REDARC ELECTRONICS PTY LTD MINIMUM RESALE PRICE (MRP) POLICY

1st June 2017

REDARC Electronics Pty Ltd (the “Company”) supports the marketing of REDARC products (“the Products”) by its distributors and dealers in traditional retail establishments and through Internet channels in the United States of America.  The Company seeks to foster competition with other brands and promote the REDARC brand through this Minimum Resale Price (“MRP”) Policy, effective from 1st May 2017, for the Products sold in the United States.

Goals of the Policy

This Policy is intended to: (a) help introduce and establish the Products in the United States; (b) support efforts of distributors and dealers to promote and support the REDARC brand and improve the customers’ overall experience; and (c) allow the REDARC brand to better compete with other brands on the basis of price, quality and service.  The Company adopts this Policy to support and protect the value and reputation of the REDARC brand and the commitment of distributors and dealers in providing information, support and service to customers to help build the brand loyalty and reputation and sales penetration of the REDARC brand.

REDARC Product Distributors and Dealers

To distribute the Products in the United States, REDARC is in the process of developing a distribution network in the United States.  REDARC intends to enter into agreements directly with certain dealers/retailers (each a “Direct Dealer”).  REDARC also intends to enter into distribution agreements (each, a “Distribution Agreement”) with individual Regional Exclusive Distributors (each, a “Distributor”) for the Products.  In accordance with the Distribution Agreements, each Distributor is authorized to sell the Products through dealers in a specific territory.

Coverage

This MRP Policy shall have no application in the states set forth in Exhibit A, which exhibit may be amended by the Company from time to time.  Except for those states, this MRP Policy applies to any and all Direct Dealers and Distributors that sell the Products throughout the remainder of the United States.

Policy Terms

The Company will not make its products available to Direct Dealers or Distributors who price the products below the minimum retail prices shown for the products in Annex A, in any revised MRP price lists issued by the Company, or in any temporary MRP promotion announced by the Company during the period of the promotion.

Annex A and MRP prices, including any temporary MRP promotional prices, are subject to change from time-to-time by the Company, effective on twenty (20) business days’ notice from the Company to its Direct Dealers and Distributors.

Policy Violations

The Company routinely checks prices for the Products.  In the event that a Direct Dealer, Distributor or any of such Distributor’s dealers is found in violation of the policies described above:

  1. if there has been no violation by the dealer (or the Direct Dealer or Distributor if it is directly implicated) within the prior twelve months, the Company will issue a warning notice to the Direct Dealer or Distributor;
  2. if a violation continues 10 calendar days after notice of a violation pursuant to paragraph (a) above, the Company will suspend all sales of Products the Direct Dealer or Distributor for one month;
  3. if a violation continues 20 calendar days after notice of a violation, or in the event of a second violation by a dealer (or a directly implicated Direct Dealer or Distributor) the Company will suspend all sales of Products the Direct Dealer or Distributor for three months;
  4. if a violation continues 30 calendar days after notice of a violation or in the event of a third violation by a dealer (or a directly implicated Direct Dealer or Distributor) within a twelve-month period, the Company will suspend all sales of Products the Direct Dealer or Distributor for a for twelve months;
  5. in the event of a second violation by a dealer (or a directly implicated Distributor), the Company, in its sole discretion, may cancel any Distribution Agreement then in effect with the Distributor.

Independent Policy of the Company

This MRP Policy is the independent policy of the Company, and is adopted unilaterally by the Company.  This MRP Policy is not intended to comprise a contract or agreement between the Company and any Distributor, dealer or any other party.  The Company does not seek, and will not accept, any agreement by a Direct Dealer or Distributor to comply with this policy.  No employee or representative of the Company is authorized to interpret, waive, alter, discuss or reach agreement regarding this MRP Policy, or any retail advertised or sales price.

This MRP Policy is effective 1st June 2017.

 

EXHIBIT A

The REDARC Electronics Pty Ltd Minimum Resale Price Policy does not apply in the following states:

  1. California;
  2. Illinois;
  3. Kansas;
  4. Maryland;
  5. Michigan;
  6. New York; and,
  7. Tennessee.