RHEEM WATER HEATER DIVISION

INTERNET MINIMUM ADVERTISED PRICE POLICY

Effective July 1, 2016

Rheem is a leading water heater company in the United States. We take pride in our water heater products' reputation for quality and performance, and we believe it is important that resellers of those products commit a substantial amount of time and other resources to learn, understand, support, and promote our products. Accordingly, Rheem has unilaterally implemented this Water Heater Division Internet Minimum Advertised Price Policy (the "Policy") to encourage our resellers to invest the requisite time and energy into Rheem's products, to remain competitive in the marketplace, to protect Rheem's image and family of brands, and to ensure that the prices at which our products are advertised online reflect the value and quality of those products.

1. Scope of this Policy

The water heater products to which this Policy applies (the "Products") are listed on the document entitled "Rheem Water Heater Division Internet MAP Policy Price List," the current version of which can be found at www.rheem.com/MAP. This Policy applies to all advertisement and promotion of the Products on the Internet, including without limitation all websites, social networks, banner ads, broadcast e-mails, landing pages, etc. Rheem reserves the right to modify the list of products to which this Policy applies at any time by updating the Current MAP Price List. It is each reseller's responsibility to check the Current MAP Price List regularly and to know which Products are covered by this Policy.

Please note that this Policy applies only to advertised prices and not to the price at which the Product is actually sold to an end customer. Resellers are free to sell the Products at any prices they choose.

This Policy is administered unilaterally by Rheem and is non-negotiable. Rheem does not seek consultation with any online reseller and Rheem will not negotiate with or enter into an agreement with any reseller regarding this Policy or regarding the prices at which the reseller will sell the Products. Please note that Rheem employees and representatives are not authorized to discuss any aspect of this MAP Policy, including the meaning or interpretation of this Policy. All inquiries regarding this MAP Policy should be directed to the following email address: map.admin@rheem.com.

Rheem may modify this Policy at any time in its sole discretion and Rheem will enforce this Policy in its sole discretion. There are no third-party beneficiary rights to this Policy. Rheem has the right, but not the obligation, to occasionally monitor, review or audit resellers' websites for compliance with this Policy. Any failure by Rheem to require compliance with any provision of this Policy will not operate as a waiver to require strict compliance in the future.

2. Internet Advertising Prices

Resellers cannot advertise or otherwise promote the Products online at a net price lower than the Rheem published list price current at the time of the advertisement or promotion (such price is referred to in this Policy as the "MAP"). The current MAPs can be found at www.rheem.com/MAP. Furthermore, resellers cannot sell the products to any other person or entity that advertises or otherwise promotes the Products on the Internet at a net price lower than the MAP. Please note the following additional information about advertising and promotion of the Products on the Internet:

  • Resellers are free to advertise the Products on the Internet at any price equal to or higher than the MAP.
  • Resellers may advertise that customers may contact the reseller to learn the actual sale price, such as "call for a price" or "email for a price". For "email for a price," any response must be individualized and not an automated or auto-generated response.
  • A price that can be seen on the reseller's website by the user clicking on "add to shopping cart" or "click here to check out" functions of the website will not be considered by Rheem to be the advertised price and is therefore not covered by this Policy.
  • When shown on the same page, email or ad as the Products, promotional gift cards, instant rebates and other promotional activities that effectively lower the advertised price below the MAP are not permitted.
  • Applicable taxes paid by the reseller's customer will not be included as part of the MAP.
  • The following actions by a reseller will not be deemed to lower the effective advertised price of a Product covered by this Policy:
    • Rheem-sponsored rebate programs;
    • Offering of free shipping; and
    • Offering of no-interest financing.

3. Enforcement of this Policy

Upon verification by Rheem to its satisfaction that the reseller has advertised or otherwise promoted a Product at a net price less than the MAP, Rheem will take the following actions:

1. On the reseller's first violation Rheem will issue a notice of violation to the reseller by email. The reseller will then have five (5) business days from the date of Rheem's notice to correct the violation and comply with this Policy. If the reseller does not correct the violation within the aforementioned five (5) business-day period, then Rheem may cease to fill and accept orders from the reseller for the Product model that is subject to the violation. If the violation is not corrected within 15 days from the date of Rheem's initial notice, then the reseller will be deemed to have committed a second violation of this Policy and Rheem may proceed as described in paragraph 2, below. If the reseller corrects the first violation within the fifteen (15) -day period, but violates the policy again within six-months, then Rheem may also proceed as described in paragraph 2, below.

2. On the reseller's second violation within a six-month period, Rheem will issue a notice of the violation by email to the reseller and Rheem may decide not to accept or fill any orders from reseller for a period of up to thirty (30) days from the date on the written notice of violation.

3. On the reseller's third violation within a 12-month period, Rheem will issue a notice of violation by email to the reseller and Rheem may decide not to accept or fill any orders from reseller for a period longer than 30 days or indefinitely, as determined by Rheem in its sole discretion.

Upon verification by Rheem to its satisfaction that the reseller has sold Products to another person or entity that has promoted or advertised such Products at a net price less than MAP, Rheem will take the following actions:

1. On the first violation Rheem will issue a warning to the reseller by email.

2. On the second violation Rheem will issue a notice of violation by email. If the violation has not been corrected within fifteen (15) business days after the date of Rheem's notice, then Rheem may decide not to accept orders from reseller for a period longer than 30 days or indefinitely, as determined by Rheem in its sole discretion.

Rheem appreciates your compliance with this Policy and thanks you for your continued support of Rheem water heater products.