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MINIMUM ADVERTISED PRICING (MAP) 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 Advertised Price And Gray Market Sales (“MAP”) Policy, effective from 1 st 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 better to 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.

Each Distributor shall communicate this Policy to each dealer or other reseller to whom it sells the Products. From time to time REDARC may update this Policy. Each Distributor shall communicate to each dealer any updates to this Policy within 10 business days of receiving the updates from REDARC.

REDARC may, from time to time, monitor the advertised prices of each dealer that sells any of the Products, including by checking such dealers’ Internet websites and advertisements. If it comes to REDARC’s attention that a dealer is not in compliance with this Policy, then REDARC shall provide notification of the violation to the dealer’s Distributor or the Direct Dealer, as the case may be.

Media Coverage

This MAP Policy applies to any and all means of advertising. Any price information relating to the Products on an Internet website is considered to be advertising for purposes of this MAP Policy. However, this MAP Policy does not apply to in-store or Internet check-out stage price adjustments.

Policy Terms

Any party to whom this Policy applies is forbidden from selling the Products outside of its home country, or to any buyer within the party's home country that the party has reason to believe will resell the Products outside of its home country.

All Direct Dealers, Distributors and dealers of such Distributors are forbidden from selling Products on Amazon.com.

All Direct Dealers, Distributors and dealers of such Distributors are free to set their own prices at any retail establishments and at the check-out stage of Internet sales, subject to the terms and conditions of any other REDARC Policies, including without limitation the REDARC ELECTRONICS PTY LTD MINIMUM RESALE PRICE (MRP) POLICY.

The MAP Policy addresses advertising, not actual pricing. Annex A and MAP prices, including any temporary MAP 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.

The rules itemized below apply for the Products within the Media Coverage, as defined above, in the United States.

An advertised price may not be below the price shown for the product in Annex A, in any revised MAP price lists issued by the Company, or in any temporary MAP promotion announced by the Company during the period of the promotion.

For Internet sales, prior to the check-out stage of sales (initiated, for example, by clicking on "add to cart", or "drop into cart"), advertised prices cannot be shown with a specific discount rate or prices with a discount rate bringing them below MAP. Products also cannot be advertised as “Price too low to show – add to cart to see price”, or words to similar effect.

All of the Products that are advertised in Media Coverage must have the marketing number, minimum technical specifications and a correct picture that is to be checked by the responsible dealer to ensure correctness of the information.

Bundled pricing of the Products must not advertise bundled pricing below the aggregate MAP for the Products in the bundle.

Policy Violations

The Company routinely checks sales channels, sales location, and the advertised prices for the Products. In the event that a dealer is selling the Products outside of the dealer’s home country, (2) a Direct Dealer, Distributor or any of such Distributor’s dealers is selling Products on Amazon.com, or (3) advertising by a Direct Dealer, Distributor or any of such Distributor’s dealers is found in violation of the policies described above:

(a) 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

(b) 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

(c) 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

(d) 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.

After REDARC provides a Distributor with notification of a violation of this Policy, a Distributor that fails to enforce this Policy against the violating dealer is subject to being punished for that failure in accordance with the escalating scale above.

Independent Policy of the Company

This MAP Policy is the independent policy of the Company, and is adopted unilaterally by the Company. This MAP 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 dealer to comply with this policy. No employee or representative of the Company is authorized to interpret, waive, alter, discuss or reach agreement regarding this MAP Policy, or any retail advertised or sales price.

All dealers are responsible for establishing their own retail prices and advertising. They remain free to sell the Products at any price they choose. The Company remains free to make decisions regarding cooperative advertising and supply, including decisions based on conduct addressed in this MAP Policy.

This MAP Policy is effective 1st June 2017.