USMAPP 2015 GROHE UNILATERAL SUGGESTED MINIMUM ADVERTISED PRICE PROGRAM (USMAPP) Effective January 1st, 2015

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1 USMAPP 2015 GROHE UNILATERAL SUGGESTED MINIMUM ADVERTISED PRICE PROGRAM (USMAPP) Effective January 1st, 2015 Throughout the years, GROHE America has built a strong brand and reputation among its customers. GROHE America actively supports the advertising, promotion and selling of its quality products by its distributors with marketing support materials at no extra cost. GROHE America will not support advertising or promotional materials through offline and/or online media that could diminish the value of the GROHE brand. Effective January 1st, 2015, GROHE America has modified its Unilateral Suggested Minimum Advertised Price Program ( USMAPP ). This program applies to: 1) U.S. GROHE stocking distributors that advertise prices of GROHE brand products offline and/or online and/or that sell to: 2) Authorized Online Sellers that purchase GROHE brand products from GROHE authorized stocking distributors and resell GROHE brand products to end users either offline and/or online. No GROHE America employee or representative has been or will be authorized to modify or change this Policy for any particular advertiser. GROHE America alone will implement, interpret and enforce this Policy in its own independent judgment. Please make sure that all appropriate people in your organization receive a copy of this Policy. GROHE America may amend or discontinue this Policy at any time, and we will notify you of any such amendment or discontinuation. This Policy is in addition to and separate from all other GROHE America policies.

2 GROHE UNILATERAL SUGGESTED MINIMUM ADVERTISED PRICE PROGRAM (USMAPP) 1. USMAPP SCOPE GROHE s USMAPP applies to any media advertising and promotions by distributors and their customers: a. Print advertising placements including inserts, coupons, mailers, catalogs, magazines, newspapers, brochures, etc. b. Outdoor Advertising including billboards, banners, posters, etc. c. Broadcast (TV, radio); d. Fax communications intended to reach multiple individuals; e. Internet placements including search engines, social networks, banner ads, broadcast s, landing pages, third party `sites, etc.; f. estores including ebay, Amazon, Nextag, Shopzilla and all other third-party sites on which distributors and Authorized Online Sellers advertise or promote GROHE products; and g. GROHE Authorized Online Seller sites which advertise or promote GROHE products. 2. SALES THROUGH AUTHORIZED SITES ONLY For online sales and advertising, distributor or Authorized Online Seller is authorized to advertise and sell GROHE brand products only on distributor s or Authorized Online Seller's designated website(s) which have been approved by GROHE. Distributor or Authorized Online Seller is not authorized to sell GROHE brand products through thirdparty marketplaces (such as Amazon and ebay marketplaces) or any other forum or media not owned by distributor or Authorized Online Seller unless approved in advance by GROHE. 3. ADVERTISING PRICES a. Advertised Prices: Distributors are not required to list prices in offline or online media. However, if a price is listed, no distributor may advertise specific designs [see USMAPP Applicable Design List] of GROHE product at a discount in excess of 30% off of the current published list price. b. No Maximum Prices: GROHE America, Inc. does not establish maximum advertised prices, and distributors may advertise GROHE products at any price in excess of the price established by the USMAPP. c. No Price Required: GROHE s USMAPP allows distributors to omit pricing from their advertisements and include statements such as call for price, call for more information, or call for quote. d. Discontinued Products: GROHE s USMAPP does not apply to products discontinued by GROHE. e. Price Mark-outs and/or Specials : GROHE s USMAPP does not apply to products with marked-out or special pricing. In order to qualify as marked-out or special pricing, the advertisement or promotion must include a statement of the reason for the marked-out or special pricing. The only acceptable reasons for marked-out and/or special pricing are: 1. Returned product 2. Refurbished product 3. Inventory reduction f. If a distributor states Inventory reduction pricing GROHE will assume that the distributor no longer intends to sell that product, and therefore GROHE will not sell that particular product to the distributor in the future g. Free and Reduced Cost: Free shipping and/or handling, 0% tax, free financing or free promotional items do not violate GROHE s USMAPP. Reduced charges also are permissible for these items. h. Going Out of Business: GROHE s USMAPP does not apply to legitimate going out of business, liquidation or bankruptcy related sales. i. Selling Prices: GROHE distributors remain free to establish their own selling prices. 4. WARRANTY GROHE authorized sellers receive support, sales and service training, and are equipped to handle most problems that may arise. GROHE cannot stand behind the quality of products sold by non-authorized sellers and, therefore, GROHE may not honor any warranty claims on products purchased from non-authorized sellers. 5. UNILATERAL POLICY a. The adoption, implementation and enforcement of this program is solely GROHE America s unilateral corporate decision and responsibility. No employee or sales representative is authorized to discuss,

3 modify or seek or obtain agreement with the USMAPP. Any questions about this program should be submitted in writing to This program is subject to revision at any time by GROHE America. b. The USMAPP is subject to revision at any time. c. GROHE America will determine unilaterally whether products are being advertised in violation of the USMAPP and will take action as warranted. d. Each distributor is free to decide whether or not to follow GROHE America, Inc. s USMAPP requirements. e. Online Pricing: All pricing listed on an Internet site, including shopping cart/check-out or similar pricing, is considered advertised price and, therefore, must comply with GROHE s USMAPP. Non-GROHE authorized website coupons (specifically for a single GROHE product or selection of GROHE products) are allowed ONLY when the coupon offer does not bring the final pricing below the established USMAPP. f. End User Rebates: If a GROHE authorized end user rebate promotion or coupon is in effect for any GROHE product, the distributor may advertise a price lower than that established by GROHE s USMAPP as long as the distributor provides a notation immediately adjacent to the pricing informing viewers that the advertised price is net of the GROHE authorized rebate or coupon AND the discount reflected in the advertised price is no lower than the total of the 30% discount under GROHE s USMAPP and the percentage of the authorized rebate or coupon. For example, if GROHE issues an authorized 5% discount coupon, the total advertised price can be no lower than 35% (30% plus 5%) off the current published list price. 6. OTHER REQUIREMENTS For online sales and advertising, distributors and Authorized Online Sellers must be in compliance at all times with all terms of the GROHE Authorized Online Seller Program.

4 Policy Enforcement Distributors GROHE USMAPP ENFORCEMENT GROHE distributors will be permitted to supply only GROHE Authorized Online Sellers as part of the separate GROHE Authorized Online Seller program. Grohe distributors found to distribute Grohe products to UNAUTHORIZED online sellers in violation of the Grohe USMAPP policy are subject to the enforcement schedule as follows First Violation GROHE America will send a written notice to the distributor advising the distributor that it is not in compliance with this policy. The distributor will be given a period of fifteen (15) days from the date of the written notice to make the required changes to become compliant. If after fifteen (15) days from the date of the written notice the distributor is still not in compliance, it will be considered a second violation. Second Violation GROHE America will send a second written notice to the distributor advising the distributor is not in compliance and that, as a result of the second violation, the distributor will lose one-twelfth (1/12) of the Growth Rebate and onetwelfth (1/12) of the Volume Rebate it otherwise would have received for the calendar year in which the second violation occurred. If after fifteen (15) days from the date of the second written notice distributor is still not in compliance, it will be considered a third violation. Third Violation GROHE America will send a third written notice to the distributor advising the distributor is not in compliance and that, as a result, the distributor will lose one-sixth (1/6) of the Growth Rebate and one-sixth (1/6) of the Volume Rebate it otherwise would have received for the calendar year in which the third violation occurred. If after fifteen (15) days from the date of the third written notice the distributor is still not in compliance, it will be considered a fourth violation. Fourth Violation GROHE America will send a fourth written notice to the distributor advising the distributor is not in compliance and that, as a result, distributor will not receive any Growth Rebate or any Volume Rebate it otherwise would have received for the calendar year in which the fourth violation occurred. If after fifteen (15) days from the date of the fourth written notice the distributor still is not in compliance, it will be considered a fifth violation. Fifth Violation GROHE America will send a fifth written notice to the distributor advising the distributor is not in compliance and that, as a result, GROHE America will immediately place the distributor on Hold status, meaning that GROHE America will stop accepting purchase orders from the distributor and will not sell any products to the distributor. Hold status cannot be removed under any circumstances as long as the distributor has not moved into compliance with USMAPP. It will be GROHE America's unilateral decision whether, and, if so, when, to resume selling to the distributor. GROHE America will take immediate and appropriate legal actions to ensure that all GROHE trademarks and other Intellectual Property have been removed from distributor's website and/or promotional materials.

5 GROHE USMAPP ENFORCEMENT Policy Enforcement Authorized Online Sellers Distributors and Authorized Online sellers found to violate the pricing restrictions are subject to the enforcment schedule as follows First Violation A written notice will be sent to the distributor and/or online seller advising that the advertiser is not compliant with this policy. The advertiser will be given a period of fifteen (15) business days from the date of the written notice to make the required changes to become compliant. If after fifteen (15) days, the advertiser is still not in compliance, it will be considered a second violation Second Violation GROHE America will send a second written notice to the distributor and/or online seller advising that the advertiser is not in compliance. GROHE America will immediately cut off product supply on all orders by the advertiser of the specific design in violation, that are placed beginning with the date of the second violation notice. GROHE America will not supply the product in violation to the distributor and/or online seller for a minimum period of 6 months from the date of the second violation notice, and at any time after the 6 month period, it will be GROHE America s unilateral decision whether to resume supply. If after fifteen (15) days, the advertiser is still not in compliance, it will be considered a third violation. Third Violation Advertiser becomes unauthorized and Grohe America will immediately cut off all product supply to the advertiser. Unauthorized status cannot be removed under any circumstances as long as the advertiser has not moved into compliance with USMAPP. It will be GROHE America's unilateral decision whether to resume supply. GROHE America will take immediate appropriate legal actions to have all GROHE Intellectual Property removed from the advertiser s website and/or promotional materials

6 USMAPP Applicable Design List Effective January 1 st, 2015 GROHE s USMAPP policy applies to the following product families. Product families include all SKUs within the design [i.e. faucets, trims, accessories, diverters, volume controls, etc.] see CVR SKU list for full details. GROHE reserves the right to modify this list at any time, including adding to the list when it begins to market new products. Bath Designs Allure, Allure Brilliant, Grandera, Atrio, Kensington, Geneva, Bridgeford, Somerset, Veris, Veris F-Digital, Allure F-Digital Shower Designs Rainshower, Power & Soul, Grandera, Sena, Grotherm F, Grohflex Authentic, Grohflex Timeless, Grohflex Allure Briliant, Grohflex Grotherm F, Grohflex Grandera Kitchen Designs K7, LadyLux3 Café, LadyLux Pro, LadyLux Café, LadyLux3 Plus, LadyLux Plus, LadyLux Café Touch, Pot Filler, Bridgeford, Alira, Ashford, GROHE Blue Pure, GROHE Blue Chilled & Sparkling, GROHE Blue Accessories, Minta, Minta Touch