NEW YORK 

WASHINGTON, DC 

MILWAUKEE 

LOS ANGELES 

HONG KONG 

GRUNFELD I DESIDERIO i LEBOWITZ 

SILVERMAN il KLESTADT LLP 

VIA WWW.REGULATIQNS.GOV 

The Honorable Robert E. Lighthizer 

Office of the United States Trade Representative 

Executive Office of the President 

October 4, 2018 

600 17th Street, NW 

Washington, DC 20508 

Re: Docket No. USTR-2018-0025 

Rikon Power Tools Inc. 

Request for Exclusion of Particular Products from the 

Determination of Action Pursuant to Section 301 

Our Reference: 13208-0890001 

Dear Ambassador Lighthizer: 

RIKON Power Tools Inc. ("RIKON") respectfully submits this letter in support of its 

requests for the exclusion of the spindle sanders described in the attached exclusion request form 

from the Determination of Action Pursuant to Section 301,83 Fed. Reg. 28710 (June 20, 2018) 

(hereinafter "Section 301-List 1"). This letter is submitted in accordance with the Procedures to 

Consider Requests for Exclusion of Particular Products from the Determination of Action 

Pursuant to Section 301 as set forth in docket number USTR-2018-0025, 83 Fed. Reg. 32181 

(July 11, 2018), published by the Office of the United States Trade Representative ("USTR") 

(the "Request for Exclusion Procedures").1 The RIKON spindle sanders in question are 

classifiable under subheading 8465.93.0075, Harmonized Tariff Schedule of the United States 

("HTSUS"). 

As discussed below, RIKON submits that the USTR should exclude the subject spindle 

sanders classifiable under HTSUS subheading 8465.93.0075 from the additional duties for the 

following reasons: 

1 The Product Exclusion Forms filed for each RIKON power tool sets out the annual quantity and value of the 

Chinese-origin product that RIKON purchased in each of the last three years. 

10060636 1 

599 LEXINGTON AVENUE FL 36 NEW YORK, NY 1 0022-7648 i TEL. 212.557.4000 i FAX 212.557.4415 I www.GDLSK.com 
GDLSK 

GRUNFELD I DESIDERIO ILEBOWITZ 

SILVERMAN S KLESTADT LLP 

• There is no practical alternative source for supply, in the United States or 

elsewhere, for these products; 

• Imposition of these tariffs will cause disproportionate economic harm to U.S. 

interests, including small- or medium-size businesses as well as U.S. consumers. 

RIKON will have to raise prices, limit growth, and consider layoffs in order to 

absorb these tariff increases. 

• Imposing the additional 301 duties on these goods will be neither practicable nor 

effective in obtaining the elimination of what the USTR has found to be China's 

harmful acts, policies, and practices related to technology transfer, intellectual 

property, and innovation. On the contrary, imposition of the 301 duties on these 

goods will cause disproportionate economic harm to U.S. businesses and 

consumers. 

I. COMPANY BACKGROUND 

Founded in 2009, RIKON is a small, privately held company headquartered in Billerica, 

MA. RIKON designs, manufactures, and imports woodworking power tools, including the 

spindle sanders described in the accompanying exclusion request. RIKON's tools are typically 

sold at hardware and woodworking stores and are used primarily by consumers for "do it 

yourself projects, as well as at some professional woodworking shops. The tools are also used 

in commercial projects, including for public works and infrastructure projects, where cost 

increases would ultimately be borne by U.S. taxpayers. The end products produced using such 

tools include furniture, cabinets, millwork, and shelving. 

II. TARIFF CLASSIFICATION AND PROPOSED DRAFT TARIFF 

LANGUAGE 

The spindle sander described in the attached Exclusion Request Form is classifiable in 

2 
GDLSK 

GRUNFELD I DESIDERIO ILEBOWITZ 

SILVERMAN 5 KLESTADT LLP 

subheading 8465.93.0075, HTSUS, which covers "Machine tools (including machines for 

nailing, stapling, glueing or otherwise assembling) for working wood, cork, bone, hard rubber, 

hard plastics or similar hard materials: Grinding, sanding or polishing machines: For 

woodworking; Other: Other." U.S. Customs and Border Protection ("CBP") has not issued any 

rulings on this particular product or tariff classification. 

We respectfully request that CBP consider the product description in box number 2 of the 

attached form to serve as Rikon's proposed draft tariff language. 

III. ADMINSTRATION OF EXCLUSION BY CBP 

If the USTR grants this request for exclusion, the exclusion will be easily administered 

by CBP. The product is identifiable on entry documents (including commercial invoices and 

bills of lading or packing lists) by product number and/or a clear product description. CBP, 

therefore, will not find the exclusion of these products from Section 301 tariffs overly 

burdensome. 

IV. DISCUSSION 

A. RIKON Cannot Source This Product Outside of China 

RIKON sources this product in China because there are no comparable manufacturers in 

North America, including the United States, or elsewhere. Indeed, none of RIKON's 

woodworking tools are manufactured in the U.S., and have not been for many years. China, by 

contrast, possesses an experienced manufacturing industry for woodworking tools with the 

capacity to meet the demands of the U.S. market. Significantly, there are currently no alternative 
GDLSK 

GRUMFELD I DESIDERIO ! LEBOWITZ 

SILVERMAN S KLESTADT LLP 

manufacturing locations that can compete with or replace China with respect to tool production. 

For example, RIKON recently explored Taiwan as a possible alternative source; however, the 

price was not competitive and the potential Taiwanese source did not have the capacity to meet 

RIKON's requirements within the one year duration of the requested exclusion if granted. To 

this point, we have attached as Exhibit A recent correspondence between RIKON and a 

Taiwanese tool manufacturing company, Giant Lakes Industrial, Inc. ("Giant Lakes"). RIKON 

begins this exchange by identifying two representative sanders it would potentially source from 

Giant Lakes.2 Giant Lakes states, however, "...it seems that lead times for new production could 

be as long as 9-12 months from date of order [emphasis added]." 

Even if alternative manufacturing sources were available, RIKON estimates that it would 

take 9 to 16 months to move production and an additional 6 months to match its current 

production levels. RIKON's spindle sanders and their current manufacturers have also been 

vetted by various certification companies (e.g., Edison Testing Laboratories or "ETL") to apply 

their respective certification marks confirming that RIKON's products meet specific safety 

standards. We have attached as Exhibit B, for example, authorization letters covering multiple 

spindle sanders imported by RIKON including the spindle sander now at issue.3 This 

certification process took several months to complete and entailed a significant financial 

investment. RIKON considers these certification marks very important to its business model 

2 These particular model numbers, although not at issue in this request, are representative of all sanders imported by 

RIKON. Furthermore, RIKON makes clear in this e-mail that the company would be interested in moving 

production of all its sanders. RIKON writes: "Of course, all of our portable benchtop sanders are in our sights for 

switching over to a Taiwan factory pending quality and price." 

3 These certificates can be matched to the exclusion form at issue by the item number provided on the accompanying 

exclusion form. 

4 
GDLSK 

GRUNFELD I DESIDERIO ILEBOWITZ 

SILVERMAN S KLESTADT LLP 

and, therefore, the pool of potenti al non-China alternatives is necessarily narrowed to only those 

capable of manufacturing RIKON's spindle sanders in the exact same manner as the company's 

current Chinese manufacturers and willing to under the certification process necessary to permit 

the use of the attached certification marks. To date, RIKON is unaware of any such alternative 

manufacturers that can accommodate the company's demands. 

B. The Imposition of Additional Section 301 Duties on This Product 

Would Cause Severe Economic Harm to U.S. Consumers and to 

RIKON 

The imposition of additional 301 duties would lead to decreased sales and loss of profits 

for RIKON (and for the small businesses that distribute RIKON's products), and higher prices 

for American consumers. This lose-lose proposition conflicts with the USTR's stated goals in 

proposing the 301 duties. 

Imposing the additional 301 duties on these products will cause disproportionate 

economic harm to RIKON and its customers. RIKON estimates that the additional Section 301 

duties would force it to increase its prices by 14% to 21% - the largest price increase in the 

history of the company. Those price increases would be passed along to U.S. consumers, 

resulting in an estimated 20-30% decrease in sales for RIKON. That significant decrease 

translates to a reduction in RIKON's profits of up to 15%. If the additional tariffs remain in 

place for an extended period, RIKON believes that the combined drop in sales and reduction in 

profits would eventually force it to close one of its two distribution centers and lay off 

employees. Indeed, as demonstrated by the e-mail attached as Exhibit C, RIKON has already 

cancelled a planned expansion of its East Coast distribution center, as well as plans to upgrade its 

5 
GDLSK 

GRUNFELO I DESIDERIO ! LEBOWITZ 

SILVERMAN S KLESTADT LLP 

material handling equipment (fork lifts, order pickers, and the like). This e-mail is dated August 

2, 2018 and is from RIKON's President to its Board of Directors. RIKON's President writes 

regarding the lease negotiation process for the expanded facility, "When this started nobody 

thought that the Tariffs would be implemented, considering the tariffs and what it looks like to 

me to be more to come. I think we should just renegotiate the current lease and stay in the 

same space we have now [emphasis added]." A letter from Rikon to this effect is also included 

in Exhibit D. Thus, as a direct result of the proposed tariffs, RIKON chose not to expand its 

distribution facility thereby foregoing additional jobs and profits that would have accompanied 

the addition. 

Imposition of these tariffs will also cause severe economic harm to the U.S. construction 

industry, which is a primary engine of growth in the U.S. economy. RIKON's tools are used in 

a variety of large and small residential and commercial projects - including for public works and 

infrastructure projects, where cost increases would ultimately be borne by U.S. taxpayers. 

C. RIKON's Products Are Not Strategically Important or Related to 

"Made in China 2025' or Other Chinese Industrial Programs 

It is important to note that there are no intellectual property secrets transferred to the 

unrelated Chinese suppliers of woodworking tools. The imposition of a 25% duty on such 

products is therefore not practicable or effective in obtaining the elimination of China's acts, 

policies, and practices. Woodworking tools also do not utilize any significant industrial 

technology; as such, they cannot enhance technology transfer or Chinese innovation. 

Woodworking tools also do not contribute to the advancement of any of the industries identified 

6 
GDLSK 

GRUNFEI.D E DESIDERIO i LEBOWITZ 

SILVERMAN S KLESTADT LLP 

in the "Made in China 2025"4 or similar China initiatives. There is simply no nexus between 

woodworking tools and the objectives of Section 301. 

In addition, the value of woodworking tools exported from China to the U.S. is extremely 

insignificant relative to the Chinese market. Even if the export of woodworking tools from 

China to the U.S. were to be stopped altogether, it would have little or no impact on China; the 

Chinese suppliers can simply sell such products to other countries without feeling the effect of 

the U.S. tariff. 

Finally, we are not aware of any domestic industry that will be protected by imposing the 

proposed 301 duties on woodworking tools. As a consequence, increased duties on such tools 

will not be practicable or effective in obtaining the elimination of the acts, policies, and practices 

of China identified by the USTR. 

V. CONCLUSION 

For the reasons set forth above, we request that the USTR exclude the spindle sanders 

classifiable under subheading 8465.93.0075, HTSUS, and identified on the attached exclusion 

request form from Section 301-List 1. We further certify on behalf of RIKON that the 

.gov/sites/default/Files/enforcement/301 Investigations/30 l%20Dt,aft%20Exec%20Summarv%203 

7 
GRUNFELD I DESIDERIO 1LEBOWITZ 

SILVERMAN S KLESTADT LLP 

information provided with this exclusion request is complete and correct to the best of RIKON's 

knowledge. We appreciate the USTR's consideration of these comments. 

Please contact us if you have questions about this submission. 

Respectfully submitted, 

GRUNFELD, DESIDERIO, LEBOWITZ, 

SILVERMAN & KLESTADT LLP 

10060636 1 

8 
EXHIBIT A 

£• •• c 
Caulfield, Patrick J. 

Subject: RE: Taiwan Sander factories 

From: Giant Lakes lnd.,lnc. <Riant.lakes(5)msa.hinet.net> 

Sent: Thursday, September 27, 2018 2:39 AM 

To: David Draves <DDraves(a)rikontools.com> 

Cc: Jack Bransfield <JBransfield(5)rikontools.com> 

Subject: RE: Taiwan Sander factories 

David, 

Attached is an excel file for the sanders that Tom has sourced for your review. 

Please let us know if you have any questions regarding the sanders. 

We need to know which models that you are interested in getting the prices. Taiwan Factories may be at or 

near capacity. We are pushing them for what they are capable of, right now it seems that lead times for new 

production could be as long as 9-12 months from date of order. Of course, they can provide samples sooner. 

Please let us know which models to concentrate on. 

Thank you very much. 

Faye 

From: David Draves [mailto:DDraves@rikontools.com1 

Sent: Tuesday, September 25, 2018 7:23 PM 

To: faye chen <favefchen(5)msn.com> 

Cc: Jack Bransfield <JBransfield@rikontools.com>; <giant.lakes(a)msa.hinet.net> 

Subject: RE: Taiwan Sander factories 

Okay, thanks Faye! 

David 

From: faye chen <favefchen(5)msn.com> 

Sent: Monday, September 24, 2018 9:02 PM 

To: David Draves <DDraves@rikontools.com> 

Cc: Jack Bransfield <JBransfield(5)rikontools.com>; <giant.lakes@msa.hinet.net> 

Subject: Re: Taiwan Sander factories 

Dave, 

We were off yesterday due to our national holiday "Full Moon Festival", I will forward your email to Tom, if he 

has any other questions, we will get back to you. Thank you. 

i 
Faye 

Giant Lakes Industrial Inc. 

2F, No. 6, Lane 27, Sec. 2, Chung Shan N. Road 

Taipei, Taiwan 

(Tel) 886-2-2562-6111 or 886-2-2563-4098 

(Fax) 886-2-2521-6220 

e-mail; giant.lakes@msa.hinet.net 

From; David Draves <DDraves@rikontools.com> 

Sent: Monday, September 24, 2018 11:48 AM 

To: faye chen 

Cc: Jack Bransfield 

Subject: Taiwan Sander factories 

Faye, 

The two model sanders that we would most like to find Taiwan sources for are our 50-144 and 50-122 models. 

Their Sell Sheets are attached for your review. 

50-122 6" x 48" Belt / 10" Disc Sander 

50-144 1" x 42" Belt / 8" Disc Sander 

The critical customer service areas of these both concern the strength and reliability of the motor. We have 

had problems with these in the past. 

Of course, all of our portable benchtop sanders are in our sights for switching over to a Taiwan factory 

pending quality and price. 

Hope that you can help us out in sourcing these machines. 

Let me know if you need any other information. 

David 

David Draves 

Product Development Manager 

BIKOW] 

16 Progress Road 

Billerica, MA 01821 

^ 'www.rikontools.com 

T: 877-884-5167 

P:978-528-5380 

F: 978-528-5383 

2 
CONFIDENTIALITY. This electronic mail and any files transmitted with it may contain information proprietary to RIKON Power Tools, Inc. (RIKON), or one of its 

subsidiaries or affiliates, and are intended solely for the use of the individual or entity to whom they are addressed, shall be maintained in confidence and not 

disclosed to third parties without the written consent of the sender. If you are not the intended recipient or the person responsible for delivering the electronic mail 

to the intended recipient, be advised that you have received this electronic mail in error and that any use, dissemination, forwarding, printing, or copying of this 

electronic mail is strictly prohibited. If you have received this electronic mail in error, please immediately notify the sender by return mail. 

3 
EXHIBIT B 
CSA 

Group 

Certificate of Compliance 

Certificate: 1936836 

Project: 70050634 

Issued to: Wendeng Allwin Motors Manufacturing 

Co Ltd 

15 Sichan Rd 

Wendeng, Shandong 264400 

China 

Attention: Paul Yanqing 

Master Contract: 226002 

Date Issued: February 16, 2016 

The products listed below are eligible to bear the CSA 

Mark shown with adjacent indicators 'C and 'US'for 

Canada and US or with adjacent indicator 'US'for 

US only or without either indicator for Canada only. 

L&tu&Wew 

Issued by: Louis Wen 

PRODUCTS 

CLASS 3881 03 - TOOLS - Bench 

CLASS 3881 83 - TOOLS-Stationary and Fixed - Electrical Tools-Certified to US Standards 

* * 

Belt/Disc Sander, cord connected, grounded. Models 055-3559-4, 13660, 240-2973, 240-2974, 32739047, 

32752545,12] 50-122, 50-144./50-15l/51-202. 51491. 55-3551, 55-3559-4, 8532293, BBD46WU, 

BD1800, BD460M. BD460PC, BD4601, BD4601G, BD4603, BD4800, BD480PC, BD6100, CT170N, CX507, 

CX506, DS12E, DS12F, DS12G, DS-E, KC-12S, MM491D, MM491G, MM493B, PCB410SA, PCB420SA, 

RK7866, SP-PB305. 

Notes: 

Prefix and suffix may be added for features not affecting Certification. 

For details related to rating, size, configuration, etc. reference should be made to the CSA Certification Record 

or the descriptive report. 

APPLICABLE REQUIREMENTS 

CAN/CSA-C22.2 No. 71.2-10 - Electric Bench Tools 

DQD 507 Rev. 2012-05-22 Page; 1 
X II \\ CSA 

Group 

Certificate: 1936836 

Project: 70050634 

Master Contract: 226002 

Date Issued: February 16, 2016 

UL No. 987-8th Edition - Stationary and Fixed Electric Tools 

DQD 507 Rev. 2012-05-22 Page; 2 
Intertek AUTHORIZATION TO MARK 

This authorizes the application of the Certification Mark(s) shown below to the models described in the Product(s) 

Covered section when made in accordance with the conditions set forth in the Certification Agreement and Listing 

Report, This authorization also applies to multiple listee model(s) identified on the correlation page of the Listing 

Report. 

This document is the property of Intertek Testing Services and is not transferable. The certification mark(s) may be 

applied only at the location of the Party Authorized To Apply Mark. 

Applicant: 

Address: 

Country: 

Contact; 

Phone: 

FAX: 

Email: 

Qingdao Capital Resource Electric Co.. 

Ltd. 

No, 155 Zhu Zhou Road, 

Lao Shan District, 

QINGDAO Shandong 266101 

China 

Steve Wang 

8653288701542 

8653288701938 

stevewang@qcrtools .com .cn 

Manufacturer; 

Address: 

Country: 

Contact; 

Phone: 

FAX: 

Email: 

Qingdao Capital Resource Electric Co., 

Ltd. 

No. 155 Zhu Zhou Road, 

Lao Shan District, 

QINGDAO Shandong 266101 

China 

Steve Wang 

8653288701542 

8653288701938 

stevewang@qcrtools.com,cn 

Party Authorized To Apply Mark: 

Report Issuing Office: 

Control Number: 4001824 

Same as Manufacturer 

Intertek Services Testing Shanghai Limited 

Authorized by: 

William T. Starr, Certification Manaq1 

^/sTeo' 

Intertek 

This document supersedes all previous Authorizations to Mark for the noted Report Number. 

This Aiilhorizalion lo Mark is for Ihe CXCIUSIVR use of Infertek's Client and is provided pursuant to the Certification agreement between Intertek and its Client. Intertek's rosponsibihly and liability are 

limited lo the terms and conditions of Ihe agreement. Intertek assumes no liability lo any party, other than to the Client in accordance with the agreement, for any loss, expense or damage occasioned 

by the use of this Authorization to Mark. Only the Client is authorized lo permit copying or dislribution of this Authorization to Mark and then only in its entirety. Use of Intertek's Certification mark is 

restricted lo the conditions laid out in the agreement and in this Authorization lo Mark. Any further use of Ihe Intertek name for the sale or advertisement of the tested material, product or service must 

first bo approved in writing by Intertek. Initial Factory Assessments and Follow up Services are for the purpose of assuring appropriate usage of the Certification mark in accordance with the 

agreement, they are not for the purposes of production quality control and do not relieve the Client of their obligations in this respect. 

Intertek Testing Services NA Inc. 

165 Main Street, Cortland, NY 13045 

Telephone 800-345-3851 or 607-753-6711 Fax 607-756-6699 

, ,. . Standard for Safety for Stationary and Fixed Electric Tools, UL 987, 8th Edition, 10/19/2011 and Electric 

rd's): Bench Toolg standard CSA C22 2 No. 71.2-2010 

Product; Electric sander 

Brand Name: Rikon 

Models: *-/ 50-120,/51-200.31-140 

ATM for Report SHI2020044-001 Page 1 of 1 ATM Issued: 24-Sep-2012 

ED 16 3.16 {18-Jun-12) Mandatory 
us 

Intertek 

mgpi..0- .S. 

Certilied Intertek 

Intertek 

<- Back Product Description 

4001824 

Title: 

Company: 

Product 

Information: 

ELECTRIC BENCH TOOL 

QINGDAO CAPITAL RESOURCE ELECTRIC CO., LTD. - Qingdao, 

Shenzhen CHINA 

Trade Name(s): Rikon. 

Drill Press, Model Nos. 1316F, TM12114, 1316B, TM12113, 1316F1, 

38144, 1316B1, 38142, 1516F, 1516B, 3416B, 3416F, SKU#42289, 

SKU#44846, 1720F, 2020F, SKU#39955, DP43020VS, 30-236. 

Electric Band Saw, Model Nos. 10- followed by 300, 302, 305, 308, 

315, 320, 325, 336, 345, 370, 380. Model Nos. 28-400, 28-401, 28­

410, 28-411, 124.32607, 124.3299, 124.21400, BAS230, BAS350, 

MBS350, MBS350X, MBS500X. Model Nos. 10-341, 10-346, 10-351, 

MBS350XA, MBS500E,XBS500. 

Electric Lathe, Model Nos. 70-050, 70-050VS, 70-100, 70-100VS, 70-

200EVS, 70-220VSR, 70-305, 70-425, 70-450, 70-500, M305E, M305, 

M305X, M320, C1000, C1000X, M910, 124.21752, 70-105, M250. 

Electric Planer, Electric Planer/Jointer, Model Nos. 23-400, 23-400H, 

25-010, 25-200, 25-210, 25-010H, 25-200H, 25-210H, TH410, TH410H, 

PT260, PT260H, PT310, PT310H. 

Electric Sander, Model Nos./50-120,j51-200, 31-140. 
Evaluated to the A representative sample of the listed devices have been tested, 

following: investigated and found to comply with the requirements of the 

Standard(s) for Electric Bench Tool (CAN/CSA-C22.2 No. 71.2) and are 

identified with the cETL Listed Mark. 

<- Back 
10/1/W'ta Certificate No. CU 72161700- Certipedia 

Back 

Certificate No. CU 72161700 

Certificate Holder: 

Laizhou Fulin Machinery Co., Ltd. 

Wenchang Road Street 

Nanwuli Industry Yard 

Laizhou, Shandong 261400 

China 

Certificate Number: 

Order Number: 

CU 72161700 

1150010980 

Certified Product: 

Oscillating Spindle Sander 

Model Designation; 

MM326C j50-300 /•» 

Fulfilled Standards: 

CSAC22.2 NO, 71.2-10 + GI1 

UL 987:2011 R12.13 

The standard(s) listed here reflect the status at the time of the release of this 

certificate. 

Date of Issue: September 07, 2016 

https://vwvw.certipedia.com/certificates/72161700?locale=en 
10/1/2018 Certificate No. CU 72161700 - Certipedia 

US + Canada Certificate 

cTUVus Mark (CU-Certificate) 

Approval for the North American Market 

This test mark, also referred to as the "cTUVus mark," serves as proof of compliance 

with the Canadian national standards adopted by the Standards Council of Canada 

(SCC) and US national standards. 

Provincial Regulators across Canada and U.S. Authorities Having Jurisdiction 

(AHJs) recognize the cTUVus mark as proof of product compliance to published 

national standards and code requirements. Retail buyers accept it on products 

Certificate Type: they're sourcing. Consumers recognize it on products they purchase as a symbol of 

safety. 

It shows that a product has been tested and certified by an independent accredited 

third party laboratory. 

TUV Rheinland tests a product sample and conducts repeat factory inspections to 

assure continued compliance. The validity of the certificate does not expire unless 

the standard(s) expire or the client cancels it. Certified products may be labeled with 

a test mark. 

More information about this service here. 

Further Information 

• Request more information on Laizhou Fulin Machinery Co., Ltd. 

• All product certificates of Laizhou Fulin Machinery Co., Ltd. 

Copyright ©2015 TOV Rheinland. All rights reserved. 

Any utilization of this material - including the duplication on thereof - requires prior consent. 

https://www.certipedja.com/certificates/72161700?locale=en 
EXHIBIT C 
Caulfield, Patrick J. 

To: Jack Bransfield 

Subject: RE: Lease in Billerica 

From: Jack Bransfield 

Sent: Thursday, August 2, 2018 9:49 PM 

To: John Zhush 

Cc: Ben Shum ,Steve Wang, Joe Taylor 

Subject: Lease in Billerica 

John and all 

I have attached the moist recent offer from CBRE the agents Albany Road the owners of 16 Progress Road. I do not think 

it will get any better than what you see in these 2 attachments. When this started nobody thought that the Tariffs would 

be implemented, considering the tariffs and what it looks like to me to be more to come. 1 think we should just 

renegotiate the current lease and stay in the same space we have now. It is very crowded right now, but we have most 

of our Inventory in without paying much in the Tariffs yet. I think we can stay where we are for now. I would like to try 

and negotiate another 3-year lease, if the landlord won't accept that then we still have 10 Months to look for new space 

or consider signing a 5-year lease. I only mention this because I know that is what they want. The reason we were 

offered the adjoining space is that Amarr the current tenant only wants to sign a 3-year lease, so it might be that they 

will accept our request. Then it is just a matter of how much they want for rent. 

If you disagree please let mew know I have another meeting with them tomorrow and I know they want an answer on 

the attached offer. I can probably stall until Monday but then I will have to either sign a letter of intent or let them know 

we are not interested in the additional apace 

Attachments 

1. RIKOIM OCA 7-27-18 this is a comparison of the Occupancy costs for each of the offers we have 

discussed 

2. 16 Progress rd. - revised this is a copy of the most recent offer. They lowered the rent to what I had 

been asking for, and are also offering us a one-time payment $81,400.00 (2.00 psf) Improvement Allowance to 

be used by RIKON to make improvements in the space 

Thanks 

Jack Bransfield 

President 

16 Progress Road 

Billerica, MA 01821 

www.rikontools.com 

T: 877-884-5167 

0:781-983-5518 

F: 978-528-5383 

1 
CONFIDENTIALITY. This electronic mail and any files transmitted with it may contain information proprietary to RIKON Power Tools, Inc. (RiKON), or one of its 

subsidiaries or affiliates, and are intended solely for the use of the individual or entity to whom they are addressed, shall be maintained in confidence and not 

disclosed to third parties without the written consent of the sender. If you are not the intended recipient or the person responsible for delivering the electronic mail 

to the intended recipient, be advised that you have received this electronic mail in error and that any use, dissemination, forwarding, printing, or copying of this 

electronic mail is strictly prohibited. If you have received this electronic mail in error, please immediately notify the sender by return mail. 

2 
EXHIBIT D 
POWER TOOLS, INC. 

16 Progress Road, Billerica, MA 01821 I www.rikontoois.com 

Toll Free: 877-884-5167 ! Tel: 978-528-5380 I Fax: 978-528-5383 

October 1, 2018 

RIKON East Coast Distribution Center expansion. 

When we closed the year in 2015, we realized that if we wanted to continue to grow and 

expand the business we would need a 2

nd Distribution center that was located more in the center of the 

Country. In 2016 we found space in Franklin Park IL and opened our second Distribution Center with 4 

new employees. It has now been up and running for a full year and we feel it has been a big help in 

satisfying our Customers, 

When we closed 2017, we had an opportunity to expand our East Coast Corporate Headquarters 

and Distribution Center. We started negotiations with our current landlord to take an additional 20,000 

sqft in the same building we are in now. This would have doubled the size of our facility and reduced our 

Inventory handling costs. We now use storage trailers for more than 6 months of the year because we 

have out grown our space. 

When we learned that the government would implement the Tariffs on China imports, we 

started to reconsider our expansion. Then in August when negotiations were starting to get serious and 

it was time to make a commitment, we decided that considering the uncertainty over the Tariffs and 

how long it might last we decided to cancel the East Coast expansion. We also cancelled plans to 

upgrade our warehouse equipment (fork lifts, Order pickers and shrink wrappers). This was done due to 

our uncertainty over how long the Tariffs would continue. 

We also announced the largest product price increase in the history of the Company - as much 

as 20% on items affected by the Tariffs. This may cause us to lose our Canadian customers that are 

already pushing back on paying any increases caused by the tariffs. We are anticipating as much as a 

25% drop in total US & Canadian sales for 2019 if the Tariffs continue. 

All these plans are now on hold until the current situation with China Trade is stabilized. 

Jack Bransfield 

President