P&SP 2300 Trust Agreement

Instructions to Complete
Trust Agreement Form
Form P&SP-2300
In these instructions, you refer to a packer, market agency or dealer (referred to as the Principal).
When you provide one or more irrevocable, transferable, standby letter(s) of credit, issued by a Federally-insured
bank or institution to meet the bonding requirements of the Packers and Stockyards Program, use form P&SP-2300
for the trust agreement (TA), governing said funds. A trust agreement, along with the standby letter(s) of credit,
must be executed to cover your operation with the Packers and Stockyards Program.
A trust agreement requires complete and correct information to be submitted to the Packers and Stockyards Program
on Form P&SP-2300. If any information is missing or incorrect, the Packers and Stockyards Program will return the
trust agreement form to the principal for completion or correction.
Operating without proper registration and bond may subject the principal to severe penalties under law, including a
fine of not more than $11,000 for each violation.
Mail one fully executed copy of the completed form P&SP-2300, along with a photocopied letter of credit to the
regional office of the Packers and Stockyards Program as listed below. The states covered by each regional office
are listed below its address.
Regional Offices of the Packers and Stockyards Program
Grain Inspection, Packers and Stockyards Administration
Eastern Regional Office
Western Regional Office
Midwestern Regional Office
Suite 230
3950 Lewiston St., Suite 200
Room 317
75 Spring Street
Aurora, CO 80011-1556
210 Walnut Street
Atlanta, GA 30303-3308
Telephone: (303) 375-4240
Des Moines, IA 50309-2110
Telephone: (404) 562-5840
FAX: (303) 371-4609
Telephone: (515) 323-2579
FAX: (404) 562-5848
E-mail:
FAX: (515) 323-2590
PSPDenverCO.GIPSA@usda.gov
E-mail: PSPAtlantaGA.GIPSA@usda.gov
E-mail: PSPDesMoinesIA.GIPSA@usda.gov
States Covered
States Covered
States Covered
AL, AR, CT, DC, DE, FL, GA, LA, AK, AZ, CA, CO, HI, ID, KS, MT, IA, IL, IN, KY, OH, MI, MO, MN,
MA, MD, ME, MS, NC, NH, NJ,
NM, NV, OK, OR, TX, UT, WA,
ND, NE, SD, WI
NY, PA, RI, SC, TN, VA, VT, WV
WY
If you have any questions about the form or completing the form, please contact the appropriate regional office of
the Packers and Stockyards Program listed above.
The Regional Office of the Packers and Stockyards Program will complete Item 1.
The financial institution providing the Irrevocable, Transferable, Standby Letter of Credit may complete lines 1
through 5, and, if named as trustee on the trust agreement, sign line 6(a). In some instances, the Principal may
complete lines 1 through 5 of the form.
If the financial institution writing the letter of credit is not named as Trustee, the Trustee named on the agreement
must sign line 6(a).
The Principal must sign line 6(b).

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Line
No.
1

2

Subject

Instruction

Principal Name

Enter the full name of the principal. The principal’s name must
match the name under which the principal is registered with the
Packers and Stockyards Program. (Contact the Regional Office that
covers your state as listed above, if you need this information.)

Trustee Name

Examples how John Doe might be registered include:
 John Doe
 John Doe Livestock, Inc.
 John Doe Livestock Co., L.L.C.
 John Doe d.b.a. John Doe Livestock Company.
 John Doe and Sam Doe d.b.a. Doe Livestock, or
 John Doe and Sam Doe.
Enter the full name of the trustee named to the trust agreement. A
trustee must always be named for the trust agreement, and must be a
financially responsible, disinterested person. If the bank issuing the
collateral will not act as the trustee, the principal is responsible for
finding a disinterested third party to act as trustee. The trustee cannot
be anyone that is directly involved with the business of the principal.
Some States require that a State agency or official be named as
trustee.

3

Conditions

See separate Trustee Information Package for descriptions of suitable
trustees and for information about State required trustees.
Line 3 defines the conditions that are applicable for livestock
operations. If condition 3 applies, enter the registrant(s) name(s) to
be listed as clearee(s) under this trust agreement in the space available
in the definition for condition 3.
Examples of each of the conditions are:
Condition 1 - The principal sells livestock for the account of others.
Condition 2 - The principal buys livestock for his/her own account or
for the accounts of others.
Condition 3 - The principal is providing bond coverage for other
registrant(s), as clearee(s), and therefore is responsible for the
obligations of the clearee(s).
Condition 4 - The principal is purchasing livestock for purposes of
slaughter, for his/her own account as a packer

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Line
No.

Subject

Instruction

4(a)

Conditions Not Applicable to
Principal’s Operation

Line 4(a) identifies the conditions that are NOT applicable to the
principal’s livestock operation. Based on the principal’s operation,
enter one of the following combinations of conditions to exclude from
the trust agreement:


5

6(a)
and (b)

Effective Date of Trust
Agreement
Signatures

Enter 2, 3 and 4 if the principal will be operating as a market
agency selling on commission.
 Enter 1, 3 and 4 if the principal will be operating as a dealer
buying and selling for his or her own account or as a market
agency buying on commission.
 Enter 1 and 4 if the principal will be operating as a dealer
and/or market agency buying on commission and a clearing
agency responsible for the financial obligations of other
registrants.
 Enter 1, 2 and 4 if the principal is operating solely as a
clearing agency responsible for the financial obligations of
other registrants.
 Enter 1, 2 and 3 if the principal is operating as a packer.
Enter the effective date of the trust agreement. This may be the date
the principal obtains the initial irrevocable, transferable, standby letter
of credit.
a) TRUSTEE’S SIGNATURE: The trustee must sign the form and
enter his/her name, title, address, and telephone number.
b) PRINCIPAL’S SIGNATURE: The principal, or someone
authorized to sign for the principal (i.e. partner, owner, or officer),
must sign the form, where indicated. The person who signs must
enter his/her name, title (if any), address, and telephone number.




P&SP-2300-i

If an individual operation, the principal must sign the trust
agreement.
If a partnership operation, one of the partners must sign the
trust agreement.
If a corporation, limited liability corporation, limited liability
partnership, or association, an owner, officer, or duly
authorized agent of the firm must sign the trust agreement.

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OMB Control No. 0580-0015
Expires: xx/xx/20xx
TA Number: __________________
U.S. DEPARTMENT OF AGRICULTURE
GRAIN INSPECTION, PACKERS AND
STOCKYARDS ADMINISTRATION
PACKERS AND STOCKYARDS
PROGRAM

TRUST AGREEMENT
For Use with One or More Letters of Credit
in Lieu of the Bond Required of Livestock Market Agencies,
Dealers, and Packers Operating Subject to
the Packers and Stockyards Act, 1921, as Amended and Supplemented

Whereas the provisions of the Packers and Stockyards Act, 1921, as amended and supplemented, and the regulations issued thereunder
by the Secretary of Agriculture, hereinafter referred to as “the P&S Act” and “Regulations,” acting through the Deputy Administrator, Packers
and Stockyards Program, Grain Inspection, Packers and Stockyards Administration, United States Department of Agriculture, Washington, D.C.
20250, hereinafter referred to as “Deputy Administrator,” require a good and sufficient surety bond or its equivalent of market agencies, dealers,
and packers as defined in the P&S Act to cover their obligations as such; and
Whereas ____________________________________________________________________________________________________,
(1. Name of Principal)
hereinafter referred to as “Principal,” is engaged in business as a market agency, dealer, or packer as defined in the P&S Act and

____________________________________________________________________________________________________________________,
(2. Name of Trustee)
hereinafter known as the “Trustee,” accepts the obligations of Trustee hereunder;
(3) Now, therefore, Principal has obtained or will obtain, from one or more banks, one or more irrevocable letters of credit, under
which Trustee may draw funds from such banks for the account of Principal for the following purposes and subject to the following conditions:

Applicable if Principal SELLS on commission

(1) If Principal shall pay when due to the person or persons entitled thereto the gross
amount, less lawful charges, for which all livestock is sold for the accounts of others
by Principal,

Applicable if Principal BUYS on commission or as a
dealer

(2) If Principal shall pay when due to the person or persons entitled thereto the
purchase price of all livestock purchased by Principal for his/her own account or for
the accounts of others, and if Principal safely keeps and properly disburses all funds,
if any, which come into his/her hands for the purpose of paying for livestock
purchased for the accounts of others,

Applicable if others CLEAR through Principal

(3) If Principal, acting as a clearing agency responsible for the financial obligations of
other registrants engaged in buying livestock, hereinafter referred to as “clearees,”
including:

or if Principal’s clearees shall (1) pay when due to the person or persons entitled
thereto the purchase price of all livestock purchased by Principal’s clearees for their
own accounts or for the accounts of others and (2) safely keep and properly disburse
all funds coming into the hands of Principal or Principal’s clearees for the purpose of
paying for livestock purchased for the accounts of others,
Applicable if Principal BUYS as a Packer

(4) If Principal shall pay when due to the person or persons entitled thereto the
purchase price of all livestock purchased for purposes of slaughter by Principal for
his/her own account,

then funds drawn by Trustee shall not be liable, but if there are any defaults, failures, or neglects under any one or more of the applicable
conditions, then the funds drawn by the Trustee shall be liable, subject to the following terms, conditions, and limitations:
(4)(a) Conditions __________, __________, and __________ were deleted prior to execution and are not part of the trust agreement.

Form P&SP-2300

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(b)

Any person damaged by failure of Principal to comply with any applicable condition of this agreement, in a transaction
occurring on or after the effective date of this agreement and before the termination date of this agreement in accord with its
provisions, may recover under this agreement in accord with and subject to its provisions. Acts, omissions or failures of
authorized agents or representatives of Principal or persons whom Principal shall knowingly permit to represent themselves as
acting on behalf of Principal shall be taken and construed to be acts, omissions or failures of Principal and to be within the
protection of this agreement to the same extent and in the same manner as if they were the acts of Principal.

(c)

Trustee shall not be liable to pay any claim for recovery under this agreement if it is not in writing and received by either Trustee
or the Deputy Administrator within 60 days from the date of the transaction on which the claim is based. Whichever of these
persons first receives a claim will notify the other at the earliest practicable date.

(d)

Trustee, upon determination that funds are due to a claimant, shall draw funds pursuant to a letter of credit obtained by Principal
under this agreement as are necessary to pay what is due to claimant up to the amount of such letter and pay such funds to the
claimant, except as otherwise provided hereinafter. Trustee, prior to paying any funds to any claimant, shall determine the total
amount due to all claimants under this agreement. If the total amount due all claimants exceeds the total of all funds which can
be drawn by Trustee under letter(s) of credit obtained by Principal under this agreement, Trustee shall distribute funds on a pro
rata basis among the claimants to which funds are due. Payment by Trustee to any claimant and acceptance by any claimant of
payment by Trustee shall discharge Trustee and reduce the amount of funds subject to this agreement as to that claimant in the
amount of payment to that claimant.

(e)

If Principal seeks an order of a court to enjoin the honoring of a draft drawn by Trustee, or an order of a court to enjoin payment
by Trustee of a claim, or both, Trustee shall notify the claimant and the Deputy Administrator. In any such action, Trustee shall
not be obligated to defend. Claimant at his or her own expense may defend in the name of Trustee.

(f)

Any claimant under this agreement may maintain suit in his/her own name and at his/her own expense against Trustee and, if
desired, against Principal, to recover under this agreement, except as provided hereafter. Trustee shall not be liable to pay any
claim for recovery under the agreement if it is not in writing and received by Trustee or the Deputy Administrator within 60 days
from the date of the transaction on which it is based, or if the claimant commences suit against Trustee thereon in less than 120
or more than 547 days of the date of the transaction on which the claim is based. Principal and Trustee hereby waive every
defense, if any, based on the fact that any such claimant is not party or privy to this agreement. If any such action is brought by
a claimant against Trustee, Trustee shall not be obligated to defend; Principal or any other claimant, at his or her own expense,
may defend in the name of Trustee.

(g)

If Trustee issues any draft under a letter of credit obtained by Principal under this agreement that is not honored by the bank on
which it is drawn, Trustee shall notify the claimant and the Deputy Administrator. The claimant, at his/her own expense, may
bring legal action in Trustee’s name to compel payment under the letter of credit to Trustee for disposition under this agreement.
Trustee shall not be obligated to prosecute any action.

(h)

If one irrevocable letter of credit obtained by Principal under this agreement is replaced by another in the same form issued by
the same bank under which Trustee can draw the same or a greater amount at the same or a later time than under the former letter
of credit, Trustee may surrender the former in exchange for the latter. In exchange for the entire amount that can be drawn by
Trustee under the letter of credit, Trustee may surrender the letter of credit. Trustee shall not, without written approval from the
Deputy Administrator, otherwise surrender or dispose of any letter of credit obtained by Principal under this agreement.

(i)

If any letter of credit obtained by Principal is about to expire and has not been replaced by another in the same form issued by
the same bank under which Trustee can draw the same or a greater amount at a later time than under the expiring letter of credit,
Trustee, unless the Deputy Administrator shall in writing state that this is unnecessary, shall obtain the full amount of the
expiring letter of credit before it expires.

(j)

This agreement may be terminated by either Trustee or Principal by delivering to the other and the Deputy Administrator written
notice of termination stating or describing a termination date. The termination date shall not be less than 30 days after the date
the notice is received by the Deputy Administrator unless the Deputy Administrator, in writing, approves an earlier termination
date. Transactions occurring after the termination date cannot be the basis of claims under this agreement. Trustee shall deliver
notice upon such receipt of any claim for recovery under this agreement unless Principal informs Trustee that action will be
taken to contest the claim. Trustee, unless otherwise directed by the Deputy Administrator, shall, before the termination date,
draw the full amount that can be drawn on under every letter of credit obtained by Principal hereunder.

(k)

During times when Trustee holds funds that have been obtained under this agreement, Trustee shall invest these funds in the
name of Trustee in a fully negotiable obligation of or guaranteed by the United States Government, or in deposits in national
banks or in other banks insured by the Federal Deposit Insurance Corporation, or as otherwise approved in writing by the Deputy
Administrator. Trustee shall not be obligated to maximize interest received on these funds. Trustee shall dispose of interest or
dividends received by Trustee on these funds in the same manner as the funds. Trustee shall not expend the funds except as
follows:
1.

Funds may be used to pay taxes due on account of interest earned by the funds and received by Trustee;

2.

Funds, with the written approval of the Deputy Administrator, may be used to pay reasonable expenses and compensation
to Trustee;

3.

Funds may be paid to claimants to whom funds are due under this agreement;

4.

Funds determined not to be needed to pay claimants under this agreement, with the written approval of the Deputy
Administrator, may be returned to the bank from which the funds were obtained to be credited to Principal’s account(s).

Form P&SP-2300

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(l)

No amendment, endorsement, rider, or modification of this agreement shall be effective unless it is in writing, a fully executed
duplicate (DOCUMENT MUST HAVE ORIGINAL SIGNATURES) of it is received by the Deputy Administrator, and either
30 days shall elapse after the date the duplicate is received by the Deputy Administrator or the Deputy Administrator shall state
in writing that he or she has no objection to it. A rider may be used to terminate the clearing services of a registrant under
condition clause 3 of this agreement.

(m) Trustee may be removed by delivering written notice of resignation to the Deputy Administrator. The Deputy Administrator is
hereby authorized to designate a person to act as Trustee under this agreement if Trustee designated herein or successor Trustee
resigns, or fails, or is unable to act or serve. Immediately upon such designation by the Deputy Administrator, the prior Trustee
shall transfer all letters of credit obtained by Principal hereunder, and shall disburse all funds drawn under these letters of credit
and in the possession of the prior Trustee to the person so designated by the Deputy Administrator. This transfer and disbursal
shall discharge the prior Trustee from all obligations hereunder to draw funds after the transfer under any letter of credit so
transferred, or to pay any funds so disbursed, or to perform any other obligations accruing under this agreement after the transfer
and disbursal. Resignation shall not operate to discharge prior Trustee from obligations accruing under this agreement prior to
the transfer and disbursal.
(n)

The term “person” as used in this agreement shall be construed to mean and include both singular and plural, individuals,
corporations, partnerships, associations, and the heirs, executors, administrators, successors, and assigns thereof.

(o)

Any reference in this agreement to one letter of credit shall be deemed to apply to multiple letters of credit if obtained by
Principal under this agreement.

(p)

Any notice or document required to be given to or filed with the Deputy Administrator under this agreement may be given to the
Regional Director of the Regional Office, Packers and Stockyards Program, in the region where Principal has its residence or
principal place of business. Any approval, authorization, designation, or other action taken by the Deputy Administrator under
this agreement may be taken or performed by the Regional Director or the Deputy Administrator.

5. This agreement becomes effective on the ______________ day of _____________________________, 20____.

___________________________________
6a. Signature of Trustee:
Name:
Title:
Address:

Telephone number:
___________________________________
6b. Signature of Principal
Name:
Title:
Address:

Telephone number:
According to the Paperwork reduction Act of 1995, an agency may not conduct or sponsor, and a person is not required to respond to, a collection
of information unless it displays a valid OMB control number. The valid OMB control number for this information collection is 0580-0015. The
time required to complete this information collection is estimated to average 54 minutes per response, including the time for reviewing
instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of
information.
Form P&SP-2300
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The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin,
age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political
beliefs, reprisal, or because all or part of an individual’s income is derived from any public assistance program. (Not all prohibited bases apply to
all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape,
etc.) should contact USDA’s TARGET Center at (202) 720-2600 (voice and TDD). To file a complaint of discrimination, write to USDA,
Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410, or call (800) 795-3272 (voice) or (202) 7206382 (TDD). USDA is an equal opportunity provider and employer.

Form P&SP-2300

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