MRP Policy

MINIMUM RETAIL PRICE (MRP) POLICY FOR RETAILERS

EFFECTIVE February 1, 2018

Healthy Pet L.P.  (“Healthy Pet”) has unilaterally adopted this Minimum Retail Price (MRP) Policy (this “Policy”) effective as of February 1, 2018 (the “Policy Effective Date”), which:  (a) is applicable to each Retailer and 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 Healthy Pet Products as specified on the price list(s) or product list(s) provided or otherwise made available to each Retailer by Healthy Pet or otherwise communicated by Healthy Pet Notice (individually, a “MRP Product” and collectively, the “MRP Products”).  (The then-current list of the MRP Products and each corresponding MRP can be found at www.healthy-pet.com/mrppricelist.)

For purposes of this Policy:  (a) “Retailer” (in the plural, “Retailers”) means an individual or entity located in either or both of the United States of America (“USA”) and Canada that promotes and sells or either thereof one or more products offered by Healthy Pet (individually, a “Healthy Pet Product” and in the plural, “Healthy Pet 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) and (b) “Healthy Pet Notice means notice from Healthy Pet to a Retailer provided or made available electronically or otherwise, including, but not limited to, posting on one or more websites designated by Healthy Pet such as healthy-pet.com/mrppolicy.

1.  Purpose.  As an industry leader of pet products across various categories and channels, Healthy Pet is committed to providing active, happy, products which are healthy for pets and people alike.  Some Retailers have taken or may take advantage of these circumstances by advertising such products as loss leaders or promoting excessive discounts.  In an effort to help safeguard the reputation of Healthy Pet, insure the long-term viability of its brands and protect the investment of those Retailers that provide valuable services to end users, Healthy Pet has adopted this Policy.

2.  Application.

(a)  Offering and Selling Prices.  This Policy applies: (i) to the price(s) at which any or all of the MRP Products is or are made available in any way (whether through advertising, promotion or otherwise and regardless of place or medium used) (individually and collectively, “offering” and its variants) and (ii) to all offers made by or on behalf of a Retailer containing Price Information, including, but not limited to, Conventional Advertising and Electronic Content.  When applied to websites, this Policy considers Price Information appearing or otherwise conveyed both outside the cart (or other container) and in the cart (or other container) to be subject to this Policy.

(b)  Certain Definitions.  For purposes of this Policy:  (i) “Price Information” means information regarding price, whether, express or implied, such as a discrete price, price formula, reference to price or anything related to price (e.g., representations or inferences regarding savings, discount(s) or value) and anything which Healthy Pet considers to be the substantive equivalent; (ii) “Conventional Advertising” means, but is not limited to newspapers, magazines, rotos, direct mail, coupons, catalogs, radio, television and signs; and (iii) “Electronic Content” means information that (A) can be accessed by an internet browser or anything which Healthy Pet considers to be the substantive equivalent, including, but not limited to, (1) internet shopping sites, (2) marketplaces and (3) comparison search engines (CSEs) to which a Retailer supplies pricing information (e.g., Google Shopping, Buy.com, eBay, Amazon and PriceGrabber); (B) is provided by or through one or more applications (apps) for mobile devices (e.g., tablets and smartphones), including, but not limited to, social media apps (e.g., Twitter, Instagram and Facebook) and mobile gaming platforms; or (C) is furnished by or through (1) electronic solicitations or other electronic communications (e.g., robocalls, caller-on-hold and other audio recordings, messaging (such as SMS (text), MMS (multimedia) and IM (instant)), webcasts, email and online or other electronic chats), (2) electronic advertisements (such as email newsletters, pop-ups and banners) or (3) anything which Healthy Pet considers to be the substantive equivalent.

(c)  Violations of this Policy.  Although each Retailer remains free to establish its own resale prices, such Retailer violates this Policy by:  (i), directly or indirectly through another party on behalf or for the benefit of such Retailer, offering one or more of the MRP Products during the Policy Period at a Net Adjusted Price less than the corresponding MRP(s) established by Healthy Pet from time to time and communicated to such Retailer or (ii), as provided in this Policy, being deemed to have violated it.

3.  Additional Definitions.  For purposes of this Policy and except as otherwise provided herein:  (a) the “Policy Period means the time period beginning on the Policy Effective Date and ending on the termination date described in Healthy Pet Notice; (b) "Net Adjusted Price" means the price at which a MRP Product is offered by or for the benefit of a Retailer to a customer (potential or actual) 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 (c) “Bundle” means a combination of one or more Healthy Pet Products with one or more other products or services offered or sold together (as determined by Healthy Pet).

4.  Calculation of Net Adjusted Price.  Except as otherwise provided in this Policy, Net Adjusted Price will be calculated by:

(a)           Including Discounts:  Taking into account all discounts, deductions, rebates and allowances offered to a customer (regardless of source, whether given or taken at the time of sale or otherwise and considered by Healthy Pet to be part of such offer or sale), except for the following:

                (i)            Rebates/Coupons from Healthy Pet:  A rebate, coupon or the equivalent (as determined by Healthy Pet) that is provided by Healthy Pet or its designee(s) directly to such customer or to such Retailer for provision to and use by such customer and

                (ii)           Free/Reduced-Price Shipping:  Free or reduced-price shipping when offered in connection with a potential or actual purchase that includes at least one of the MRP Products, provided that, as determined by Healthy Pet: (A) such offer applies to all other products in the category in which each such MRP Product resides and (B) the value thereof is reasonable;

(b)           Excluding Taxes/Certain Charges:  Excluding, if to be paid by such customer, all applicable taxes and all shipping, delivery and insurance charges (However, if such Retailer offers to pay any or all of such taxes and such charges that otherwise would be paid by such customer, the amount so offered by such Retailer will be considered a discount, except as otherwise provided in this Policy.);

(c)           Subtracting Freebie Value:  Subtracting, in the case of free goods, services and similar benefits for such customer provided or made available by such Retailer, the fair market value (as determined by Healthy Pet) of all such goods, services and benefits (regardless of source, whether given or taken at the time of sale or otherwise and considered by Healthy Pet to be part of such offer or sale); and

(d)           Subtracting Reduced-Price Value:  Subtracting, in the case of reduced-price goods and services and similar benefits for such customer provided or made available by such Retailer, the difference between:  (i) the fair market value (as determined by Healthy Pet) of all such goods, services and benefits (regardless of source, whether given or taken at the time of sale or otherwise and considered by Healthy Pet to be part of such offer or sale) and (ii) the amount to be paid for such goods, services and benefits.

The fair market value for each MRP Product offered for free or at a reduced price with the purchase of another MRP Product will be its Minimum Retail Price.  From time to time, Healthy Pet may communicate to a Retailer by notice what it considers to be the fair market value for other goods or services.  Unless otherwise directed by Healthy Pet, each time the same MRP Product is offered in pairs or other groupings, the offer price must be no less that the applicable MRP multiplied by the number of units in the offer.

5.  Consequences of Violating this Policy.  Healthy Pet, without assuming any liability, will take one or more of the following actions immediately following verification by Healthy Pet to its satisfaction that a Retailer has violated this Policy:

For the first violation during the Policy PeriodIf such violation is due to:

(a) continuing use of offending reference(s), text or conduct, such Retailer, after receiving notice of such violation from Healthy Pet, will remove or stop or cause to be removed or stopped the offending reference(s), text or conduct (if Healthy Pet determines that it or they can be) within the Allotted Period (for purposes of this Policy, the “Allotted Period” means the time period specified in the notice of violation provided by Healthy Pet to such Retailer, which typically will be one of the following:  (i) no later than one (1) business day (usually for a violation involving Electronic Content), (ii) no later than three (3) business days (generally for all other cases) or (iii) by the conclusion of the period otherwise specified by Healthy Pet) (if such Retailer takes such action, a violation still has been accrued) or

(b) offending reference(s), text or conduct that Healthy Pet determines has or have been removed or stopped (for example, a violation that has not been continued or repeated, such as an offending ad run one time the previous week), no further action is required on the part of such Retailer, but a violation has been accrued.

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 of this Policy is or are not removed or stopped (if Healthy Pet determines that it or they can be) within the Allotted Period after receiving notice of such first violation from Healthy Pet or (b) such Retailer otherwise violates this Policy a second time, effective as of the date specified in notice from Healthy Pet to such Retailer and continuing for the next thirty (30) days, the authorization of such Retailer to purchase each stock-keeping unit (“SKU”) in the product family involved in the second violation (as determined by Healthy Pet) will be immediately revoked by Healthy Pet, so that all pending orders (even if accepted) from such Retailer will be cancelled and no new orders will be accepted from such Retailer for each such SKU.

For the third violation during the Policy Period:  In the event that (a) the offending reference(s), text or conduct that caused the second violation of this Policy is or are not removed or stopped (if Healthy Pet determines that it or they can be) within the Allotted Period after receiving notice of such second violation from Healthy Pet or (b) such Retailer otherwise violates this Policy a third time, effective as of the date specified in notice from Healthy Pet to such Retailer and continuing for the next sixty (60) days, the authorization of such Retailer to purchase each SKU in the product family involved in the third violation (as determined by Healthy Pet) will be immediately revoked by Healthy Pet, so that all pending orders (even if accepted) from such Retailer will be cancelled and no new orders will be accepted from such Retailer for each such SKU.  (If the thirty (30) day period for the second violation of this Policy has not run and the third violation of this Policy involves the same product family as that of the second (as determined by Healthy Pet), the sixty (60) day period will begin after the thirty (30) day period concludes.)

For the fourth violation during the Policy Period:  In the event that (a) the offending reference(s), text or conduct that caused the third violation of this Policy is or are not removed or stopped (if Healthy Pet determines that it or they can be) within the Allotted Period after receiving notice of such third violation from Healthy Pet or (b) such Retailer otherwise violates this Policy a fourth time, effective as of the date specified in notice from Healthy Pet to such Retailer and continuing until Healthy Pet provides notice to such Retailer otherwise, if ever, the authorization of such Retailer to purchase any or all of the Healthy Pet Products designated by Healthy Pet (the “Designated Products”) will be immediately revoked by Healthy Pet, so that all pending orders (even if accepted) from such Retailer will be cancelled and no new orders will be accepted from such Retailer for any or all of the Designated Products.

For each additional violation during the Policy Period:  In the event that, after the fourth violation of this Policy by a Retailer, either or both of the following is or are relevant:  (a) the Designated Products do not include all Healthy Pet Products and (b) Healthy Pet provides notice to such Retailer that Healthy Pet has re-authorized such Retailer to purchase any or all of the Designated Products, then each act or failure to act of such Retailer that constitutes a violation of this Policy (or is deemed by Healthy Pet to be such a violation) will receive the same treatment as if a new fourth violation had then occurred.

Each violation of this Policy is cumulative through the Policy Period.  Except as noted, the consequences of each violation 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.

6.  Do-Not-Sell List.  If a Retailer purchases any or all Healthy Pet Products from one or more Distributors, restrictions on product access will be enforced through a Do-Not-Sell List provided to all Distributors.  For purposes of this Policy:  (a) “Distributors” means, collectively, each individual or entity (other than Healthy Pet) designated as such by Healthy Pet Notice as authorized by Healthy Pet to sell Healthy Pet Products to such Retailer (individually, a “Distributor”) and (b) Do-Not-Sell List” means notice from Healthy Pet which indicates that (i) one or more individuals or entities is or are not authorized by Healthy Pet to promote or resell any or all Healthy Pet Products or (ii) such authorization has been revoked in whole or part with respect to all Healthy Pet Products or revoked only with respect to certain of such products.

7.  Minimum Advertised Price.  Healthy Pet, at any time, may (a) vary the Minimum Advertised Price for a MRP Product or (b) add to or delete any or all of the MRP 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 Healthy Pet program(s) or any other Healthy Pet policy or in any other situation announced by Healthy Pet from time to time.  Healthy Pet will endeavor to provide prior notice of each new MRP or such change in the MRP Products, generally not less than five (5) days in advance.  While Healthy Pet will communicate each MRP and such change through Healthy Pet Notice, each Retailer is responsible for making sure that it is aware of the then-current MRP(s) and items of the MRP Products in each circumstance.

8.  Other Ways to Violate this Policy.  Except as expressly authorized or directed by Healthy Pet Notice or otherwise allowed by this Policy, a Retailer (directly or through another party on behalf or for the benefit of such Retailer) knowingly or negligently, directly or indirectly engaging in any or all of the following conduct (or the substantive equivalent as determined by Healthy Pet) in connection (directly or indirectly) with the offering of any or all Healthy Pet Products (or, if so noted below, only any or all of the MRP Products) will be deemed to be a violation of this Policy:

(a)           Use of Certain Terms or Low Price Guarantee(i) using the terms “lowest price,” the “lowest prices” or “prices too low to show”; (ii) an offer for one or more of the MRP Products at less than its or their MRP(s) resulting from (A) any form of low-price guarantee or (B) offering to match a lower price offered by another seller or (iii) the substantive equivalent (as determined by Healthy Pet) of any or all of these terms or concepts;

(b)           Strike-Throughs:  In connection with the offering of any or all of the MRP Products, showing a strike-through of any MRP(s) regardless whether one or more other prices are shown;

(c)           Offers for “Likes”:  Offering a discount, coupon or rebate applicable to any or all of the MRP Products in return for a Facebook “Like” or anything similar in intent or effect (as determined by Healthy Pet) involving one or more social media;

(d)           Price Variance:  If a price for a MRP Product is shown in advertising or promotion involving Electronic Content permitted by this Policy, such price varies with respect to such product (exclusive of applicable taxes and all shipping, delivery and insurance charges) across any or all of (i) the initial mention, depiction or description of such product (if a price for such product appears or is used there), (ii) the in-the-cart (or other container) price and (iii) the substantive equivalent of any or all of them as determined by Healthy Pet;

(e)           Invitations to Take Other Action:  Using an invitation to click, rollover, visit a location (such as a website, store or showroom) or otherwise communicate to obtain a price, except indicating the ability of customers to make specific inquiries by telephone or email to obtain a price is permissible, as long as neither of the following (or the equivalent as determined by Healthy Pet) is used to transmit Price Information: (i) automated call(s) or (ii) automated “bounce-back” email;

(f)            Group Discounts:  The promotion to group purchasers, except at price(s) no less than each applicable MRP;

(g)           Trade-in Offers:  Advertising or promoting a trade-in offer for any or all Healthy Pet Products and other products in connection with or applicable to any or all of the MRP Products, regardless whether a specific trade-in price or value is advertised or promoted;

(h)           Certain Offers and Sales:  Advertising, promoting or selling in any or all of the following ways: (i) outside the USA and Canada (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 the USA and Canada); (ii) using any business name(s) or storefront(s) other than the such Retailer’s full business name or acceptable variants thereof (as determined by Healthy Pet); (iii) online in any fashion, unless and only to the extent each website and marketplace used for such purpose by such Retailer (along with each business name and storefront) is approved in advance by Healthy Pet for such use and which approval has not been rescinded by notice from Healthy Pet; and (iv) prior to the release date specified by Healthy Pet for a new product or a product with a special promotional price authorized by Healthy Pet;

(i)            No Resale:  Selling in either or both of the following ways:  (i) to anyone for resale other than, in the case of permitted returns of any or all items of Healthy Pet Products permitted by Healthy Pet or a Distributor, to Healthy Pet or such Distributor, respectively, and (ii) to anyone other than end user purchasers permitted by Healthy Pet, including without limitation to the Special Accounts for purposes of this Policy, the “Special Accounts” means, collectively, each individual or entity so designated by Healthy Pet Notice);

(j)            Amazon Standard Identification Numbers (ASINs):  Creating or assisting in or otherwise cooperating in the creation of new ASINs for any or all Healthy Pet Products;

(k)           Challenges:  Questioning or challenging the rights claimed by Healthy Pet or its designee(s) in or to the Healthy Pet Intellectual Property or assisting in any way any other(s) in doing so (for purposes of this Policy, “Healthy Pet Intellectual Property” means trademarks, trade names, service marks, copyrights, logotypes, images, artwork, copy or anything else in which Healthy Pet or its designee(s) claim(s) rights);

(l)            Certain Purchases:  Purchasing any or all Healthy Pet Products other than from Healthy Pet, one or more Distributors or, in the case of bona fide returns, end users;

(m)          Modifications or Counterfeits:  Offering or selling one or more products that are modified or counterfeit version(s) of any or all Healthy Pet Products;

(n)           URLs:  Using any or all of Healthy Pet, its trademarks or other Healthy Pet Intellectual Property (or any variant(s) thereof) as or as part of one or more Uniform Resource Locators (URLs) or the substantive equivalent as determined by Healthy Pet employed by or for the benefit of such Retailer, regardless whether such use is in connection with the offering or sale of any or all Healthy Pet Products; and

(o)           Circumvention:  Using one or more tactics which Healthy Pet determines are intended to circumvent application or operation of this          Policy.

9.  The Exemptions.  As long as a Retailer does not otherwise violate this Policy, such Retailer offering to a potential or actual customer any or all of the MRP Products after the Policy Effective Date below its or their respective MRP(s) is exempt from this Policy and will not violate it, if such offering is consistent with one or more of the following exemptions (the “Exemptions”):

(a)           Live Telephone or email:  Individualized live telephone communication or individualized email (but not automated bounce-back email or the substantive equivalent) in direct response to a specific customer inquiry;

(b)           Grandfathering:  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 MRP Products or this Policy until such time that it is reasonable to revise such materials (as determined by Healthy Pet) to be consistent with this Policy;

(c)           Timing:  A bona fide offer of one or more of the MRP Products made by such Retailer prior to the effective date of a change in the MRP(s), the MRP Products or this Policy, which makes such offer non-compliant with this Policy, as long as (i), if this Policy was in place at the time such offer was made, such offer complied with the then-current terms of this Policy; (ii) such offer is effective for no longer than ten (10) days or other reasonable time period (as determined by Healthy Pet) after the effective date of such change; and (iii) each of the MRP Products included in such sale will be delivered to such customer no later than thirty (30) days after acceptance of such offer;

(d)           Special Programs:  The offer under one or more special programs (if any) designated by Healthy Pet;

(e)           Discontinued Products:  The offer of one or more items of any or all of the MRP Products that is or are discontinued by Healthy Pet effective (A) when such item(s) do not appear on the then-current the price list(s) or product list(s) issued by Healthy Pet or (B) on the date(s) referred to in notice of discontinuance provided by Healthy Pet to Retailers; and

(f)            Employee Offers:  The offer to an employee of such Retailer for his or her personal use (and not for resale), provided that such offer is reasonable (as determined by Healthy Pet).

If Healthy Pet determines that such Retailer does not qualify for or abused any or all of the Exemptions, such exemption(s) will be deemed withdrawn by Healthy Pet retroactive to the Policy Effective Date or such other date specified by Healthy Pet.  Except in extraordinary circumstances, Healthy Pet will not consider any requests for other exemptions.

10.  When a Retailer Requests Approval under this Policy.  If the approval of Healthy Pet under this Policy is sought by a Retailer, 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.

11.  Additional Policy Terms and Conditions.  Effective as of the Policy Effective Date, this Policy supersedes and cancels each other policy applicable to each Retailer from Healthy Pet for any or all Healthy Pet Products, if any, regarding minimum advertised price, resale price or, to the extent covered by this Policy, the other matters referred to herein.  For any reason(s) deemed appropriate by Healthy Pet (including without limitation based on the request of a Retailer for Healthy Pet to consider such things as, but not necessarily restricted to, limited-time promotional offers for an event in which such Retailer is participating or otherwise), but, in no case other than as the unilateral decision of Healthy Pet, this Policy may be modified, extended, waived, suspended, discontinued or rescinded in whole or part by Healthy Pet Notice at any time (including without limitation during any Healthy Pet-designated promotional period(s)), with such action(s) effective immediately or as otherwise described by Healthy Pet.  If Healthy Pet negotiates a price or prices with a customer that is or are less than the MRP(s) and provides a Retailer the opportunity to offer to fulfill one or more orders at such price(s), acceptance by such Retailer of such opportunity will not constitute a violation of this Policy.

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

The availability of one or more items of Healthy Pet Products may be changed by Healthy Pet any time, in which case, any or all of Healthy Pet and each other individual or entity supplying a Retailer may without liability or penalty (a) cancel all pending orders (even if accepted) from such Retailer for the affected item(s) and (b) refuse to accept any new orders from such Retailer for such item(s).

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

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

Healthy Pet will not discuss any conditions of acceptance related to this Policy.  In addition, Healthy Pet neither solicits, nor will it accept, any assurance of compliance with this Policy.  Notwithstanding anything to the contrary which may be expressed or implied in or by one or more agreements between a Retailer and Healthy Pet or otherwise, nothing shall constitute an agreement by such Retailer to comply with this Policy, as, among other things, this Policy is not and should not be construed to be one of the Healthy Pet policies (as such term or a similar term is or may be used in any or all of such agreements or otherwise) for which such compliance is mandatory.

12.  Questions, Additional Information or Information Regarding Potential Violations.  For reference, copies of the then-current versions of the following can be found where indicated:

·    This Policy:   healthy-pet.com/mrppolicy

·    The list of the MRP Products, with each corresponding MRP:  healthy-pet.com/mrppricelist

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

                Policy Administrator
                Healthy Pet LP
                6960 Salashan Parkway
               
Ferndale, WA USA
               email:  mrpadmin@healthy-pet.com