Minimum Advertised Price (MAP) Policy

This MAP Policy will be effective as of June 1, 2021.

 

Effective June 1, 2021, KHS America, Inc. (“KHSA”) is unilaterally revising and reissuing its Minimum Advertised Price (“MAP”) Policy for the musical instrument brands that KHSA distributes to dealers for resale in the United States of America to institutional and individual customers and covers with this MAP Policy (“Covered Brands”). KHSA has unilaterally written this revised MAP Policy and will unilaterally monitor and administer this MAP Policy. KHSA has not solicited, and will not solicit, any input from dealers to formulate this Policy or to set the Minimum Advertised Price lever for any brand or product. To assist KHSA to monitor dealers subject to this MAP policy, KHSA requires that all resellers disclose and list accurately all sales channels, aliases and DBA’s for all selling platforms as part of the exhibits to the KHSA Dealer Agreement.

 

PURPOSE

KHSA greatly values its brands and the reputation for strong customer support by our dealers. For our products to maintain their value and reputation, and the dealers to be sufficiently funded to provide the levels of support for Covered Brands necessary to be competitive and maintain the marketplace reputation of the Covered Brands, all KHSA products must be advertised at the established Minimum Advertised Prices (MAP) which includes print, catalogs, broadcasting, internet, and all forms of electronic communications.

 

SCOPE

This MAP Policy applies to advertising by dealers located in the United States for instruments sold as “New,” and “Demo” products as further defined in this Policy. This MAP Policy does not apply to any advertised price where the dealer clearly, conspicuously and proximately identifies the Product to be sold as “Second”, “B Stock” or Used.” MAP also does not apply to Products that are discontinued by KHSA, as shown by the absence of a MAP Price on the then-current Confidential Price List, or as otherwise removed from the MAP Policy by written communication from KHSA to authorized dealers.

KHSA will apply this MAP Policy to individual products (“Covered Products”) within a Covered Brand by notice to dealers in a confidential price list or other written communication. KHSA may, in its sole discretion (i) exclude any individual products, product lines, models, stock keeping units or serial numbers within a Covered Brand from this MAP Policy, (ii) cover all or less than all of a particular brand’s products within a Covered Brand, and (III) exclude an instrument brand it distributes from this MAP Policy.

Nothing in this policy should be construed as an express or implied agreement, contract or a solicitation for an agreement about, or a requirement concerning, actual resale prices to customers, which are set by each dealer in its own discretion. KHSA will not seek, nor accept, assurances from any dealer that they will comply with this MAP Policy, in part or in whole, nor accept or acknowledge compliance or non-compliance with this MAP Policy as reported by any third party unless that third party is specifically retained by KHSA for the purpose of monitoring compliance with this MAP Policy.

 

LIMITATION

This MAP Policy is void and does not apply in any jurisdiction where such a policy is unlawful to enforce or is per se unlawful.

 

OVERVIEW

KHSA intends to monitor advertising in the marketplace by its dealers for compliance with this Policy. This policy applies only to “advertised” prices and does not apply to the actual retail price for which the products are sold or offered for sale to customers by the dealer immediately prior to bona fide sale.

This MAP Policy and the related minimum advertised price list is each proprietary and confidential. Dealers shall not communicate any portion of this policy to any third party either in content or any related pricing covered under this policy.

This MAP Policy includes but is not limited to advertising on dealer’s authorized website, any site or channel approved by KHSA as listed on Exhibit A to the Dealer Agreement, and search engine results pages. Use of third party auction sites by their nature does not comply with this MAP Policy, and is not permitted.

MAP Policy pricing and Covered Products included under the MAP Policy will be published and available on confidential dealer price lists for the Covered Brand. These practices will vary from brand to brand. If a KHSA confidential dealer price list does not list a brand as a Covered Brand or a product within a Covered Brand as a Covered Product, this MAP Policy does not apply to that brand or product.

For KHSA Covered Products that are advertised in conjunction with other products, gift cards, etc… whether from KHSA or third-party vendors, the MAP Policy price for the Covered Product must be clearly identified together with the Covered Product to comply with this MAP Policy.

Under no circumstances will verbal conversations with any KHSA employee be considered, authorized or binding upon KHSA relative to the monitoring or enforcement of consequences under this policy.

This document contains the complete KHSA MAP policy in effect on the date of publication of this document as listed in the preamble. This document supersedes all previous policies and will remain in effect until terminated, cancelled, modified or revoked by KHSA at its’ sole discretion. KHSA may revise, replace or discontinue this MAP Policy at any time without prior notice to dealers.

 

KHSA DEFINITIONS OF MAP PRICES

“MAP” means the “Minimum Advertised Price” for the specific KHSA Covered Product, as set forth on KHSA’s then-current Confidential Dealer Price Lists, which may be amended by KHSA from time to time. KHSA reserves the right to temporarily lower or suspend the MAP Policy pricing on specific Covered Products at its’ sole discretion.

To comply with the MAP Policy, the price of a Covered Product in all of its advertisements must be equal to, or higher than, the published MAP Policy price. The MAP Policy Price as shown on the then-current Confidential Dealer Price List applies to the sale of ”New”, and “Demo” products. KHSA Covered Products may not be included in “global discount” advertising if the advertised discount takes the price below the MAP Policy price.

All advertisements in all media, including without limitation on all websites, of KHSA Covered Products are deemed to be of “New” products unless there appears, in conjunction with the product image and the advertised price, a clear and conspicuous statement identifying the specific product as “Second”, “B Stock” or “Used”.

To satisfy the “clear and conspicuous” requirement, the relevant category of the product being advertised must appear, in the same size font as the product name, in conjunction with the product image and the advertised price every place either of these appears in any advertisement.

Usage by any dealer of any alternate or website-specific product designations (i.e. “Blem”, “Scratch and Dent”, “Re-box,” “Manufacturer Refurbished,” etc.), does not comply with this policy and does not alter or replace the standard definitions as set forth above.

 

KHSA DEFINITION OF “ADVERTISEMENT”

This MAP Policy applies to all advertisements of products in any and all media, including, but not limited to, flyers, posters, coupons, mailers, inserts, newspapers, magazines, catalogs, mail order catalogs, blogs, electronic newsletters, general (not individualized) e-mail solicitations, Internet or similar electronic media, television, radio, and public signage.

Any offers on platforms like eBay and Amazon must comply with MAP and must be effected by and for an authorized KHSA dealer.

This MAP Policy is not applicable to any brick and mortar in-store advertising that is displayed only in the dealer’s store or to any advertising distributed to consumer(s) exclusively in the dealer’s store.

If a dealer chooses to advertise prices for any of the Covered Products in its promotional efforts, the pricing must be at or above the current MAP pricing listed in the current official price list to be in compliance. A dealer may omit pricing information for a Covered Product in its advertising and promotions entirely.

If pricing is advertised (as defined above), any strike-through or other alteration of the Minimum Advertised Price is not in compliance with this policy.

This MAP Policy does not in any way limit the ability of any dealer to advertise that “we have the lowest prices” or that “we will meet or beat any competitor’s price”.

Call for Price, Call and Save, Instant Rebate, See Store for Details, In-Cart pricing and Best Offer are acceptable forms for online promotions under this MAP Policy.

The advertisement of reduced prices or services or products, whether presented individually or part of a bundle, in which the products are Covered Products from KHSA, other manufacturers or any combination thereof, is not a violation of the MAP Policy, provided that the KHSA Products and/or the bundle are advertised at or above MAP.

 

KHSA DEFINITION OF COVERED PRODUCT CATEGORIES

“KHSA Covered Product” as defined for MAP purposes will fall into one of four categories: “New”; “Demo”; “Second” or “B Stock”; “Used”.

1. “New” – Defined as a Covered Product that has been purchased directly from KHSA by a dealer authorized to sell the specific product. KHSA MAP Policy prices apply to “New” KHSA Covered Products as shown on the then-current confidential dealer price lists.

   Product that has been purchased by Dealer as ”New” product remains “New” product for purposes of the MAP Policy if the Dealer has elected to open the original packaging, but has otherwise not sold the product, or utilized it in a manner that would qualify it as “Demo” or “Second” product, as described below.

2. “Demo” – Defined as products that are functionally and cosmetically equivalent to “New”, or have incurred minor cosmetic damage as a result of shipping, customer handling in-store, sales floor wear and tear, or have been returned by customers within the terms of the dealer’s new product return policy, and contain all original packaging and paperwork. This MAP Policy prices apply to “Demo” Covered Products as shown on the then-current confidential dealer price lists.
3. “Second” or “B Stock”- Defined as Covered Products in an authorized dealer’s inventory that has been purchased directly from KHSA at a price below normal dealer net price due to functional, cosmetic or other clear and conspicuous defects that differentiate the product from “New” first quality merchandise, or represent discontinued, closed out, obsolete or out of date models that KHSA has determined to sell other than as New.
4. “Used”- Defined as Covered Products that that have been sold or rented to a consumer and have obvious wear and tear from consumer use. These may not be represented as “New”, “Demo”, “Second” or “B Stock” and no longer carry a manufacturer’s warranty. “Used” products must be clearly marked as “Used” and are not covered under this MAP Policy.

 

PENALTIES FOR VIOLATING KHSA MAP POLICY

KHSA reserves the right to determine unilaterally what action to take, if any, if a dealer violates the MAP Policy, including termination of its Dealer Agreement, in its sole discretion. KHSA may, but is not obligated to, take any of the following actions. KHSA has no obligation to engage in progressive discipline before termination of the Dealer Agreement, and this MAP Policy creates no agreement, expectation or understanding with any dealer regarding progressive discipline for violations of this MAP Policy.

• A dealer may be suspended for 2 weeks from placing and receiving any orders for any KHSA products, including Covered Products and other products.
• A dealer may be suspended for 30 days from placing and receiving any orders for KHSA products and will lose any earned discounts (if applicable) on any KHSA products including Covered Products and other products.
• A dealer may be suspended for 6 months from placing and receiving any orders for any KHSA products and dealer will lose any earned discounts (if applicable) on any KHSA products for a period of up to one year from the date of the notice.