Products”) - BACKRACK Complete Policy.pdf · (the “Advertising and Marketing Policy” or the...

2019

To Our Valued Dealers:

Thank you for your continued enthusiasm and support.

This note is to introduce to you our new Value Protection (VP) Policies for Dealers (the “Policies”), which are effective January 1, 2019 and accompany this note. They have been adopted in an effort to help safeguard the premium image of Backrack, insure the long-term viability of our brands and protect the investment of those Dealers that provide valuable services to end users.

The Policies (1) are applicable to each individual or entity located in Canada and the United States (“USA”) that promotes and sells or either thereof (whether doing so directly or through another party that does such things as advertise or fulfill orders on behalf of such individual or entity) any or all products offered by Backrack (in the plural, “BRI Products”) to one or more end user purchasers (such individual or entity is a “Dealer” and, in the plural, are “Dealers”) and (2) consist of (a) a policy regarding minimum retail price (the “Minimum Retail Price Policy” or the “MRP Policy”) and (b) a policy dealing with advertising and marketing (the “Advertising and Marketing Policy” or the “A&M Policy”).

While the Policies are those of Backrack alone, we made every effort to develop a realistic approach that addresses practical issues. In addition, we are providing you with advance notice of the effective date of the Policies, so that you have sufficient time, if you wish, to notify your staff, incorporate the Policies into your planning and conform practices and advertising and promotional efforts. Since this note is only a summary, we encourage you to read the Policies carefully.

The Minimum Retail Price Policy: The MRP Policy: (1) establishes a minimum retail price (“MRP”) for various BRI Products (individually, a “Covered Product” and collectively, the “Covered Products”) and (2) applies to the prices at which the Covered Products are offered and sold, regardless of the means used. In other words, although each Dealer is free to make its own pricing decisions, the MRP Policy applies both to the advertised or offer price, as well as the actual selling price. A violation of the MRP Policy occurs when a Dealer offers or sells a Covered Product below its MRP.

The Advertising and Marketing Policy: Among other things, the A&M Policy: (1) requires that the use of Backrack intellectual property (such as trademarks and product images) and the depiction of BRI Products comply with Backrack policies and (2) prohibits selling (a) outside Canada and the USA, (b) online, except when using a website and business name approved by Backrack in advance and (c) to anyone for resale.

Other Violations: The Policies also may be violated through certain conduct, including such things as the use of particular terms, descriptions, conditions or offers.

Consequences of Violations: For the first violation of the Policies, the Dealer involved will be asked to take down or stop the violative activity (assuming it can be taken down or stopped) within the specified time, while subsequent violations result in the loss of access to some or all BRI Products either temporarily or permanently.

Questions and Additional Information: To help address questions and concerns, a copy of the Explanation (including Frequently Asked Questions (FAQs)) accompanies this note. All questions or requests for additional information regarding the Policies or information concerning potential violations of the Policies (which must be in writing) are to be addressed to the person at Backrack responsible for the Policies (“Policy Administrator”):

Policy Administrator Backrack, Inc. 475 Wyecroft Road Oakville, ON, L6K 2H2 Canada email: [email protected]

Only the Policy Administrator or the Policy Administrator’s designated representative(s) is or are authorized by Backrack to answer questions regarding the Policies, to comment on the Policies or to accept information regarding potential violations.

Sincerely,

Adrian Jayne President

082916/3638358/2

BRI Value Protection (VP) Policies for Dealers (Canada/U.S.) - 1

CONFIDENTIAL CANADIAN/U.S. DEALER

082916/3594839/7

VALUE PROTECTION (VP) POLICIES FOR DEALERS EFFECTIVE AS OF JANUARY 1, 2019

Backrack, Inc. (“BRI”) has unilaterally adopted these Value Protection (VP) Policies for Dealers (these “Policies”) effective as of January 1, 2019 (the “Policy Effective Date”), which (1) are applicable to each Dealer and consist of (a) a policy regarding minimum retail price (the “Minimum Retail Price Policy” or the “MRP Policy”) and (b) a policy dealing with advertising and marketing (the “Advertising and Marketing Policy” or the “A&M Policy”). For purposes of these Policies, “Dealer” (“Dealers” in the plural) means an individual or entity located in either or both of the Canada and United States of America (“U.S.”) that promotes and sells any or all products offered by BRI (in the plural, “BRI Products”) to one or more end user purchasers (whether doing so directly or through another party that does such things as advertise or fulfill orders on behalf of such individual or entity).

1. Purpose

BRI Products are of high quality with a premium image for excellence and innovation earned through extensive product and market development activities and superior service. Some Dealers have taken or may take advantage of these facts by advertising or selling such products as loss leaders, promoting or applying unfair discounts or misusing intellectual property of BRI or references to BRI or its products. In an effort to help safeguard the reputation of BRI, insure the long-term viability of its brands and protect the investment of those Dealers that provide valuable services to end users, BRI has adopted these Policies.

2. The Minimum Retail Price Policy

(a) The Covered Products

The MRP Policy establishes a minimum retail price ("Minimum Retail Price” or “MRP” and referring to either the singular or the plural or both, “MRP(s)”) for each of the BRI Products as specified on the price list(s) or product list(s) provided or otherwise made available to each Dealer by BRI or otherwise communicated by BRI Notice (individually, a “Covered Product” and collectively, the “Covered Products”). For purposes of these Policies, “BRI Notice” means notice from BRI to a Dealer provided or made available electronically or otherwise, such as, but not limited to, posting on one or more websites designated by BRI.

(b) Violations of the MRP Policy

Although each Dealer remains free to establish its own resale prices, such Dealer violates the MRP Policy: (a) by (i) making available in any way (whether through advertising, promotion, proposal, quotation or otherwise and regardless of place or medium used) (individually and collectively, “offering” and its variants), (ii) selling (whether face-to-face, in-store, online, through a catalog or otherwise) or (iii) otherwise providing (except in exchange for bona fide returns) one or more of the Covered Products during the Policy Period at a Net Adjusted Price less than the corresponding MRP(s) established by BRI from time to time and communicated by BRI Notice or (b) by being deemed to have violated the MRP Policy as provided herein.

(c) Certain Definitions

For purposes of these Policies, (i) the “Policy Period” with respect to a Dealer means the time period beginning on the Policy Effective Date and ending on the termination date described in a future BRI Notice; (ii) “Net Adjusted Price” means the lower of the price at which a Covered Product is offered by or for the benefit of a Dealer to a customer (potential or actual) or that actually paid to or for the benefit of a Dealer for a Covered Product by such customer after (A) applying all discounts and similar price reductions, (B) excluding certain taxes and shipment charges and (C) giving effect to the value of each Bundle involving one or more free or reduced-price goods or services; and (iii) “Bundle” means a combination of one or more BRI Products with one or more other products or services offered or sold together (as determined by BRI).

(d) Calculation of Net Adjusted Price

Except as otherwise provided in the MRP Policy, Net Adjusted Price will be calculated by:

(i) taking into account all discounts, deductions, rebates and allowances offered or given to a an actual or potential customer (regardless of source,whether given or taken at the time of sale or otherwise and considered by BRI to be part of such offer or sale), except that an offer or sale usingor applying a rebate, coupon or the equivalent (as determined by BRI) will not be considered part of Net Adjusted Price if such rebate, couponor the equivalent is provided by BRI or its designee(s) (A) directly to such customer or (B) to such Dealer for provision to and use by suchcustomer;

(ii) excluding, if to be paid or paid by such customer, all applicable taxes and all shipping, delivery and insurance charges (However, if such Dealeroffers to pay or pays any or all of such taxes and such charges that otherwise would be paid by such customer, the amount so offered or paidby such Dealer will be considered a discount, except as otherwise provided in the MRP Policy.);

(iii) subtracting, in the case of free goods, services and similar benefits for such customer offered or provided by such Dealer, the fair market value(as determined by BRI) of all such goods, services and benefits (regardless of source, whether given or taken at the time of sale or otherwiseand considered by BRI to be part of such offer or sale); and

(iv) subtracting, in the case of reduced-price goods and services and similar benefits for such customer offered or provided by such Dealer, thedifference between: (A) the fair market value (as determined by BRI) of all such goods, services and benefits (regardless of source, whethergiven or taken at the time of sale or otherwise and considered by BRI to be part of such offer or sale) and (B) the amount to be paid or actuallypaid for such goods, services and benefits.


The fair market value for each Covered Product offered or provided for free or at a reduced price with the purchase of another Covered Product will be its MRP. From time to time, BRI may communicate to a Dealer in writing or electronically what it considers to be the fair market value for particular goods or services.

(e) Other Ways to Violate the MRP Policy

Except as expressly approved by BRI in advance or to the extent limited to the Covered Products as provided herein, a Dealer (directly or through another party on behalf or for the benefit of such Dealer) using or engaging in any or all of the following terms, descriptions, conditions, offers or activities (or the substantive equivalent of any or all of them as determined by BRI) in connection (directly or indirectly) with the offering or sale of any or all BRI Products will be deemed to be a violation of these Policies:

(i) offering to match or matching a lower price offered by another seller;

(ii) in connection with the offering or sale of any or all of the Covered Products, a strike-through of any MRP(s) regardless whether one or moreother prices is or are shown;

(iii) offering or providing a discount, coupon or rebate applicable to any or all of the Covered Products in return for a Facebook “Like” or anythingsimilar in intent or effect (as determined by BRI) involving one or more social media;

(iv) offering or selling a Bundle, unless such bundle either (A) originates from BRI or (B) has been expressly approved by BRI Notice to such Dealerin advance;

(v) if a price for a Covered Product is shown in Internet advertising or promotion or as part of a sale made over the Internet permitted by thesePolicies and the price for such product varies (exclusive of applicable taxes and all shipping, delivery and insurance charges) across any or allof (A) the initial webpage mentioning, depicting or describing such product (if a price for such product appears on such page), (B) the in-the-cart (or other container) price, (C) the checkout price and (D) the substantive equivalent of any or all of them as determined by BRI;

(vi) an invitation to click, rollover, call, e-mail, visit a location (such as a website, store or showroom) or otherwise communicate to obtain a price;

(vii) the promotion or sale to group purchasers, except at price(s) no less than each applicable MRP;

(viii) making or applying a trade-in offer for one or more BRI Products or any other product(s) in connection with or applicable to any or all of theCovered Products, regardless whether a specific trade-in price or value is communicated;

(ix) on any or all proposals, quotations, contracts, invoices and receipts provided to or prepared for the benefit of any or all of such Dealer’s potentialand actual customers in connection with the offer or sale of any or all BRI Products (individually and collectively, “CustomerCommunications”), the failure of such Dealer to itemize the price charged for each of the products and services shown, referred to or otherwiseincluded on or in such Customer Communications, regardless whether such Customer Communications contain(s) any reference to any or allof the Covered Products; and

(x) one or more tactics which BRI determines is or are intended to circumvent application or operation of the MRP Policy.

(f) Changes Relevant to the MRP Policy

BRI, at any time, may vary the Minimum Retail Price for a Covered Product or add to or delete any or all of the Covered 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 BRI program(s) or any other BRI policy or in any other situation announced by BRI from time to time. BRI will endeavor to provide prior notice of each new MRP or such change in the Covered Products, generally not less than five (5) days in advance. While BRI will communicate each MRP and such change through the price list(s) or product list(s) provided or made available to each Dealer by BRI or otherwise by BRI Notice, each Dealer is responsible for making sure that it is aware of the appropriate MRP(s) and the Covered Products in each circumstance.

(g) Free or Reduced-Price Shipping Not Considered Discount

Notwithstanding anything to the contrary in the MRP Policy, free or reduced-price shipping may be offered or furnished by a Dealer without it being considered to be a discount when offered or furnished in connection with a purchase that includes at least one of the Covered Products, provided that, as determined by BRI: (a) such offer or furnishing applies to all other products in the category in which each such Covered Product resides and (b) the value thereof is reasonable.

(h) The MRP Policy Exemptions

A Dealer does not violate the MRP Policy by offering or selling to a potential or actual customer any or all of the Covered Products during the Policy Period at a Net Adjusted Price that is less than the applicable MRP(s) if such offer or sale is made in accordance with one or more of the following exemptions (collectively, the “MRP Policy Exemptions”) and otherwise complies with these Policies:

(i) 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 MRP(s), the Covered Products or the MRP Policy until such time that it is reasonable to revise such materials (as determined by BRI) to be consistent with the MRP Policy;

(ii) each bona fide written contract between such Dealer and a customer that became effective (A) prior to July 15, 2016 (the “Policy Announcement Date”) or, after the Policy Announcement Date, if performance by such Dealer under such contract is completed prior to the Policy Effective Date or (B), in the case of a change in the MRP(s), the Covered Products or the MRP Policy, the day before such change is announced by BRI;


(iii) a bona fide offer of one or more of the Covered Products made by such Dealer prior to (A) the Policy Announcement Date or (B) the effective date of a change in the MRP(s), the Covered Products or the MRP Policy, which makes such offer or the subsequent sale based on acceptance of such offer non-compliant with the MRP Policy, as long as (1), if the MRP Policy was in place at the time such offer was made, it complied with the then-current terms thereof; (2) such offer is effective for no longer than ten (10) days or other reasonable time period (as determined by BRI) after the Policy Announcement Date or the effective date of such change; and (3) each of the Covered Products included in such sale will be delivered to such customer no later than thirty (30) days after such acceptance;

(iv) the offer or sale under one or more special programs (if any) designated by BRI;

(v) (A) a card benefit consisting of a discount, credit or rebate associated with the use of a designated credit or debit card or (B) a coupon or other discount that in either case would, after its application, result in offer or sales price(s) for any or all of the Covered Products below its or their respective MRP(s), as long as (1) such card benefit, coupon or other discount may be applied to all or almost all of the products offered by such Dealer or, in the case of a category-wide sale (such as truck accessories), all or almost all of the other products in the category and (2) none of the statements or materials promoting such card benefit or coupon or other discount mentions, uses, depicts or otherwise refers to or appears adjacent to or near any or all of the name or mark BRI and the Covered Products;

(vi) the accrual of “points” or other things of value (“Loyalty Points”) in connection with the purchase or receipt of any or all products and services from such Dealer (as long as each relevant Covered Product offered and sold in connection with such purchase at no less than its Minimum Retail Price) and the application of Loyalty Points, even if such application results in price(s) for any or all of the Covered Products below its or their respective MRP(s), as long as: (A) Loyalty Points may be accrued and applied to all or almost all of the products and services offered by such Dealer, (B) the everyday accumulation rate for Loyalty Points applicable to the purchase of any or all BRI Products is no more than that applicable to all or almost all other brands of products offered by such Dealer (as determined by BRI regardless of category) and (C) none of the statements or materials promoting Loyalty Points mentions, uses, depicts or otherwise refers to any or all of BRI and BRI Products; except that such Dealer may offer and provide a greater accumulation rate applicable to the purchase of any or all BRI Products and promote it, as long as such Dealer has received BRI Notice in advance expressly approving such rate and such promotion;

(vii) the offer of one or more items of any or all of the Covered Products that is or are discontinued by BRI effective (A) when such item(s) does or do not appear on the then-current the price list(s) or product list(s) issued by BRI or (B) on the date(s) referred to in notice of discontinuance provided by BRI to Dealers; and

(viii) provided that such offer or sale is reasonable (as determined by BRI), the offer or sale of one or more units of any or all of the Covered Products: (A) that are demonstration or display units or (B) to an employee of such Dealer for his or her personal use (and not for resale).

3. The Advertising and Marketing Policy

(a) Use of BRI Intellectual Property or BRI Product References

A Dealer violates the A&M Policy if any advertisement, promotion or other marketing vehicle (regardless of the medium used, whether Conventional Advertising, Electronic Content or otherwise) used or done by or on behalf of such Dealer (i) includes any or all BRI Intellectual Property or mentions, uses, depicts or otherwise refers to any or all of the BRI Products and (ii) either (A) does not conform to the Usage Policies or (B) otherwise is not expressly approved in advance in writing by BRI.

(b) Some Relevant Definitions

For purposes of the A&M Policy: (i) “Conventional Advertising” means, but is not limited to newspapers, magazines, direct mail, flyers, catalogs, radio, television and signs; (ii) “Electronic Content” means information which (A) can be accessed directly through any hypertext link, by any other method which uses hypertext transfer protocol (http) or anything which BRI considers to be the substantive equivalent or (B), to the extent not covered by the preceding description, is provided by or on (1) one or more mobile apps or mobile sites for devices (such as tablets and smartphones), (2) social media (e.g., Twitter feeds and Facebook), (3) Internet shopping sites, marketplaces and comparison search engines (CSEs) to which a Dealer supplies pricing information (e.g., Google Shopping, Buy.com, eBay, Amazon and PriceGrabber), (4) electronic solicitations or other electronic communications (e.g., robocalls, caller-on-hold and other audio recordings, messaging (e.g., SMS (text), MMS (multimedia) and IM (instant)), webcasts, e-mail and online or other electronic chats) and (5) electronic media advertisements (e.g., e-mail newsletters, pop-ups and banners); (iii) “BRI Intellectual Property” means any or all of the designs, trademarks, trade names, service marks, logotypes, trade dress, images, artwork, copy, commercial symbols, copyrights, data, data bases, marketing information, trade secrets, confidential information and anything else in which BRI or its designee(s) claim(s) rights, regardless whether steps have been taken to register such rights with any government authority; and (iv) the “Usage Policies” means policies regarding (A) the use of BRI Intellectual Property and (B) uses, depictions or other references of or to any or all of the BRI Products (including without limitation those policies relating to format(s) and content) made available by BRI through BRI Notice.

(c) Other Restrictions under the A&M Policy

Except as expressly authorized by BRI Notice or otherwise allowed by these Policies, with respect to any or all items of BRI Products, a Dealer violates the A&M Policy by knowingly or negligently, directly or indirectly:

(i) advertising, promoting or selling using the terms “lowest price,” the “lowest prices” or “prices too low to show,” any form of low-price guarantee or the substantive equivalent (as determined by BRI) of any or all of these terms or concepts;

(ii) advertising, promoting or selling in any or all of the following ways: (A) outside Canada and the U.S. (except to the extent any or all advertising and promotion efforts cannot be reasonably restricted geographically, but this exception does not apply to sales made to anyone located outside Canada and the U.S.), (B) using any business name(s) or storefront(s) other than the such Dealer’s full business name or acceptable variants thereof (as determined by BRI) and (C) online in any fashion, unless and only to the extent each website and marketplace used for such purpose


by such Dealer is (along with each business name and storefront) approved in advance by BRI for such use and which approval has not been rescinded by notice from BRI;

(iii) selling in either or both of the following ways: (A) to anyone for resale other than, in the case of permitted returns, to any or all of the Distributors or BRI and (B) to anyone other than end user customers permitted by BRI, including without limitation to the Special Accounts (for purposes of these Policies: (1) the “Special Accounts” means, collectively, each individual or entity so designated by BRI Notice and (2) “Distributor” (in the plural, the “Distributors”) means an individual or entity authorized by BRI to sell any or all BRI Products to one or more Dealers);

(iv) using any or all of BRI, its trademarks or other BRI Intellectual Property (or any variant(s) thereof) as or as part of any or all Uniform Resource Locators (URLs), AdWords, corporate names and trade names (or the substantive equivalent as determined by BRI) employed by or for the benefit of such Dealer, regardless whether such use is in connection with the offering or sale of any or all BRI Products;

(v) questioning or challenging the rights claimed by BRI or its designee(s) in or to BRI Intellectual Property or assisting in any way any other(s) in doing so;

(vi) creating or assisting in or otherwise cooperating in the creation of new Amazon Standard Identification Numbers (ASINs);

(vii) purchasing any or all BRI Products from any individual or entity other than BRI, a Distributor or, in the case of bona fide returns only, an end user;

(viii) offering or selling one or more products that are (A) modified or counterfeit versions of any or all BRI Products or (B) private label versions made by or for such Dealer or one or more affiliates of such Dealer (as determined by BRI); and

(ix) one or more tactics which BRI determines is or are intended to circumvent application or operation of the A&M Policy.

(d) The A&M Policy Exemption

Provided that a Dealer otherwise complies with these Policies, such Dealer does not violate the A&M Policy by conduct that, as determined by BRI, cannot reasonably be modified prior to the Policy Effective Date or the effective date of a change in the A&M Policy until such time that it is reasonable to modify such conduct (as determined by BRI) to be consistent with the A&M Policy (the “A&M Policy Exemption”).

4. Consequences of Violating these Policies

BRI, without assuming any liability, will take one or more of the following actions immediately following verification by BRI to its satisfaction that a Dealer has violated any or all of these Policies:

For the first violation during the Policy Period:

(a) Effective as of the date specified in notice from BRI to such Dealer and continuing for the next thirty (30) days, the authorization of such Dealer to purchase each stock-keeping unit (“SKU”) in the product family involved in the first violation (as determined by BRI) will be immediately revoked by BRI, 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 and

(b) if such violation is due to: (i) continuing use of offending reference(s), text or conduct, such Dealer, after receiving notice of such violation from BRI, will remove or stop or cause to be removed or stopped the offending reference(s), text or conduct (if BRI determines that it or they can be) within the Allotted Period or (ii) offending reference(s), text or conduct that BRI determines have been removed or stopped (for example, a violation that has not been continued or repeated, such as an offending ad run one time or a sale made last week), no further action is necessary on the part of such Dealer. (For purposes of these Policies, the “Allotted Period” means the time period specified in the notice of violation provided by BRI to such Dealer, which typically will be one of the following: (A) no later than one (1) business day (usually for a violation involving Electronic Content, including with limitation that using the Internet); (B) no later than three (3) business days (generally for all other cases); or (C) by the conclusion of the period otherwise specified by BRI.)

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 BRI determines that it or they can be) within the Allotted Period after receiving notice of the first violation from BRI or (b) such Dealer otherwise violates these Policies a second time, effective as of the date specified in notice from BRI to such Dealer and continuing for the next sixty (60) days, the authorization of such Dealer to purchase each SKU in the product family involved in the second violation (as determined by BRI) will be immediately revoked by BRI, 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. (If the thirty (30) day period for the first violation of these Policies has not run and the second violation of these Policies involves the same product family as that of the first (as determined by BRI), the sixty (60) day period will begin after the thirty (30) day period concludes.)

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 BRI determines that it or they can be) within the Allotted Period after receiving notice of the second violation from BRI or (b) such Dealer otherwise violates these Policies a third time, effective as of the date specified in notice from BRI to such Dealer and continuing until BRI provides notice to such Dealer otherwise, if ever, the authorization of such Dealer to purchase any or all of the BRI Products designated by BRI (the “Designated Products”) will be immediately revoked by BRI, 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 any or all of the Designated Products.

Each violation of these Policies is cumulative through the Policy Period. Except as noted, beginning with the second violation, the consequences of each violation can take effect regardless whether the consequences for the preceding violation(s) are still running. The same act(s) or failure(s) to act may result in multiple violations. For each Dealer purchasing any or all BRI Products from a Distributor, these Policies will be enforced through a Do-Not-Sell List. For purposes of these Policies, “Do-Not-Sell List” means BRI Notice which indicates that (a) one or more individuals or entities is or are not


authorized by BRI to promote or resell BRI Products or (b) such authorization has been revoked in whole or part with respect to all BRI Products or revoked only with respect to certain of such products.

5. Additional Provisions

Effective as of the Policy Effective Date, these Policies supersede and cancel each other policy applicable to each Dealer from BRI for any or all BRI Products, if any, regarding minimum advertised price (MAP), resale price or, to the extent covered by these Policies, the advertising and marketing matters referred to herein. For any reason(s) deemed appropriate by BRI (including without limitation based the request of a Dealer for BRI to consider such things as, but not necessarily restricted to, limited-time promotional offers for a Dealer event or otherwise), but in no case other than as the unilateral decision of BRI, these Policies may be modified, extended, waived, suspended, discontinued or rescinded in whole or part by notice from BRI at any time (including without limitation during any BRI-designated promotional period(s)), with such action(s) effective immediately or as otherwise described by BRI. If BRI negotiates price(s) with an individual or entity that is or are less than the MRP(s) and offers a Dealer the opportunity to fulfill one or more orders at such price(s), acceptance by such Dealer of such opportunity will not constitute a violation of these Policies.

If the approval of BRI under these Policies is sought by a Dealer, the failure to obtain it no later than seven (7) days after such request will be deemed to be a disapproval of each thing for which such approval is sought. As designated by notice from BRI, any or all of the approvals under these Policies provided to a Dealer by BRI may be rescinded in whole or part or otherwise modified, including without limitation if such Dealer does not fully comply with the then-current terms and conditions of one or more of such approvals.

The availability of any or all items of BRI Products may be changed by BRI anytime, in which case, BRI and each of the Distributors may without liability or penalty (a) cancel all pending orders (even if accepted) from a Dealer for such changed item(s) and (b) refuse to accept any new orders from a Dealer for such item(s).

Unless BRI designates otherwise, for purposes of compliance with these Policies, each business (regardless of the name(s) used and location(s)) directly or indirectly owned, operated or associated with a Dealer (as determined by BRI) will be considered to part of such Dealer, so that each violation by any such business will be aggregated with that or those of each other such business and attributed to such Dealer.

Regardless whether expressly indicated in these Policies, each notice referred to herein (including without limitation BRI Notice): (a) may, as determined by BRI, be given in writing or electronically (including without limitation posting on a website or portal for Dealers) and (b) will be considered to be received as designated by BRI. The Explanation (which also may be referred to as “Frequently Asked Questions,” “FAQs” or the equivalent as determined by BRI), if any, accompanying or associated with these Policies is intended to help answer questions in connection with it, but is not part of these Policies. In the event of any disagreement over the interpretation or enforcement of these Policies, the view of BRI will control.

If a Dealer violates these Policies or BRI determines that such Dealer does not qualify for or abused any or all of the MRP Policy Exemptions and the A&M Policy Exemption, such exemption(s) will be deemed withdrawn by BRI retroactive to the Policy Effective Date or such other date specified by BRI. Except in extraordinary circumstances, BRI will not consider any requests for other exemptions.

BRI will not discuss any conditions of acceptance related to these Policies. In addition, BRI neither solicits, nor will it accept, any assurance of compliance with these Policies. Notwithstanding anything to the contrary which may be expressed or implied in or by one or more agreements between (a) a Dealer and BRI, (b) such Dealer and each Distributor (if any) from which such Dealer obtains any or all BRI Products or (c) such Dealer and anyone else, nothing therein shall constitute an agreement by such Dealer to comply with these Policies, as, among other things, these Policies are not and should not be construed to be one of the Dealer Policies, the BRI Policies or the DP (as such term(s) is, are or may be used in any or all of such agreements) where such compliance is mandatory.

6. Questions, Additional Information or Information Regarding Potential Violations

All questions or requests for additional information regarding these Policies or information concerning potential violations of these Policies must be in writing and are to be addressed to the following person at BRI responsible for these Policies (“Policy Administrator”):

Policy Administrator Backrack, Inc. 475 Wyecroft Road Oakville, ON, L6K 2H2 Canada

email: [email protected]

Only the Policy Administrator or the Policy Administrator’s designated representative(s) is or are authorized by BRI to answer questions regarding these Policies, to comment on these Policies or to accept information regarding potential violations.

082916/3594839/7


082916/3638679/3

VALUE PROTECTION (VP) POLICIES FOR DEALERS EXPLANATION

INCLUDING FREQUENTLY ASKED QUESTIONS (FAQs)

This Explanation is intended to help answer questions in connection with the Value Protection (BP) Policies for Dealers (the “Policies”), but is not part of the Policies.

General

1. Why has Backrack (“BRI”) implemented the Policies?

BRI products are of high quality with a premium image for excellence and innovation earned through extensive product and market development activities and superior service. Some Dealers have taken or may take advantage of these facts by advertising or selling such products as loss leaders, promoting or applying unfair discounts or misusing intellectual property of BRI or references to BRI or its products. In an effort to help safeguard the reputation of BRI, insure the long-term viability of its brands and protect the investment of those Dealers that provide valuable services to end users, BRI has adopted the Policies.

2. When are the Policies effective?

The Policies are effective January 1, 2019 (the “Policy Effective Date”).

3. What do the Policies cover and to whom do they apply?

The Policies (a) are applicable to each Dealer and consist of (a) a policy regarding minimum retail price (the “Minimum Retail Price Policy” or the “MRP Policy”) and (b) a policy dealing with advertising and marketing (the “Advertising and Marketing Policy” or the “A&M Policy”). As used in the Policies, “Dealer” (“Dealers” in the plural) means an individual or entity located in either or both of the Canada and United States of America (“U.S.”) that promotes and sells any or all products offered by BRI (in the plural, “BRI Products”) to one or more end user purchasers (whether doing so directly or through another party that does such things as advertise or fulfill orders on behalf of such individual or entity).

The Minimum Retail Price Policy

4. What does the MRP Policy do and what products are subject to it?

The MRP Policy establishes a minimum retail price ("Minimum Retail Price” or “MRP” and referring to either the singular or the plural or both, “MRP(s)”) for each of the BRI Products as specified on the price list(s) or product list(s) provided or otherwise made available to each Dealer by BRI or otherwise communicated by BRI Notice (individually, a “Covered Product” and collectively, the “Covered Products”). The Minimum Retail Price is a price below which a Dealer may not offer or sell a Covered Product without subjecting itself to certain consequences. (See Question 23 of this Explanation.)

For purposes of the Policies, “BRI Notice” means notice from BRI to a Dealer provided or made available electronically or otherwise, such as, but not limited to, posting on one or more websites designated by BRI.

Note that parts of the Policies apply to all BRI Products, while others only apply to the Covered Products, i.e., each BRI Product with a Minimum Retail Price specified by BRI.

5. Is there any difference between the MRP Policy and a minimum advertised price (MAP) policy?

Yes. The MRP Policy addresses both the advertised or offer price and the actual selling price, while a minimum advertised price (MAP) policy applies to only the advertised or offer price. In other words, the MRP Policy applies: (a) to the price(s) at which any or all of the Covered Products is or are made available in any way (whether through advertising, promotion, proposal, quotation or otherwise and regardless of place or medium used) (individually and collectively, “offering” and its variants) and (b) to the actual sales price(s).

6. How does the Minimum Retail Price relate to the Manufacturer’s Suggested Retail Price?

BRI may designate a Manufacturer’s Suggested Retail Price (“MSRP”) for any or all BRI Products. The MRP for each of the Covered Products could be the same as or less than its MSRP.

7. Can BRI change the various aspects of the MRP Policy?

Yes. BRI, at any time, may vary the Minimum Retail Price for a Covered Product or add to or delete any or all of the Covered 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 BRI program(s) or any other BRI policy or in any other situation announced by BRI from time to time. BRI will endeavor to provide prior notice of each new MRP or such change in the Covered Products, generally not less than five (5) days in advance. While BRI will communicate each MRP and such change through the price list(s) or product list(s) provided or made available to each Dealer by BRI or otherwise by BRI Notice, each Dealer is responsible for making sure that it is aware of the appropriate MRP(s) and the Covered Products in each circumstance.

8. Is BRI setting the price charged by Dealers?

No. Each Dealer may offer or charge any price it wishes. However, a Dealer violates the MRP Policy: (a) by (i) making available in any way (whether

BRI Value Protection (VP) Policies for Dealers: Explanation - 1


through advertising, promotion, proposal, quotation or otherwise and regardless of place or medium used) (individually and collectively, “offering” and its variants), (ii) selling (whether face-to-face, in-store, online, through a catalog or otherwise) or (iii) otherwise providing (except in exchange for bona fide returns) one or more of the Covered Products during the Policy Period at a Net Adjusted Price less than the corresponding MRP(s) established by BRI from time to time and communicated by BRI Notice or (b), as provided in the MRP Policy, by being deemed to have violated it. For purposes of the Policies, the “Policy Period” with respect to a Dealer means the time period beginning on the Policy Effective Date and ending on the termination date described in BRI Notice.

9. What is “Net Adjusted Price”?

Under the Policies, (a) “Net Adjusted Price” means the lower of the price at which a Covered Product is offered by or for the benefit of a Dealer to a customer (potential or actual) or that actually paid to or for the benefit of a Dealer for a Covered Product by such customer after (i) applying all discounts and similar price reductions, (ii) excluding certain taxes and shipment charges and (iii) giving effect to the value of each Bundle involving one or more free or reduced-price goods or services and (b) “Bundle” means a combination of one or more BRI Products with one or more other products or services offered or sold together (as determined by BRI).

Specifically, except as otherwise provided in the MRP Policy, Net Adjusted Price will be calculated by:

(A) taking into account all discounts, deductions, rebates and allowances offered or given to a an actual or potential customer (regardless of source,whether given or taken at the time of sale or otherwise and considered by BRI to be part of such offer or sale), except that an offer or sale usingor applying a rebate, coupon or the equivalent (as determined by BRI) will not be considered part of Net Adjusted Price if such rebate, couponor the equivalent is provided by BRI or its designee(s) (1) directly to such customer or (2) to such Dealer for provision to and use by suchcustomer;

(B) excluding, if to be paid or paid by such customer, all applicable taxes and all shipping, delivery and insurance charges (However, if such Dealeroffers to pay or pays any or all of such taxes and such charges that otherwise would be paid by such customer, the amount so offered or paidby such Dealer will be considered a discount.);

(C) subtracting, in the case of free goods, services and similar benefits for such customer offered or provided by such Dealer, the fair market value(as determined by BRI) of all such goods, services and benefits (regardless of source, whether given or taken at the time of sale or otherwiseand considered by BRI to be part of such offer or sale); and

(D) subtracting, in the case of reduced-price goods and services and similar benefits for such customer offered or provided by such Dealer, thedifference between: (1) the fair market value (as determined by BRI) of all such goods, services and benefits (regardless of source, whethergiven or taken at the time of sale or otherwise and considered by BRI to be part of such offer or sale) and (2) the amount to be paid or actuallypaid for such goods, services and benefits.

What this means is that the Dealer’s "bottom-line" offering or selling price to its customers for each of the Covered Products must be at or above the applicable price described in the MRP Policy. The bottom-line price is after all discounts, deductions, rebates and allowances and excludes taxes, shipping, delivery and insurance (if paid by the customer). In addition, the fair market value of free goods is treated as a discount against the price of the Covered Product, as is the excess of the fair market value of reduced-price goods over the amount to be paid or actually paid.

In other words, the value of free goods and the extent by which the value exceeds the amount to be paid or paid for reduced-price goods (regardless of whether they come from BRI, another supplier, a Dealer or anyone else) will be considered as discounts against the price to be paid by the customer if BRI considers such goods to be included in the offer or sale of a product covered by the MRP Policy.

10. Is there some guidance from BRI on “fair market value”?

Yes. The fair market value for each Covered Product offered or provided for free or at a reduced price with the purchase of another Covered Product will be its MRP. From time to time, BRI may communicate to a Dealer in writing or electronically what it considers to be the fair market value for particular goods or services.

11. Is free or reduced-price shipping treated as a discount?

No. Free or reduced-price shipping may be offered or furnished by a Dealer without it being considered to be a discount when offered or furnished in connection with a purchase that includes at least one of the Covered Products, provided that, as determined by BRI: (a) such offer or furnishing applies to all other products in the category in which each such Covered Product resides and (b) the value thereof is reasonable.

12. Are there other ways to violate the MRP Policy?

Yes. Except as expressly approved by BRI in advance or to the extent limited to the Covered Products as provided in the MRP Policy, a Dealer (directly or through another party on behalf or for the benefit of such Dealer) using or engaging in any or all of the following terms, descriptions, conditions, offers or activities (or the substantive equivalent of any or all of them as determined by BRI) in connection (directly or indirectly) with the offering or sale of any or all BRI Products will be deemed to be a violation of the Policies:

(a) offering to match or matching a lower price offered by another seller;

(b) in connection with the offering or sale of any or all of the Covered Products, a strike-through of any MRP(s) regardless whether one or moreother prices is or are shown;

(c) offering or providing a discount, coupon or rebate applicable to any or all of the Covered Products in return for a Facebook “Like” or anythingsimilar in intent or effect (as determined by BRI) involving one or more social media;


(d) offering or selling a Bundle, unless such bundle either (i) originates from BRI or (ii) has been expressly approved by BRI Notice to such Dealerin advance;

(e) if a price for a Covered Product is shown in Internet advertising or promotion or as part of a sale made over the Internet permitted by the Policiesand the price for such product varies (exclusive of applicable taxes and all shipping, delivery and insurance charges) across any or all of (i) theinitial webpage mentioning, depicting or describing such product (if a price for such product appears on such page), (ii) the in-the-cart (or othercontainer) price, (iii) the checkout price and (iv) the substantive equivalent of any or all of them as determined by BRI;

(f) an invitation to click, rollover, call, e-mail, visit a location (such as a website, store or showroom) or otherwise communicate to obtain a price;

(g) the promotion or sale to group purchasers, except at price(s) no less than each applicable MRP;

(h) making or applying a trade-in offer for one or more BRI Products or any other product(s) in connection with or applicable to any or all of theCovered Products, regardless whether a specific trade-in price or value is communicated;

(i) on any or all proposals, quotations, contracts, invoices and receipts provided to or prepared for the benefit of any or all of such Dealer’s potentialand actual customers in connection with the offer or sale of any or all BRI Products (individually and collectively, “CustomerCommunications”), the failure of such Dealer to itemize the price charged for each of the products and services shown, referred to or otherwiseincluded on or in such Customer Communications, regardless whether such Customer Communications contain(s) any reference to any or allof the Covered Products; and

(j) one or more tactics which BRI determines is or are intended to circumvent application or operation of the MRP Policy.

13. Apart from free or reduced-price shipping, are there other exemptions from the MRP Policy?

Yes. As long as a Dealer otherwise complies with the Policies, such Dealer does not violate the MRP Policy by offering or selling to a potential or actual customer any or all of the Covered Products during the Policy Period at a Net Adjusted Price that is less than the applicable MRP(s) if such offer or sale is made in accordance with one or more of the following exemptions:

(a) 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 MRP(s), the Covered Products or the MRP Policy until such time that it is reasonable to revise such materials (as determined by BRI) to be consistent with the MRP Policy;

(b) each bona fide written contract between such Dealer and a customer that became effective (i) prior to July 15, 2016 (the “Policy Announcement Date”) or, after the Policy Announcement Date, if performance by such Dealer under such contract is completed prior to the Policy Effective Date or (ii), in the case of a change in the MRP(s), the Covered Products or the MRP Policy, the day before such change is announced by BRI;

(c) a bona fide offer of one or more of the Covered Products made by such Dealer prior to (i) the Policy Announcement Date or (ii) the effective date of a change in the MRP(s), the Covered Products or the MRP Policy, which makes such offer or the subsequent sale based on acceptance of such offer non-compliant with the MRP Policy, as long as (A), if the MRP Policy was in place at the time such offer was made, it complied with the then-current terms thereof; (B) such offer is effective for no longer than ten (10) days or other reasonable time period (as determined by BRI) after the Policy Announcement Date or the effective date of such change; and (C) each of the Covered Products included in such sale will be delivered to such customer no later than thirty (30) days after such acceptance;

(d) the offer or sale under one or more special programs (if any) designated by BRI;

(e) (i) a card benefit consisting of a discount, credit or rebate associated with the use of a designated credit or debit card or (ii) a coupon or other discount that in either case would, after its application, result in offer or sales price(s) for any or all of the Covered Products below its or their respective MRP(s), as long as (A) such card benefit, coupon or other discount may be applied to all or almost all of the products offered by such Dealer or, in the case of a category-wide sale (such as truck accessories), all or almost all of the other products in the category and (B) none of the statements or materials promoting such card benefit or coupon or other discount mentions, uses, depicts or otherwise refers to or appears adjacent to or near any or all of the name or mark BRI and the Covered Products;

(f) the accrual of “points” or other things of value (“Loyalty Points”) in connection with the purchase or receipt of any or all products and services from such Dealer (as long as each relevant Covered Product offered and sold in connection with such purchase at no less than its Minimum Retail Price) and the application of Loyalty Points, even if such application results in price(s) for any or all of the Covered Products below its or their respective MRP(s), as long as: (i) Loyalty Points may be accrued and applied to all or almost all of the products and services offered by such Dealer, (ii) the everyday accumulation rate for Loyalty Points applicable to the purchase of any or all BRI Products is no more than that applicable to all or almost all other brands of products offered by such Dealer (as determined by BRI regardless of category) and (iii) none of the statements or materials promoting Loyalty Points mentions, uses, depicts or otherwise refers to any or all of BRI and BRI Products; except that such Dealer may offer and provide a greater accumulation rate applicable to the purchase of any or all BRI Products and promote it, as long as such Dealer has received BRI Notice in advance expressly approving such rate and such promotion;

(g) the offer of one or more items of any or all of the Covered Products that is or are discontinued by BRI effective (i) when such item(s) does or do not appear on the then-current the price list(s) or product list(s) issued by BRI or (ii) on the date(s) referred to in notice of discontinuance provided by BRI to Dealers; and

(h) provided that such offer or sale is reasonable (as determined by BRI), the offer or sale of one or more units of any or all of the Covered Products: (i) that are demonstration or display units or (ii) to an employee of such Dealer for his or her personal use (and not for resale).


The Advertising and Marketing Policy

14. What does the A&M Policy do and what products are subject to it?

The Advertising and Marketing Policy applies to all BRI Products and protects the intellectual property of BRI and references to BRI or its products. Specifically, a Dealer violates the A&M Policy if any advertisement, promotion or other marketing vehicle (regardless of the medium used, whether Conventional Advertising, Electronic Content or otherwise) used or done by or on behalf of such Dealer (a) includes any or all BRI Intellectual Property or mentions, uses, depicts or otherwise refers to any or all of the BRI Products and (bi) either (i) does not conform to the Usage Policies or (ii) otherwise is not expressly approved in advance in writing by BRI.

15. What do the terms “Conventional Advertising,” “Electronic Content,” “BRI Intellectual Property” and the “Usage Policies” mean?

For purposes of the A&M Policy: (a) “Conventional Advertising” means, but is not limited to newspapers, magazines, direct mail, flyers, catalogs, radio, television and signs; (b) “Electronic Content” means information which (i) can be accessed directly through any hypertext link, by any other method which uses hypertext transfer protocol (http) or anything which BRI considers to be the substantive equivalent or (ii), to the extent not covered by the preceding description, is provided by or on (A) one or more mobile apps or mobile sites for devices (such as tablets and smartphones), (B) social media (e.g., Twitter feeds and Facebook), (C) Internet shopping sites, marketplaces and comparison search engines (CSEs) to which a Dealer supplies pricing information (e.g., Google Shopping, Buy.com, eBay, Amazon and PriceGrabber), (D) electronic solicitations or other electronic communications (e.g., robocalls, caller-on-hold and other audio recordings, messaging (e.g., SMS (text), MMS (multimedia) and IM (instant)), webcasts, e-mail and online or other electronic chats) and (E) electronic media advertisements (e.g., e-mail newsletters, pop-ups and banners); (c) “BRI Intellectual Property” means any or all of the designs, trademarks, trade names, service marks, logotypes, trade dress, images, artwork, copy, commercial symbols, copyrights, data, data bases, marketing information, trade secrets, confidential information and anything else in which BRI or its designee(s) claim(s) rights, regardless whether steps have been taken to register such rights with any government authority; and (d) the “Usage Policies” means policies regarding (i) the use of BRI Intellectual Property and (ii) uses, depictions or other references of or to any or all of the BRI Products (including without limitation those policies relating to format(s) and content) made available by BRI through BRI Notice.

16. Apart from using BRI Intellectual Property or references to or depictions of BRI Products without following the Usage Policiesor obtaining BRI’s approval, can the A&M Policy be violated in other ways?

Yes. Except as expressly authorized by BRI Notice or otherwise allowed by the Policies, with respect to any or all items of BRI Products, a Dealer violates the A&M

Policy by knowingly or negligently, directly or indirectly doing any or all of the following:

(a) advertising, promoting or selling using the terms “lowest price,” the “lowest prices” or “prices too low to show,” any form of low-price guaranteeor the substantive equivalent (as determined by BRI) of any or all of these terms or concepts;

(b) advertising, promoting or selling in any or all of the following ways: (i) outside Canada and the U.S. (except to the extent any or all advertising and promotion efforts cannot be reasonably restricted geographically, but this exception does not apply to sales made to anyone located outside Canada and the U.S.), (ii) using any business name(s) or storefront(s) other than the such Dealer’s full business name or acceptable variants thereof (as determined by BRI) and (iii) online in any fashion, unless and only to the extent each website and marketplace used for such purpose bysuch Dealer is (along with each business name and storefront) approved in advance by BRI for such use and which approval has not beenrescinded by notice from BRI;

(c) selling in either or both of the following ways: (i) to anyone for resale other than, in the case of permitted returns, to any or all of the Distributorsor BRI and (ii) to anyone other than end user customers permitted by BRI, including without limitation to the Special Accounts (for purposes ofthe Policies: (A) the “Special Accounts” means, collectively, each individual or entity so designated by BRI Notice and (B) “Distributor” (inthe plural, the “Distributors”) means an individual or entity authorized by BRI to sell any or all BRI Products to one or more Dealers);

(d) using any or all of BRI, its trademarks or other BRI Intellectual Property (or any variant(s) thereof) as or as part of any or all Uniform ResourceLocators (URLs), AdWords, corporate names and trade names (or the substantive equivalent as determined by BRI) employed by or for thebenefit of such Dealer, regardless whether such use is in connection with the offering or sale of any or all BRI Products;

(e) questioning or challenging the rights claimed by BRI or its designee(s) in or to BRI Intellectual Property or assisting in any way any other(s) in doingso;

(f) creating or assisting in or otherwise cooperating in the creation of new Amazon Standard Identification Numbers (ASINs);

(g) purchasing any or all BRI Products from any individual or entity other than BRI, a Distributor or, in the case of bona fide returns only, an end user;

(h) offering or selling one or more products that are (i) modified or counterfeit versions of any or all BRI Products or (ii) private label versions made by or for such Dealer or one or more affiliates of such Dealer (as determined by BRI); and

(i) one or more tactics which BRI determines is or are intended to circumvent application or operation of the A&M Policy.

17. Are there any exemptions from the A&M Policy?

Yes. Provided that a Dealer otherwise complies with the Policies, such Dealer does not violate the A&M Policy by conduct that, as determined by BRI, cannot reasonably be modified prior to the Policy Effective Date (i.e., January 1, 2019) or the effective date of a change in the A&M Policy until such time that it is reasonable to modify such conduct (as determined by BRI) to be consistent with the A&M Policy.

Questions Applicable to both the MRP Policy and the A&M Policy

18. Will BRI consider requests for additional exemptions?


No, except in extraordinary situations.

19. What happens if a Dealer relies on one or more exemptions, but does not qualify for or abused it or them?

If a Dealer violates the Policies or BRI determines that such Dealer does not qualify for or abused any or all of the exemptions under the Policies, such exemption(s) will be deemed withdrawn by BRI retroactive to the Policy Effective Date or such other date specified by BRI.

20. How is the situation treated when a Dealer requests approval from BRI under the Policies, but doesn’t hear back?

If the approval of BRI under the Policies is sought by a Dealer, the failure to obtain it no later than seven (7) days after the date of such request will be deemed to be a disapproval of each thing for which such approval is sought.

21. What do the Policies say about product availability?

The availability of any or all items of BRI Products may be changed by BRI anytime, in which case, BRI and each of the Distributors may without liability or penalty (a) cancel all pending orders (even if accepted) from a Dealer for such changed item(s) and (b) refuse to accept any new orders from a Dealer for such item(s).

22. If a Dealer violates the MRP Policy and later violates the A&M Policy, has it committed (a) one violation of each policy or (b) two violations of the Policies?

Both (a) and (b). But what is most important is that any violation of the MRP Policy is combined with any violation of the A&M Policy to determine the number of times a Dealer has violated the Policies. So, all the violations of the Policies could be based on MRP Policy violations, A&M Policy violations or both types taken together.

23. What happens if a Dealer violates the Policies?

BRI, without assuming any liability, will take one or more of the following actions immediately following verification by BRI to its satisfaction that a Dealer has violated any or all of the Policies:

For the first violation during the Policy Period:

(a) Effective as of the date specified in notice from BRI to such Dealer and continuing for the next thirty (30) days, the authorization of such Dealer to purchase each stock-keeping unit (“SKU”) in the product family involved in the first violation (as determined by BRI) will be immediately revoked by BRI, 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 and

(b) if such violation is due to: (i) continuing use of offending reference(s), text or conduct, such Dealer, after receiving notice of such violation from BRI, will remove or stop or cause to be removed or stopped the offending reference(s), text or conduct (if BRI determines that it or they can be) within the Allotted Period or (ii) offending reference(s), text or conduct that BRI determines have been removed or stopped (for example, a violation that has not been continued or repeated, such as an offending ad run one time or a sale made last week), no further action is necessary on the part of such Dealer. (For purposes of the Policies, the “Allotted Period” means the time period specified in the notice of violation provided by BRI to such Dealer, which typically will be one of the following: (A) no later than one (1) business day (usually for a violation involving Electronic Content, including with limitation that using the Internet); (B) no later than three (3) business days (generally for all other cases); or (C) by the conclusion of the period otherwise specified by BRI.)

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 BRI determines that it or they can be) within the Allotted Period after receiving notice of the first violation from BRI or (b) such Dealer otherwise violates the Policies a second time, effective as of the date specified in notice from BRI to such Dealer and continuing for the next sixty (60) days, the authorization of such Dealer to purchase each SKU in the product family involved in the second violation (as determined by BRI) will be immediately revoked by BRI, 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. (If the thirty (30) day period for the first violation of the Policies has not run and the second violation of the Policies involves the same product family as that of the first (as determined by BRI), the sixty (60) day period will begin after the thirty (30) day period concludes.)

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 BRI determines that it or they can be) within the Allotted Period after receiving notice of the second violation from BRI or (b) such Dealer otherwise violates the Policies a third time, effective as of the date specified in notice from BRI to such Dealer and continuing until BRI provides notice to such Dealer otherwise, if ever, the authorization of such Dealer to purchase any or all of the BRI Products designated by BRI (the “Designated Products”) will be immediately revoked by BRI, 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 any or all of the Designated Products.

Each violation of the Policies is cumulative through the Policy Period. Except as noted, beginning with the second violation, the consequences of each violation can take effect regardless whether the consequences for the preceding violation(s) are still running. The same act(s) or failure(s) to act may result in multiple violations.

24. If a Dealer buys from a Distributor and violates the Policies, how are the restrictions on product access enforced?

If a Dealer purchases any or all BRI Products from one or more Distributors, a Do-Not-Sell List provided to all Distributors will be used to enforce restrictions on product access caused by violations of the Policies. For purposes of the Policies, “Do-Not-Sell List” means BRI Notice which indicates that (a) one


or more individuals or entities is or are not authorized by BRI to promote or resell BRI Products or (b) such authorization has been revoked in whole or part with respect to all BRI Products or revoked only with respect to certain of such products.

25. Will a Dealer violating the Policies be warned first?

No. BRI cannot provide any advance warning.

26. How are violations of the Policies handled if a Dealer sells BRI Products through more than one business?

Unless BRI designates otherwise, for purposes of compliance with the Policies, each business (regardless of the name(s) used and location(s)) directly or indirectly owned, operated or associated with a Dealer (as determined by BRI) will be considered to part of such Dealer, so that each violation by any such business will be aggregated with that or those of each other such business and attributed to such Dealer.

27. Does BRI have any recourse beyond the consequences described for violating the Policies?

Yes. The consequences of violating the Policies are non-exclusive and do not limit or waive in any way the legal, equitable and other remedies available to BRI, particularly for conduct relating to BRI Intellectual Property.

28. How are minimum retail price policies (like the MRP Policy) treated under the laws of Canada and the United States?

A 2009 amendment to the Competition Act in Canada treats minimum retail price policies as lawful, unless they can be proven on balance to be unreasonably anticompetitive—a standard that provides BRI with considerable flexibility. The same test applies to the other restrictions in the Policies.

As far as the U.S. is concerned, at least four Supreme Court cases taken together—U.S. v. Colgate (1919), Monsanto v. Spray-Rite (1984), Business Electronics v. Sharp (1988) and Leegin v. PSKS (2007)—have recognized that a supplier may establish the terms and conditions under which it will sell its products, including the terms and conditions affecting retail price. Particularly in the resale pricing area, such terms and conditions must be determined by the supplier unilaterally, i.e., without agreeing with any of its customers. Although there is more latitude in matters relating to advertising and marketing, BRI will not discuss the conditions of acceptance of the Policies nor solicit or accept any assurances of compliance in order to maintain the Policies as unilateral.

29. Do the concerns in the U.S. about discussing the Policies mean that BRI cannot explain the Policies?

No. BRI will answer questions about the Policies, but it will not do anything that may change the nature of the Policies into something other than unilateral. As a result, BRI cannot give any warning to any Dealer violating the Policies, nor can it ask for or accept pledges of compliance from Dealers.

All questions or requests for additional information regarding the Policies or information concerning potential violations of the Policies must be in writing and are to be addressed to the following person at BRI responsible for the Policies (“Policy Administrator”):

Policy Administrator Backrack, Inc. 475 Wyecroft Road Oakville, ON, L6K 2H2 Canada

email: [email protected]

Only the Policy Administrator or the Policy Administrator’s designated representative(s) is or are authorized by BRI to answer questions regarding the Policies, to comment on the Policies or to accept information regarding potential violations.

30. Will Dealers that follow the Policies violate Canadian competition or U.S. antitrust laws?

No. But, particularly in the U.S., they should avoid communicating to BRI their acceptance of the Policies or their compliance with them. Honoring the Policies by offering or selling any or all of the Covered Products at or above the relevant MRP or avoiding certain conduct or the use of certain terms is not communicating acceptance or compliance.

31. If a Dealer notifies BRI that another Dealer has violated the Policies, may BRI act on this information?

Yes. Such notification must be in writing addressed to the Policy Administrator and document the apparent violation. BRI may investigate and, if warranted, take action against the Dealer violating the Policies, as long as, in the U.S., the Dealer that contacted BRI does not agree with the company on a specific retail price. (Following the Policies is not an agreement.) In addition, BRI will not disclose to the Dealer that contacts it the outcome of its investigation, as, although BRI enforces its policies uniformly, all of the dealings between the company and its Dealers are confidential. BRI also may use the services of one or more outside firms to monitor compliance with the Policies.

32. Why are the rules so strict?

In order to comply with the standards established by the law, BRI must carefully stay within their boundaries.

33. How long will the Policies be in effect?

The Policies will remain in effect with respect to a Dealer until BRI notifies it otherwise, but BRI may modify or suspend the Policies at any time, including, among other things, by changing their terms and conditions in any way. It also may grant variances as it deems appropriate for limited-time promotional offers and the like.

34. Can BRI add other products or services to the Policies and establish minimum offering and selling prices for them, remove certain products or services from coverage under the Policies or change the MRP for a Covered Product?


Yes. BRI may do so at any time.

35. Are other companies doing this?

Yes. A number of automotive products manufacturers and those in other industries have adopted policies to address the same or similar concerns as those faced by BRI.

082916/3638679/3

CONFIDENTIAL CAN/US DIST/DEAL POLICY

082916/3677895/1

DISPUTE RESOLUTION POLICY APPLICABLE TO AUTHORIZED DISTRIBUTORS AND AUTHORIZED DEALERS

(Effective as of January 1, 2019)

The Distributor Policies and the Dealer Policies, including without limitation the one set out below (this “Policy”), are issued under and governed by the Authorized Distributor Agreement and the Authorized Dealer Agreement, respectively, (individually and collectively, the “Agreement”) between Backrack, Inc. (“BRI”) and Distributor or Dealer, as the case may be (individually and collectively, “Reseller”). Each capitalized term not defined in this Policy will have the meaning shown in the Agreement. In the event that the Agreement is not in place or a different contract applies to the relationship between BRI and a distributor or dealer, such distributor or dealer is still subject to this Policy (and the definitions in the Agreement) and is deemed to be “Reseller” hereunder. This Policy will survive termination of the Agreement or such contract.

1. Arbitration. Each of the Disputes (including without limitation the determination of the scope or applicability of the agreement to arbitrate, such asquestions as to jurisdiction or the arbitrability of any or all of the Disputes) shall be finally settled by arbitration by one (1) arbitrator (the “Arbitrator”)under the Rules of Arbitration of the International Chamber of Commerce (or the then-current substantively equivalent successor(s) of such rules) (the“Rules” and the “ICC,” respectively) as modified by this Policy. The Parties agree that the ICC shall appoint an attorney from Canada who is familiarwith the law of the Province of Ontario to serve as the Arbitrator. With respect to each such arbitration (the “Arbitration”): (a), in the event the Arbitrationof a Dispute is not initiated by Reseller during the one (1) year period after the occurrence of the event giving rise to such Dispute, the claims of any andall of the Distributor Parties or the Dealer Parties (as relevant) against any or all of the BRI Parties in such Dispute will be barred; (b) the language to beused in the Arbitration proceedings, in transcripts of such proceedings and in documents and legal authorities submitted in connection therewith shall beCanadian English (or, in the case of documents in languages other than Canadian English, shall be submitted along with translations into CanadianEnglish), except that the Arbitrator will have the authority, in the event so requested by either Party, to reasonably modify the arbitral proceedings toaccount for language differences, if such modification is necessary to achieve fundamental fairness; (c) the place of the Arbitration will be Toronto, Ontario;and (d), except as provided in the Agreement, each Party will divide equally the costs of the Arbitration and be responsible for its own attorneys’ fees andexpenses.

2. Evidentiary Rules. The Arbitrator will follow the IBA Rules on the Taking of Evidence in International Commercial Arbitration (the “IBA Rules”), withthe limited exception that strict compliance with the requirements of Article 3(3)(a)-(c) of the IBA Rules with respect to Requests to Produce documentsshall not be required, and the Parties may, in good faith, identify generally the categories of documents to be produced. (“IBA” is the International BarAssociation.) Unless otherwise mutually agreed by the Parties or determined by the Arbitrator, all discovery shall be completed within ninety (90) days ofthe date on which the Arbitrator is appointed. The Arbitrator may, for good cause shown by a Party or the Parties, modify the scope of discovery and thediscovery schedule set forth herein.

3. Award. Unless the Parties otherwise agree in writing signed by each Party, the Arbitrator shall submit an award in writing (“Award”) for scrutiny to theInternational Court of Arbitration of the ICC no later than forty-five (45) days following the last day of the Arbitration hearing or the filing of the last post-hearing submissions, whichever is later. Such Award shall state the reasons therefor and be final and binding on the Parties and shall deal with the issueof costs as provided in Section 1(d) of this Policy. The Arbitrator shall be bound by the fee-shifting and indemnification provisions, if any, of the RelationshipDocuments or the Dealer Relationship Documents, as the case may be.

4. Interim Relief. As provided in the Rules, either Party may request that the Arbitrator order interim or conservatory measures at any time, includingwithout limitation injunctive relief. The Arbitrator shall promptly conduct whatever proceedings he or she deems necessary and shall issue a decision onsuch a request on an expedited basis, but no later than seven (7) days from the date of such request. The Arbitrator shall issue such decision in the formof an Award ("Interim Award"), which shall be final, binding and enforceable as of the date it is issued. Notwithstanding this Section 4 of this Policy,either Party may also seek interim or conservatory measures in any court of competent jurisdiction.

5. Recognition. Each Award (including without limitation each Interim Award), may be recognized and enforced by any court of competent jurisdiction.

6. Jurisdiction. Each of the Parties, on behalf of itself and its Affiliate(s), hereby: (a) submits to the personal jurisdiction of the courts in Toronto, Ontario(collectively, the “Ontario Courts”) for the sole purpose of a proceeding or action seeking the recognition or enforcement of any Award or Interim Award(the “Action”); (b) irrevocably waives, and agrees not to assert by way of motion, defense, or otherwise, in the Action, any claim (i) that it is not subjectpersonally to the jurisdiction of the Ontario Courts and (ii) that the Action is brought in an inconvenient forum; and (c) acknowledges that the venue of theAction is proper.

7. Service. Each Party may serve the other Party (or such other Party’s designated legal counsel) arbitration or court papers in a manner consistent withprovision of notices under the Agreement or as otherwise provided by law.

082916/3677895/1

of 12 Backrack Inc. 2019 Sales Policies & Procedures

BACKRACK INC. 2019 Sales Policies

Effective as of January 1, 2019 through December 31, 2019

As further explained in this document, the Relationship Documents, including without limitation these 2019 Sales Policies: (a) supersede all previous Distributor or Dealer agreements, policies, procedures and practices and (b) are subject to change by Backrack without notice.


Table of Contents

Description Page

Table of Contents .................................................................................................... 2

Application ............................................................................................................... 2

Ordering Procedures Policy .................................................................................... 3

Payment Policy ....................................................................................................... 5

Shipping Policy ........................................................................................................ 6

Tech Support Policy ................................................................................................ 7

Return Procedures Policy ........................................................................................ 8

Stock Adjustment Policy .......................................................................................... 10

Warranty Policy ....................................................................................................... 11

Application

The price list(s), announcements and policies (including without limitation these 2019 Sales Policies, effective as of January 1, 2019 and running through December 31, 2019 or until such time as Backrack issues modifications or replacements) issued by Backrack Inc. ("Backrack") and intended for each Backrack customer ("Customer") to which a copy of them is provided or made available (regardless of whether related to pricing, terms or anything else, collectively the "Backrack Policies"), together with the relevant agreements originating from Backrack (collectively, the “Relationship Documents”): (a) govern the purchase, sale, and resale of each of the products sold by Backrack to such Customer under the Backrack brand or otherwise (collectively, "Backrack Products"), (b) supersede all other Distributor or Dealer agreements, policies, procedures and practices and (c) are subject to change by Backrack at anytime without advance notice effective as of the date specified by Backrack. In the event of any disagreement over the interpretation or enforcement of any or all of the Relationship Documents, Backrack's view will control.


Ordering Procedures Policy

Pricing: Prices and terms of sale for Backrack Products ordered by a Customer from Backrack will be consistent the prices and terms in the then-current version(s) of the Relationship Documents. Such prices and terms are subject to change by Backrack without advance notice effective as of the date specified by Backrack. Such prices do not include sales, use, excise or other taxes applicable to Backrack Products. Except as otherwise modified by one or more of the Relationship Documents, all prices are Free on Board (FOB) such place(s) as designated by Backrack. Each order submitted to Backrack is subject to acceptance by Backrack in a manner that is consistent with the Relationship Documents. At all times, Backrack shall have the right to allocate Backrack Products in such manner as Backrack deems advisable.

How to place an order:

Electronic Data Interchange (EDI)

EDI (Specifically SPS Commerce, Backrack preferred partner) is generally the most efficient means of transmitting order information and, therefore, is Backrack's recommended method. Please contact Backrack Customer Service (800-265-8137) to learn about placing EDI orders

Email Orders (EMO)

Backrack supports EMO in CSV, XLS, and PDF formats. EMO allows the Customer to place orders by attaching a specified-format order document to an email. Backrack does not charge any fees in connection with placing orders via EMO. To learn about EMO, please contact Backrack Customer Service (800-265-8137). EMO orders should be sent to: [email protected]

Faxed Order Placement (FOP)

Backrack supports the placement of orders via fax. Fax orders to 905-849-4116. To learn about placing orders via FOP, please contact Backrack Customer Service (800-265-8137).

Expedited Orders: Expedited orders (limited to drop ship orders only, i.e., does not apply to pallet or less-than-truckload (LTL) orders) require premium freight shipments. Backrack clears all courier and single-package shipments on Thursday every week into the United States (“USA”). When able and at the customer request, Backrack will expedite orders for shipment at the customer’s expense. Overnight shipments will be invoiced at carrier’s standard shipping rates.

Minimum Order: No minimum order required (freight will be invoiced at carrier’s standard shipping rates).

Drop-Ship Orders: No fee for drop ship orders.

Custom Orders: Custom orders should be directed to [email protected]. Custom orders will be accepted at the discretion of Backrack. For clarification or more information on custom orders, contact Backrack Customer Service (800-265-8137).

Back Orders: Back orders are held at customer request and will be cancelled if not filled within 90 days. Backrack will notify the Customer should back orders be cancelled.

Order Error Return Policy: Merchandise ordered in error must be returned freight prepaid within 15 days of shipment (a 25% handling/restock fee will apply). Credit will be issued for product returned in accordance with Backrack’s Order Error Return Policy at the lowest net acquisition price within the last 12 months. Literature and promotional materials may not be returned.


All returns require advance approval as evidenced by a Return Goods Authorization (“RGA”) number (see "Return Procedures Policy").

Force Majeure: Backrack will not be liable for loss, damage or delay resulting from any cause(s) whatsoever beyond its reasonable control. Delivery dates for any or all Backrack Products may be extended by Backrack to the extent of each such delay.

Inconsistent Terms: In the event that Backrack receives one or more orders (or similar or related documents) from a Customer which contain one or more provisions which are inconsistent with or in addition to any or all provisions of the Relationship Documents: (a) each such order (or document) will be conclusively deemed to be governed by the Relationship Documents; (b) each such inconsistent or additional provision will be deemed stricken; and (c) no order submitted to Backrack by such Customer will be deemed to be governed by any provision(s) other than that or those contained in the Relationship Documents, unless and until a written supplement is duly executed by both Backrack and such Customer which expressly adopts such provision(s).


Payment Policy

Credit Terms: Backrack may grant credit terms in accordance with its credit standards as established from time to time. For each credit-eligible Customer, standard credit terms are Net 30 days from date of invoice (“Net 30”).

Quick-Pay Discount: Backrack offers no quick pay discount. All accounts are Net 30

Remittance Instructions: All payments should be sent to Backrack at the address shown on the relevant invoice(s). Remittance advice must accompany all payments, otherwise amounts received will be applied to the oldest open items.

Other Payment Methods: Backrack may accept Customer payment via credit card. A service charge of 2% will apply to any credit card payment in excess of $2001. Any payment less than $2000 will not be subject to the 2% service charge. Backrack may also accept prepaid orders at its discretion. Shipment of prepaid orders will be delayed to allow time for payment to clear.


Shipping Policy

Free Shipping: Free shipping will apply to each order greater than $7,000 to a single location within Canada and the Continental USA via a Backrack-selected carrier (individually, a "Freight Prepaid Order"). Each back order from a Freight Prepaid Order will be shipped with one or more following Freight Prepaid Orders.

If a Customer elects to use its own carrier, the shipment will be made freight collect. Orders that do not qualify for free shipping may be sent freight collect via a Backrack-selected carrier, unless the Customer specifies its own carrier with the order.

Carton Shortages and Damage: Claims for carton shortages or damage must be made against the carrier at the time of delivery. The Customer should list any shortages or damage on the bill of lading at the time of delivery and request an inspection by the carrier. Freight claims must be filed against the carrier in accordance with the carrier’s policies and procedures.

Shipping Discrepancies: Shipping discrepancies (within cartons) must be reported to Backrack within 5 days of receipt of shipment (invoice number, part number and quantity discrepancy must be provided). Backrack will issue a credit memo for allowed claims for shipping discrepancies. Payment deductions in connection with shipping discrepancies are not permitted.

Shipping Status: For delivery information, shipping errors or shortages, please call Backrack Customer Service (800-265-8137).


Tech Support Policy

To answer a Customer's technical questions and provide technical support for Backrack Products ("Tech Support"), Tech Support lines (800-265-8137) are available 8:00 am-5:00 pm Eastern Time, Monday through Friday.

Tech Support questions may also be submitted online. Visit Backrack.ca, and click on [email protected]. Send an email with product information requests. Online Tech Support requests may be submitted anytime, 24 hours a day/7 days a week. Customers should allow up to 48 hours for a response to online requests. Questions will be answered in the order in which they are received.


Return Procedures Policy

All returns require advance approval as evidenced by a Return Goods Authorization or RGA number. Each return received without a RGA number will be returned to the Customer freight collect. RGA numbers will be valid for no more than 30 days for the date of issuance.

All returns must be shipped to the appropriate address (“Return Center”) as set forth below (for small parcel return only):

Return Center for Customers located in Canada:

Backrack Inc. 5230 Harvester Rd Unit 3 Burlington, ON L7L 4X4Canada

Return Center for Customers located in the USA:

Backrack Inc. c/o Productive Transportation 530 Grand Island Blvd Tonawanda, NY USA 14150

Backrack Products may be returned in connection with the Stock Adjustment Policy, Warranty Policy or Order Error Return Policy in accordance with their respective provisions.

Stock Adjustment Policy Returns: Each Customer in good standing may return Backrack Products in accordance with the Stock Adjustment Policy (individually, a "Stock Adjustment Return"). Credit will be issued for products returned under such policy at the lowest net acquisition price within the last 12 months.

Stock Adjustment Return Procedures:

1. Prepare a list of the item(s) to be returned, including: (a) Customer name, address and Customer number; (b) part number(s) and quantities; and (c) unit cost and extension based on the lowest price paid within the last 12 months.

2. Provide the return list to Backrack Customer Service for approval.

3. After the Customer's return request is reviewed and approved, the Customer will receive a RGA number from Backrack Customer Service.

4. All returned items must be protected against damage and shipped in original packaging.

5. Ship the item(s) freight prepaid to the appropriate return center (as described above), marking each carton with the RGA number. No Stock Adjustment Return may be combined with any other return, as a separate bill of lading is required for each type of return.

6. Returned items not in resalable condition (such as that previously installed or not in original condition) will receive no credit. A 25% restocking charge will be applied to returns which require repackaging. No returns are available for any custom products, and there are no exceptions.

Warranty Policy Returns: Consistent with the Warranty Policy, each Customer in good standing may return allegedly defective Backrack Products for determination of whether credit will be issued at the lowest net acquisition price within the last 12 months, less damaged or missing parts. Products for which a warranty claim is rejected will be scrapped by Backrack


with no credit issued, unless a request for return of such products is made upon issuance of the RGA number.

All returns under the Warranty Policy (each, a "Warranty Return") require advance approval as evidenced by a RGA number.

Warranty Return Procedures:

1. Inspect each item to be returned for proper tagging and verify that such item is within thewarranty period. Items that are not properly tagged or visually violate the WarrantyPolicy may not be returned.

2. Ensure that warranty tags are properly complete and that the original consumerreceipts are included for each returned item.

3. Prepare a list of the item(s) to be returned, including: (a) Customer name, address andCustomer number; (b) part number(s) and quantities; and (c) unit cost and extensionbased on the lowest price paid within the last 12 months. Backrack will not accept anyreturns thru a third party online retailer, such as Amazon.

4. Call Customer Service (800-265-8137) to obtain a RGA number.

5. Send one copy of the list of the item(s) to be returned to the appropriate return center.Send another copy with the shipment, and keep a third copy. All cartons should bemarked with the RGA number.

7. Ship the item(s) freight collect to the appropriate return center (as described above),marking each carton with the RGA number. No Warranty Return may be combined withany other return, as a separate bill of lading is required for each type of return.

8. All returned items must be protected against damage and shipped in original packaging.


Stock Adjustment Policy

To adjust Customer inventories of Backrack Products ("Stock Adjustment"), each Customer in good standing is entitled to return up to 1% of its prior-year net purchases. Net purchases will be calculated by Backrack as gross purchases of Backrack Products, less all rebates, credits, returns, allowances and adjustments. A 2:1 offsetting order will be required for each Stock Adjustment. Any products acquired through excess inventory or distressed merchandise purchases are not eligible for return. Each Stock Adjustment Return for the current calendar year must be completed prior to November 1 of that year.

Each Stock Adjustment Return requires advance approval as evidenced by a Return Goods

Authorization or RGA number (see Return Procedures Policy).


Warranty Policy

The Warranty

The written warranty or warranties accompanying each item of Backrack Products or set forth in the Backrack Policies (collectively, the “Warranty”) will be the only warranties applicable to Backrack Products. THE WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION INFRINGEMENT, MERCHANTABILITY, FITNESS FOR PARTICULAR PURPOSE AND EACH WARRANTY OTHERWISE ARISING FOR ANY REASON(S) WHATSOEVER. The remedies set forth in the Warranty will be the only remedies available to any individual(s), entity or entities with respect to Backrack Products. Backrack neither assumes nor authorizes any individual(s), entity or entities (including without limitation any or all of the Customers) to assume or express for Backrack any other obligation or liability with respect to any or all Backrack Products. The exclusive remedies provided in the Warranty shall not be deemed to have failed of their essential purpose so long as Backrack is willing and able to perform under the Warranty in the manner prescribed therein.

The Consumer

The Warranty is extended to the original end-user (the "Consumer") only and is not assignable or otherwise transferable. In the event of an alleged defect in material or workmanship, Backrack's responsibility is strictly limited to repair or replace the product that Backrack determines should be repaired or replaced by it. Backrack has no other obligation expressed or implied. Final claim determination under the Warranty will be made by Backrack in its sole discretion.

Limitations

In no event shall Backrack be liable to any or all of the Customer, purchaser(s) or user(s) for any reason(s) whatsoever, whether in contract, tort (including without limitation negligence and strict liability) or otherwise, regardless whether Backrack is, was or has been advised of the possibility thereof, for any or all of the following, whether actual or alleged: (a) labor, transportation and other charges and (b) indirect, consequential, incidental, special and punitive damages, loss and expense (including without limitation lost profits).

The Warranty sets forth specific legal rights. The Consumer may have other rights as a result of variations in provincial or state laws. As required by law, the Warranty generally is characterized as "limited." This Policy and the Warranty supersede all prior statements regarding warranties.

Backrack does not warrant and will be relieved of all liability with respect to any or all Backrack Products which have been: (a) modified or altered in any way; (b) subjected to adverse conditions such as misuse, neglect, accident, improper installation or adjustment, dirt or other contaminants, water, corrosion or faulty repair; or (c) used in other than those applications expressly then-currently recommended by Backrack in writing (for example, use in any or all racing activities is not recommended by Backrack).

Products, Time Periods and Claims

Set out below is a summary of the Warranty currently applicable to Backrack Products:

Backrack products are designed to assist in securing cargo on pickup trucks. Backrack has no control over how its products are used and, therefore, its warranty is limited to the materials and workmanship used in the manufacturing of its products.


Powder coat finish is not covered under warranty. Backrack reserves the right to modify its products without notice. Backrack shall not be liable for any damages caused by failure of any vehicle attachment point, misuse or modification of its products in any form, damage due to negligence caused by the operator of the vehicle to which our products are attached. Any warranties are made exclusively to the original purchaser only and proof of purchase must accompany any warranty claim.

The Nature of this Policy

For convenience, this Policy describes the Warranty. However, nothing in this Policy that is inconsistent with the Warranty will be deemed to override it, as the provisions of the Warranty that are then-current control.

081016/3664379/1

Backrack Authorized Dealer Agreement (Canada/U.S.) - 1


062816/3623209/2

AUTHORIZED DEALER AGREEMENT THE INTRODUCTION (Various terms are defined in Section 7 and elsewhere in this Agreement in bold italics.)

Dealer (full business name) (“FBN”): ___________________________________________________________________________________________

Principal Address: ____________________________________ City: ___________________ Prov/Terr/State: _________ Postal/Zip Code: __________

Owner/Manager: ________________________________________________________ email: _____________________________________________

Contact (if different): ___________________________________________ Contact email (if different): _______________________________________

Phone: ____________________________ Customer Service Phone (if different): __________________________

BRI-approved name(s)/storefronts under which Dealer operates BRI-approved website(s) (URLs)/marketplace(s) used by Dealer

Principal address for notices to Backrack, Inc. (“BRI”): Administrator, Backrack, Inc., 475 Wyecroft Road, Oakville, ON, L6K 2H2 Canada ● email: email: [email protected]

SIGNATURES DEALER

By:

Name:

Title:

Date:

Made and accepted in Oakville, Ontario: BRI

By: ________________________________________________________

Adrian Jayne, President

Date: ______________________________________________________

The Effective Date: ___________________________________________

THIS AGREEMENT is made as of the Effective Date by and between BRI (an Ontario corporation) and Dealer, each located at its respective principal address shown in the Introduction.

1. Appointment. Subject to the terms and conditions of this Agreement, BRI appoints Dealer and Dealer agrees to perform as an AuthorizedNonexclusive Dealer during the Term for the Products. For any or items of BRI Products, Dealer will only submit orders to and purchase from: (a) anyor all of the Distributors or (b), if and as directed by BRI, any or all of the Distributors and BRI. Each such order will be subject to (and Dealer will complywith) the price, credit, payment, discount and other terms and conditions of sale: (i), if such order is accepted by a Distributor, as determined betweenDealer and such Distributor (to the extent that there is no conflict with the Dealer Relationship Documents (collectively, the “DRD”)) and (ii), if suchorder is accepted by BRI pursuant to the DRD, as contained in the DRD.

2. Responsibilities. Except as otherwise expressly directed or approved in advance by BRI Notice or otherwise expressly permitted by the DRD, Dealer, atits own expense, will do each of the following: (a) promote the sale and use of the Products; (b) promptly and effectively respond to questions and requestsregarding any or all items of the Products (i) from actual and prospective end user purchasers (but not resellers) permitted under the DRD (collectively, the“Authorized Customers”) and (ii) from BRI, including without limitation questions and requests from BRI regarding any or all of the customers of Dealer; (c)represent the Products in a professional manner during the Coverage Period; (d) refrain from any conduct that is or could be detrimental to the reputation orintegrity of any or all of Dealer, the Distributors (as applicable), BRI and BRI Products; (e) refrain from knowingly or negligently directly or indirectly (i)advertising, promoting or selling in any or all of the following ways: (A) outside Canada and the United States of America (“U.S.”) (except to the extent anyor all advertising and promotion efforts cannot be reasonably restricted geographically, but this exception does not apply to sales made to anyone locatedoutside Canada and the U.S.), (B) doing business under or otherwise using any business name(s) or storefront(s) other than the FBN or acceptable variants thereof (as determined by BRI) and (C) online in any fashion, unless and only to the extent each business name, storefront, website and marketplaceused for such purpose by such Dealer is expressly approved in advance by BRI in writing for such use (such as in the Introduction) and which approvalhas not been rescinded by BRI Notice and (ii) selling in either or both of the following ways: (A) to anyone for resale other than, in the case of permittedreturns, to any or all of the Distributors and BRI and (B) to anyone other than the Authorized Customers, including without limitation to the Special Accounts; (f) refrain from creating or assisting in or otherwise cooperating in the creation of any or all new Amazon Standard Identification Numbers (ASINs) andBundles specific to Dealer on Amazon.com; (g) use the Intellectual Property only as permitted by BRI in the DRD, including without limitation (i) maintainingthe confidentiality of all information designated as confidential by BRI and (ii) using only artwork, images and copy depicting or pertaining to any or all BRI Products or otherwise regarding BRI that have been expressly approved by BRI in writing for use by Dealer and which approval has not been rescinded by BRI Notice; (h) refrain from questioning or challenging the rights claimed by the BRI Parties in or to the Intellectual Property or assisting in any way any other(s) indoing so; (i) comply with all laws and, except to the extent expressly excluded by BRI from mandatory compliance therewith, all of the Dealer Policies; (j)promptly and in timely fashion comply with whatever request may be made by BRI or any or all of the Distributors relating to any law or expectation thereof or


the modification or recall of any or all items of BRI Products; and (k), after termination of this Agreement, immediately cease at the end of the Coverage Period: (i) advertising, promoting and selling any and all BRI Products and (ii) all use of anything which would give the impression that Dealer is an authorized dealer, reseller or representative of or for any or all of such products or has any affiliation whatsoever with BRI or such products.

3. Relationship. Neither any or all of the DRD nor any or all duties and obligations thereunder may be delegated, transferred or assigned by Dealer without the express written consent of BRI. Each delegation, transfer or assignment by Dealer without such consent shall be void. The relationship between BRI and Dealer shall be that of independent contractors, and, notwithstanding the use anywhere of the term “partner,” anything similar thereto or any other term(s), nothing regarding the relationship between the Parties expressed or implied in the DRD or elsewhere shall constitute or be deemed to constitute a partnership, joint venture or franchise between BRI and Dealer or shall constitute or be deemed to constitute Dealer as agent of BRI for any purpose whatsoever. Dealer shall have no authority or power in any way for any purpose to do any or all of the following: (a) bind BRI, (b) contract in the name of BRI and (c) create a liability against BRI.

4. Acceptance. At all times, BRI shall have the right to: (a) accept, reject or, if already accepted by BRI, cancel any or all Direct Orders for any reason or no reason; (b) allocate any or all items of BRI Products in such manner as BRI deems advisable; and (c), in the event that BRI should determine that one or more special credit restrictions (as defined by BRI) apply, impose such payment terms as BRI deems appropriate prior to doing either or both of the following: (i) accepting from Dealer any or all new Direct Orders or (ii) filling or completing any or all pending Direct Orders (even if accepted) from Dealer.

5. Termination. This Agreement will terminate when either Party provides the other Party with written notice of termination, and such termination shall be effective as elected in such notice: (a) no sooner than the date of receipt of such notice in the event of a material breach of this Agreement by such other Party; (b) no less than thirty (30) days after such receipt for termination with or without cause; or (c) as provided in Section 11(b) of this Agreement. Except to the extent expressly excluded by BRI from mandatory compliance therewith, a breach by Dealer of any or all of the Dealer Policies will be deemed to be a material breach by Dealer of this Agreement. After termination of this Agreement, acceptance of one or more orders from Dealer by any or all of BRI and the Distributors or fulfillment thereby of one or more accepted orders (regardless whether accepted before or after termination) will: (i), unless otherwise designated by BRI, be subject to all of the terms and conditions of the DRD as if such acceptance or fulfillment had occurred during the Term and (ii), in no event, be construed as a renewal or extension of this Agreement or as a waiver of termination or of notice of termination.

6. Buyback. If and as requested by BRI, Dealer will sell or cause the sale to BRI of and, as directed by BRI and at BRI’s expense, ship or cause to be shipped to BRI or its designee(s) each of the items in the Dealer’s Inventories (free of all liens, security interests, claims and encumbrances, other than that or those in favor of BRI) which is acceptable (as determined by BRI) at a price equal to the price paid to BRI or each relevant Distributor therefor or, if unpaid, in lieu of the amount due to BRI or each such Distributor therefor, less in either case a restocking charge equal to the amount, if any, described in the Dealer Policies. BRI has rights of set-off, recoupment and counterclaim against Dealer.

7. Modification. At any time and without prior notice: (a) BRI may modify any or all of the Dealer Policies and rescind any or all of the consents and approvals provided by BRI, with each such modification or rescission becoming effective immediately, unless BRI notifies Dealer in writing of another effective date and (b) any or all items of BRI Products may change, in which case, Dealer acknowledges and agrees that BRI and each of the Distributors may without liability or penalty cancel all pending orders (even if accepted) from Dealer for such changed item(s) and refuse to accept any new orders from Dealer for such item(s).

8. Applicable Law. Each Party, on behalf of, respectively, the BRI Parties and the Dealer Parties, agrees that each dispute, claim or controversy of any kind (whether in contract, tort or otherwise) between the BRI Parties and the Dealer Parties (individually, a “Dispute” and collectively, the “Disputes”): (a) shall be governed by the substantive and procedural laws of the Province of Ontario (without regard to that jurisdiction’s conflicts of laws provisions or application of the United Nations Convention on Contracts for the International Sale of Goods), including without limitation each Dispute arising out of or relating to any or all of the DRD; (b) each of the Disputes shall be finally settled by arbitration as described in the Dealer Policies; and (c), in the event that arbitration or litigation of a Dispute is not initiated by Dealer during the one (1) year period after the occurrence of the event(s) giving rise thereto, each claim of the Dealer Parties against the BRI Parties will be barred.

9. Direct Orders. In the event that BRI receives one or more Direct Orders (or similar or related documents) from Dealer which contain one or more provisions which are inconsistent with or in addition to any or all provisions of the DRD: (a) each such order (or document) will be conclusively deemed to be governed by the DRD; (b) each such inconsistent or additional provision will be deemed stricken; and (c) none of the Direct Orders will be deemed to be governed by any provision(s) other than that or those contained in the DRD, unless and until a written supplement is duly executed by both of the Parties which expressly adopts such provision(s).

10. Headings. The headings appearing at the beginning of any or all of the DRD and each part thereof are for convenience only and shall not be deemed to define, limit or construe the contents of any or all thereof. The DRD shall be deemed to reflect the mutual intent of the Parties, and no rule of strict construction shall be applied against either Party. Time is of the essence of the DRD. BRI shall not be liable for: (a) loss, damage or delay resulting from any cause whatsoever beyond the reasonable control of BRI and (b) consequential, incidental, punitive or special damages, loss or expense to any or all of Dealer and others for any reason(s) whatsoever. The interpretation by BRI of the DRD will control. Wherever required by the context thereof, each pronoun used therein shall be deemed to include both the singular and the plural and to encompass each gender.

11. Reformation. If applicable law contains any requirement that is contrary to, conflicts with or is missing from any provision(s) or part(s) thereof in the DRD (collectively, the “Affected Provisions”), BRI, at any time, may elect by BRI Notice (effective upon receipt thereof or as otherwise designated by BRI therein) that: (a) such requirement be substituted for or added to the Affected Provisions to the minimum extent necessary to validate the Affected Provisions or (b) this Agreement be terminated. If one or more parts of the DRD shall be held invalid, the remainder of the DRD shall continue in full force and effect, and each such part shall be deemed not to be part of the DRD.


12. Integration. The DRD, as modified from time to time: (a) constitutes the entire understanding of the Parties binding upon them with respect to the subject matter thereof; (b) is intended to govern the relationship between the Parties therefor; (c) supersedes all agreements, representations or statements between the Parties, either oral or written; and (d) except as otherwise provided herein, may be amended or modified only by a written supplement and, in the case of this Agreement only, duly executed by both of the Parties, as each Party hereby waives its right, if any, to modify the DRD orally. Each Party acknowledges and agrees that: (i) it has full authority to execute and perform this Agreement; (ii) each agreement (other than this Agreement) between any or all of BRI and its Affiliate(s) and predecessor(s) on one hand (collectively, the “BRI Entities”) and any or all of Dealer and its Affiliate(s) and predecessor(s) on the other has been fully performed by the BRI Entities; (iii) the terms and conditions of this Agreement are material bargained-for bases of this Agreement and have been taken into account and reflected in determining the consideration to and from each Party under this Agreement and the decision by each Party to enter into this Agreement; (iv) in the event of any conflict between the Dealer Policies and this Agreement, the Dealer Policies will control (silence in the Dealer Policies is not a conflict); and (v) this Agreement may be executed in separate counterparts (and any or all of such counterparts may be transmitted or exchanged as hardcopy, as portable document format (pdf) files or by other electronic means), each of which is deemed to be an original (and originally executed), and all of which taken together constitute one and the same binding agreement.

13. Enforcement. In the event the BRI Parties file(s) any action(s) against the Dealer Parties to enforce or defend any of the rights claimed by the BRI Parties or file(s) any response(s) to or in any action(s) brought against the BRI Parties by the Dealer Parties, the BRI Parties shall be entitled: (a) to equitable relief without the necessity of posting bond or other security (including without limitation entry of temporary and permanent injunctions and orders of specific performance) and (b) to recover from the Dealer Parties in each judgment wholly or partially in favor of the BRI Parties entered in such action(s) the attorneys’ fees and arbitration and litigation expenses of the BRI Parties, the court costs and damages as permitted by law, the costs of collection thereof and other relief as an arbitrator, arbitration tribunal or court may award or order. In the event of any breach or threatened breach of any or all of Sections 2(b) through 2(k), 6 and 8 of this Agreement, remedies at law alone will not be adequate.

14. Waiver. Except as otherwise expressly provided in the DRD or as the Parties otherwise may expressly agree in writing signed by both of the Parties, no failure, refusal, neglect, delay, waiver, forbearance or omission by BRI to exercise any right(s) under the DRD or to insist upon full compliance by Dealer with Dealer’s duties, obligations or restrictions thereunder shall constitute a novation or waiver of any provision(s) thereof or otherwise thereafter limit the right of BRI to fully enforce any or all of the provisions and parts thereof.

15. Survivability. The following shall survive the termination of this Agreement: (a) Sections 1 and 2(b)(ii) through 17 of this Agreement; (b) each of the definitions otherwise contained in the DRD; (c) the Introduction; and (d) each of the Dealer Policies that, by its own terms, expressly states that it survives the termination of this Agreement or which BRI otherwise designates as so surviving.

16. Notices. Except as otherwise provided in the DRD, each notice described therein to either Party (including without limitation to change a Party’s principal address) must be in writing and shall be sent to the intended recipient (with all fees paid) by express courier service or email to such recipient’s principal address shown in the Introduction and shall be considered effective or received when actually received or refused by such recipient, provided that the sending Party has written confirmation thereof and such refusal was not due electronic or mechanical malfunction or failure.

17. Certain Definitions. For purposes of this Agreement (and regardless whether appearing in bold italics): (a) “Affiliate(s)” means any or all of the individuals and entities directly or indirectly controlling, controlled by or under common control with the Party identified, with “control” and its variants in this context having the same meaning as under the U.S. federal securities laws; (b) “Authorized Nonexclusive Dealer” means that (i) Dealer may hold itself out as a reseller authorized by BRI for the Products during the Term and (ii) any or all of BRI and the Distributors may offer and sell anywhere and everywhere any or all items of the Products and anything else directly or indirectly to one or more individuals and entities other than Dealer; (c) “BRI Notice” means notice from BRI to Dealer that either (i) complies with Section 16 of this Agreement or (ii) is otherwise provided or made available electronically (such as, but not limited to, posting on one or more websites designated by BRI, as long as notice under such Section 16 is received by Dealer, which, at a minimum, indicates that a change has been or will be made to what is posted thereon); (d) the “BRI Parties” means any or all of BRI, its Affiliate(s) and its designees; (e) “BRI Products” means, collectively, the products offered by BRI; (f) “Bundles” means combinations of one or more BRI Products with one or more other products or services offered or sold together (as determined by BRI); (g) the “Coverage Period” means the Term and the reasonable period afterward, if any, until (as relevant) Dealer has or, as determined by BRI, should have sold or otherwise disposed of all of the Dealer’s Inventories (each such sale or other disposition will be in a manner consistent with the DRD); (h) “Dealer” means the Party identified as such in the Introduction, which can be the Dealer Operation (as defined in the Authorized Distributor Agreement by and between BRI and Distributor (as the latter term is defined therein); (i) the “Dealer Parties” means any or all of Dealer and its Affiliate(s); (j) the “Dealer Policies” means, collectively, each then-current version of the announcements and policies (whether in the form of correspondence, memoranda, notices or otherwise) expressly labeled as a policy or policies (or the substantive equivalent as determined by BRI) and from time to time issued in writing or made available electronically to Dealer by BRI’s policy administrator (or the designee(s) or successor(s) thereof); (k) the “Dealer’s Inventories” means the inventories of BRI Products in Dealer’s possession or under its control; (l) the “Dealer Relationship Documents” means this Agreement and the Dealer Policies; (m) “Direct Orders” means orders for any or all items of BRI Products submitted by Dealer directly to BRI as permitted by the DRD; (n) the “Effective Date” means that labeled as such under Signatures in this Agreement; (o) the “Intellectual Property” means any or all of the patents, designs, trademarks, trade names, service marks, logotypes, trade dress, images, artwork, copy, commercial symbols, copyrights, data, data bases, marketing information, trade secrets and confidential information and anything else in which BRI or its designee(s) claim(s) proprietary rights, regardless whether steps have been taken to register such rights with any government authority; (p) the “Introduction” means that part of this Agreement labeled as such, which will be deemed to be one of the Dealer Policies; (q) “Party” means BRI or Dealer and the “Parties” means BRI and Dealer; (r) the “Products” means those BRI Products for resale by Dealer as permitted in the DRD which are made available to Dealer by any or all of (i) BRI and (ii) the distributors specifically authorized by BRI to sell to or supply Dealer (individually, “Distributor” and collectively, the “Distributors”); (s) “Signatures” means that part of this Agreement labeled as such; (t) the “Special Accounts” means, collectively, each individual or entity so designated by BRI Notice; and (u) the “Term” means the period from the Effective Date until this Agreement is terminated pursuant to Section 5 hereof. 062816/3623209/2

Backrack Authorized Distributor Agreement (Canada/U.S.) - 1

CONFIDENTIAL CANADIAN/U.S. DISTRIBUTOR

062816/3630678/1

AUTHORIZED DISTRIBUTOR AGREEMENT

THE INTRODUCTION (Various terms are defined in Section 20 and elsewhere in this Agreement in bold italics.)

Distributor (full business name) (“FBN”): ________________________________________________________________________________________

Principal Address: ____________________________________ City: ___________________ Prov/Terr/State: _________ Postal/Zip Code: __________

Owner/Manager: ________________________________________________________ email: _____________________________________________

Contact (if different): ___________________________________________ Contact email (if different): _______________________________________

Phone: ____________________________ Customer Service Phone (if different): __________________________

Approved name(s)/storefront(s) under which Distributor operates Approved name(s)/storefront(s) under which the Dealer Operation operates

Approved website(s) (URLs)/marketplace(s) used by Distributor Approved website(s) (URLs)/marketplace(s) used by the Dealer Operation

Principal address for notices to Backrack, Inc. (“BRI”): Administrator, Backrack, Inc., 475 Wyecroft Road, Oakville, ON, L6K 2H2 Canada ● email: email: [email protected]

SIGNATURES

DISTRIBUTOR

By:

Name:

Title:

Date:

Made and accepted in Oakville, Ontario:

BRI

By: ________________________________________________________

Adrian Jayne, President

Date: ______________________________________________________

The Effective Date: ___________________________________________

THIS AGREEMENT is made as of the Effective Date by and between BRI (an Ontario corporation) and Distributor, each located at its respective principal address shown in the Introduction.

1. Appointment. Subject to the terms and conditions of this Agreement, BRI appoints Distributor and Distributor agrees to perform as an Authorized Nonexclusive Distributor during the Term for the Products. Except as otherwise expressly directed in writing by BRI: (a), for any or all items of BRI Products, Distributor will only submit orders to and purchase from BRI and (b), for each order from Distributor accepted by BRI pursuant to the Relationship Documents for Distributors (the “RDD”), Distributor agrees to pay BRI consistent with the price, credit, payment, discount and other terms and conditions of sale described in the RDD.

2. Responsibilities. Except as otherwise directed or approved in advance by BRI Notice or otherwise expressly permitted by the RDD, Distributor, at its own expense, will do each of the following: (a) promote the sale and use of the Products; (b) promptly and effectively respond to questions and requests from the Authorized Dealers and from BRI, including without limitation questions and requests from BRI regarding any or all of the customers of Distributor; (c) maintain a staff of competent sales personnel who are trained to describe, demonstrate and sell each of the Products; (d) maintain sufficient amounts of Distributor’s Inventories to support Distributor’s duties and obligations under the RDD; (e) represent the Products in a professional manner during the Coverage Period; (f) refrain from any conduct that is or could be detrimental to the reputation or integrity of any or all of Distributor, BRI and the BRI Products; (g) promptly transmit to each individual and entity communications from BRI as BRI designates; (h) with respect to any or all of the BRI Products, refrain from knowingly or negligently directly or indirectly (i) advertising, promoting or selling in any or all of the following ways: (A) outside Canada and the United States of America (“U.S.”) (except to the extent any or all advertising and promotion efforts cannot be reasonably restricted geographically, but this exception does not apply to sales made to anyone located outside Canada and the U.S.), (B) doing business under or otherwise using any business name(s) or storefront(s) other than the FBN or acceptable variants thereof (as determined by BRI) and (C) online in any fashion, unless and only to the extent each website and marketplace used for such purpose by Distributor (1) is an Approved Secure Website and (2) is (along with each business name and storefront) approved in advance by BRI in writing for such use (such as in the Introduction) and which approval has not been rescinded by BRI Notice and (ii) selling, supplying or drop shipping in any or all of the following ways to or on behalf of: (A) anyone for resale other than any or all of the Authorized Dealers and, for purposes of BRI-authorized returns, BRI, (B) to any or all actual or prospective end user purchasers, except as permitted in Section 5 of this Agreement (Distributor may drop ship to one or more end user purchasers (but not resellers) on behalf of any or all the Authorized Dealers, so long as Distributor has not received notice from BRI which rescinds the approval of BRI therefor) and (C) each individual and entity (1) that is one of the Special Accounts or (2) appearing on the then-current Do-Not-Sell List (including without limitation drop shipping on behalf thereof), except to the extent as may be permitted therein; (i) use the Intellectual Property only as permitted by BRI in the RDD, including without limitation (i) maintaining the confidentiality of all information designated as confidential by BRI and (ii) using only artwork, images and


copy depicting or pertaining to any or all BRI Products or otherwise regarding BRI that have been expressly approved by BRI in writing for use by Distributor and which approval has not been rescinded by BRI Notice; (j) refrain from questioning or challenging the rights claimed by the BRI Parties in or to the Intellectual Property or assisting in any way any other(s) in doing so; (k) comply with all laws and, except to the extent expressly excluded by BRI from mandatory compliance therewith, all of the Distributor Policies and, with respect to the Dealer Operation, the Dealer Policies; (l) promptly and in timely fashion comply with whatever request may be made by BRI relating to any law or expectation thereof or the modification or recall of any or all items of BRI Products; and (m), after termination of this Agreement, immediately cease at the end of the Coverage Period: (i) advertising, promoting and selling any and all BRI Products and (ii) all use of anything which would give the impression that Distributor is an authorized distributor, reseller or representative of or for any and all of such products or has any affiliation whatsoever with BRI or such products.

3. Relationship. Neither any or all of the RDD nor any or all duties and obligations thereunder may be delegated, transferred or assigned by Distributor without the express written consent of BRI. Each delegation, transfer or assignment by Distributor without such consent shall be void. The relationship between BRI and Distributor shall be that of independent contractors, and notwithstanding the use anywhere of the term “partner,” anything similar thereto or any other term(s), nothing regarding the relationship between the Parties expressed or implied in the RDD or elsewhere shall constitute or be deemed to constitute a partnership, joint venture or franchise between BRI and Distributor or shall constitute or be deemed to constitute Distributor as agent of BRI for any purpose whatsoever. Distributor shall have no authority or power in any way for any purpose to do any or all of the following: (a) bind BRI, (b) contract in the name of BRI and (c) create a liability against BRI.

4. Acceptance. At all times, BRI shall have the right to: (a) accept, reject or, if already accepted by BRI, cancel any or all orders from Distributor for any reason or no reason; (b) allocate any or all items of BRI Products in such manner as BRI deems advisable; and (c), in the event that BRI should determine that one or more special credit restrictions (as defined by BRI) apply, impose such payment terms as BRI deems appropriate prior to doing either or both of the following: (i) accepting from Distributor any or all new orders or (ii) filling or completing any or all pending orders (even if accepted) from Distributor.

5. Sales to End User Purchasers. If Distributor wishes to advertise, promote or sell any or all BRI Products to end user purchasers, BRI appoints the Dealer Operation (and only the Dealer Operation doing business under the BRI-approved name(s) and using the BRI-approved website(s), if any, appearing in the Introduction and which approval has not been rescinded by BRI in whole or part), and Distributor agrees that: (a) the Dealer Operation will perform as a Nonexclusive Authorized Dealer for the Dealer Products (and be deemed to be one of the Authorized Dealers) until the sooner to occur of (i) termination of this Agreement under Section 8 hereof or (ii) the loss of status for all or any part(s) of the Dealer Operation as one of the Authorized Dealers as permitted herein (if such status is lost for part(s) of the Dealer Operation, the remainder will be deemed to be the Dealer Operation thereafter) and (b), without any way diminishing the rights of BRI to pursue the Dealer Operation (or any current or previous part(s) thereof), Distributor will be liable to BRI for the act(s) or the failure(s) to act of the Dealer Operation as presently or previously configured. Each order submitted to BRI by the Dealer Operation will be deemed to have been submitted by Distributor. Each BRI Notice and other notice from BRI regarding or directed to the Dealer Operation need only be sent to or made available to Distributor.

6. Responsibilities of the Dealer Operation. Except as otherwise directed or approved in advance by BRI Notice or otherwise expressly permitted by the RDD, Distributor agrees that the Dealer Operation, at its own expense (or that of Distributor), will do each of the following: (a) promote the sale and use of the Dealer Products; (b) promptly and effectively respond to questions and requests (i) from actual and prospective end user purchasers (but not resellers) of any or all of the Dealer Products permitted under the RDD (collectively, the “Authorized End Users”) and (ii) from BRI, including without limitation questions and requests from BRI regarding any or all of the customers of the Dealer Operation; (c) maintain a staff of competent sales personnel who are trained to describe, demonstrate and sell each of the Dealer Products; (d) represent the Dealer Products in a professional manner until the end of the Coverage Period; (e) refrain from any conduct that is or could be detrimental to the reputation or integrity of any or all of the Dealer Operation, Distributor, BRI and the BRI Products; (f) with respect to any or all of BRI Products, refrain from knowingly or negligently directly or indirectly (i) advertising, promoting or selling in any or all of the following ways: (A) outside Canada and the U.S. (except to the extent any or all advertising and promotion efforts cannot be reasonably restricted geographically, but this exception does not apply to sales made to anyone located outside Canada and the U.S.), (B) doing business under or otherwise using any business name(s) or storefront(s) other than the FBN or variants thereof or alternatives thereto acceptable to BRI and (C) online in any fashion, unless and only to the extent each business name, storefront, website and marketplace used for such purpose by the Dealer Operation is expressly approved in advance by BRI in writing for such use (such as in the Introduction) and which approval has not been rescinded by BRI Notice and (ii) selling in any or all of the following ways: (A) to anyone for resale other than, in the case of permitted returns, to any or all of Distributor and BRI, (B) to each individual and entity appearing on the then-current Do-Not-Sell List (including without limitation drop shipping on behalf thereof), except to the extent as may be permitted therein and (C) to anyone other than the Authorized End Users, including without limitation to the Special Accounts; (g) refrain from creating or assisting in or otherwise cooperating in the creation of any or all new Amazon Standard Identification Numbers (ASINs) and Bundles specific to the Dealer Operation on Amazon.com; (h) comply with Sections 2(i) through 2(l) of this Agreement (substituting “the Dealer Operation” for “Distributor,” but without in any way diminishing Distributor’s responsibility thereunder); and (i), after termination of this Agreement or the loss of status in whole or part as one of the Authorized Dealers, immediately cease at the end of the Coverage Period: (i) advertising, promoting and selling any and all BRI Products and (ii) all use of anything which would give the impression that the Dealer Operation (or just each part thereof losing such status) is an authorized dealer, reseller or a representative of or for any or all of such products or has any affiliation whatsoever with BRI or such products.

7. Do-Not-Sell List. Immediately upon receipt by Distributor of each Do-Not-Sell List, Distributor will cancel all pending orders (even if accepted) from each individual or entity identified in such Do-Not-Sell List and refuse to accept any new orders from such individual(s), entity or entities for (or otherwise supply to or drop ship on behalf of any and all of them): (a), in the case of an Unauthorized Dealer or a Complete Revocation, any and all BRI Products or (b), in the case of a Partial Revocation, any and all of the Select Products.

8. Termination. This Agreement will terminate when either Party provides the other Party with written notice of termination, and such termination shall be effective as elected in such notice: (a) no sooner than the date of receipt of such notice in the event of a material breach of this Agreement by such other Party; (b) no less than thirty (30) days after such receipt for termination with or without cause; or (c) as provided in Section 14(b) of this Agreement. Except to the extent expressly excluded by BRI from mandatory compliance therewith, a breach by Distributor or the Dealer Operation of any or all of the Distributor Policies and the Dealer Policies, respectively, will be deemed to be a material breach by Distributor of this Agreement. After termination of this Agreement, acceptance by BRI of one or more orders submitted by Distributor (or the Dealer Operation) or fulfillment by BRI of one or more accepted


orders (regardless whether accepted before or after termination) will: (i), unless otherwise designated by BRI, be subject to all of the terms and conditions of the RDD as if such acceptance or fulfillment had occurred during the Term and (ii), in no event, be construed as a renewal or extension of this Agreement or as a waiver of termination or of notice of termination.

9. Buyback. If and as requested by BRI, Distributor will sell or cause the sale to BRI of and, as directed by BRI and at the expense of BRI, ship or cause to be shipped to BRI or its designee(s) each of the items in Distributor’s Inventories (free of all liens, security interests, claims and encumbrances, other than that or those in favor of BRI) which is acceptable (as determined by BRI) at a price equal to the price paid to BRI therefor or, if unpaid, in lieu of the amount due to BRI therefor, less in either case a restocking charge equal to the amount, if any, described in the Distributor Policies. BRI has rights of set-off, recoupment and counterclaim against Distributor.

10. Modification. At any time and without prior notice: (a) BRI may modify any or all of the Distributor Policies and the Dealer Policies and rescind any or all of the consents and approvals provided by BRI, with each such modification or rescission becoming effective immediately, unless BRI notifies Distributor in writing of another effective date and (b) any or all items of BRI Products may change, in which case, Distributor acknowledges and agrees that BRI may without liability or penalty (i) cancel all pending orders (even if accepted) from Distributor for such changed item(s) and (ii) refuse to accept any new orders from Distributor or the Dealer Operation for such item(s).

11. Applicable Law. Each Party, on behalf of, respectively, the BRI Parties and the Distributor Parties, agrees that each dispute, claim or controversy of any kind (whether in contract, tort or otherwise) between the BRI Parties and the Distributor Parties (individually, a “Dispute” and collectively, the “Disputes”): (a) shall be governed by the substantive and procedural laws of the Province of Ontario (without regard to that jurisdiction’s conflicts of laws provisions or application of the United Nations Convention on Contracts for the International Sale of Goods), including without limitation each Dispute arising out of or relating to any or all of the RDD; (b) each of the Disputes shall be finally settled by arbitration as described in the Distributor Policies; and (c), in the event that arbitration or litigation of a Dispute is not initiated by Distributor during the one (1) year period after the occurrence of the event(s) giving rise thereto, each claim of the Distributor Parties against the BRI Parties will be barred.

12. Orders. In the event that BRI receives one or more orders (or similar or related documents) from Distributor or the Dealer Operation which contain one or more provisions which are inconsistent with or in addition to any or all provisions of the RDD: (a) each such order (or document) will be conclusively deemed to be governed by the RDD; (b) each such inconsistent or additional provision will be deemed stricken; and (c) no order submitted to BRI by Distributor will be deemed to be governed by any provision(s) other than that or those contained in the RDD, unless and until a written supplement is duly executed by both of the Parties which expressly adopts such provision(s).

13. Headings. The headings appearing at the beginning of any or all of the RDD and each part thereof are for convenience only and shall not be deemed to define, limit or construe the contents of any or all thereof. The RDD shall be deemed to reflect the mutual intent of the Parties, and no rule of strict construction shall be applied against either Party. Time is of the essence of the RDD. BRI shall not be liable for: (a) loss, damage or delay resulting from any cause whatsoever beyond the reasonable control of BRI and (b) consequential, incidental, punitive or special damages, loss or expense to any or all of Distributor, the Authorized Dealers (including without limitation the Dealer Operation) and others for any reason(s) whatsoever. The interpretation by BRI of the RDD will control. Wherever required by the context thereof, each pronoun used therein shall be deemed to include both the singular and the plural and to encompass each gender.

14. Reformation. If applicable law contains any requirement that is contrary to, conflicts with or is missing from any provision(s) or part(s) thereof in the RDD (collectively, the “Affected Provisions”), BRI, at any time, may elect by BRI Notice (effective upon receipt thereof or as otherwise designated by BRI therein) that: (a) such requirement be substituted for or added to the Affected Provisions to the minimum extent necessary to validate the Affected Provisions or (b) this Agreement be terminated. If one or more parts of the RDD shall be held invalid, the remainder of the RDD shall continue in full force and effect, and each such part shall be deemed not to be part of the RDD.

15. Integration. The RDD, as modified from time to time: (a) constitutes the entire understanding of the Parties binding upon them with respect to the subject matter thereof; (b) is intended to govern the relationship between the Parties therefor; (c) supersedes all agreements, representations or statements between the Parties, either oral or written; and (d) except as otherwise provided therein, may be amended or modified only by a written supplement and, in the case of this Agreement only, duly executed by both of the Parties, as each Party hereby waives its right, if any, to modify the RDD orally. Each Party acknowledges and agrees that: (i) it has full authority to execute and perform this Agreement; (ii) each agreement (other than this Agreement) between any or all of BRI and its Affiliate(s) and predecessor(s) on one hand (collectively, the “BRI Entities”) and any or all of Distributor and its Affiliate(s) and predecessor(s) on the other has been fully performed by the BRI Entities; (iii) the terms and conditions of this Agreement are material bargained-for bases of this Agreement and have been taken into account and reflected in determining the consideration to and from each Party under this Agreement and the decision by each Party to enter into this Agreement; (iv) in the event of any conflict between the Policies and this Agreement, the Policies will control (silence in the Policies is not a conflict); and (v) this Agreement may be executed in separate counterparts (and any or all of such counterparts may be transmitted or exchanged as hardcopy, as portable document format (pdf) files or by other electronic means), each of which is deemed to be an original (and originally executed), and all of which taken together constitute one and the same binding agreement.

16. Enforcement. In the event the BRI Parties file(s) any action(s) against the Distributor Parties to enforce or defend any of the rights claimed by the BRI Parties or file(s) any response(s) to or in any action(s) brought against the BRI Parties by the Distributor Parties, the BRI Parties shall be entitled: (a) to equitable relief without the necessity of posting bond or other security (including without limitation entry of temporary and permanent injunctions and orders of specific performance) and (b) to recover from the Distributor Parties in each judgment wholly or partially in favor of the BRI Parties entered in such action(s) the attorneys’ fees and arbitration and litigation expenses of the BRI Parties, the court costs and damages as permitted by law, the costs of collection thereof and other relief as an arbitrator, arbitration tribunal court may award or order. In the event of any breach or threatened breach of any or all of Sections 2(b), 2(e) through 3, 6(b), 6(d) through 7, 9 and 11 of this Agreement, remedies at law alone will not be adequate.

17. Waiver. Except as otherwise expressly provided in the RDD or as the Parties otherwise may expressly agree in writing signed by both of the Parties, no failure, refusal, neglect, delay, waiver, forbearance or omission by BRI to exercise any right(s) under the RDD or to insist upon full compliance by Distributor and the Dealer Operation with the duties, obligations or restrictions of Distributor and the Dealer Operation thereunder shall constitute a novation or waiver of any provision(s) thereof or otherwise thereafter limit the right of BRI to fully enforce any or all of the provisions and parts thereof.


18. Survivability. The following shall survive the termination of this Agreement: (a) Sections 1, 2(b), 2(e) through 5 and 6(b) through 20 of this Agreement; (b) each of the definitions otherwise contained in the RDD; (c) the Introduction; and (d) each of the Policies that, by its own terms, expressly states that it survives the termination of this Agreement or which BRI otherwise designates as so surviving.

19. Notices. Except as otherwise provided in the RDD, each notice described therein to either Party (including without limitation to change a Party’s principal address) must be in writing and shall be sent to the intended recipient (with all fees paid) by express courier service or email to such recipient’s principal address shown in the Introduction and shall be considered effective or received when actually received or refused by such recipient, provided that the sending Party has written confirmation thereof and such refusal was not due to electronic or mechanical malfunction or failure.

20. Certain Definitions. For purposes of this Agreement (and regardless whether appearing in bold italics): (a) “Affiliate(s)” means any or all of the individuals and entities directly or indirectly controlling, controlled by or under common control with the Party identified, with “control” and its variants in this context having the same meaning as under the U.S. federal securities laws; (b) “Approved Secure Website” means a website that (i) is accessible only by Distributor, the Authorized Dealers and BRI through the use of unique and secure passwords and (ii) is expressly approved by BRI for online advertising, promotion and selling in the Introduction and which approval has not been rescinded by BRI Notice; (c) the “Authorized Dealers” means, collectively, each reseller designated as such by BRI Notice or otherwise permitted by BRI to be sold by Distributor, but only to the extent that such reseller is not on the then-current Do-Not-Sell List (individually, an “Authorized Dealer”); (d) “Authorized Nonexclusive Dealer” means that (i) the Dealer Operation may hold itself out as a reseller authorized by BRI for the Dealer Products during the Term and (ii) BRI and others may offer and sell anywhere and everywhere any or all of the Dealer Products and anything else directly or indirectly to one or more individuals and entities other than the Dealer Operation; (e) “Authorized Nonexclusive Distributor” means that (i) Distributor may hold itself out as a distributor authorized by BRI for the Products during the Term and (ii) BRI may offer and sell anywhere and everywhere any or all of the Products and anything else directly or indirectly to one or more individuals and entities other than Distributor; (f) “BRI Notice” means notice to Distributor from BRI that either (i) complies with Section 19 of this Agreement or (ii) is made available on a BRI-designated website and notice under such Section 19 is received by Distributor, which, at a minimum, indicates that a change has been or will be made to what is posted thereon; (g) the “BRI Parties” means any or all of BRI, its Affiliate(s) and its designees; (h) “BRI Products” means, collectively, the products offered by BRI; (i) “Bundles” means combinations of one or more BRI Products with one or more other products or services offered or sold together (as determined by BRI); (j) the “Coverage Period” means the Term and the reasonable period afterward, if any, until (as relevant) Distributor has or, as determined by BRI, should have sold or otherwise disposed of all of Distributor’s Inventories (each such sale or other disposition will be in a manner consistent with the RDD); (k) the “Dealer Operation” means an enterprise that sells to end user purchasers in any or all of the following ways: (i) directly by Distributor and (ii) through one or more business(es) owned or operated by (A) Distributor, (B) one or more Affiliate(s) of Distributor and (C), if Distributor is a cooperative or buying group, one or more of the member(s) thereof; (l) the “Dealer Policies” and the “Distributor Policies” (individually and collectively, the “Policies”) means, taken together, each then-current version of the announcements and policies (whether in the form of correspondence, memoranda, notices or otherwise) expressly labeled as a policy or policies (or the substantive equivalent as determined by BRI) and from time to time issued by BRI Notice from the BRI policy administrator (or the designee(s) or successor(s) thereof) and intended by BRI for the Dealer Operation and Distributor, respectively; (m) “Distributor” means the Party identified as such in the Introduction; (n) the “Distributor Parties” means any or all of Distributor, its Affiliate(s) and, if not included in the definition of Affiliate(s), the Dealer Operation; (o) the “Distributor’s Inventories” means all inventories of any or all items of BRI Products in Distributor’s possession or under Distributor’s control; (p) “Do-Not-Sell List” means BRI Notice which indicates that (i) one or more individuals or entities is or are not authorized by BRI to promote or resell any or all BRI Products (individually, an “Unauthorized Reseller”) in or through all promotional or sales media or just that or those designated by BRI (such as, but not necessarily limited to the Internet) or (ii) the designation of an Authorized Dealer as such has been revoked with respect to all BRI Products (“Complete Revocation”) for all such media or revoked only with respect to the Select Products (“Partial Revocation”) for all such media or just that or those designated by BRI; (q) the “Effective Date” means that labeled as such under Signatures; (r) the “Intellectual Property” means any or all of the patents, designs, trademarks, trade names, service marks, logotypes, trade dress, images, artwork, copy, commercial symbols, copyrights, data, data bases, marketing information, trade secrets and confidential information and anything else in which BRI or its designee(s) claim(s) proprietary rights, regardless whether steps have been taken to register such rights with any government authority; (s) the “Introduction” means that part of this Agreement labeled as such, which will be deemed to be one of the Distributor Policies; (t) “Party” means BRI or Distributor and the “Parties” means BRI and Distributor; (u) the “Products” means those BRI Products for resale by Distributor as permitted by the RDD which are made available to Distributor by any or all of BRI and its designee(s); (v) the “Relationship Documents for Distributors” or the “RDD” means this Agreement, the Distributor Policies and, with respect to the Dealer Operation, the Dealer Policies; (w) the “Select Products” means those items of BRI Products specified on a Do-Not-Sell List consisting of fewer than all items of BRI Products; (x) “Signatures” means that part of this Agreement labeled as such; (y) the “Special Accounts” means, collectively, each individual or entity so designated by BRI Notice (unless and until such notice is provided by BRI, Distributor may advertise, promote or sell in a manner otherwise permitted under the RDD); and (z) the “Term” means the period from the Effective Date until this Agreement is terminated pursuant to Section 8 hereof.

062816/3630678/1

Products”) - BACKRACK Complete Policy.pdf · (the “Advertising and Marketing Policy” or the...

Documents

Transcript of Products”) - BACKRACK Complete Policy.pdf · (the “Advertising and Marketing Policy” or the...