The Board of Directors has adopted the following policy concerning Preferred Sources of Supply.


It is the policy of CONSOLIDATED DISTRIBUTORS, INC. to establish and maintain favorable and mutual benefits with preferred supply sources. The selection and maintenance of preferred supply sources shall be within the exclusive responsibility of the Board of Directors, whose purpose shall be to select those manufacturers or suppliers willing and able to provide quality products and services. The following criteria are to be used as guidelines by the Board of Directors in this regard.

The products to furnished must be of current need by the members (distributors) in open product categories, and the Board may close product categories from further participation. The Board shall review all supplier programs at the end of each calendar year and select those manufacturers who can provide the best products, services, and support required by the membership.

National distribution capability is a preferred consideration, but multiple suppliers may be selected and approved to provide total market coverage for all members, if necessary.

All supply sources shall be responsible, qualified, and financially secure.

Quality products, marketing services and assistance, and high standards shall be the guidelines in selecting suppliers for this company.

Any supplier may be terminated when the foregoing criteria are not satisfied or when the Board determines that the relationship is unsatisfactory, including the failure to have representatives present at each Annual Member/Supplier Conference of Consolidated Distributors, Inc.

Payment for marketing allowances must be made within forty-five (45) days after the end of the purchases period.

No supplier shall be largely and significantly engaged in the business of wholesale chemical and paper distribution, including its parent, subsidiary, or affiliated company.

Any preferred supplier who is being considered for termination by the Board shall be given notice an opportunity for hearing. Notice shall be given in writing, stating the reasons for the proposed termination, and the supplier shall have fifteen (15) days in which to request a hearing before the Board of Directors, either in person, by written correspondence, or by an attorney, to explain the unsatisfactory conduct. The Board shall consider all relevant facts before taking final action with respect to such termination, but the decision of the Board shall be final.