting date in accordance with the foftowing: planting period, It is covered under the fate (a) The Final Guarantee for each acre planted to the planting provisions. insured crop during the late planting period will be (b) The actuarial documents may contain additional reduced by 1 percent per day for each day planted levels of prevented planting coverage that you may after the final planting date. purchase for the Insured crop: (b) Acreage planted after the late planting period (or after (1) Such purchase must be made on or before the the final planting date for crops that do not have a late sales closing date. planting period) may be Insured as follows: (2) If you do not purchase one of those addHional (1) The Anal Guarantee for each acre planted as levels by the sales closing date, you will receive speclfl8d In this subsection will be detennined by the prevented planting coverage specified in the multiplying the Anal Guarantee that Is provided Crop Provisions. for acreage of the insured crop that is timely (3) If you have an MPCI Catastrophic Risk Protection planted by the prevented planting coverage level Endorsement for any acreage of •high risk land," percentage you elected, or that is contained In the additional levels of prevented planting the Crop Provisions If you did not elect a coverage will not be available for that acreage; prevented planting coverage level percentage; and (2) Planting on such acreage must have been (4) You may not Increase your elected or assigned prevented by the final planting date (or during the preventing planting coverage level for any crop late planting period, if applicable) by an insurable year if a cause of loss that will or could prevent cause occurring within the insurance period for planting Is evident prior to the time you wish to ) prevented planting coverage; and change your prevented planting coverage level. (3) All production from insured acreage as specified (c) The premium amount for acreage that is prevented in this section will be Included as production to from being planted will be the same as that for timely count for the unit. planted acreage except as specified in section 16(e). (c) The premium amount for insurable acreage specified If the amount of premium you are required to pay in this section will be the same as that for timely (gross premium less our subsidy) for acreage that Is planted acreage. If the amount of premium you are prevented from being planted exceeds the liability on required to pay (gross premium less our subsidy) for such acreage, coverage for those acres will not be such acreage exceeds the liability, coverage for those provided (no premium will be due and no indemnity acres will not be provided (no premium will be due, will be paid for such acreage). and no indemnity will be paid). (d) Drought or failure of the Irrigation water supply will be (d) Any acreage on which an insured cause of loss is a considered to be an Insurable cause of loss for the material factor In preventing completion of planting, as purposes of prevented planting only if on the final specified In the definition of "planted acreage" (e.g., planting date (or within the late planting period If you seed Is broadcast on the soli surface but cannot be elect to try to plant the crop): lnco1p0rated) will be considered as acreage planted (1) For non-Irrigated acreage, the area that is after the final planting date and the Final Guarantee prevented from being planted has Insufficient soil will be calculated In accordance with section 17(b)(1). moisture for germination of seed or progress 18. Prevented Planting toward crop maturity due to a prolonged period of (a) Unless limited by the policy provisions, a prevented dry weather. Prolonged precipitation deficiencies planting payment may be made to you for eligible must be verifiable using Information collected by acreage if: sources whose business it Is to record and study (1) You were prevented from planting the insured the weather, including, but not limited to, local crop (Failure to plant when other producers In the weather reporting stations of the National area were planting will result In the denial of the Weather Service; or prevented planting claim) by an insured cause (2) For Irrigated acreage, there Is not a reasonable that occurs: expectation of having adequate water to carry out (i) On or after the sales closing date contained an Irrigated practice. If you knew or had reason to In the Special Provisions for the insured crop know that your water is reduced before the final In the county for the crop year the application planting date, no reasonable expectation existed. for Insurance Is accepted; or (e) The maximum number of acres that may be eligible (ii) For any subsequent crop year, on or after for a prevented planting payment for any crop will be the sales closing date for the previous crop detennlned as follows:

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EXHIBIT 4 41 .. {1) The total number of acres eligible for prevented the eligible acres. If a processor planting coverage for all crops cannot exceed the cancels or does not provide number of acres of cropland In your fanning contracts, or reduces the contracted operation for the crop year, unless you are acreage or production from what eligible for prevented planting coverage on would have otherwise been allowed, solely because the acreage was double cropped acreage In accordance with prevented from being planted due to section 18(f){4). The eUgible acres for each an Insured cause of loss, we may Insured crop will be determined In accordance elect to detennlne the nunber of with th e foilowrno• table: acres eligible based on the number of Type of Eligible acres If, In any of the 4 most Eligible acres If, In acres or amount of production you Crop recent crop years, you have planted any of the 4 most had contracted In the county In the any crop In the county for which recent crop years, previous crop year. If you did not prevented planting Insurance was you have not have a processor contract In place for available or have received a planted any crop In the previous crop year, you will not prevented planting Insurance the county for have any eligible prevented planting guarantee. which prevented acreage for the applicable processor planting Insurance crop. The total eligible prevented was available or planting acres In au counties cannot have not received exceed the to1a1 nunber of acres or a prevented amooot of production contracted In aJ planting Insurance counties In the previous crop year. guarantee. (2) Any eligible acreage determined in accordance {I) The (A) The maximum number of acres (B) The number of with the table contained In section 18(e)(1) will be crop Is not certified for APH purposes or lnstnd acres specified on reduced by subtracting the number of acres of required acres reported for 1nstnnce for the yoor Intended the crop (insured and uninsured) that are timely to be crop In any one of the 4 most recent acreage report and late planted, Including acreage specified In contracted crop years (not Including reported which Is submitted with a prevented planting acreage that was to us by the sales section 17(b). processor planted to a second crop unless you closing date for all (f) Regardless of the number of eligible acres to be meet the double cropping crops you Insure determined In section 18(e), prevented planting Insured requirements In section 18(1)(4)). The for the crop year coverage will not be provided for any acreage: number of acres detennlned above and that Is (1) That does not constitute at least 20 acres or 20 for a crop may be Increased by accepted by us. percent of the Insurable crop acreage In the unit, multiplying It by the ratio of the total The total number whichever Is less, and any prevented planting cropland acres that you are fanning of acres listed may acreage within a field that contains planted this year (It greater) to the total not exceed the cropland acres that you fanned In the runber of acres of acreage will be considered to be acreage of the same crop, type, and practice that Is planted In ) previous year, provided that you cropland In yoiM' submit proof to us that for the current fanning operation the field except that the prevented planting crop year you have ptxehased or at the time you acreage may be considered to be acreage of a leased addltionalland or that acreage submit the crop, type, and practice other than that which is will be released from any USDA Intended acreage planted In the field If: program which protllblls harvest of a report. The nt.mber (i) The acreage that was prevented from being crop. Such acreage must have been of acres planted constitutes at least 20 acres or 20 purchased, leased, or released from determined above tha USDA program, In time to plant It for a crop may only percent of the total Insurable acreage In the for the cutn!flt crop year using good be Increased by field and you produced both crops, crop fanning practices. No cause of loss multiplying It by the types, or followed both practices In the same that would prevent planting may be ratio of the total field In the same crop year within any one of evident at the time you lease the cropland acres that the four most recent crop years; or acreage (except acreage you leesed you are fanning (il) You were prevented from planting a first the previous year and continue to this year (If insured crop and you planted a second crop lease In the current crop year); you greater) to the In the field (There can only be one first buy the acreage; the acreage Is number of acres released from a USDA program Insured crop In a field unless the listed on your which prohibits harvest of a crop; you Intended acreage requirements In section 18{f)(1 )(I) or (ill) are request a written agreement to ins!M'e report, Hyou meet met); or the acreage; or you otherwise acquire the conditions (iii) The insured crop planted In the field would the acreage (such as lnherHed or stated In section not have been planted on the remaining gifted acreage). 18(e)(1)(1)(A). prevented planting acreage (For example, (H)The (A) The nunber of acres of the crop (B) The number of where rotation requirements would not be crop must specified In the processor contract, If acres of the crop met or you already planted the total number be the contract specifies a n~n~ber of as detennlned In of acres specified In the processor contract); contracted acres contracted for the crop year; or section {2) For which the actuarial documents do not provide with a the result of dividing the quantity of 18(e)(1 )(IQ(A). the Information needed to determine a premium processor production stated In the processor to be contract by your approved yield, If the rate unless a written agreement designates such Insured processor contract specifies a premium rate; quantity of production that will be (3) Used for conservation purposes, intended to be accepted. If a minimum number of left unplanted under any program administered } acres or amount of production Is by the USDA or other government agency, or specified In the processor contract. required to be left unharvested under the terms of I thls amount will be used to determine the lease or any other agreement (The number of

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EXHIBIT 4 42 • .. acres eligible for prevented planting will be (Evidence that you have previously planted th limited to the number of acres specified In the crop on the unit will be considered adequat lease for which you are required to pay either proof unless your planting practices or rotation; cash or share rent); requirements show that the acreage would hav (4) On which the Insured crop Is prevented from remained fallow or been planted to another crop; ) being planted, if you or any other person receives {1 0) Based on an Irrigated practice Anal Guarante a prevented planting payment for any crop for the unless adequate Irrigation facilities were in plac same acreage In the same crop year (It Is your to carry out an irrigated practice on the acreag responsibility to determine whether a prevented prior to the Insured cause of loss that prevente planting payment had previously been made for you from planting. Acreage with an Irrigate the crop year on the acreage for which you are practice Final Guarantee will be limited to th now claiming a prevented planting payment and number of acres allowed for that practice unde report such information to us before any sections 18(e) and (f); prevented planting payment can be made), (11) Based on a crop type that you did not plant, c excluding share arrangements, unless: did not receive a prevented planting insuranc1 (I) It Is a practice that Is generally recognized by guarantee for, in at least one of the four mo~ agricultural experts or the organic recent crop years. Types for which separat1 agricultural Industry In the area to plant the Insurance guarantees are available must b• second crop for harvest following harvest of included in your approved yield database in a the first Insured crop, and additional least one of the four most recent crop years, o coverage insurance offered under the crops that do not require yield certification (crop! authority of the Act is available in the county for which the Insurance guarantee Is not baset for both crops in the same crop year; on an approved yield) must be reported on you (II) You provide records acceptable to us of acreage report In at least one of the four mos acreage and production that show you have recent crop years except as allowed in sectior double cropped acreage In at least two of the 18(e)(1){1){B). We will limit prevented plantin! last four crop years In which the first insured payments based on a specific crop type to thf crop was planted, or that show the number of acres allowed for that crop type a! applicable acreage was double cropped In at specified In sections 18(e) and (f); or least two of the last four crop years in which (12) If a cause of loss has occurred that woulc the first insured crop was grown on it: and prevent planting at the time: (Iii) The amount of acreage you are double (I) You lease the acreage (except acreage yol cropping in the current crop year does not leased the previous crop year and continue exceed the number of acres for which you to lease in the current crop year); provide the records required in section (ii) You buy the acreage; 18(f)(4)(H); (iii) The acreage is released from a USDP (5) On which the Insured crop is prevented from program which prohibits harvest of a crop; being planted, it (iv) You request a written agreement to Insure (i) Any crop Is planted within or prior to the late the acreage; or planting period or on or prior to the final (v) You acquire the acreage through mean~ planting date if no late planting period is other than lease or purchase (such a~ applicable, unless: inherited or gifted acreage). (A) You meet the double cropping (g) If you purchased an additional coverage policy for a requirements in section 18(f)(4); crop, and you executed a High Risk land Exclusion (B) The crop planted was a cover crop; or Option that separately Insures acreage which has (C) No benefit, including any benefit under been designated as •high risk" land by FCJC under a any USDA program, was derived from Catastrophic Risk Protection Endorsement for that the crop; or crop, the maximum number of acres eligible for a (II) Any volunteer or cover crop Is hayed, grazed prevented planting payment will be limited for each or otherwise harvested within or prior to the policy as specified in sections 18(e) and (f). late planting period or on or prior to the final (h) If you are prevented from planting a crop for which planting date if no late planting period Is you do not have an adequate base of eligible applicable; prevented planting acreage, as determined in (6) For which planting history or conservation plans accordance with section 18(e)(1), your prevented Indicate that the acreage would remain faUow for planting Final Guarantee, premium, and prevented crop rotation purposes or on which any pasture planting payment will be based on the crops Insured or other forage crop Is in place on the acreage for the current crop year, for which you have during the time that planting of the Insured crop remaining eligible prevented planting acreage. The generally occurs in the area; crops used for this purpose will be those that result In (7) That exceeds the number of acres eligible for a a prevented planting payment most similar to the prevented planting payment; prevented planting payment that would have been (8) That exceeds the number of eligible acres made for the crop that was prevented from being physically available for planting; planted. (9) For which you cannot provide proof that you had (1) For example, assume you were prevented from the inputs available to plant and produce a crop planting 200 acres of com and have 100 acres

' ~ 2004 with the expectation of at least producing the yield used to determine the Final Guarantee

National Crop Insurance Services, Inc. Page 19 of 26 eligible for a com prevented planting guarantee that would result In a payment of $40 per acre.

EXHIBIT 4 43 •• You also had 50 acres of potato eligibility that accordance with section 20(g). If resolution cannot be would result In a $100 per acre payment, 90 reached through mediation, or you and we do not acres of grain sorghum eligibility that would result agree to mediation, the disagreement must be In a $30 per acre payment, and 100 acres of resolved through arbitration In accordance with the soybean eligibiHty that would result In a $25 per rules of the American Arbitration Association (AAA), acre payment. Your prevented planting coverage except as provided In sections 20(c) and (f), and for the 200 acres would be based on 100 acres of unless rules are established by FCIC for this purpose. com ($40 per acre), 90 acres of grain sorghum Any mediator or arbitrator with a familial, financial or ($30 per acre), and 10 acres of soybeans ($25 other business relationship to you or us, or our agent per acre). or loss adjuster, Is disqualified from hearing the (2) Prevented planting coverage will be allowed as dispute. specified In this section (18(h)) only If the crop (1) All disputes Involving determinations made by us, that was prevented from being planted meets all except those specified In section 20(d), are policy provisions, except for having an adequate subject to mediation or arbitration. However, If base of eligible prevented planting acreage. the dispute In any way involves a policy or Payment may be made based on crops other procedure Interpretation, regarding whether a than those that were prevented from being specffic policy provision or procedure Is planted even though other policy provisions, applicable to the situation, how It Is applicable, or Including but not limited to, processor contract the meaning of any policy provision or procedure, and rotation requirements, have not been met for either you or we must obtain an Interpretation the crop on which payment Is being based. from FCIC In accordance with 7 CFR part 400, However, If you were prevented from planting subpart X or such other procedures as any non-Irrigated crop acreage and you do not established by FCIC. have any remaining eHgible acreage for that crop {I) Any Interpretation by FCIC will be binding in and you do not have any other crop remaining any mediation or arbitration. with eligible acres under a non-Irrigated practice, (II) Failure to obtain any required interpretation no prevented planting payment will be made for from FCIC will result in the nullification of any the acreage. agreement or award. (i) The prevented planting payment for any eligible (iii) An interpretation by FCIC of a policy acreage within a basic or optional unit will be provision is considered a rule of general determined by: applicability and Is not appealable. If you (1) Multiplying the Anal Guarantee for timely planted disagree with an Interpretation of a policy acreage of the Insured crop by the prevented provision by FCIC, you must obtain a planting coverage level percentage you elected, Director's review from the National Appeals or that Is contained In the Crop Provisions if you Division In accordance wfth 7 CFR 11.6 ) did not elect a prevented planting coverage level before obtaining judicial review In percentage; accordance with subsection.{e); (2) Multiplying the result of section 18(1)(1) by the (iv) An Interpretation by FCIC of a procedure number of eligible prevented planting acres In the may be appealed to the National Appeals unit; and Division in accordance with 7 CFR part 11. (3) Multiplying the result of section 18(1)(2) by your (2) Unless the dispute Is resolved through mediation, share. the arbitrator must provide to you and us a 0) The prevented planting payment for any eligible written statement describing the issues in acreage within an enterprise unit will be determined dispute, the factual findings, the determinations by: and the amount and basis for any award and (1) Multiplying the Final Guarantee for each basic breakdown by claim for any award. The unit or optional unit within the enterprise unit, for statement must also include any amounts timely planted acreage of the insured crop by the awarded for interest. Failure of the arbitrator to prevented planting coverage level percentage provide such written statement will result in the you elected, or that is contained in the Crop nullification of all determinations of the arbitrator. Provisions If you did not elect a prevented All agreements reached through settlement, planting coverage level percentage; Including those resulting from mediation, must be (2) Multiplying the result of section 180)(1) by the In writing and contain at a minimum a statement number of eligible prevented planting acres in of the issues In dispute and the amount of the each basic unit or optional unit within the settlement. enterprise untt; (b) Regardless of whether mediation is elected: (3) Multiplying the result of section 18(j)(2) by your (1) The initiation of arbitration proceedings must share; and occur within one year of the date we denied your (4) Total the results from section 18(j)(3). claim or rendered the determination with which 19. Crops As Payment you disagree, whichever Is later; You must not abandon any crop to us. We will not accept (2) If you fail to initiate arbitration in accordance with any crop as compensation for payments due us. section 20(b)(1) and complete the process, you 20. Mediation, Arbitration, Appeal, Reconsideration, and will not be able to resolve the dispute through Administrative and Judicial Review judicial review; (a) If you and we fall to agree on any determination made (3) If arbitration has been initiated In accordance with by us except those specified in section 20(d), the section 20(b)(1) and completed, and judicial disagreement may be resolved through mediation In review is sought, suit must be filed not later than

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EXHIBIT 4 44 ... one year after the date the arbitration decision {h) Except as provided in section 20{1), no award o was rendered; and seHiement in mediation, arbitration, appeal (4) In any suit, if the dispute in any way involves a administrative review or reconsideration process o policy or procedure interpretation, regarding judicial review can exceed the amount of liablli~ whether a specific policy provision or procedure established or which should have been establishec is applicable to the situation, how it is applicable, under the policy, except for interest awarded ir or the meaning of any policy provision or accordance with section 26. procedure, an interpretation must be obtained (I) In a judicial review only, you may recover attomey1 from FCIC in accordance with 7 CFR part 400, fees or other expenses, or any punitive subpart X or such other procedures as compensatory or any other damages from us only I established by FCIC. Such interpretation will be you obtain a detennination from FCIC that we, ou binding. agent or loss adjuster failed to comply with the tennf (c) Any decision rendered in arbitration Is binding on you of this policy or procedures issued by FCIC and suet and us unless judicial review Is sought in accordance failure resulted in you receiving a payment in ar with section 20(b)(3). Notwithstanding any provision in amount that is less than the amount to which yoL the rules of the AAA, you and we have the right to were entitled. Requests for such a determinatfor judicial review of any decision rendered In arbitration. should be addressed • to the following (d) If you do not agree with any determination made by USDAIRMA/Deputy Administrator of Compliance/Sto,: us or FCIC regarding whether you have used a good 0806, 1400 Independence Avenue, S.W., Washingtor farming practice (excluding determinations by us of D.C. 20250-0806. the amount of assigned production for uninsured 0) If FCIC elects to participate ln the adjustment of you1 causes for your failure to use good farming practices), claim, or modifies, revises or corrects your claim, prio1 you may request ~onslderatlon by FCIC of this to payment, you may not bring an arbitration, determination in accordance with the reconsideration mediation or litigation action against us. You mus1 process established for this purpose and published at request administrative review or appeal in accordance 7 CFR part 400, subpart J (reconsideration). To with section 20(e). resolve disputes regarding determinations of the 21. Access to Insured Crop and Records, and Record amount of assigned production, you must use the Retention arbitration or mediation process contained in this (a) We, and any employee of USDA authorized to section. investigate or review any matter relating to crop (1) You must complete reconsideration before filing insurance, have the right to examine the insured crop suit against FCIC and any such suit must be and all records related to the Insured crop and any brought in the United States district court for the mediation, arbitration or litigation involving the insured district in which the insured farm is located. crop as often as reasonably required during the ) (2) Suit must be filed not later than one year after the date of the decision rendered In the record retention period. (b) You must retain, and provide upon our request, or the reconsideration. request of any employee of USDA authorized to (3) You cannot sue us for determinations of whether investigate or review any matter relating to crop good farming practices were used by you. insurance: (e) Except as provided in section 20(d), if you disagree (1) Complete records of the planting, replanting, with any other determination made by FCIC, you may inputs, production, harvesting, and disposition of obtain an administrative review in accordance with 7 the insured crop on each unit for three years after CFR part 400, subpart J (administrative review) or the end of the crop year (This requirement also appeal in accordance with 7 CFR part 11 (appeal). If applies to all such records for acreage that is not you elect to bring suit after completion of any appeal, Insured); and such suit must be filed against FCIC not later than (2) All records used to establish the amount of one year after the date of the decision rendered in production you certified on your production such appeal. Under no circumstances can you reports used to compute your approved yield for recover any attorney fees or other expenses, or any three years after the end of the crop year for punitive, compensatory or any other damages from which you initially certified such records, unless FCIC. such records have already been provided to us (f) In any mediation, arbitration, appeal, administrative (For example, if your approved yield for the 2003 review, reconsideration or judicial process, the terms crop year was based on production records you of this policy, the Act, and the regulations published at certified for the 1997 through 2002 crop years, 7 CFR chapter IV, including the provisions of 7 CFR you must retain all such records through the 2006 part 400, subpart P, are binding. Conflicts between crop year, unless such records have already this policy and any state or local laws will be resolved been provided to us). in accordance with section 36. If there are conflicts (c) We, or any employee of USDA authorized to between any rules of the AAA and the provisions of investigate or review any matter relating to crop your policy, the provisions of your policy will control. insurance, may extend the record retention period (g) To resolve any dispute through mediation, you and beyond three years by notifying you of such extension we must both: in writing. (1) Agree to mediate the dispute; (d) By signing the application for insurance authorized (2) Agree on a mediator; and under the Act or by continuing insurance for which } (3) Be present or have a designated representative you have previously applied, you authorize us or who has authority to settle the case present, at USDA, or any person acting for us or USDA the mediation. authorized to investigate or review any matter relating

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EXHIBIT 4 45 • to crop insurance, to obtain records relating to the and the other policy will be void, unless boll planting, replanting, inputs, production, harvesting, policies are with: and disposition of the insured crop from any person (I) The same Insurance provider and th• who may have custody of such records, Including but insurance provider agrees otherwise; or not limited to, FSA offices, banks, warehouses, gins, (II) Different insurance providers and boll ) cooperatives, marketing associations, and Insurance providers agree otherwise. accountants. You must assist in obtaining all records (b) Other Insurance Against Fire - If you have othe we or any employee of USDA authorized to insurance, whether valid or not, against damage t< Investigate or review any matter relating to crop the Insured crop by fire during the Insurance period Insurance request from third parties. we will be liable for loss due to fire caused by £ (e) Failure to provide access to the insured crop or the naturally occurring event only for the smaller of: farm, authorize access to the records maintained by (1) The amount of indemnity determined pursuant tc third parties or assist in obtaining such records will this policy without regard to such other insurance result In a determination that no Indemnity Is due for or the crop year In which such failure occurred. (2) The amount by which the loss from fire If (f) Failure to maintain or provide records will result in: determined to exceed the indemnity pald 01 (1) The Imposition of an assigned yield In payable under such other Insurance. accordance with section 4(d)(1) and 7 CFA part (c) For the purpose of section 22(b), the amount of lo~ 400, subpart G for those crop years for which you from fire will be the reduction In revenue of the do not have the required production records to insured crop on the unit involved determined pursuan1 support a certified yield; to this policy. (2) A determination that no indemnity Is due if you 23. Conformity to Food Security Act fall to provide records necessary to determine Although your violation of a number of federal statutes, your Joss; Including the Act, may cause cancellation, termination, or (3) Combination of the optional units Into the voidance of your Insurance contract, you should be appUcable basic unit; specifically aware that your policy will be canceled if you (4) Assignment of production to the units by us If you are determined to be Ineligible to receive benefits under fail to maintain separate records: the Act due to violation of the controlled substance (I) For your basic units; or provision (title XVII of the Food Security Act of 1985 (Pub. {ii) For any uninsurable acreage; and L 99-198)) and the regulations promulgated under the Act {5) The imposition of consequences specified In by USDA. Your Insurance policy will be canceled If you are section 7(g), as applicable. determined, by the appropriate Agency, to be In violation {g) If the Imposition of an assigned yield under section of these provisions. We wHI recover any and all monies 21(f)(1) would affect an Indemnity, prevented planting paid to you or received by you during your period of payment or replant payment that was paid In a prior Ineligibility, and your premium will be refunded, less a crop year, such claim will be adjusted and you will be reasonable amount for expenses and handling not to required to repay any overpaid amounts. exceed 20 percent of the premium paid or to be paid by 22. Other Insurance you. (a) Other Uke Insurance - Nothing In this section 24. Amounts Due Us prevents you from obtaining other Insurance not (a) Interest will accrue at the rate of 1.25 percent simple authorized under the Act. However, unless specifically Interest per calendar month, or any portion thereof, on required by policy provisions, you must not obtain any any unpaid amount owed to us or on any unpaid other crop insurance authorized under the Act on your administrative fees owed to FCIC. For the purpose of share of the Insured crop. If you cannot demonstrate premium amounts owed to us or administrative fees that you did not intend to have more than one policy owed to FCIC, Interest wm start to accrue on the first in effect, you may be subject to the consequences day of the month following the premium billing date authorized under this policy, the Act, or any other specified in the Special Provisions. We will collect any applicable statute. If you can demonstrate that you did unpaid amounts owed to us and any interest owed not intend to have more than one policy in effect (For thereon and, prior to the termination date, we will example, an application to transfer your policy or collect any administrative fees and interest owed written notification to an Insurance provider that states thereon to FCIC. After the termination date, FCIC will you want to purchase, or transfer, Insurance and you collect any unpaid administrative fees and any want any other policies for the crop canceled would interest owed thereon. demonstrate you did not intend to have duplicate (b) For the purpose of any other amounts due us, such policies), and: as repayment of Indemnities found not to have been (1) One Is an additional coverage policy and the earned, interest will start to accrue on the date that other is a Catastrophic Risk Protection policy: notice Is Issued to you for the collection of the (I) The additional coverage policy will apply if uneamed amount. Amounts found due under this both policies are with the same insurance paragraph will not be charged Interest if payment Is provider or, if not, both Insurance providers made within 30 days of Issuance of the notice by us. agree; or The amount will be considered delinquent If not paid (ii) The policy with the earliest date of within 30 days of the date the notice Is Issued by us. application will be in force if both Insurance (c) All amounts paid win be applied first to expenses of providers do not agree; or collection (see section 24(d)) if any, second to the (2) Both are additional coverage policies or both are reduction of accrued interest, and then to the ) Catastrophic Risk Protection policies, the policy reduction of the principal balance. with the earliest date of application will be In force

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EXHIBIT 4 46 •• (d) If we determine that it Is necessary to contract with a loss from an insurable cause and fall to file a claim fc cotlection agency or to employ an attorney to assist In indemnity within 60 days after the Harvest Price i collection, you agree to pay all of the expenses of released, the assignee may submit the claim for indemnit collection. not later than 15 days after the 60-day period has explrec , (e) The portion of the amounts owed by you for a potlcy We will honor the terms of the assignment only if we ca I authorized under the Act that are owed to FCIC may accurately determine the amount of the claim. Howeve1 be collected In part through administrative offset from no action will lie against us for failure to do so. payments you receive from United States government 30. Subrogation (Recovery of Loss From a Third Party) agencies In accordance with 31 U.S.C. chapter 37. Since you may be able to recover all or a part of your los Such amounts Include all administrative fees, and the from someone other than us, you must do all you can to share of the overpaid indemnities and premiums preserve this right. If you receive any compensation fc retained by FCIC plus any Interest owed thereon. your loss, excluding private hail insurance payments an• 25. [Reserved] payments covered by section 33, and the Indemnity dut 26. Interest Umltations under this policy plus the amount you receive from th• We will pay simple Interest computed on the net indemnity person exceeds the amount of your actual loss, th• ultimately found to be due by us or by a final judgment of a Indemnity will be reduced by the excess amount, or if tht court of competent jurisdiction, from and Including the 61 51 Indemnity has already been paid, you will be required It day after the date you sign, date, and submit to us the repay the excess amount, not to exceed the amount of th1 proper1y completed claim on our form. Interest will be paid indemnity. The total amount of the actual loss Is tht only If the reason for our failure to timely pay Is NOT due difference between the value of the insured crop befon to your failure to provide Information or other material and after the loss, based on your production records am necessary for the computation or payment of the the Harvest Price available for the crop. If we pay you fo indemnity. The Interest rate will be that established by the your loss, your right to recovery will, at our option, belen( Secretary of the Treasury under section 12 of the Contract to us. If we recover more than we paid you plus ou Disputes Act of 1978 (41 U.S.C. 611) and published In the expenses, the excess will be paid to you. Federal Register semiannually on or about January 1 and 31. Descriptive Headings July 1 of each year, and may vary with each publication. The descriptive headings of the various policy provislom 27. Concealment. Misrepresentation or Fraud are formulated for convenience only and are not intende< (a) If you have falsely or fraudulently concealed the fact to affect the construction or meaning of any of the policl that you are Ineligible to receive benefits under the provisions. Act or if you or anyone assisting you has Intentionally 32. Notices concealed or misrepresented any material fact (a) All notices required to be given by you must be ir relating to this policy: writing and received by your crop insurance agen (1) This policy will be voided; and within the designated time unless otherwise providec j (2) You may be subject to remedial sanctions In by the notice requirement. Notices required to be accordance with 7 CFR part 400, subpart R. given immediately may be by telephone or in persor (b) Even though the policy is void, you may still be and confirmed In writing. Time of the notice will be required to pay 20 percent of the premium due under determined by the time of our receipt of the writter the policy to offset costs incurred by us in the service notice. If the date by which you are required to submi~ of this policy. If previously paid, the balance of the a report or notice falls on Saturday, Sunday, or e premium will be returned. Federal holiday, or, if your agent's office is, for an} (c) Voidance of this policy will result in you having to reason, not open for business on the date you are reimburse all indemnities paid for the crop year In required to submit such notice or report, such notice which the voidance was effective. or report must be submitted on the next business day. (d) Voidance will be effective on the first day of the (b) All notices and communications required to be sent b~ insurance period for the crop year in which the act us to you will be mailed to the address contained in occurred and will not affect the policy for subsequent your records located with your crop insurance agent. crop years unless a violation of this section also Notice sent to such address will be conclusively occurred In such crop years. presumed to have been received by you. You should 28. Transfer of Coverage and Right to Indemnity advise us immediately of any change of address. If you transfer any part of your share during the crop year, 33. Multrple Benefits you may transfer your coverage rights, If the transferee Is (a) If you are eligible to receive an indemnity under an eligible for crop insurance. We will not be liable for any additional coverage plan of insurance and are also more than the liability determined in accordance with your eligible to receive benefits for the same loss under policy that existed before the transfer occurred. The any other USDA program, you may receive benefits transfer of coverage rights must be on our form and will under both programs, unless specifically limited by not be effective until approved by us in writing. Both you the crop Insurance contract or by law. and the transferee are jointly and severally liable for the (b) The total amount received from all such sources may payment of the premium and administrative fees. The not exceed the amount of your actual loss. The total transferee has all rights and responslbflities under this amount of the actual loss is the difference between policy consistent with the transferee's Interest. the fair market value of the Insured commodity before 29. Assignment of Indemnity and after the loss, based on your production records You may assign to another party your right to an indemnity and the Harvest Price available for the crop. for the crop year. The assignment must be on our form (c) FSA will determine and pay the additional amount due and will not be effective until approved in writing by us. you for any applicable USDA program, after first The assignee wfll have the right to submit all loss notices considering the amount of any crop insurance and forms as required by the policy. If you have suffered a Indemnity.

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EXHIBIT 4 47 • 34.' Written Agreements (A) Insure unrated land, or an unratec Terms of this policy which are specifically designated for practice, type or variety of a crop (fa the use of written agreements may be altered by written which that practice, type, or variety o agreement in accordance with the following: the crop Is insured under CAC for thit (a) You must apply in writing for each written agreement crop year) and such written agreement! no later than the sales closing date, except as may be approved only after inspectior provided In section 34(f); of the acreage by us and the writter (b) The application for a written agreement must contain agreement may only be approved b~ all variable terms of the contract between you and us FCIC if the crop's potential is equal to o that will be In effect If the written agreement Is not exceeds 90 percent of the yield used tc approved. determine the Anal Guarantee and yoL (c) A written agreement may only be used to Insure a sign the agreement on the same day the CRC crop In a county without a CAC program If the appraisal is made; or county without a CRC program Is adjacent to a county (B) Establish optional units In accordance with a CRC program; with FCIC procedures that otherwise (d) If approved by FCIC, the written agreement will would not be allowed, change the Include all terms of the contract, Including, but not premium rate or transitional yield for limited to, crop practice, type or variety, the guarantee designated high risk land, or Insure (except for a written agreement In effect for more than acreage that Is greater than 5 percent of one year) and premium rate or lnfonnatlon needed to the planted acreage In the unit where detennlne the guarantee and premium rate; the acreage has not been planted and (e) Each written agreement will only be valid for the harvested or Insured in any of the three number of crop years specffied in the written previous crop years; or agreement and a multi-year written agreement: (li) On or before the cancellation date, to Insure (1) Will only apply for any particular crop year a crop in a county that does not have designated In the written agreement If all terms actuarial documents for the crop (If the Crop and conditions In the written agreement are still Provisions do not provide a cancellation date applicable for the crop year and the conditions for the county, the cancellation date for other under which the written agreement has been Insurable crops In the same state that have provided have not changed prior to the beginning similar final planting and harvesting dates of the insurance period (If conditions change will be applicable); or during or prior to the crop year, the written (UI) On or before the date specified In the Crop agreement will not be effective for that crop year Provisions or Special Provisions; but may still be effective for a subsequent crop (3) On or before the sales closing date, for all year if conditions under which the written requests for renewal of written agreements, agreement has been provided exist for such except as provided In section 34(f)(1); year); (4) To add land or a crop to an existing written (2) May be canceled In writing by: agreement or to add land or a crop to a request (i) FCIC not less than 30 days before the for a written agreement provided the request is cancellation date if it discovers that any tenn submitted by the deadlines specified In this or condition of the written agreement. subsection; including the premium rate, is not (g) A request for a written agreement must contain: appropriate for the crop; or (1) For an written agreement requests: (ii) You or us on or before the cancellation date; (I) A completed "Request for Actuarial Change• (3) That is not renewed in writing after it expires, Is form; not applicable for a crop year, or is canceled, (li) An APH form(except for policies that do not then Insurance coverage will be in accordance require APH) containing all the Information with the terms and conditions stated in this policy, needed to determine the approved yield for without regard to the written agreement; and the current crop year (completed APH form), (4) Will be automaticaly cancelled If you transfer signed by you, or an unsigned, completed your policy to another Insurance provider (No APH form with the applicable production notice will be provided to you and for any reports signed and dated by you that are subsequent crop year, for a written agreement to based on verifiable records of actual yields be effective, you must timely request renewal of for the crop and county for which the written the written agreement In accordance with this agreement Is being requested (the actual section); yields do not necessarily have to be from the (f) A request for a written agreement may be submitted: same physical acreage for which you are (1) After the sales closing date, but on or before the requesting a written ·agreement) for at least acreage reporting date, if you demonstrate your the most recent crop year during the base physical inability to submit the request prior to the period and verifiable records of actual yields sales closing date (For example, you have been If required by FCIC; hospitalized or a blizzard has made It impossible (iii) The legal description of the land (In areas to submit the written agreement request In where legal descriptions are available), FSA person or by mall); Farm Serial Number Including tract number, (2) For the first year the written agreement will be In and a FSA aerial photograph, acceptable effect only: Geographic Information System or Global (I) On or before the acreage reporting date, to: Positioning System maps or other leglble

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EXHIBIT 4 48 maps delineating field boundaries where you (2) The original written agreement Is signed by yoJ Intend to plant the crop for which Insurance and sent to us not later than the expiration date is requested; and and (lv) All other lnfonnatlon that supports your (3) The crop meets the minimum appraisal amour request for a written agreement (Including specified in section 34(f)(2)(i)(A), if applicable; ) but not limited to records pertaining to (k) Multiyear written agreements may be canceled Brll levees, drainage systems, flood frequency requests for renewal may be rejected if the severity o data, soil types, elevation, etc.); frequency of your loss experience under the writte1 {2) For written agreement requests for counties agreement Is significantly worse than expected basec without actuarial documents for the crop, the on the Information provided by you or used tc requirements In section 34(g)(1) (except section establish your premium rate and the loss experienc1 34(g)( 1){II)) and: of other crops with similar risks In the area; (I) A completed APH form (except for policies (/) With respect to your and our abflity to reject an offe that do not require APH) based on verifiable for a written agreement: records of actual yields for the crop and (1) When a single Request for Actuarial ChangE county for which the written agreement is form Is submitted, regardless of how man! being requested (the actual yields do not requests for changes are contained on the form necessarily have to be from the same you and we can only accept or reject the writter physical acreage for which you are agreement In Its entirety (you cannot rejec requesting a written agreement) for at least specific terms of the written agreement anc the most recent three consecutive crop years accept others); during the base period; (2) When multiple Request for Actuarial ChangE (H) Acceptable production records for at least forms are submitted, regardless of when thE the most recent three consecutive crop forms are submitted, for the same condition or fo1 years; the same crop (I.e., to Insure com on ten lega (iii) The dates you and other growers in the area descriptions where there are no actuarfa normally plant and harvest the crop, if documents In the county or the request is tc applicable; change the premium rates from the high ris~ (iv) The name, location of, and approximate rates) all these forms may be treated as one distance to the place the crop will be sold or request and you and we will only have the option used by you; of accepting or rejecting the written agreement In (v) For any Irrigated practice, the water source, Its entirety (you cannot reject specific terms of the method of irrigation, and the amount of water written agreement and accept others); needed for an irrigated practice for the crop; (3) When multiple Request for Actuarial Change and forms are submitted, regardless of when the (vi) All other information that supports your forms are submitted, for the different conditions request for a written agreement (such as or for different crops, separate agreements may pubHcations regarding yields, practices, be issued and you and we will have the option to risks, climatic data, etc.); and accept or reject each written agreement and (3) Such other fnfonnatlon as specified In the Special (4) If we reject an offer for a written agreement Provisions or required by FCIC; approved by FCIC, you may seek arbitration or (h) A request for a written agreement will not be accepted mediation of our decision to reject the offer in if: accordance with section 20; (1) The request is submitted to us after the deadline (m) Any Information that is submitted by you after the contained In sections 34(a) or (f); applicable deadlines In sections 34(a) and (f) will not (2) All the information required in section 34(g) Is not be considered, unless such Information is specifically submitted to us with the request for a written requested in accordance with section 34(g)(3); agreement (The request for a written agreement (n) If the written agreement or the policy is canceled for may be accepted if any missing Information Is any reason, or the period for which an existing written available from other acceptable sources): or agreement Is In effect ends, a request for renewal of (3) The request Is to add land to an existing written the written agreement must contain all the lnfonnation agreement or to add land to a request for a required by this section and be submitted In written agreement and the request to add the accordance with section 34(f}, unless otherwise land Is not submitted by the deadlines specified specified by FCIC; and In sections 34{a) or (f). (o) If a request for a written agreement Is not approved (I) A request for a written agreement will be denied if: by FCIC, a request for a written agreement for any (1) FCIC determines the risk Is excessive; subsequent crop year that fails to address the stated (2) Your APH history demonstrates you have not basis for the denial win not be accepted (If the request produced at least 50 percent of the transitional for a written agreement contains the same infonnation yield for the crop, type, and practice obtained that was previously rejected or denied, you will not from an adjacent county with similar agronomic have any right to arbitrate, mediate or appeal the non- conditions and risk exposure; acceptance of your request). (3) Agricultural experts or the organic agricultural 35. Substitution of Yields Industry determines the crop is not adapted to the (a) When you have actual yields in your production county; history database that, due to an insurable cause of 0) A written agreement will be denied unless: loss, are less than 60 percent of the applicable (1) FCIC approves the written agreement; transitional yield (T-yield) you may elect, on an

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EXHIBIT 4 49 • •• Individual actual yield basis, to exclude and replace (c) On the date you report your acreage, you must have: one or more of any such yields within each database. (1) For certified organic acreage, a writter (b) Each election made in section 35{a) must be made on certification in effect from a certifying agen~ or before the production reporting date for the Insured Indicating the name of the entity certified crop and each such election will remain in effect for effective date of certification, certificate number, succeeding years unless cancelled by the production types of commodities certified, and name and reporting date for the succeeding crop year. If you address of the certifying agent (A certificate cancel an election, the actual yield will be used in the Issued to a tenant may be used to qualify a database. For example, If you elected to substitute landlord or other similar arrangement); yields In your database for the 1998 and 2000 crop (2) For transitional acreage, a certificate as year, for any subsequent crop year, you can elect to described In section 37(c)(1), or written cancel the substitution for either or both years. documentation from a certifying agent Indicating (c) Each excluded actual yield will be replaced with a an organic plan is In effect for the acreage; and yield equal to 60 percent of the applicable T -yield for (3) Records from the certifying agent showing the the crop year in which the yield Is being replaced (For specific location of each field of certified organic, example, if you elect to exclude a 2001 crop year transitional, buffer zone, and acreage not actual yield, the T-yleld in effect for the 2001 crop maintained under organic management year in the county will be used. If you also elect to (d) If you claim a loss on any acreage insured under an exclude a 2002 crop year actual yield, the T-yield In organic farming practice, you must provide us with effect for the 2002 crop year in the county will be copies of the records required In section 37(c). used). The replacement yields wiU be used in the (e) If any acreage qualifies as certified organic or same manner as actual yields for the purpose of transitional acreage on the date you report such calculating the approved yield. acreage, and such certification Is subsequently (d) Once you have elected to exclude an actual yield revoked by the certifying agent, or the certifying agent from the database, the replacement yield will remain no longer considers the acreage as transitional In effect until such time as that crop year Is no longer acreage for the remainder of the crop year, that included In the database unless this election Is acreage will remain Insured under the reported cancelled In accordance with section 35(b). practice for which it quaUfled at the time the acreage (e) Although your approved yield will be used to was reported. Any loss due to failure to comply with determine your amount of premium owed, the organic standards will be considered an uninsured premium rate will be increased to cover the additional cause of loss. risk associated with the substitution of higher yields. (f) Contamination by application or drift of prohibited 36. Applicability of State and Local Statutes substances onto land on which crops are grown using If the provisions of this policy conflict with statutes of the organic farming practices will not be an Insured peril State or locality In which this policy is Issued, the policy on any certified organic, transitional or buffer zone provisions will prevaiL State and local laws and regulations acreage. in conflict with federal statutes, this policy, and the (g) In addition to the provisions contained in section 18(f), applicable regulations do not apply to this policy. prevented planting coverage will not be provided for 37. Organic Fanning Practices any acreage based on an organic farming practice In (a) In accordance with section 9(b)(2), Insurance will not excess of the number of acres that will be grown be provided for any crop grown using an organic under an organic farming practice and shown as such farming practice, unless the Information needed to In the records required In section 37(c). determine a premium rate for an organic farming (h) In lieu of the provisions contained in section 18(f){1) practice is specified on the actuarial table, or that specify prevented planting acreage within a field insurance Is allowed by a written agreement. that contains planted acreage will be considered to be (b) If Insurance is provided for an organic farming acreage of the same practice that is planted In the practice as specified in section 37(a), only the field, prevented planting acreage will be considered following acreage will be insured under such practice: as organic practice acreage if it Is Identified as (1) Certified organic acreage; certified organic, transitional, or buffer zone acreage (2) Transitional acreage being converted to certified In the organic plan. organic acreage In accordance with an organic plan; and (3) Buffer zone acreage.

)

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EXHIBIT 4 50 | | Positive As of: June 4, 2015 4:28 PM EDT

9 USCS § 10 Current through PL 114-13, approved 5/19/15

United States Code Service - Titles 1 through 54 > TITLE 9. ARBITRATION > CHAPTER 1. GENERAL PROVISIONS

§ 10. Same; vacation; grounds; rehearing (a) In any of the following cases the United States court in and for the district wherein the award was made may make an order vacating the award upon the application of any party to the arbitration-- (1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators, or either of them; (3) where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced; or (4) where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and definite award upon the subject matter submitted was not made. (b) If an award is vacated and the time within which the agreement required the award to be made has not expired, the court may, in its discretion, direct a rehearing by the arbitrators. (c) The United States district court for the district wherein an award was made that was issued pursuant to section 580 of title 5 may make an order vacating the award upon the application of a person, other than a party to the arbitration, who is adversely affected or aggrieved by the award, if the use of arbitration or the award is clearly inconsistent with the factors set forth in section 572 of title 5.

History

(July 30, 1947, ch 392, § 1,61 Stat. 672; Nov. 15, 1990, P.L. 101-552, § 5, 104 Stat. 2745; Aug. 26, 1992, P.L. 102-354, § 5(b)(4), 106 Stat. 946; May 7, 2002, P.L. 107-169, § 1, 116 Stat. 132.)

Prior law and revision: This section is based on Act Feb. 12, 1925, ch 213, § 10, 43 Stat. 885 (§ 10 of former Title 9).

EXHIBIT 5 | | Neutral As of: June 4, 2015 4:31 PM EDT

Tex. Bus. & Com. Code § 17.42 This document is current through the 2013 3rd Called Session

Texas Statutes and Codes > BUSINESS AND COMMERCE CODE > TITLE 2. COMPETITION AND TRADE PRACTICES > CHAPTER 17. DECEPTIVE TRADE PRACTICES > SUBCHAPTER E. DECEPTIVE TRADE PRACTICES AND CONSUMER PROTECTION

§ 17.42. Waivers: Public Policy (a) Any waiver by a consumer of the provisions of this subchapter is contrary to public policy and is unenforceable and void; provided, however, that a waiver is valid and enforceable if: (1) the waiver is in writing and is signed by the consumer; (2) the consumer is not in a significantly disparate bargaining position; and (3) the consumer is represented by legal counsel in seeking or acquiring the goods or services. (b) A waiver under Subsection (a) is not effective if the consumer’s legal counsel was directly or indirectly identified, suggested, or selected by a defendant or an agent of the defendant. (c) A waiver under this section must be: (1) conspicuous and in bold-face type of at least 10 points in size; (2) identified by the heading ″Waiver of Consumer Rights,″ or words of similar meaning; and (3) in substantially the following form: ″I waive my rights under the Deceptive Trade Practices-Consumer Protection Act, Section 17.41 et seq., Business & Commerce Code, a law that gives consumers special rights and protections. After consultation with an attorney of my own selection, I voluntarily consent to this waiver.″ (d) The waiver required by Subsection (c) may be modified to waive only specified rights under this subchapter. (e) The fact that a consumer has signed a waiver under this section is not a defense to an action brought by the attorney general under Section 17.47.

Enacted by Acts 1973, 63rd Leg., ch. 143 (H.B. 417), § 1, effective May 21, 1973; am. Acts 1981, 67th Leg., ch. 307 (S.B. 619), § 1, effective August 31, 1981; am. Acts 1983, 68th Leg., ch. 883 (H.B. 1438), § 1, effective August 29, 1983; am. Acts 1987, 70th Leg., ch. 167 (S.B. 892), § 5.02(6), effective September 1, 1987; am. Acts 1989, 71st Leg., ch. 380 (S.B. 437), § 1, effective September 1, 1989; am. Acts 1995, 74th Leg., ch. 414 (H.B. 668), § 1, effective September 1, 1995.

EXHIBIT 6 | | Positive As of: June 4, 2015 4:31 PM EDT

Tex. Bus. & Com. Code § 17.565 This document is current through the 2013 3rd Called Session

Texas Statutes and Codes > BUSINESS AND COMMERCE CODE > TITLE 2. COMPETITION AND TRADE PRACTICES > CHAPTER 17. DECEPTIVE TRADE PRACTICES > SUBCHAPTER E. DECEPTIVE TRADE PRACTICES AND CONSUMER PROTECTION

§ 17.565. Limitation

All actions brought under this subchapter must be commenced within two years after the date on which the false, misleading, or deceptive act or practice occurred or within two years after the consumer discovered or in the exercise of reasonable diligence should have discovered the occurrence of the false, misleading, or deceptive act or practice. The period of limitation provided in this section may be extended for a period of 180 days if the plaintiff proves that failure timely to commence the action was caused by the defendant’s knowingly engaging in conduct solely calculated to induce the plaintiff to refrain from or postpone the commencement of the action.

Enacted by Acts 1979, 66th Leg., ch. 603 (S.B. 357), § 8, effective August 27, 1979; am. Acts 1987, 70th Leg., ch. 167 (S.B. 892), § 5.02(7), effective September 1, 1987 (renumbered from Sec. 17.56A).

Annotations

Case Notes

Antitrust & Trade Law: Consumer Protection: General Overview Antitrust & Trade Law: Consumer Protection: Deceptive Acts & Practices: General Overview Antitrust & Trade Law: Consumer Protection: Deceptive Acts & Practices: State Regulation Antitrust & Trade Law: Consumer Protection: Deceptive Labeling & Packaging: State Regulation Antitrust & Trade Law: State Civil Action Antitrust & Trade Law: Trade Practices & Unfair Competition: General Overview Antitrust & Trade Law: Trade Practices & Unfair Competition: State Regulation: Claims Banking Law: Consumer Protection: State Law: General Overview Civil Procedure: Pleading & Practice: Defenses, Demurrers & Objections: Affirmative Defenses: General Overview Civil Procedure: Pleading & Practice: Defenses, Demurrers & Objections: Affirmative Defenses: Statutes of Limitations: General Overview Civil Procedure: Pleading & Practice: Pleadings: Amended Pleadings: General Overview Civil Procedure: Pleading & Practice: Pleadings: Amended Pleadings: Relation Back Civil Procedure: Pleading & Practice: Pleadings: Time Limitations: General Overview Civil Procedure: Summary Judgment: General Overview Civil Procedure: Summary Judgment: Burdens of Production & Proof: General Overview

EXHIBIT 7 | | Positive As of: June 4, 2015 4:32 PM EDT

Tex. Civ. Prac. & Rem. Code § 16.003 This document is current through the 2013 3rd Called Session

Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 2. TRIAL, JUDGMENT, AND APPEAL > SUBTITLE B. TRIAL MATTERS > CHAPTER 16. LIMITATIONS > SUBCHAPTER A. LIMITATIONS OF PERSONAL ACTIONS

§ 16.003. Two-Year Limitations Period (a) Except as provided by Sections 16.010, 16.0031, and 16.0045, a person must bring suit for trespass for injury to the estate or to the property of another, conversion of personal property, taking or detaining the personal property of another, personal injury, forcible entry and detainer, and forcible detainer not later than two years after the day the cause of action accrues. (b) A person must bring suit not later than two years after the day the cause of action accrues in an action for injury resulting in death. The cause of action accrues on the death of the injured person.

Enacted by Acts 1985, 69th Leg., ch. 959 (S.B. 797), § 1, effective September 1, 1985; am. Acts 1995, 74th Leg., ch. 739 (H.B. 2330), § 2, effective June 15, 1995; am. Acts 1997, 75th Leg., ch. 26 (H.B. 368), § 2, effective May 1, 1997; am. Acts 2005, 79th Leg., ch. 97 (S.B. 15), § 3, effective September 1, 2005.

Notes Legislative Note. -- * See Texas Litigation Guide, Ch. 72, Limitation of Actions.

Editor’s Notes. --

Acts 2005, 79th Leg., ch. 97 (S.B. 15), § 10 provides: ″There is a direct appeal to the supreme court from an order, however characterized, of a trial court granting or denying a temporary or otherwise interlocutory injunction or a permanent injunction on the grounds of the constitutionality or unconstitutionality, or other validity or invalidity, under the state or federal constitution of all or any part of this Act. The direct appeal is an accelerated appeal.″ 2005 amendment, added ″16.0031″ in (a).

Banking Law: Consumer Protection: Fair Debt Collection: Unfair Practices Bankruptcy Law: Case Administration: Examiners, Officers & Trustees: General Overview

EXHIBIT 8 | | Positive As of: June 4, 2015 4:34 PM EDT

Tex. Civ. Prac. & Rem. Code § 16.070 This document is current through the 2013 3rd Called Session

Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 2. TRIAL, JUDGMENT, AND APPEAL > SUBTITLE B. TRIAL MATTERS > CHAPTER 16. LIMITATIONS > SUBCHAPTER D. MISCELLANEOUS PROVISIONS

§ 16.070. Contractual Limitations Period (a) Except as provided by Subsection (b), a person may not enter a stipulation, contract, or agreement that purports to limit the time in which to bring suit on the stipulation, contract, or agreement to a period shorter than two years. A stipulation, contract, or agreement that establishes a limitations period that is shorter than two years is void in this state. (b) This section does not apply to a stipulation, contract, or agreement relating to the sale or purchase of a business entity if a party to the stipulation, contract, or agreement pays or receives or is obligated to pay or entitled to receive consideration under the stipulation, contract, or agreement having an aggregate value of not less than $ 500,000.

Enacted by Acts 1985, 69th Leg., ch. 959 (S.B. 797), § 1, effective September 1, 1985; am. Acts 1991, 72nd Leg., ch. 840 (S.B. 935), § 2, effective August 26, 1991.

Notes 1991 Note: The amendments made by Acts 1991, 72nd Leg., ch. 840 apply to a stipulation, contract, or agreement entered into before, on, or after August 26, 1991. Acts 1991, 72nd Leg., ch. 840, § 5. * See Texas Litigation Guide, Ch. 72, Limitation of Actions.

Civil Procedure: Federal & State Interrelationships: Choice of Law: General Overview Civil Procedure: Federal & State Interrelationships: Federal Common Law: General Overview Contracts Law: Breach: Causes of Action: General Overview Contracts Law: Contract Conditions & Provisions: Conditions Precedent Contracts Law: Defenses: Statutes of Limitations Governments: Legislation: Statutes of Limitations: General Overview Governments: Legislation: Statutes of Limitations: Time Limitations Governments: Legislation: Statutes of Limitations: Waivers Insurance Law: Claims & Contracts: Policy Interpretation: General Overview

EXHIBIT 9 | | Positive As of: June 4, 2015 4:35 PM EDT

Tex. Civ. Prac. & Rem. Code § 171.021 This document is current through the 2013 3rd Called Session

Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 7. ALTERNATE METHODS OF DISPUTE RESOLUTION > CHAPTER 171. GENERAL ARBITRATION > SUBCHAPTER B. PROCEEDINGS TO COMPEL OR STAY ARBITRATIONS

§ 171.021. Proceeding to Compel Arbitration (a) A court shall order the parties to arbitrate on application of a party showing: (1) an agreement to arbitrate; and (2) the opposing party’s refusal to arbitrate. (b) If a party opposing an application made under Subsection (a) denies the existence of the agreement, the court shall summarily determine that issue. The court shall order the arbitration if it finds for the party that made the application. If the court does not find for that party, the court shall deny the application. (c) An order compelling arbitration must include a stay of any proceeding subject to Section 171.025.

Enacted by Acts 1997, 75th Leg., ch. 165 (S.B. 898), § 5.01, effective September 1, 1997.

Notes

For information regarding the reorganization of former Chapter 171, see the editor’s notes following Tex. Civ. Prac. & Rem. Code § 171.001.

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EXHIBIT 10 | | Positive As of: June 4, 2015 4:35 PM EDT

Tex. Civ. Prac. & Rem. Code § 171.088 This document is current through the 2013 3rd Called Session

Texas Statutes and Codes > CIVIL PRACTICE AND REMEDIES CODE > TITLE 7. ALTERNATE METHODS OF DISPUTE RESOLUTION > CHAPTER 171. GENERAL ARBITRATION > SUBCHAPTER D. COURT PROCEEDINGS

§ 171.088. Vacating Award (a) On application of a party, the court shall vacate an award if: (1) the award was obtained by corruption, fraud, or other undue means; (2) the rights of a party were prejudiced by: (A) evident partiality by an arbitrator appointed as a neutral arbitrator; (B) corruption in an arbitrator; or (C) misconduct or wilful misbehavior of an arbitrator; (3) the arbitrators: (A) exceeded their powers; (B) refused to postpone the hearing after a showing of sufficient cause for the postponement; (C) refused to hear evidence material to the controversy; or (D) conducted the hearing, contrary to Section 171.043, 171.044, 171.045, 171.046, or 171.047, in a manner that substantially prejudiced the rights of a party; or (4) there was no agreement to arbitrate, the issue was not adversely determined in a proceeding under Subchapter B, and the party did not participate in the arbitration hearing without raising the objection. (b) A party must make an application under this section not later than the 90th day after the date of delivery of a copy of the award to the applicant. A party must make an application under Subsection (a)(1) not later than the 90th day after the date the grounds for the application are known or should have been known. (c) If the application to vacate is denied and a motion to modify or correct the award is not pending, the court shall confirm the award.

Enacted by Acts 1997, 75th Leg., ch. 165 (S.B. 898), § 5.01, effective September 1, 1997.

EXHIBIT 11 Tex. Const. Art. I, § 13 This document is current through the 2015 regular session, 84th Legislature, S.B. 293 (chapter 2).

Texas Constitution > CONSTITUTION OF THE STATE OF TEXAS 1876 > ARTICLE I. BILL OF RIGHTS

§ 13. Excessive Bail or Fines; Cruel and Unusual Punishment; Remedy by Due Course of Law.

Excessive bail shall not be required, nor excessive fines imposed, nor cruel or unusual punishment inflicted. All courts shall be open, and every person for an injury done him, in his lands, goods, person or reputation, shall have remedy by due course of law.

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EXHIBIT 12