Ruud Air Conditioning Division Online Sales Policy Canada

Effective January 1, 2019

Rheem Canada Ltd. (“Rheem”) takes pride in its air conditioning and heating equipment (“HVAC”) products‘ reputation for quality and performance. In order to maintain Rheem‘s excellent reputation, Rheem believes it is important that resellers of Rheem‘s HVAC products commit a substantial amount of time and resources to learn, understand, support, and promote Rheem products. Resellers need to have a solid knowledge of Rheem and its products in order to explain and communicate product features, understand the importance of professional installation by a qualified and trained HVAC contractor, and be able to provide effective post-sales support. Since HVAC products are part of an applied system, Rheem continues to believe that in-person sales of Rheem products by contractors who are knowledgeable about Rheem products and their application is the preferred way to provide an excellent and satisfactory sales experience to the homeowner. That said, Rheem recognizes that e-commerce continues to grow in all sectors and that Rheem customers expect Rheem to participate in the online sales channel.

This Online Sales Policy (“Policy”) sets clear guidelines for the online sale of Rheem‘s HVAC products in a manner that will protect Rheem‘s reputation and provide a great experience for online customers. This Policy is issued unilaterally by Rheem, and all Resellers (as defined below) must comply with its requirements. Resellers that violate the terms of this Policy will be subject to the consequences detailed under the section entitled “4. Violations”, below. Rheem reserves the right to make changes to this Policy at any time and from time to time. This Policy will be kept and maintained on My.Rheem/My.Ruud and each Reseller is responsible for regularly reviewing the latest version of this Policy.

1. Who may sell Rheem HVAC products online?

Authorized wholesale distributors of Rheem HVAC products (“Distributors”) and their Permitted Online Resellers (as defined below), as well as authorized retailers (together, the “Resellers”) may sell the Online Eligible Products (as defined below). “Permitted Online Resellers” means online reseller customers of Distributors who meet the requirements of, and comply with, this Policy.

2. Which HVAC products may be sold online?

A current list of the HVAC product models that may be advertised for online sale, offered for online sale or sold online (the “Online Eligible Products”) is available and will be maintained at My.Rheem/My.Ruud. It is each Reseller‘s obligation to regularly monitor the list of Online Eligible Products and to ensure that its sales and promotion activities comply with this Policy. Online Eligible Products are not permitted to be resold on auction websites or on online marketplaces.

Please note that the online sale of any Rheem HVAC products other than the Online Eligible Products is prohibited. Notwithstanding the foregoing, Rheem reserves the right to modify the list of Online Eligible Products at any time and also to offer other Rheem HVAC products for online sale, directly or indirectly, through other programs.

The Policy does not prohibit general promotion of Rheem products other than Online Eligible Products when they are not offered for sale or sold online. The Policy does not prohibit Distributors from completing sales to their contractor customers of Rheem products other than Online Eligible Products on non-public e-commerce platforms.

3. Requirements

All Resellers must comply with these rules:

• Each Reseller must disclose to Rheem (by email sent to your local Rheem/Ruud Sales Manager) all URLs of the websites through which the Reseller sells and promotes Online Eligible Products (the “Selling Websites”). All new Selling Websites or changes to existing URLs must be reported within 5 business days after becoming active or being implemented.
• Each Reseller must in a conspicuous manner on each Selling Website:
  1. Provide a list of, or link to, qualified, trained and licensed (where licensing is required) HVAC installation professionals (“Qualified HVAC Installer”) in the online customer‘s geographic area or a link to the Rheem Dealer Locator website (rheem.com / www.ruud.com); and
  2. Clearly state that the manufacturer strongly recommends installation of the products by a Qualified HVAC Installer and that the manufacturer‘s Limited Warranty (as defined below) for Online Eligible Products will be voided if the equipment is not installed by a Qualified HVAC Installer.
• Each Reseller must provide each online customer with a clear and conspicuous notice of the Rheem limited warranties for the Online Eligible Products (“Limited Warranty”), including a copy of the applicable Limited Warranty or clear instructions on how to access the applicable Limited Warranty. Resellers must not misrepresent the terms of the Limited Warranty or provide any warranty information in a misleading manner or in violation of applicable law.
• Each Reseller must provide live support to online customers via telephone or online chat during normal business hours, being between 9:00 a.m. to 5:00 p.m. in the Reseller‘s time zone(s) where the Online Eligible Products are being sold.
• Resellers may not market, promote, sell or export the Online Eligible Products outside Canada.
• Each Reseller must fulfill orders for Online Eligible Products within 10 calendar days or less.
• Each Reseller must provide a secure online shopping cart and SSL certification for the complete online transaction with each online customer.
• Each Reseller may use only the current Rheem-authorized product images, marketing and service materials, and advertising copy for the Online Eligible Products, including current product titles, descriptions, model numbers, and technical data. Each Reseller must update its website within 5 business days of notice by Rheem of any changes to these product materials or information.
• In all activities relating to the Online Eligible Products, each Reseller must comply with all applicable federal, provincial, and local laws and regulations (including without limitation such laws and regulations that are applicable to HVAC equipment and its sale, installation and use), and observe the highest standards of professionalism, industry standards, ethics, and fair dealing. Resellers must not engage in any unlawful, unfair, misleading, or deceptive practices, including but not limited to, false advertising, aggressive sales tactics, or misrepresentation, exaggeration, or misstatement of product features, consumer benefits, or operational characteristics.
• Resellers must not engage in “bait and switch” practices, such as advertising products that are not available in sufficient quantities or not available at the stated price with the intent or effect of switching potential purchasers to another product.
• Resellers must not use the words “Rheem”, “Ruud”, “WeatherKing”, or any Rheem company or brand name or similar words within a root URL, email address, or any other identifier associated with the Reseller.
• Each Reseller must comply with Rheem‘s branding policies in all use of any Rheem brand name, logo, trademark, trade dress, or any other intellectual property.

4. Violations

Rheem has the right in its sole discretion to choose with whom it wishes to do business or not do business with. If a Reseller fails to comply with this Policy or any other Rheem policy, Rheem may choose to no longer do business with that Reseller and may revoke that Reseller‘s status as a Permitted Online Reseller. It is also a violation of this Policy for a Reseller to sell Online Eligible Products to a customer that offers, promotes, or sells any Rheem HVAC products via the Internet not in accordance with this Policy.

Consequences for a Reseller‘s violations of this Policy occurring within a rolling 12-month period include:

1^st Violation — Written notice to the Reseller;

2^nd Violation — Written notice to Reseller and Rheem will place Reseller on a list of prohibited Resellers for a period of 30 Days;

More than two violations – Rheem will immediately and permanently place the Reseller on a list of prohibited Resellers and will stop all sales of Online Eligible Products to the Reseller.

Additionally, Rheem may unilaterally impose sanctions against Distributors who supply Online Eligible Products to a Reseller while that Reseller is on the list of prohibited Resellers. Such sanctions may include, in Rheem‘s sole discretion, a reduction of the Distributor‘s Growth Development Program monies to a temporary or permanent cessation of sales to the Distributor of Online Eligible Products. Distributors may sell Online Eligible Products only to Permitted Online Resellers that are located in the Distributor‘s authorized territory.

This Policy does not constitute an agreement between any Reseller, Distributor or other party and Rheem. Rheem will independently and unilaterally monitor and enforce compliance with this Policy. Resellers will not be involved in monitoring or investigating any actions of other Resellers. Rheem reserves the right in its sole discretion to modify this Policy and/or the Online Eligible Products, as well as to discontinue or suspend the online resale of its products entirely at any time as it sees fit.

This Policy may be terminated, suspended or modified in whole or in part, from time to time and at any time, in Rheem‘s sole discretion and without prior notice.

5. Contact Information

All questions or comments regarding this Policy should be submitted in writing and directed to your local Rheem/Ruud Sales Manager. No Rheem employee or representative is authorized to discuss any Reseller‘s compliance or non-compliance with the Policy, or to waive any non-compliance. Rheem will enforce this Policy unilaterally and does not seek, and will not entertain, any complaints or reports about any Reseller‘s compliance with this Policy.

Communications between Rheem and its Resellers or Distributors concerning issues of this Policy shall be deemed to be strictly confidential and disclosure to third-parties is not permitted.

6. Other

Unless specifically stated otherwise, use of the singular includes the plural and use of the plural includes the singular.