LAST
DAY OF EACH FISCAL YEAR.
8.
UNITED'S BOOKS AND RECORDS.
UNITED SHALL KEEP ACCURATE RECORDS
OF COSTS, SALES, AND DISTRIBUTIONS OF PRIMARY POOL PROCEEDS IN ACCORDANCE WITH
SOUND AND GENERALLY ACCEPTED ACCOUNTING PRACTICES.
SAID RECORDS SHALL BE AT ALL
REASONABLE TIMES FULLY AVAILABLE FOR INSPECTION AND COPYING BY ACSC OR ITS
CERTIFIED PUBLIC ACCOUNTANTS.
ALL RECORDS OF THE PRIMARY POOL AND ANY SEPARATE
POOL THAT IS CREATED SHALL BE AUDITED ANNUALLY BY UNITED'S REGULAR INDEPENDENT
CERTIFIED PUBLIC AUDITORS AND THE AUDIT REPORT MADE AVAILABLE TO ACSC.
9.
BUDGET OF MARKETING COSTS.
UNITED SHALL PREPARE AN ANNUAL BUDGET
OR ESTIMATE OF ALL DIRECT AND INDIRECT MARKETING COSTS FOR THE PRIMARY POOL.
IT
IS THE INTENTION OF UNITED TO SECURE INDEPENDENT FINANCING FOR COSTS ASSOCIATED
WITH THE MARKETING OF PRODUCTS AS REFLECTED IN THE BUDGET.
10.
PRODUCT SPECIFICATIONS, QUALITY STANDARDS AND HANDLING OF PRODUCTS
OF SUBSTANDARD QUALITY.
10.1
SPECIFICATIONS.
ACSC AGREES TO COMPLY WITH UNITED'S SPECIFICATIONS
FOR PRODUCTS, WHICH SPECIFICATIONS PRESCRIBE STANDARDS AND PROCEDURES FOR
QUALITY CONTROL, STORAGE, AND SHIPMENT OF PRODUCTS, AND WHICH ARE ATTACHED
HERETO AS SCHEDULE A.
IN ADDITION, ACSC AGREES TO COMPLY WITH UNITED'S QUALITY
ASSURANCE POLICY THAT IS ATTACHED HERETO AS SCHEDULE B.
ANY CHANGES TO THE
SPECIFICATIONS OR QUALITY ASSURANCE POLICY SHALL BE MUTUALLY AGREED UPON BY
UNITED AND THE MEMBERS.
10.2
STATE AND FEDERAL REGULATIONS.
ALL PRODUCTS DELIVERED TO OR AT THE
ORDER OF UNITED SHALL CONFORM TO QUALITY AND OTHER STANDARDS PRESCRIBED BY
APPLICABLE STATE AND FEDERAL RULES AND REGULATIONS.
6
10.3
SUBSTANDARD PRODUCT.
PRODUCT THAT FAILS TO MEET THE SPECIFICATIONS
OR THE QUALITY ASSURANCE POLICY AND WHICH CANNOT BE SOLD WITHOUT DISCOUNTING
SHALL BE CONSIDERED SUBSTANDARD FOR PURPOSES OF THIS AGREEMENT.
PRODUCT OF
SUBSTANDARD QUALITY SHALL BE WITHHELD FROM THE PRIMARY POOL AND MARKETED BY
UNITED IN A SEPARATE POOL, WITH PROCEEDS OF THE SALE OF SUCH PRODUCT, LESS ALL
DIRECT AND INDIRECT SELLING EXPENSES, DISTRIBUTED TO THE MEMBER THAT PRODUCED
SUCH PRODUCT; IN THE ALTERNATIVE, THIS MEMBER AND UNITED MAY MUTUALLY AGREE THAT
THE PRODUCT OF SUBSTANDARD QUALITY MAY REMAIN IN THE PRIMARY POOL AND THE MEMBER
WILL BE CHARGED WITH THE ADDITIONAL COSTS RELATING TO THE SUBSTANDARD QUALITY OF
THE PRODUCT, INCLUDING ANY NECESSARY DISCOUNTS.
11.
STORAGE OF PRODUCT.
ACSC SHALL STORE ITS PRODUCT AS THE PARTIES
SHALL MUTUALLY AGREE; PROVIDED, HOWEVER, THAT WITH RESPECT TO STORAGE BY MEMBERS
OR UNITED, THE PARTIES SHALL UTILIZE REASONABLY AVAILABLE STORAGE METHODS THAT
RESULT IN THE LOWEST TOTAL COST TO THE PRIMARY POOL.
AT THE EARLIEST REASONABLE
TIME AFTER PROCESSING COMMENCES IN EACH FISCAL YEAR AND AS SOON AS PRODUCT HAS
BEGUN TO BE PLACED IN STORAGE, ACSC SHALL DELIVER DAILY PRODUCT INVENTORY
REPORTS TO UNITED.
ALL PRODUCT INCLUDED IN THE DAILY INVENTORY SHALL BE
INCLUDED IN THE PRIMARY POOL FOR THE APPROPRIATE FISCAL YEAR EVEN THOUGH THE
PRODUCT REMAINS ON THE PREMISES OF ACSC.
11.1
PORTION OF SIDNEY STORAGE FACILITY CONTROLLED BY UNITED.
UNITED
WILL HAVE THE EXCLUSIVE RIGHT TO STORE 910,000 CWT OF SUGAR IN THE SIDNEY
STORAGE FACILITY (THE