MINIMUM ADVERTISED PRICE (MAP) POLICY

Traxxas, L.P. has unilaterally determined to implement this Dealer Minimum Advertised Price (MAP) Policy effective as of June 2, 2014, which is applicable to each dealer located in the United States of America (“USA”) and Canada that offers any or all Traxxas products to end-users (individually, a “Dealer” and collectively, “Dealers”) with respect to each of the Traxxas products for which a minimum advertised price ("Minimum Advertised Price” or “MAP” and referring to either the singular or the plural or both, “MAP(s)”) is specified on the price list(s) or product list(s) provided or otherwise made available to such Dealer by Traxxas or otherwise communicated by notice from Traxxas to such Dealer (individually, a “MAP Product” and collectively, the “MAP Products”):

Mission

Traxxas builds on a decades-long heritage of innovation and customer support that provides a distinct competitive advantage for its products in the marketplace. Traxxas end-users expect world-class customer service and support both directly from Traxxas and the Traxxas network of Dealers.

Traxxas has adopted this Policy to discourage Dealer advertising that focuses primarily on price. This Policy is intended to help Dealers maintain the margin necessary to invest in store locations, store displays, trained staff, marketing, merchandising and parts support and service that Traxxas end-users expect. The goal of this Policy is to strengthen all aspects of the Traxxas brand, benefit Dealers which comply with this Policy and benefit Traxxas end-users who enjoy the support of successful, professional Dealers.

Application

This Policy applies to all forms of advertising and promotion (regardless of the medium used) done by and on behalf of a Dealer, including, but not limited to conventional advertising, catalogs and price information relating to one or more of the MAP Products that can be accessed directly through any hypertext link, by any other method which uses hypertext transfer protocol (http) or which Traxxas considers to be the substantive equivalent (e.g., e-mail or social media). When applied to the Internet, both outside-the-cart (or other container) and in-the-cart (or other container) prices are considered offers which are subject to this Policy.

Other examples of media to which this Policy applies include without limitation flyers, posters, coupons, mailers, inserts, newspapers, magazines, online forums, banner advertising, newsletters, e-mail solicitations, television, radio, texting  and signage visible outside a brick and mortar store.

Violations of this Policy

A Dealer violates this Policy by advertising or otherwise offering or making available, whether by advertising, promotion,  proposal, quotation or otherwise and regardless of place or medium used (individually and collectively, “advertising” or “offering” and their variants), one or more of the MAP Products at a net adjusted price less than the corresponding MAP(s) established by Traxxas from time to time and communicated to such Dealer. However, this Policy pertains only to advertised prices and does not cover actual sales prices, so each Dealer remains free to sell Traxxas products at any prices it chooses. This Policy also is violated if a Dealer uses particular terms in advertising or engages in certain activities.

Net Adjusted Price

“Net adjusted price" (“net adjusted price(s)” referring to either the singular or the plural or both) means the price at which a MAP Product is offered by or for the benefit of a Dealer to an end-user (potential or actual) and is calculated by:

• taking into account all discounts, deductions, rebates and allowances advertised to such end-user (regardless of source, whether given or taken at the time of sale or otherwise and considered by Traxxas to be part of such offer or sale); except that an offer or sale using or applying a rebate, coupon or the equivalent (as determined by Traxxas) will not be considered part of net adjusted price if such rebate, coupon or the equivalent is provided by Traxxas or its designee(s) directly to such end-user or to such Dealer for provision to and use by such end-user
• excluding all applicable taxes and all shipping, delivery and insurance charges if paid by the end user. However, if the Dealer offers to pay any or all of such taxes and charges that otherwise would be paid by the end-user, the amount so offered by the Dealer will be considered a discount, except as otherwise provided in this Policy.
  • subtracting, in the case of free goods, services and similar benefits for the end-user provided or made available by the Dealer, the fair market value (as determined by Traxxas) of all such goods, services and benefits (regardless of  source, whether given or taken at the time of sale or otherwise and considered by Traxxas to be part of such offer or sale)
  • subtracting, in the case of reduced-price goods and services and similar benefits for the end-user provided or made available by the Dealer, the difference between: the fair market value (as determined by Traxxas) of all such goods, services and benefits (regardless of source, whether given or taken at the time of sale or otherwise and considered by Traxxas to be part of such offer or sale) and the amount to be paid for such goods, services and benefits.

At the same time, free or reduced-price shipping may be offered by a Dealer without it being considered to be a discount when offered in connection with a purchase that includes at least one of the MAP Products, as long as: such offer or provision applies to all other products in the category (as determined by Traxxas) in which such MAP Product or such MAP Products  reside and the value thereof is reasonable (as determined by Traxxas).

Violation Examples

Among other ways, a Dealer may violate this Policy by:

• displaying or using an offer price that is lower than the relevant MAP, including without limitation for Internet offers, as an out-of-the-cart or an in-the-cart price
  • displaying or using a percentage reduction from a reference price (by coupon or otherwise) that results in a price less than the relevant MAP
  • displaying or using a price for a bundle of MAP Products that is less than the sum of each MAP for the corresponding products
  • displaying or using “prices too low to show,” “call or e-mail for best price,” “click for lower price,” “a lower price may be available,” “enter your e-mail for lower price” or the substantive equivalent as determined by Traxxas
  • displaying or using a strike-through of any MAP(s) regardless whether one or more other prices are shown
  • displaying or using a discount, coupon or rebate applicable to any or all of the MAP Products in return for a Facebook “Like”
  • displaying or using an invitation to click, visit a location (such as a website, store or showroom) or otherwise communicate to obtain a price, except indicating the ability of end-users to make specific inquiries by telephone or e- mail to obtain a price is permissible, as long as no automated “bounce-back” pricing e-mail or other communication is used
  • the failure to show a price for each of the MAP Products depicted, described or to which a reference is otherwise made
  • the failure to expressly exclude any and all of the MAP Products (using a disclaimer provided by Traxxas or, if not so provided, a disclaimer acceptable to Traxxas) from an offer of a coupon, discount, or rebate that applies to all or many of the products offered by such Dealer or in a category of products offered by such Dealer relevant to the MAP Products (such as radio-controlled vehicles) when such offer has or would have the effect of reducing the price of any or all of the MAP Products below the applicable MAP(s) and the use of any statement(s) or material(s) promoting such coupon, discount or rebate that mentions, uses, depicts or otherwise refers to any or all of the MAP Products, except for such disclaimer
  • knowingly, negligently directly or indirectly advertising, promoting or selling any or all items of Traxxas products (other than as expressly authorized by express written or electronic notice to the Dealer from Traxxas) in any or all of the following ways:
    • outside the USA (for a USA dealer) or outside of Canada (for a Canadian dealer).
    • to anyone for resale.
    • on or through an online auction site (such as eBay), unless (i) the Dealer is using its own Dealer name or a seller name previously provided by the Dealer to Traxxas as the Seller on such site and (ii) the product is listed with a “beginning bid,” “reserve amount,” or “buy it now” price equal to or greater than the relevant MAP without allowing “or best offer.”
    • on or through an online marketplace (such as that operated by Amazon or any of its affiliate(s)) unless the Dealer is using its own Dealer name or a seller name previously provided by the dealer to Traxxas.
    • on or through an online site which is not or is no longer approved by Traxxas; however, such Dealer may advertise, promote and sell such products on its own (non-auction) website, as long as such Dealer has not received notice from Traxxas disapproving of such site and otherwise complies with this Policy and each agreement between Traxxas and such Dealer
• except as otherwise directed by this Policy, on any or all advertising and promotions provided to or prepared for the benefit of any or all of the Dealer’s potential and actual end-users in connection with the offer of any or all of the MAP Products (individually and collectively, “Customer Communications”), the failure of such Dealer to itemize the price charged for each of the products and services shown or referred to on such Customer Communications, regardless whether such Customer Communications contain(s) any reference to any or all of the MAP Products.

Minimum Advertised Price

Traxxas, at any time, may vary the Minimum Advertised Price for a MAP Product or add to or delete any or all of the MAP Products, which may, among other things, be based on whether such product(s) is or are offered or sold under or subject to one or more select Traxxas program(s) or any other Traxxas policy or in any other situation announced by Traxxas from time to time. Traxxas will endeavor to provide prior notice of each new MAP or such change in the MAP Products, generally not less than five

(5)   days in advance. While Traxxas will communicate each MAP and such change through the price list(s) or product list(s) provided or made available to each Dealer electronically or otherwise, such Dealer is responsible for making sure that it is aware of the appropriate MAP(s) and the MAP Products in each circumstance.

The Exemptions

Each of the following is exempt from this Policy, except as otherwise expressly indicated:

• individualized, non-automated e-mail sent or live telephone communication in direct response to a specific end-user inquiry
  • in-store materials at a brick-and-mortar location that simply state the price(s) at which one or more of the MAP  Products may be purchased, including, without limitation, point-of-sale signs, price stickers and hangtags
  • bona fide advertising and promotional materials (including without limitation printed catalogs) that cannot reasonably be modified prior to the Policy Effective Date or the effective date of a change in the MAP(s), the MAP Products or this Policy until such time that it is reasonable to revise such materials (as determined by Traxxas) to be consistent with this Policy
    • the offer under one or more special programs (if any) designated by Traxxas, provided that such Dealer complies fully with each requirement of such program(s) (such as that or those relating to display, if any)
    • the accrual of “points” or other things of value (“Loyalty Points”) in connection with the purchase of any or all Traxxas products and the application of Loyalty Points, even if such application results in net adjusted price(s) for any or all of the MAP Products below its or their respective MAP(s), as long as:
      • Loyalty Points may be accrued and applied to all or almost all of the products offered by such Dealer
      • the everyday accumulation rate for Loyalty Points applicable to the purchase of any or all Traxxas products is no more than that applicable to all other brands of products offered by such Dealer (regardless of category), except that, as part of a Traxxas special program, Traxxas may permit such Dealer to offer for a reasonable, limited time or times (as determined by Traxxas) a greater accumulation rate applicable to the purchase of any or all Traxxas products, provided that such offer applies to one or more products of at least one other brand in each of the same category or categories as the MAP Products involved
• the offer of one or more units of any or all of the MAP Products that are used, rather than new, such as demonstration units
• the offer to an employee of such Dealer for his or her personal use (and not for resale), provided that such offer is reasonable (as determined by Traxxas)

Violation Consequences

Each violation of this Policy is cumulative, and the same act(s) or failure(s) to act may result in multiple violations if not addressed as required by this Policy, so, during the period that this Policy is in effect (the “Policy Period”):

For the first violation during the Policy Period: Such Dealer will remove or stop or cause to be removed or stopped the offending reference(s), text or conduct (if Traxxas determines that it or they can be) after receiving notice of such violation from Traxxas (a), in the case of a violation involving the Internet, no later than one (1) business day later, and (b), in all other cases, no later than three (3) business days later or by the conclusion of the time period otherwise specified by Traxxas (collectively, the “Allotted Period”).

For the second violation during the Policy Period: In the event that (a) the offending reference(s), text or conduct that caused the first violation is or are not removed or stopped (if Traxxas determines that it or they can be) within the Allotted Period or (b) such Dealer otherwise violates this Policy a second time, effective as of the date specified in notice from Traxxas to such Dealer and continuing for the next ninety (90) days, the authorization of such Dealer to purchase each stock-keeping unit (“SKU”) in the product family involved in the second violation (as determined by Traxxas) will be immediately revoked by Traxxas, so that all pending orders (even if accepted) from such Dealer will  be cancelled and no new orders will be accepted from such Dealer for each such SKU.

For the third violation during the Policy Period: In the event that (a) the offending reference(s), text or conduct that caused the second violation is or are not removed or stopped (if Traxxas determines that it or they can be) within the Allotted Period after receiving notice of the second violation from Traxxas or (b) such Dealer otherwise violates this Policy a third time, effective as of the date specified in notice from Traxxas to such Dealer and continuing until Traxxas