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88 Page 142 SBWMA January 16 Questions have attached a letter provided to us for the SBWMA fi'om ACN. \Ve hope that this letter, fhlIowing on the prior communication directly from ACN to the SB\VMA, helps to assuage any concerns regarding ACN's support oflIudson Baylor's proposal to operate the Shoreway Environmental Center. We will provide. more specific documentation following our selection for this project. . Commodity Price Manipulation o Hudson Baylor has secured price support from the world's largest recycled commodity buyer. While this feature offers potential benefit to SBWMA, it also presents the opportunity for price manipulation. SBWMA hereby requests that HBC propose a "fail.safe" mechanism whereby SBWMA can be assured that it will receive amounts that are equal to or greater than the highest prices that are paid for like commodities in the local market area. HBC providei.i its sales mechanism for the sale of:fiber products in its original bid. We will sell ONP and oce at the higher of market price or OB1\1 SF high +$10, for the duration of our contract. All other commodities wHl be sold at market prices. \Ve wlderstand that the establishment of"markeC prices for recovered c-ommodities is a difficult endeavor. Nevertheless, commodity sales are the lifeblood of our business. As outlined in our draft marketing plan, our corporate process is to solicit multiple prices on an ongoing (at least monthly) basis, so that we can be as aggressive as possible in selli,ng at the best possible pricing. \Ve note., as outlined in our bid, that the "besC pricing is related both to specific price, as well as other sales issues such as the reliability of buyers, the buyers' ability to arrange for pickup at our facilities, and the buyers' credit worthiness. It is not our corporate policy to chase unknown, non- established, or potentially transient buyers simply because of a short te11D pricing offer. We have seen too many other recycling companies who have been burned (financially and by reputation) from selling commodities -for price alone, regardless of the qualil1cations or the buyer. Finally, we are very concerned with the actual end use of our recovered materials, that the materials we sell are handled in an environmentally sound mannerl and used in t.he manufacture of new products. . Union Issues o Hudson Baylor has executed a Memorandum of Understanding as prepared by Teamsters Local 350. Please provide confirmation of the company's position, or an update regarding interaction with the Teamsters. Hudson Baylor Corporation 3/16/09 Page 3