Common use of DISTRIBUTOR CHARGES FOR ADDITIONAL SERVICES Clause in Contracts

DISTRIBUTOR CHARGES FOR ADDITIONAL SERVICES. Distributors are frequently required by their customers to provide, in addition to competi- tive pricing, a greater level of additional services including: commodity management, consignment inventory, point-of-use vending, special marking and packaging, consolidated billing, special credit terms, specialized delivery and other services. It is Seco’s policy that its distributors may charge their customers for such additional services. It is Seco’s policy that distributors may not obtain a meeting competition or contract account discount and fail to pass the discount on to the customer in compli- ance with anti trust laws. Further, Seco has taken the position that charging the customer an amount over the discounted price of the Seco goods or services, may suggest that additional xxxx up was obtained without related goods and services. In order to comply with both policies a distributor must be able to provide, on request, objective evi- dence to Seco that charges to customers for addi- tional services, are in fact, provided in addition to the goods and services covered by the discounted Seco price. Pursuant to its procedures and the Dis- tributor Agreement, Seco may audit to assure to its satisfaction that this is the case. It is recommended that the distributor should sep- arately account for additional services or separately describe charges for additional services in custom- er statements. Also, distributors should maintain documentation substantiating the monetary value of additional services charged to the customer over and above the discounted price for Seco products. It is the distributor’s sole responsibility to justify the cost of any services provided where meet comp discounts have been granted.