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This document outlines the policies and procedures for independent business owners (IBOs) of FurChange. It includes 17 sections that cover topics such as: becoming an IBO; IBO benefits and requirements; business practices; compensation; and termination of the IBO agreement. The document establishes the terms of the legal agreement between FurChange and IBOs, and notes that FurChange may amend the policies and procedures at its sole discretion with 30 days notice.
This document outlines the policies and procedures for independent business owners (IBOs) of FurChange. It includes 17 sections that cover topics such as: becoming an IBO; IBO benefits and requirements; business practices; compensation; and termination of the IBO agreement. The document establishes the terms of the legal agreement between FurChange and IBOs, and notes that FurChange may amend the policies and procedures at its sole discretion with 30 days notice.
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This document outlines the policies and procedures for independent business owners (IBOs) of FurChange. It includes 17 sections that cover topics such as: becoming an IBO; IBO benefits and requirements; business practices; compensation; and termination of the IBO agreement. The document establishes the terms of the legal agreement between FurChange and IBOs, and notes that FurChange may amend the policies and procedures at its sole discretion with 30 days notice.
Авторское право:
Attribution Non-Commercial (BY-NC)
Доступные форматы
Скачайте в формате PDF, TXT или читайте онлайн в Scribd
CONTENTS SECTION 1: POLICIES AND PROCEDURES INCORPORATED INTO INDEPENDENT BUSINESS OWNER AGREEMENT SECTION 2: DEFINITIONS SECTION 3: BECOMING AN INDEPENDENT BUSINESS OWNER SECTION 4: INDEPENDENT BUSINESS OWNER BENEFITS SECTION 5: INDEPENDENT BUSINESS OWNER REQUIREMENTS AND RESTRICTIONS SECTION 6: INDEPENDENT BUSINESS OWNER BUSINESS PRACTICES SECTION 7: SPONSORING AND TRAINING SECTION 8: ORDERING PROCEDURES SECTION 9: SHIPMENT SECTION 10: RETURN PROCEDURES SECTION 11: ADVERTISING AND USE OF FURCHANGE TRADEMARKS SECTION 12: COMPENSATION SECTION 13: TRANSFER OF INDEPENDENT BUSINESS OWNER AGREEMENT SECTION 14: TERMINATION AND SUSPENSION SECTION 15: REMEDIAL ACTIONS, GRIEVANCES, AND COMPLAINTS SECTION SECTION 16: WARRANTIES, LIMITATIONS OF LIABILITY; INDEMNIFICATION SECTION 17: MISCELLANEOUS
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SECTION 1: POLICIES AND PROCEDURES INCORPORATED INTO INDEPENDENT BUSINESS OWNER AGREEMENT
These Policies and Procedures in their present form and as may be amended from time to time at the sole discretion of lC A l lC are incorporated into and form an integral part of the Independent Business Owner Agreement, which sets forth the respective legal rights and obligations of FurChange and Independent Business Owners. 1 IBO A between lC l 8 C l8C sts of (i) a properly completed and signed IBO Application that has been accepted by FurChange; (ii) these Policies and Procedures; (iii) the FurChange Compensation Plan; and if applicable, (iv) a properly completed and signed Business Entity Registration Form. It is the responsibility of each IBO to read, understand, adhere to, and ensure that she or he is aware of and operating under the most current version of these Policies and Procedures. When sponsoring a potential IBO, it is the responsibility of the Sponsor to provide access to the most current version of these Policies and Procedures to the new applicant prior to the potential l8C submission of the IBO Application. FurChange may at any time revise the terms of the IBO Agreement including these Policies and Procedures. Notice of any substantive proposed changes days after notice is provided. It is the responsibility of all IBOs to check the FurChange website frequently for amendments to the IBO Agreement. A l8C continued participation following the effective date of any changes to the Policies and Procedures constitutes acceptance of any changes or additions.
SECTION 2: DEFINITIONS Applicant refers to a potential Independent Business Owner (IBO) who has submitted an Independent Business Owner Application that is under consideration by FurChange and has yet been neither accepted nor rejected by FurChange.
Business Entity refers to a corporation, limited liability company, partnership or trust that has submitted a properly completed and signed IBO Application and Business Entity Registration Form that have been approved by FurChange.
Business Entity Registration Form refers to the form that must be properly completed and signed and submitted by every IBO that is a business entity as a condition to such business entity becoming an IBO. The Business Entity Registration Form contains important information regarding the Applicant that is a business entity.
BV is an abbreviation for Business Volume. Business Volume is the commissionable value assigned to each commissionable product for calculation of IBO commissions and bonuses.
Compensation Plan refers to the program by which FurChange IBOs can earn commissions and bonuses. The Compensation Plan is incorporated and made a part of the IBO Agreement.
Confidential Information refers to confidential and/or proprietary information of FurChange, which includes, but is not limited to Downline Activity Reports and C u lC and performance information, marketing and financial plans and data, and training materials. See Section 6(r).
Customer refers to a customer (other than an IBO) who purchases FurChange Products from or through an IBO at the Suggested Retail Price.
Customer Data refers to all data and information submitted by a Customer or potential Customer to an IBO in connection with the purchase of Products or otherwise inc C financial account information, products ordered, and order volume.
Direct Upline refers to the FurChange IBO occupying the position one level above another IBO. Direct Downline refers to the IBO occupying the position one level below another IBO. Downline refers to the organization consisting of IBOs directly or indirectly sponsored by a particular IBO.
FurChange refers to FurChange (America) Inc. including its affiliates, successors and assigns. Page 3
FurChange Content refers to (i) all FurChange Trademarks; (ii) all text, images, graphics, and other content and materials used or displayed on or in connection with any FurChange Product (or any related packaging), FurChange marketing materials or the FurChange website; and (iii) the names, images, and likenesses of the principals of FurChange.
FurChange Products lC l8C A
FurChange Program lC lC l8C A Compensation Plan.
FurChange Trademarks refers to all trademarks, service marks, trade names, product names, logos, and domain names used or displayed on or in connection with any FurChange Product (or any related packaging).
IBO Information l8C -mail address, Social Security Number or Federal Tax Identification Number, date of birth, and other information required to be provided in or with the IBO Application.
IBO Business Kit refers to the kit that includes certain FurChange materials, an IBO Application, and a Policies and Procedures manual. Each Applicant is required to purchase a Business Kit at the time she or he submits an IBO Application to FurChange (the purchase of a Business Kit is optional for residents of North Dakota).
Independent Business Owner (IBO) refers to an individual, married couple or Business Entity that: (i) has submitted an IBO Application that has been accepted by FurChange; and (ii) is in compliance with the requirements of the IBO Agreement, including the renewal requirement and other obligations set forth in these Policies and Procedures. Unless otherwise specified, th IBO IBO, regardless of whether such IBO has been promoted to a higher Recognition Title.
Independent Business Owner Agreement refers to the legally binding agreement between FurChange and each IBO consisting of: (i) a properly completed and signed Independent Business Owner Application that has been accepted by FurChange; (ii) these Policies and Procedures, which are incorporated into and form an integral part of the IBO Agreement; (iii) the Compensation Plan; and (iv) if applicable, a properly completed and signed Business Entity Registration Form. Placer refers to an IBO who is the Direct Upline of an IBO that he or she did not sponsor.
Placement occurs when a sponsoring IBO places a newly enrolled IBO in a position in the spon l8C u 1 enrolled IBO may be placed in a position directly downline from the sponsoring IBO or at another position in the sponsoring l8C u n
Personal Website refers to a personal website made available to IBOs whi l8C l n may be used for placing Customer orders and enrolling new IBOs.
Sponsor refers to an IBO who enrolls another IBO into the Company and is listed as the sponsor on the IBO Application.
Termination refers to the non-renewal, termination, voluntary or involuntary termination of an IBO Agreement. Upon any termination, the former IBO shall have no right, title, claim, or interest l8C A l8C Downline or to any commissions or bonuses from the sales generated by Downline following a Termination.
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SECTION 3: BECOMING AN INDEPENDENT BUSINESS OWNER a. To become an IBO, one must: be 18 years of age or older; be a legal resident of the United States, the District of Columbia, Puerto Rico, and Guam; have a valid Social Security Number; not be in jail or prison or otherwise confined to a correctional institution; not have ever been convicted of a felony or prohibited from engaging in direct selling activity; not be a current employee, officer, or director of FurChange or the spouse of any of the foregoing; complete, sign, and submit an Independent Business Owner Application that is accepted by FurChange; purchase an IBO Business Kit (this purchase is optional for residents of North Dakota); and have a valid e-mail address and valid credit card. A Business Entity (i.e., a corporation, limited liability company, partnership, or trust) applying to be an IBO must also comply with the requirements of Section 5(i). b. Independent Contractor Status: IBOs are self-employed, non-exclusive independent contractors who are authorized to market and sell FurChange Products in the 50 United States, the District of Columbia, Puerto Rico, and Guam. IBOs are not, and shall not represent themselves to be, employees, agents, or representatives of FurChange or purchasers of a franchise or a business opportunity. Any agreement between FurChange and an IBO does not create an employee/employer relationship, agency, partnership, or joint venture between FurChange and such IBO. IBOs shall not be treated as employees of FurChange for any purpose including, without limitation, for federal, state, or local tax purposes. IBOs have no authority (expressed or implied), and shall not represent that they have any authority to bind FurChange to any obligation. IBOs shall establish their own goals, hours, place of business, and methods of sale, so long as they comply with their IBO Agreement. IBOs are solely responsible for all decisions made and all costs incurred with respect to their business. IBOs assume all entrepreneurial and business risk in connection with their independent businesses. There is no guarantee that there is or will be a market for the FurChange Products or that IBOs will earn or will not lose money. c. Getting Started: Once an Applicant has submitted a properly completed and signed IBO Application, purchased an IBO Business Kit (the purchase of an IBO Business Kit is optional for residents of North Dakota), submitted any other documents that FurChange may require, and FurChange has accepted and processed the IBO Application, the Applicant will become an IBO and will be assigned a unique Identification Number. IBO Applications may also be submitted electronically through the FurChange Website, but any IBO who
the electronic submission. An IBO suspension. l submission may result in termination. A l8C Identification Number must be used by that IBO in all correspondence with FurChange and may also be required for transactions. An IBO may provide his or her Identification Number to Customers and potential Customers to assist FurChange in identifying and linking the Customer or potential Customer to that l8C account for online orders. Page 5
SECTION 4: INDEPENDENT BUSINESS OWNER BENEFITS Once an Applicant has become an IBO as described above, the IBO is eligible to: purchase FurChange Products at discounted prices; sell FurChange Products; participate in the Compensation Plan (receiving commissions and bonuses, if eligible); sponsor other potential IBOs to build a Downline and advance through the various levels under the Compensation Plan; receive periodic FurChange literature and other FurChange communications; and participate in FurChange sponsored support, service, training, motivational, promotional, incentive, and recognition programs for IBOs (upon payment of appropriate charges if applicable).
SECTION 5: IBO REQUIREMENTS AND RESTRICTIONS a. IBO Business Kit: In order to become an IBO, an Applicant must purchase an IBO Business Kit at the time she or he submits an IBO Application. An IBO may return the IBO Business Kit at any time within one year* after becoming an active IBO and receive a complete refund of the Business Kit price (not including any shipping costs). The return of a Business Kit by an IBO shall result in the voluntary l8C A *One year requirement is not applicable to residents of Maryland, Wyoming, Massachusetts and Puerto Rico. b. No Inventory Requirements/70% Rule: IBOs are neither required to purchase nor required to carry any amount of inventory of FurChange Products, and it is possible to maintain active status and earn bonuses and commissions without carrying any inventory at all. FurChange encourages IBOs to provide their Personal Website addresses to their Customers so that those Customers may place orders directly through their l8C Personal Websites. IBOs may also place orders through the FurChange website using their IBO Identification Numbers. IBOs will receive full credit for all such sales, without the need to carry any inventory at all. IBOs may, at their option, purchase FurChange Products for personal consumption or resale to Customers. If an IBO purchases over $500 of FurChange Products, the IBO must retain receipts showing that at least 70% of those products were resold to at least three different Customers within 30 days of the product order date. IBOs shall furnish copies of such receipts upon request by FurChange. Falsely representing the sale of FurChange Products shall be grounds for termination. c. IBO Status: An Applicant becomes an IBO when her or his IBO Application is accepted by FurChange. An IBO remains an IBO in the FurChange program by (i) renewing the IBO Agreement in accordance with Section 5(k) below; and (ii) complying with the requirements of the IBO Agreement including these Policies and Procedures. d. Eligibility: FurChange reserves the right to accept or reject any IBO Application for any reason in its sole discretion. Without limiting the generality of the foregoing, FurChange reserves the right to reject any IBO Application if FurChange determines, in its sole discretion that its acceptance of a particular IBO Application would result in an actual or potential conflict of interest. e. Limitation on Number of Accounts: Page 6
An IBO may hold only a single account under a single Sponsor unless and until the IBO is granted new account(s) by the Company according to the compensation plan (please see the FurChange Compensation Plan for details). Until such rank is achieved, an IBO may not be a party to more than one IBO Agreement or hold, directly or indirectly, any interest in another l8C , including any FurChange business operated by a Business Entity. No IBO may pay others to market and sell FurChange Products. f. Husband and Wife Treated as a Single IBO: Subject to the provisions of Section 13(c), if a husband and wife or domestic partners both wish to be IBOs, they must be registered together as a single IBO under a single Sponsor. A husband and wife or domestic partners may neither sponsor each other directly or indirectly, nor have different Sponsors. Children over the age of 18 residing with their parents who meet all of the eligibility requirements may apply to become an IBO. For information regarding the disposition of a husband/wife or domestic partnership IBO upon divorce or separation, see Section 13(b). For information on transferring an IBO to a Spouse or domestic partner, see Section 13(f). g. Territory: No IBO shall assert or imply that she or he has ownership of, or exclusivity in, any particular geographic area, territory, market, or region. All IBO Agreements are nonexclusive, and all active IBOs have the full right to market and sell FurChange Products and otherwise conduct their business in all geographic areas and territories within the 50 United States, the District of Columbia, Puerto Rico, and Guam in accordance with the terms of the IBO Agreement. IBOs may not market or sell FurChange Products or otherwise conduct their FurChange businesses in any geographic area or territory outside the 50 United States, the District of Columbia, Puerto Rico, and Guam. h. IBO Information: Each IBO is responsible for keeping the information submitted with the IBO Application up-to-date and accurate and must immediately notify FurChange in writing of any changes. It is particularly important that an IBO provide FurChange with a current e-mail address, as e-mail is one of the primary ways that FurChange will communicate with the IBO. i. Business Entities/Change in IBO Status: A corporation, limited liability company, partnership, or trust may apply to become an IBO. To become an IBO, a corporation, limited liability company, partnership, or trust must: be incorporated or organized in the United States, Canada, the District of Columbia, Puerto Rico, and Guam; have its principal place of business in the United States, Canada, the District of Columbia, Puerto Rico, and Guam; have a valid Federal Tax Identification Number; complete, sign, and submit an IBO Application that is accepted by FurChange; complete, sign, and submit a Business Entity Registration Form that is accepted by FurChange; submit a true and complete copy of the organizational and charter documentation (e.g., certificate of incorporation, articles of organization, certificate of formation, operating agreement, trust agreement, etc.) of such corporation, limited liability company, partnership, or trust; purchase an IBO Business Kit (not required for residents of North Dakota); and have a valid e-mail address and a valid credit or debit card. All sales and sponsorship activities of an IBO that is a Business Entity must be conducted only by the beneficial owners of the Business Entity or persons under their direct supervision. Page 7
An IBO that is a Business Entity and undergoes a change of control must comply with Section 13(d). Failure to do so will result in termination. An IBO that is a Business Entity may not use any trade name, business name, or DBA that includes any FurChange Trademark. Subject to the above requirements and restrictions, an IBO may change a l8C status from a sole proprietorship to a corporation, limited liability company, partnership, or trust, or from one type of Business Entity to another, by submitting a new IBO Application and Business Entity Registration Form, and paying a $100 fee for each such change. An IBO may also add her or his spouse to a sole proprietorship as a co-applicant to the l8C existing Agreement by submitting a new IBO Application. In each such case, upon lC acceptance of the new IBO Application and, if applicable, the Business Entity Registration Form, the original IBO Agreement will automatically terminate and be replaced and superseded by the new IBO Agreement. Note that none of the changes described above will permit an IBO to change Sponsors, except pursuant to Section 7(d), or to assign or transfer an IBO Agreement except pursuant to Section 13(a). j. Actions of Household Members, Employees, Agents, etc.: Each IBO is responsible for the actions of her or his immediate household members and each IBO that is a Business Entity is responsible for the actions of its owners, officers, directors, employees, contractors, and agents. If any such household member or such owner, officer, director, employee, contractor, or agent engages in any activity which, if performed by the IBO would violate the terms of the IBO Agreement, such activity will be deemed a violation by the IBO and FurChange may take remedial action against the IBO pursuant to the terms of the Agreement in addition to seeking other appropriate remedies. k. Renewal of IBO Agreement: An IBO Agreement has a term of one year from the date on which it is accepted by FurChange. If an IBO generates BV of $100 during the IBO Agreement term, the IBO Agreement will be eligible for renewal by FurChange in its sole discretion. If an IBO 8v l8C A l8C terminate at the expiration of the one year term. l. Income Taxes: Each IBO is responsible for paying (and agrees to indemnify and hold FurChange harmless from) all local, state, federal, and other taxes on any income derived from the sale of FurChange Products and any payments or other compensation made pursuant to the IBO Agreement. FurChange will provide an Internal Revenue Service (IRS) Form 1099 MISC (non-employee compensation) earnings statement to each IBO who had earnings of over $600 in the previous calendar year or made purchases from FurChange during the previous year in excess of $5,000. FurChange will not withhold or make payments for social security, make unemployment insurance or disability insurance contributions, o l8C behalf.
SECTION 6: IBO BUSINESS PRACTICES a. Media Inquiries: IBOs may not respond to media inquiries regarding lC lC products or services, or any other aspect of lC businesses. All such media inquiries should be immediately referred to lC orporate office. This policy is designed to ensure that accurate and consistent information is provided to the public. b. Adherence to the Program: IBOs shall present the FurChange program in a truthful and accurate manner consistent with the information presented on lC lC l8C IBOs shall not offer or present the FurChange program through or in combination with any other system, program, or method of marketing. IBOs shall not require or encourage any current or potential IBOs or Customers to (i) participate in FurChange in a manner that varies from the Page 8
FurChange program as set forth in the IBO Agreement and the FurChange marketing materials, or (ii) execute or adhere to any agreement or contract other than the IBO Application and these Policies and Procedures in order to become a FurChange IBO.
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c. Product Claims: IBOs shall not make any claims or representations regarding the FurChange Products other than those claims and representations found in marketing materials created or distributed by FurChange. d. Income Claims Prohibited: IBOs shall not make claims or representations of potential or guaranteed income or profits in connection with the FurChange program. Any amounts that IBOs earn are based only on the sale of FurChange Products and not on the mere act of sponsoring other IBOs. The Federal Trade Commission and many states have laws and regulations that prohibit certain types of income claims and testimonials by persons engaging in direct selling/network marketing. While IBOs may believe it is beneficial to tell other IBOs and potential IBOs about their earnings or the earnings of others, such claims may have legal consequences that can negatively impact FurChange as well as IBOs making the claims unless the appropriate disclosure required by law is made contemporaneously with the income claim. Because IBOs generally do not have the information necessary to comply with such legal requirements, IBOs are prohibited from making any projections, claims, or estimates regarding potential, actual or guaranteed income (including the display of checks, bank statements, tax records, or other such documents). Hypothetical income examples that are used to explain the operation of the Compensation Plan, and which are based solely on mathematical projections, may be presented to potential IBOs so long as IBOs who use such hypothetical examples make clear to the potential IBOs that such earnings are hypothetical. e. No Representations Regarding Governmental Approval: IBOs may not represent that the FurChange program or the FurChange Products have been approved or endorsed by any governmental or regulatory agency. In addition, IBOs may not make any claims or representations regarding the FurChange Products that constitute off-label drug claims. f. No Repackaging and Relabeling: IBOs may not re-label or alter the labels on any FurChange Products, FurChange marketing materials, or other information or materials provided by FurChange, although IBOs may affix address labels to the product packaging. IBOs may not repackage or refill any FurChange Products. FurChange Products must be sold in original company containers only. Re-labeling or repackaging may violate applicable laws, which could result in civil damages or criminal penalties. Civil liability may also result if a person using FurChange Products suffers any type of injury or property damage due to the repackaging or re-labeling of FurChange Products. g. Downline Activity Reports: FurChange will make activity reports available to Sponsors for the sole purpose of supporting communication and leadership with their own respective Downlines and the development of their downline organizations. The reports will contain names and sales performance data for all IBOs in a Sponsors Downline Network. IBOs agree that such information may be included in the activity reports provided to their Upline. All activity reports and the information contained in the reports are Confidential Information of FurChange pursuant to Section 6(r). In particular, except as expressly permitted by Section 6(r), IBOs must not: directly or indirectly disclose any information contained in any activity report to any third party; use such information to compete with FurChange for any purpose other than supporting communication and leadership with their own respective Downline Organizations; encourage or solicit any IBOs or Customers listed in an activity report to alter their business relationship with FurChange; directly or indirectly disclose to any third party the Identification Number of any IBO (except that Sponsors may disclose their Identification Number to Applicants they are sponsoring for the purpose of identifying such Sponsor to FurChange). Page 10
h. Ethical Marketing: IBOs shall safeguard and promote the good reputation of FurChange. IBOs shall at all times conduct their FurChange business in a manner that reflects favorably at all times on the FurChange Products and the good name, goodwill, and reputation of FurChange. IBOs shall not engage in deceptive, misleading, or unethical conduct or practices that are or might be detrimental to FurChange, the FurChange Products, or the public, including, without limitation, disparagement of FurChange or the FurChange Products (as discussed in more detail below). IBOs shall comply with all laws, rules, regulations, and governmental requirements applicable to the operation of their independent FurChange business and performance of their obligations under this Agreement, including the marketing, promotion, and sale of the FurChange Products. In addition, IBOs shall: (i) not publish or use any misleading or deceptive advertising material regarding FurChange or the FurChange Products; (ii) honor the Customer Satisfaction Guarantee with respect to all FurChange Products; (iii) not make any statements, representations, guarantees, or warranties regarding the FurChange Products that are inconsistent with those set forth in the IBO Agreement and FurChange marketing materials (whether with regard to prices, quality, performance, standards, grades, contents, style or model, place of origin, availability, or otherwise); (iv) distribute the FurChange Products only as shipped by FurChange, unopened and with all documentation, packaging, and other supplemental materials intact; and (v) not alter or modify any FurChange Product or packaging, or take any action that affects or could affect the appearance, quality, content, or performance of any FurChange Product. i. Retail Sales Receipts: An IBO must provide her or his Customer with two copies of a FurChange sales receipt at the time of the sale. The FurChange sales receipt sets forth certain customer protection rights afforded by federal law. An IBO is required to inform her or his Customer that they are entitled to cancel any purchase of $25 or more within 3 business days from the date of the sale. An IBO must retain copies of their retail sales receipts for a period of two years and furnish them to FurChange request. FurChange will maintain records documenting online purchases made by Customers through a l8C Personal Website or the FurChange Website. Retail sales receipts are available for purchase from FurChange. j. Non-disparagement: FurChange welcomes constructive input regarding the FurChange program and FurChange Products, but negative comments and remarks by IBOs about FurChange, the FurChange Products, the Compensation Pan or other IBOs serve no purpose other than to undermine the enthusiasm of other FurChange IBOs. For this reason, and to set a proper example for newly enrolled IBOs, IBOs must not disparage FurChange (or any of its employees, officers, or directors), the FurChange Products, the Compensation Plan or other IBOs. The disparagement of FurChange (or any of its employees, officers, or directors), the FurChange Products, the Compensation Plan or other IBOs shall constitute a material breach of the IBO Agreement. k. Security: All IBOs must adopt, implement, and maintain appropriate administrative, technical, and physical safeguards to protect against anticipated threats or hazards to the security of Confidential Information. Appropriate safeguards for electronic and paper records may include, but are not limited to: (i) encrypting data before electronically transmitting it; (ii) storing records in a secure location; and (iii) password-protecting computer files or locking up physical files containing Confidential Information. Upon request, an IBO must certify to FurChange that all forms of the requested personal Information have been destroyed. m. Reporting Security Breaches: IBOs must comply with all applicable privacy and data security laws, including security breach notification laws. In the event of an actual or suspected security breach affecting Confidential Information or customer data, the IBO shall promptly notify the affected Customers and FurChange in writing after becoming aware of such security breach and specify the extent to which Confidential Information or customer data was disclosed or compromised and shall promptly comply with all applicable security breach disclosure laws. IBOs, at their expense, shall cooperate with FurChange and affected Customers and use their best Page 11
efforts to mitigate any potential damage caused by a security breach, including by sending notice to the affected individuals, state agencies, and consumer reporting agencies, if such notification is required by law. n. Commercial Outlets: FurChange is a person-to-person marketing company and as such does not allow the FurChange Products to be sold or displayed in or otherwise distributed through retail establishments open or available to the general public. This includes department stores, health food stores, beauty supply outlets, supermarkets, mall booths, kiosks, discount establishments, swap meets, drugstores, flea markets, specialty gift shops, or any other business or commercial establishment that is open or available to the general public. No IBO shall (i) sell, display, or distribute any FurChange Products in or through any such establishment; (ii) sell any FurChange Products to any Customer that the IBO knows or has reason to believe may intend to resell such FurChange Products in or through any such establishment; or (iii) solicit or encourage any third party to sell FurChange Products in a retail establishment. o. Personal Service Facilities: Subject to the requirements set forth in this Section, FurChange Products may be sold or displayed in the following personal service facilities if owned and operated by an IBO: (i) offices and other areas located in private clubs that are not accessible to or in view of the general public; (ii) the private offices of professionals who operate by appointment only (e.g., doctors, dentists, chiropractors, etc.); and (iii) beauty salons that operate by appointment only. FurChange allows the sales of FurChange Products in such personal service facilities, consistent with local laws and regulations, so long as there are no signs, products, flyers, advertisements, or products visible from outside of the personal service facility. Any owner of any such personal service facility where the FurChange Products are sold or displayed must be an IBO in good standing and obtain prior approval from FurChange prior to selling any FurChange Products pursuant to this section. p. Fairs and Trade Shows: Subject to the requirements set forth in this Section, an IBO may be permitted to operate temporary booths to promote FurChange Products and the FurChange program at fairs and trade shows. When arranging and participating in such an event, the IBO must comply with the following requirements: The IBO must register for the event as a FurChange Independent Business Owner and the registration must be approved by FurChange prior to the event. The IBO lC advertising and trademark guidelines. The booth must be staffed at all times by knowledgeable IBOs. Each IBO is responsible for contacting the local authorities regarding any required permits or other documentation with regard to participating in the trade show, fair, or other event. If a permit or other documentation is required, the IBO must submit a copy of the permit or other documentation to FurChange prior to the event. All FurChange Products displayed, used, or sold at such events must be owned by the IBO that is registered to work the event. No IBO may display, use, or sell any FurChange Products for any other IBO at the event. q. Taxes: As a direct-selling company, FurChange collects sales tax on behalf of IBOs based on the suggested retail price of the FurChange Products. FurChange collects sales tax based on the purchase price of FurChange marketing materials and sales aids as these items are for personal use or demonstration purposes only and not intended for resale. Sales tax collected by FurChange is S 1 FurChange submits sales tax collected to the appropriate agency on behalf of each IBO. If an IBO has submitted, and FurChange has accepted, a current sales tax exemption certificate, FurChange will not collect sales tax on the l8C direct purchase of FurChange Products and it shall be the l8C responsibility to collect and remit sales tax to the appropriate tax agency. Page 12
r. Confidential Information and Competitive Businesses: An IBO shall hold in strict confidence, and shall not disclose to any third party any Confidential Information (as defined in Section 2 above). An IBO shall use the same degree of care to protect the Confidential Information that she or he uses to protect her or his own sensitive and proprietary information. An IBO shall use the Confidential Information only for the purposes of performing her or his obligations or exercising rights under her or his respective IBO Agreement. An IBO shall limit access to the Confidential Information to only those persons who have a legitimate need to know such information in the performance of l8C rights and obligations under her or his respective IBO Agreement. Each person who is given access to Confidential Information shall be bound by a confidentiality obligation at least equivalent to the confidentiality obligations of each IBO under her or his respective IBO Agreement. An IBO shall be responsible for the acts and omissions of her or his respective employees, contractors, and agents with respect to such confidentiality obligations. Notwithstanding the foregoing, an IBO may disclose the Confidential Information to the extent she, he, or it is legally compelled to do so; provided, however, that, prior to any such compelled disclosure, the IBO notifies FurChange and fully cooperates with FurChange in protecting against or limiting the disclosure of Confidential Information. Each IBO further agrees that, during the term of her or his IBO Agreement and for a period of one (1) year following termination of the Agreement, the IBO shall not, directly or indirectly, solicit business from any Customer of FurChange unless, in either case, the IBO can prove by a preponderance of the evidence that any action taken in contravention of this Section was done without the use in any way of the Confidential Information. Each IBO acknowledges and agrees that a violation of this paragraph would necessarily involve the use or disclosure of Confidential Information but that proof of such use would be extremely difficult. In order to avoid disruption to lC business, each IBO agrees that, during the term of her or his IBO Agreement and for a period of two (2) years following termination of the Agreement, the IBO shall not, directly or indirectly, solicit for employment, or solicit for engagement as a consultant or independent contractor, any person employed by FurChange, or any FurChange Independent Business Owner where, in either case, such person was employed by FurChange or a FurChange IBO at any time prior to the termination of the l8C Agreement. Each IBO agrees to not use any aspect of the FurChange program to promote, market, or sell the products, services, or programs offered by any competitive business or to market or sell FurChange Products together with the products or services of any competitive business during the term of this IBO A A volves or is related to the direct sale of products or services by independent contractors or representatives. Each IBO agrees that (i) the provisions contained in this section are reasonable and necessary to protect the legitimate interests of FurChange; (ii) FurChange would not have accepted the l8C Application in the absence of the l8C agreement to such provisions; and (iii) the l8C breach or threatened breach of such provisions would cause FurChange irreparable harm and significant injury, the amount of which would be extremely difficult to estimate and ascertain and thus making any remedy at law or in damages inadequate. Each IBO therefore agrees that FurChange shall be entitled, without the necessity of posting of any bond or security, to the issuance of injunctive relief by any court or arbitrator of competent jurisdiction as provided in Section 18(i), enjoining any breach or threatened breach of such provisions and for any other relief such court deems appropriate. This right shall be in addition to any other remedy available to FurChange at law or in equity. s. No International Sale or Marketing: Due to critical legal and tax considerations, FurChange must limit the sale and marketing of FurChange Products and the presentation of the FurChange program to potential Customers and IBOs located within the 50 United States, the District of Columbia, Puerto Rico, and Guam. FurChange Products and Marketing Materials may not be shipped into or sold in any foreign countries, including Canada. In addition, IBOs may not engage in the following activities outside of the 50 United States, the District of Columbia, Puerto Rico, and Guam: (i) conducting training meetings; (ii) sponsoring or attempting to sponsor potential IBOs; or (iii) conducting any activity for the purpose of selling FurChange Products, establishing a Downline, or promoting the FurChange program. (FurChange recognizes that Personal Websites may be available for viewing worldwide through the Page 13
Internet, and IBOs will not be deemed to be in violation of this Section based solely on such availability, as long as they comply with the other provisions of this section.) SECTION 7: SPONSORING AND TRAINING a. Sponsoring Other IBOs: IBOs may sponsor other persons to become IBOs within the 50 United States, the District of Columbia, Puerto Rico, and Guam. However, IBOs earn bonuses and commissions based on the sale of FurChange Products, not merely from sponsoring other IBOs. The most current version of the IBO Agreement can always be found on the FurChange website. Once a potential IBO has read and understood the IBO Agreement, they may complete the IBO A S identification number. Any IBO Applications completed offline must be sent to FurChange within 48 hours from the time it is signed by the new IBOs. b. Responsibilities of Sponsors: Sponsors must always present the FurChange Products and the FurChange Program to others in a manner that complies with the IBO Agreement, including the requirements of Section 6 of these Policies and Procedures regarding business ethics and practices. In addition, Sponsors are responsible for assisting, motivating, and training their Downlines. Accordingly, Sponsors must: provide assistance, as appropriate, in the sale and delivery of FurChange Products to Customers by their Downlines; train and communicate to their Downlines to ensure that their Downline IBOs do not make improper product or business claims, engage in illegal or inappropriate conduct, or otherwise violate the IBO Agreement; assist, motivate, and train their Downlines by having ongoing contact and communication, which may include the use of newsletters, written correspondence, personal meetings, telephone contact, voice mail, electronic mail, and training sessions, and accompanying their Downline IBOs to FurChange training and orientation meetings; and motivate and train their Downlines regarding FurChange Products, effective sales techniques, the Compensation Plan, and compliance with these Policies and Procedures. As IBOs progress through the various levels of leadership in the FurChange Program, they will become more experienced in sales techniques, as well as more knowledgeable about the FurChange Products and the Program. Such IBOs may be called upon to share this knowledge with less experienced IBOs. Those who sponsor widely but do not help new IBOs develop their business organizations meet with limited success. Therefore, all Sponsors have a responsibility to work with new IBOs in their Downline, helping them learn the business, and encouraging them during the critical early months. c. Applicant Rights: FurChange strongly encourages any new IBO to enroll under the Sponsor who introduced them to the Program. If two IBOs both claim to be the Sponsor of an Applicant, FurChange shall treat the first IBO Application received by FurChange as the controlling Application, and shall designate the IBO S A A S d. Line Switching: Each IBO can have only one Sponsor, and no IBO shall sponsor or attempt to sponsor any person or Business Entity that has already submitted an IBO Application to FurChange or that has had an IBO Agreement terminated within the preceding six months (or any Business Entity that is controlled by 8 L 1 L S is strictly prohibited, as is any attempt to circumvent the prohibition on Line Switching through the use of pseudonyms or s, D/B/As, or Business Entities. IBOs shall not encourage, offer, or assist any other IBO in attempting to change Sponsors or Uplines. Under no circumstance shall any IBO offer or provide any financial or other consideration or incentive to another IBO in exchange for such other l8Cs agreement to terminate her or his Page 14
existing IBO Agreement and re-enroll under another Sponsor. Once an IBO is sponsored, FurChange requires that the relationship between the IBO and the Sponsor be maintained and protected. An IBO wishing to change Sponsors may do so only if the IBO: (i) terminates her or his IBO Agreement by providing written notice to FurChange, (ii) does not participate in the FurChange Program in any capacity for six consecutive months after the effective date of such termination; and (iii) re-applies to become a new IBO after such six-month period and the IBO Application is accepted by FurChange. SECTION 8: ORDERING PROCEDURES a. General: IBOs must order all FurChange Products, marketing materials, and business supplies from FurChange or its approved suppliers. All orders are subject to acceptance by FurChange or lC applicable third party supplier. Orders for FurChange Products may be placed via the FurChange Website or by telephone. Following the procedures below will facilitate the processing of orders so that they proceed with speed and accuracy. b. Ordering via the Internet: IBOs may place orders through (i) the FurChange website, or (ii) their respective Personal Websites. FurChange generally makes the FurChange Website order entry service available 24 hours per day, 7 days a week (other than downtime for maintenance or due to technical problems). For orders placed through the FurChange Website, IBOs must log in using their account username and password to ensure that they are credited for each purchase. IBOs C FurChange Products by logging on their Personal Websites. IBOs may use their Personal Websites to enter orders on behalf of their Customers and pay for C cards. Finally, IBOs may provide their Personal Websites to their Customers so that they can place orders directly through their l8C Personal Websites. As long as IBOs or their Customers use the l8C Personal Websites to place the order and use a credit card for payment, the IBO will receive credit for the purchase. Should Customers pay for their purchases by cash or check, the IBO should deposit the funds or check into their accounts and place the orders through their Personal Website or through the FurChange website using their own credit or debit card numbers. c. Telephone Orders: Orders placed by telephone must be placed by calling - and providing the following information: (i) the IBO name and Identification Number; (ii) a valid credit or debit card number (i.e., Visa, Master Card, Discover Card, or American Express) and other required billing information; (iii) the shipping address (if different from the billing address); and (iv) the FurChange Products to be ordered, including the product names, code numbers, and quantity desired. There may be a $5.00 service and processing charge added to any orders placed via telephone. d. Cut-Off Date: All orders are credited to a l8C account for the commission period in which they are purchased. In order for an IBO to be credited for an order in a particular month, FurChange must receive the order with all necessary information (including payment) by 11:59 p.m. Central Standard Time on the last day of the commission period. For all orders processed via the FurChange Website or a Personal Website, the cut off for receipt of orders to be included in commission and bonus calculations for any given month is 11:59 p.m. Central Standard Time on the last day of that commission period. FurChange shall not be liable for incorrect, incomplete, lost, or mailed orders. f. Placing Orders Under Another IBO Identification Number Prohibited: IBOs must place all orders using their own Identification Number. Placement of an order by an IBO using another l8C Identification Number or account is strictly prohibited and constitutes a material breach of the IBO Agreement. Page 15
g. Forms of Payment: In order to simplify the payment process, facilitate the shipment of orders, and maintain accurate IBO account records, FurChange requires payment using a debit card, Visa, Master Card, Discover Card, or American Express credit card. FurChange does not accept personal checks. h. Shipping and Handling Charges: Shipping and handling charges will be applied on applicable orders. SECTION 9: SHIPMENTS a. General: After FurChange has accepted and processed an order, it will use reasonable efforts to ship the order to the address specified in the order using a carrier chosen by FurChange. Risk of loss or damage will pass to the ordering IBO upon lC delivery to the carrier. Orders are shipped on business days only and IBOs should allow up to 48 business hours for order processing. Orders can be shipped only to a street address within the 50 United States, the District of Columbia, Puerto Rico, and Guam or in most cases Military APO/FPO or Military P.O. Box addresses. Although FurChange uses reasonable efforts to fill all orders, it is not liable for any damages arising from any failure to fill an order or any delay in delivery. b. Special Handling: Some FurChange Products require special handling as specified by federal, state, and local regulations governing the shipping of these items. The method of shipment for these items is dictated by these regulations. FurChange complies with these regulations and therefore the shipment of some products to certain locations may not be possible. Please contact the FurChange Customer Service Department for additional shipping information. c. Shipment to APO/FPO/PO Boxes: Most FurChange Products may be shipped to Military APO/FPO or Military P.O. Box addresses, but some restrictions may apply. Orders being sent to Military P.O. Boxes or Military APO/FPO addresses must be shipped via United States Postal Service and cannot be shipped via overnight or 2nd day service. d. Shipments to Alaska, Hawaii, Puerto Rico and Guam: Most FurChange Products can be shipped to Alaska, Hawaii, District of Columbia, Puerto Rico and Guam, but some restrictions apply and additional shipping and handling charges may apply. Priority shipping methods (overnight or 2nd day service) are not available for certain locations in Alaska, Hawaii, District of Columbia, Puerto Rico and Guam. e. Receiving Shipments: After receiving an order, the IBO or Customer should promptly and carefully inspect the ordered items to make sure they are complete and undamaged. After inspection, if there is a problem with an order, the IBO or Customer should: not accept delivery, or note on the delivery receipt any damaged or missing items; set any damaged boxes or items aside for later inspection by the carrier, and ask the driver or delivery agent to make arrangements to have the boxes or items inspected; and immediately notify the FurChange Customer Service Department. Section 10 describes the procedures for returning damaged or defective FurChange Products. f. Non-Deliverable Orders: In some cases, an order may be returned to FurChange if the carrier is unable to deliver it to the specified shipping address. This may happen because: Page 16
the IBO or Customer did not accept the order when it was delivered by the carrier; the IBO or Customer was unavailable to accept delivery for orders that require signature upon delivery; or the IBO or Customer provided invalid or incorrect shipping information. When this occurs, at the IBO C FurChange will reship the order. FurChange will reship orders only once. The IBO or Customer will be required to pay the original shipping and handling charges and the charges for the second delivery. If an order is returned a second time, that order will be cancelled and neither the IBO nor the IBO u will receive any credit for the order. If the order has already been credited to the IBO, the credit (and any associated awards, bonuses, or commissions) will be cancelled. g. Out-of-Stock Items: lC inventory control procedures are intended to ensure that shortages of FurChange Products rarely occur. However, should an item not be available at the time of an order, the item will be identified as out-of-stock, and orders will not be accepted for such items. IBOs and Customers will be asked to order another item. FurChange will use reasonable efforts to notify IBOs of the expected future availability of out-of-stock items. h. Discontinued Items: FurChange may at any time discontinue the manufacture and/or sale of any FurChange Products, or make any changes in their respective prices, quality, performance, standards, grades, contents, place of origin, or otherwise, in its sole discretion. FurChange will have no liability to any IBO based on any such discontinuation or change. When an item is discontinued, orders will not be accepted for such items. FurChange will use reasonable efforts to notify IBOs of the date of discontinuance. SECTION 10: RETURN PROCEDURES a. General: An IBO who wishes to return FurChange Products to FurChange for any reason must complete a Return Authorization Form (RA) and request a Return Authorization Number (RA Number) from FurChange. If the FurChange Products are being returned because they are deemed defective (as described below), the FurChange Customer Service Department will provide the IBO with a pre-paid return label for delivery through the carrier of her or his choice. Otherwise, the IBO is responsible for shipping the FurChange Products to FurChange at her or his own expense. FurChange does not accept ship-collect packages. Proper shipping cartons and packing materials must be used in packaging any FurChange Products being returned and the IBO must write the RA Number on each shipping carton being returned. The risk of loss or damage in shipping shall be the responsi bility of the IBO; FurChange will not accept return of any items that were damaged during shipping due to improper packing. b. Returns of Defective Products: FurChange will determine, in its sole discretion, whether any FurChange Product returned to it claimed to be defective is defective. If FurChange determines that the returned items were defective when shipped, FurChange will at the l8C or C replace and ship replacements for the defective items to an address specified by the IBO or applicable Customer at no additional charge, if replacements are available; exchange the items for different items of equal or greater value selected by the IBO or the applicable Customer. The original order will be refunded and a new ordered will be submitted; or refund the amounts paid for the items by crediting 100% of the purchase price, sales tax, and shipping and handling charges on the credit card used to make the purchase. Qualifications and commissions will be adjusted accordingly. If FurChange determines that the returned items were not defective when shipped, it will at the IBO C option: Page 17
ship the original items to an address specified by the IBO or applicable Customer, charging the applicable shipping and handling charges; or if the returned items are resalable, exchange the returned items for different items of equal or greater value, as selected by the IBO or applicable Customer. The original order will be refunded and a new ordered will be submitted, as well as applicable sales tax and shipping and handling charges. c. Product Return Policy: If for any reason a Customer or IBO is not completely satisfied with any FurChange product, the Customer of IBO may return the unused portion of the product within 30 days from the date of purchase. For FurChange Products returned pursuant to this policy, FurChange will, at the Customer l8C option: replace and ship replacements for the returned items to an address specified by the Customer or IBO at no additional charge, if replacements are available, charging the applicable shipping and handling charges; exchange the items for different items of equal or greater value selected by the Customer or IBO. The original order will be refunded and a new ordered will be submitted, as well as applicable sales tax and shipping and handling charges; or refund the amounts paid for the items by crediting 100% of the purchase price (less shipping and handling charges) and sales tax on the credit card used to make the purchase. Qualifications and commissions will be adjusted accordingly. For products returned under the Product Return Policy, an IBO has certain responsibilities with respect to the completion and handling of return forms and providing accurate return information on the RA form. See Section 10(a) above. Section 10(g) applies to returns of FurChange Products by IBOs after the 30 Days Product Return Policy has expired. Returned business samples or unsold inventory may be returned by an IBO only in accordance with Section 10(c) and 10 (g) of these Policies and Procedures. FurChange reserves the right to review and terminate any IBO Agreement for excessive return activity. d. Missing Items When an item is missing from an order, the IBO or Customer is requested to complete an RA and request an RA Number and assistance from the FurChange Customer Service Department. If FurChange determines that the item was not shipped with the original order, it will use reasonable efforts to ship the missing item to the address specified by the IBO or Customer at no charge within three to five days. Out-of-stock items may require a longer period. e. Damaged Products: Items that were damaged at the time that FurChange delivered them to the carrier are considered defective items and handled as described in Section 10(b) above. f. Canceled Orders: If a Customer cancels an order after the order has been placed with FurChange, the IBO must follow the same procedure applicable to defective product claims as described in Section 10(b) by completing an RA and obtaining an RA Number from the FurChange Customer Service Department. Credits, exchange, or refunds for such orders are also handled in the same manner as described in Section 10(b). g. Returns of Unsold Inventory by a Terminating IBO: A terminating IBO may return any unsold FurChange Products that were purchased from FurChange after 30 days and up to one year* from date of purchase for a partial refund as described in this Section if she or he is unable to sell or use the items. An IBO may only return FurChange products that are current and in resalable condition.** After lC receipt of the FurChange Products, FurChange will refund 90% of the original purchase price of the resalable returned items, less shipping and handling charges. The refund will be credited back to the same credit card used for the original order or by another method of Page 18
lC choice. Any returned FurChange Products that FurChange determines are not in resalable condition will be shipped back to the IBO at the IBO Commissions and Bonuses will be adjusted accordingly. For information on Adjustments to Commissions and Bonuses, refer to section 12(c). *One year requirement is not applicable to residents of Maryland, Wyoming, Massachusetts, and Puerto Rico. ** urrent and resalable if (i) the product is being offered for sale by FurChange on the date it receives the unsold product from the IBO; (ii)the product is in current packaging and the packaging has not been altered or damaged; (iii) the products and packaging are in condition such that it is commercially reasonable within the trade to sell the items at full price; and (iv) the items are not identified as non-returnable, discontinued or as seasonal items. . To the extent a Ter l8C state of residence has adopted a definition of adopted by that state.
SECTION 11: ADVERTISING AND USE OF FURCHANGE TRADEMARKS a. General: The FurChange Trademarks represent FurChange quality, integrity, and service, and are valuable business assets of FurChange and support a robust and equitable sponsoring environment for FurChange IBOs. The FurChange Trademarks, properly used, lend strength, professionalism, and credibility to FurChange independent businesses. Accordingly, FurChange and IBOs have a mutual interest in maintaining the validity of the FurChange Trademarks. For this reason, all IBOs must use the FurChange Trademarks only as permitted by this Section. The FurChange Trademarks are defined in Section 2. b. Trademark Ownership: FurChange is the sole and exclusive owner of all right, title, and interest in the FurChange Trademarks, including all related intellectual property and proprietary rights, subject only to the specific licenses granted to IBOs in this Section 11. Except as expressly set forth in this Section, IBOs shall not acquire or claim any rights in any FurChange Trademarks. No l8C use of any FurChange Trademark shall give the IBO any right, title, or interest in or to the FurChange Trademark, and all such use and associated goodwill will inure solely to the benefit of FurChange. c. License: Subject to full compliance with the terms and conditions of the IBO Agreement and this Section 11, FurChange grants each IBO a non-transferable, non-exclusive right during the term of the IBO Agreement to use the FurChange Trademarks solely to advertise and promote the FurChange Products and to indicate that the IBO is an authorized distributor of the FurChange Products. d. Restrictions: IBOs are not permitted to (i) use any trademark or service mark confusingly similar to any FurChange Trademarks; (ii) combine any FurChange Trademark with any other mark; (iii) remove any FurChange Trademark from the FurChange Products or FurChange marketing materials or business supplies; (iv) use or register any domain name that includes any FurChange Trademarks or any mark confusingly similar; (v) use any FurChange Trademark in connection with any products other than genuine FurChange Products; (vi) register or attempt to register any FurChange Trademarks or similar trademarks in any class of products or services anywhere in the world; or (vii) use any trade name or business name in connection their independent FurChange business that includes any FurChange Trademark. e. FurChange Marketing Materials and Business Supplies: FurChange has created approved Marketing Materials and Business Supplies available to IBOs for use in advertising and promoting the FurChange Products. These materials are made available by the company for purchase. If IBOs have particular needs for Marketing Materials or Business Supplies that are not currently available from the company, IBOs may submit written Page 19
requests for such items to the FurChange Marketing Department. FurChange, however, is under no obligation to provide specially-requested FurChange Marketing Materials or Business Supplies. IBOs are permitted to create advertising materials (if those materials are currently not provided) provided that they only use approved FurChange Trademarks. Product claims or earnings claims not published by the company are not permitted. If an IBO wishes to use content not provided by FurChange, she or he must submit a written request for approval from FurChange. FurChange reserves the right to deny approval of any IBO-created material used for advertising purposes. f. General Advertising Policies: IBOs are expected to engage in responsible, legal, and environmentally friendly advertising and marketing activities directed to customers, potential customers, or potential IBOs. Appropriate locations for distribution of advertising and marketing materials include bulletin boards and message boards located in public places and private businesses. Inappropriate forms of advertising include signage on telephone poles and flyers left on car windshields. Other than sales through the FurChange website or a Personal Website, sales must be made through personal one-on-one marketing to people with whom IBOs have established a 1 relationship formed by a voluntary two-way communication between IBO and a person, on the basis of: (i) an inquiry, application, purchase, or transaction by the person regarding products offered by such IBOs; or (ii) a personal or familial relationship, which relationship has not been previously terminated by either party. Product displays should be restricted to locations where the FurChange Products are permitted to be sold pursuant to Section 6. g. Mass Media Advertising: As a matter of fairness to all FurChange IBOs, IBOs are not permitted to advertise on television, radio, billboards, national print, online publications, through mass mailings or otherwise deemed inappropriate by FurChange. Subject to the other requirements of this Section, IBOs are permitted to advertise in their local newspaper, community newsletters, through their local Chamber of Commerce and through telephone book listings. Telephone listings must comply with Section (o) below. h. Selling via the Internet: IBOs may sell FurChange Products through their Personal Websites or through the FurChange website and may also direct Customers to purchase FurChange Products through the FurChange website. Sales of FurChange products through any other website, including internet auction sites such as eBay, or a third party website are strictly prohibited. i. Search Engines, Keywords, and Meta-Tags: IBOs agree to cooperate fully with FurChange so that internet search engines list the FurChange website as the first search FurChange FurChange Trademark. IBOs may not bid on or purchase (or encourage or solicit any third party to bid on or purchase) any FurChange Trademark or any term containing any FurChange Trademark as a meta-tag, keyword, sponsored link, or paid search term, whether used to trigger search results, sponsored links, banner ads, pop-up ads, or otherwise. If IBOs wish to use any such meta-tags or search-based advertising programs to advertise the FurChange Products or their FurChange independent business, they may do so only using generic, nutritional products health wellness Page 20
j. Personal Websites: All IBOs have the opportunity to conduct their independent business through a Personal Website through which IBOs can sell FurChange products and enroll new IBOs with all transactions automatically linked directly to their FurChange IBO IDs. It is the responsibility of each FurChange IBO to ensure that their Personal Website fully complies with these Policies & Procedures and all applicable federal and state rules and regulations. k. Social Networking FurChange encourages IBOs to join social networking sites, online forums, discussion groups, blogs and other forms of internet communication to leverage the power of the FurChange brand and communicate the benefits of the FurChange products and business opportunity. Online social networks may be used to drive traffic to Personal Websites or to the FurChange Corporate website. Social networks include such sites as Facebook, LinkedIn, MySpace, eBlogger, Friendster, Hi 5, Piczo, Xanga, and YouTube. IBOs who advertise through social networking sites must ensure that they comply with these Policies and Procedures, including lC advertising, business practices and product claims. IBOs must clearly identify themselves as a FurChange Independent Business Owner in any social networking profiles they use to promote FurChange. When participating in social media, IBOs may only use approved FurChange Trademarks when promoting the FurChange products and opportunity. Use of personal videos, audio tapes or other recordings featuring FurChange corporate representatives must be submitted for approval before posting on social networking sites. Use of unapproved personal video, audio tapes or other recordings featuring FurChange corporate representatives is strictly prohibited. Recordings made available by FurChange may be used on social networking sites without approval. IBOs are allowed to post personal photographs with FurChange employees on social networking sites, so long as said photographs are appropriate and maintain the integrity of FurChange. When participating in any social networking sites as a FurChange IBO, IBOs must avoid inappropriate conversations, comments, images, videos, audio, applications, or any other adult, profane, discriminatory or vulgar content. The determination of what is inappropriate is at lC sole discretion, and IBOs who violate this policy will be subject to disciplinary action and/or termination. IBOs who use social networking sites must also be sure to comply with the rules associated with that particular website or network. For example, some sites prohibit users from advertising products or promoting financial opportunities. On such sites, you may instead choose to share your personal story, telling others about the product results you have experienced or how your lifestyle has improved. When others inquire, you can refer them to your Personal Website. IBOs who provide testimonials on social networking sites and otherwise on the Internet are responsible for ensuring that their testimonials comply with all applicable regulations. Among other things, IBOs shall not (i) make any specific income claim or commitment to any amount of income that others may realize as a FurChange IBO; (ii) make any guarantee of success; or (iii) suggest that a specific amount of inventory must be purchased at the time of enrollment. IBOs may describe, in general terms, the positive impact of FurChange on their lifestyle or the positive results they have personally experienced from using FurChange products. l. Independent Websites: Subject to the provisions of this Section, IBOs are permitted to advertise through independent websites provided that they only use approved FurChange Trademarks or marketing materials made available by the company. Product claims or earnings claims not found on materials created by FurChange are not permitted. IBOs may also link to their Personal Website as a whole and complete website upon itself, not part or a sub-site of any other website. Technical aspects of linking to Personal Websites from independent websites not provided or supported by FurChange and are the sole responsibility and choice of the IBO and FurChange does not provide support or assume responsibility for this functionality in any way. IBOs are not permitted to place links to other independent websites or online locations on their Personal Websites. IBOs who use an independent website must adhere to the following guidelines: 1. Identify yourself as a FurChange Independent Business Owner Page 21
2. Use only current, approved images and content provided by FurChange, adhering to branding, trademark and image usage policies described in this document. 3. Include the independent website disclaimer below on every webpage of your independent website. The disclaimer must be posted with a minimum of size 8 font so that it is legible. 4. Agree to modify your website to comply with current or future FurChange policies. Independent website disclaimer: The information on this website has been provided by a FurChange Independent Business Owner. FurChange (America) Inc. is not responsible for statements or claims made on this website. Each IBO is solely responsible and liable for content on her/his independent website, including messaging, claims, and information. IBOs must ensure their website appropriately represents the FurChange brand and adheres to all policies and procedures. IBOs are strictly prohibited from using personal videos, audio tapes or other recordings of FurChange corporate events on independent websites; only recordings made available by FurChange may be used. IBOs are not allowed to post personal photographs of FurChange employees on independent websites. FurChange reserves the right to require immediate withdrawal of any online posting that is deemed to pose a risk to the FurChange Trademarks or lC image or business integrity. Failure to comply with such a demand constitutes a material breach of the IBO Agreement. The provisions of this paragraph do not apply to personal e-mail to Customers or IBOs, or potential IBOs or Customers with whom IBOs have established business or personal relationships. m. Unsolicited Faxes and E-mails: An IBO may not use or transmit unsolicited faxes, mass e-mail distribution, unsolicited e-mail, connection with the advertising, promotion, or sale of the FurChange Products or the operation of their respective FurChange independent businesses 1 - telephone facsimile or electronic mail, respectively, of any material or information advertising or promoting that is transmitted to any person on an unsolicited basis. The exceptions to this prohibition are faxes and e-mail to (i) any person who gave that IBO prior consent to send such fax or e-mail; or (ii) any person with whom an IBO has an established business or personal relationship. Any e-mail sent by or for an IBO advertising or promoting the FurChange Products l8C must comply with requirements applicable to commercial e-mailers found in the Controlling the Assault of Non-Solicited Pornography and M A CAn-SAM l1C Without limitation of the preceding paragraph, any e-mail sent by an IBO advertising or promoting the FurChange Products or l8C lC must meet all of the following requirements: there must be a functioning return e-mail address to the sender. there must be a notice in the e-mail that advises the recipient that she or he may reply to the e-mail via the functioning return e-mail address to request that future e-mail solicitations or correspondence not be sent to -ou the e-mail must include the IBOs physical mailing address. the e-mail must clearly and conspicuously disclose that the message is an advertisement or solicitation. the use of deceptive subject lines and/or false header information is prohibited. - -mail or regular mail, must be honored. If an IBO receives an - request from a recipient of an e-mail, the IBO - FurChange. FurChange may periodically send commercial e-mails on behalf of IBOs, and IBOs agree that FurChange may send such e-mails and that the IBOs -mail addresses may be included in such e-mails as outlined above. IBOs - requests that may be generated as a result of such e-mails sent by FurChange. Page 22
n. Domain Names and E-mail Addresses: IBOs may not use or register any domain name or e-mail address that consists of or contains any FurChange Trademark or any mark confusingly similar, except that IBOs may use a domain name or e-mail address that is provided by FurChange in connection with their respective Personal Websites. Domain names used in connection with any Personal Websites must be in good taste and exhibit no vulgarity. FurChange reserves the right to prohibit the use of domain names deemed inappropriate by FurChange in its sole discretion. o. Newsletters: An IBO may use FurChange Trademarks or content provided by FurChange for such purposes in newsletters that they distribute to her or his Downline and Customers. All such newsletters must comply with the following requirements: the newsletter must clearly identify the IBO as the publisher of the newsletter, and must identify the IBO as a FurChange Independent Business Owner the newsletter may contain articles and other content that FurChange makes available for such purposes, provided that (i) the FurChange content is reproduced exactly as it originally appeared when it was provided by FurChange without any modification; (ii) FurChange or the applicable individual author is credited as the author; and (iii) all copyright, trademark, and other proprietary notices are reproduced as they originally appeared. the newsletter must not be used to sell, advertise, or promote any product, service, or program other than FurChange Products or the FurChange business opportunity. Each IBO represents and warrants that any material or content that appears in her or his newsletters (other than material or content provided by FurChange) does not and will not infringe or misappropriate any patent, copyright, trademark, trade secret, publicity, privacy, or other rights of any third person, and is not and will not be defamatory or obscene. p. Telephone Directory Listings and Advertising: White Pages and Yellow Pages Listings: An IBO who wishes to appear in a telephone directory or other similar directory must list her or his name alphabetically according to her or his surname or, if the IBO is a Business Entity, the trade name, business name, or d/b/a of the Business Entity. If the directory permits, the IBO FurChange Independent Business Owner l8C name, address, and telephone number. An IBO is permitted to advertise through yellow page display ads provided that the ad complies with the advertising policies set forth in these Policies & Procedures. Toll-Free Numbers: An IBO may use and advertise toll-free telephone numbers in accordance with the above guidelines. An IBO may not state or imply that her or his toll-free number is a FurChange number or is linked to any FurChange location. In addition, any use of a toll-free number in connection with infomercials or any other television programs is prohibited. Telephone Answering Devices: An IBO may not answer (or have any phone answering service or device answer) the telephone FurChange the FurChange corporate office. An IBO is permitted to state that she or he is an Independent Business Owner for FurChange. Telephone Solicitation: The Federal Trade Commission and Federal Communications Commission each have issued regulations 8 regulations as part of their telemarketing laws. While an IBO
inadverte an IBO to violate the law. Moreover, these regulations must not be taken lightly, as they carry significant penalties (up to $11,000 per violation). Therefore, IBOs must not engage in any type of telemarketing or telephone solicitations in connection with the sale, advertising, or promotion of FurChange. Page 23
q. Social Networking and Independent Website Termination: In the event of a voluntary or involuntary termination of an IBO Agreement, the terminated IBO must remove all references to FurChange from any social networking profile(s) and/or independent website(s) from public view within 10 days. If an IBO has specific FurChange social networking group presence, the IBO must remove her or his social networking group from public view within 10 days. The name of your social networking group may be transferred to another FurChange IBO subject to FurChange approval. SECTION 12: COMPENSATION a. General: The Compensation Plan is incorporated into and made a part of these Policies and Procedures and the IBO Agreement. The Compensation Plan identifies the earning opportunities available to IBOs and sets forth the sales and organizational requirements necessary to earn commissions and bonuses. The Compensation Plan is built upon sales of FurChange Products to Customers. IBOs who meet certain Business Volume requirements are eligible to earn commissions and bonuses as described in the Compensation Plan. b. Commission Period: Commissions are calculated on a weekly basis based upon a commission period beginning at 12:00 a.m. (CST) on Monday and ending at 11:59 p.m. (CST) on Sunday. Orders received on the last day of a Commission Period via the FurChange website or an l8C Personal Website by 11:59 pm (CST) on Sunday C calculation. All orders received after the cut-off date will be included in the commission and bonus calculation for the following Commission Period. With respect to a Commission Period, commission checks will be issued to IBOs on the following Wednesday after the close of the Commission Period, unless otherwise notified by FurChange. c. Adjustments to Qualifications, Bonuses and Commissions: When a product is returned to FurChange for a refund, the qualifications, bonuses and commissions attributable to the returned product(s) will be deducted from the l8C future qualifications, bonuses and commissions. These deductions will be made in the month in which the refund was given and will continue every bonus or commission period thereafter until the commission and bonuses are recovered from the IBO who received the bonuses and commissions on the sale of the returned product. In the event an IBO terminates and the amounts of the bonuses and commissions attributable to the returned product(s) have not yet been fully recovered by FurChange, the remainder of the outstanding balance may be set off against any amounts owed to the terminated IBO. FurChange reserves the right to review and terminate any account for consistently excessive or improper return activity associated with non-defective merchandise. d. Unclaimed Bonuses, Commissions, and Credits: An IBO must deposit or cash her or his bonus or commission checks within six months from the date of issuance. A check that remains uncashed after six months will be void. After a check has been voided, FurChange will attempt to notify the IBO who has an un-cashed check by sending written notice to her or his last known address, identifying the amount of the check and advising that she or he may request that the check be reissued. There shall be a $15.00 charge for reissuing a check and $10.00 fee for each notice that is sent to the IBO. The charges will be deducted from the balance owed to the IBO. FurChange will not attempt to contact an IBO if the balance on the voided check is less than $15.00. SECTION 13: TRANSFER OF IBO AGREEMENT a. Sale or Transfer of IBO Agreement: An IBO may not sell, assign, or otherwise transfer her or his IBO Agreement without the prior written consent of FurChange. FurChange reserves the right in its sole judgment to disapprove and prohibit any sale, assignment, or transfer of an IBO Agreement. Page 24
b. Divorce or Separation of IBOs: Husband and wife or domestic partnership IBOs must operate under a single IBO Agreement. Upon a divorce or separation, husband and wife or domestic partnership IBOs must do one of the following: Either the husband, wife or a domestic partner may agree in writing to (i) terminate the IBO Agreement as it applies to him or her; (ii) relinquish his or her interest in the IBO Agreement; and (iii) authorize FurChange to pay all commissions and bonuses to, and otherwise deal directly and solely with, the non-relinquishing spouse or domestic partner; or Notwithstanding the divorce or separation, the husband and wife or domestic partners may agree to continue to jointly operate under the IBO Agreement -as- FurChange will continue to pay all commissions and bonuses and otherwise deal with the husband and wife or domestic partners in the same manner as it did prior to the divorce or separation. Under no circumstances will the Downline of any divorcing or separating IBO spouses be divided. Similarly, under no circumstances will FurChange split bonus or commission payments between divorcing or separating spouses. c. Marriage of IBOs: Should an unmarried IBO get married to a person who is not currently an IBO, the IBO has the option of adding the new spouse to l8C l8C A To add a spouse to an existing IBO Agreement, the spouse must complete and submit a new IBO Agreement and otherwise meet all applicable eligibility requirements. Should an unmarried IBO marry a person who is currently an IBO, the new couple is encouraged, but not required, to work together under a single IBO Agreement. If one of the IBOs in the marriage chooses to l8C A IBO must relinquish all right and interest in her or his existing IBO Agreement. If an IBO marries an IBO that he or she personally sponsored, the two IBOs may merge their respective IBO Agreements into one IBO Agreement. d. Business Entity Change of Control: With respect to any IBO that is a Business Entity, a the acquisition by any other person or entity or group of persons or entities of a controlling or majority ownership interest in such Business Entity. If FurChange determines in its sole discretion that such a Change of Control will adversely affect other IBOs or FurChange, FurChange may terminate the 8 L IBO Agreement. Upon any Change of Control, the surviving Business Entity must continue to meet each of the requirements of the IBO Agreement, including these Policies & Procedures. e. Death and Incapacity: Upon death or incapacity of an IBO, the l8C l8C A may be passed to the l8C heirs, trustees, or other beneficiaries, provided that arrangements are made to ensure that other IBOs in the applicable Upline and FurChange are not adversely affected. If FurChange determines in its sole discretion that such a disposition of an IBO Agreement will adversely affect other IBOs or the business of FurChange, then FurChange may terminate the applicable IBO Agreement upon the death or incapacity of the IBO. Appropriate legal documentation must be submitted to FurChange in connection with any transfer of an IBO Agreement upon the death or incapacity of an IBO. Accordingly, each IBO should consult with their attorney to assist in the preparation of a will, trust, or other testamentary instrument that will properly transfer the l8C interest. When the rights under an IBO Agreement are transferred by will or other testamentary process with lC approval, the beneficiary will acquire the right to collect bonuses and commissions generated by the deceased l8C Downline, and will otherwise assume all the rights and obligations of the deceased IBO under the IBO Agreement, provided the following requirements are met. The beneficiary must: submit a new IBO Application and otherwise meet all the eligibility requirements to become an IBO; comply with the terms and provisions of the IBO Agreement; and meet all the qualifications for the deceased l8C level and title. Page 25
To effect a testamentary transfer of an IBO Agreement upon the death of an IBO, the successor must provide the following to FurChange: an original Certificate of Death; a notarized copy of the will or other instrument establi l8C A; and a completed and properly executed IBO Application. To effect the transfer of an IBO Agreement to a trustee upon the incapacitation of an IBO, the trustee must provide FurChange with the following: a notarized copy of an appointment as trustee; IBO Agreement; and a completed and properly executed IBO Application executed by the trustee. Bonus and commission checks generated under an IBO Agreement transferred pursuant to this Section will be paid in a single check jointly to the new IBO. The checks will be mailed to the address shown on the new IBO Application. If the IBO Agreement is transferred to 8 L and acquire a Federal Taxpayer Identification Number that is supplied to FurChange, and otherwise comply with all the requirements for such Business Entity set forth in the IBO Agreement. FurChange will issue all bonus and commission checks and one IRS Form 1099 to the new Business Entity. f. Transfer of IBO Agreement to Spouse or Children: An IBO may transfer their rights under their IBO Agreement to a spouse, domestic partner or child so long as such spouse, domestic partner or child meets all the eligibility and other requirements of the IBO Agreement. Such transfer shall not be subject to the requirements of Section 14(a). The transferee(s) must fulfill the ongoing responsibilities of the transferor IBO, complete and submit a properly executed IBO Application, and comply with all terms of the IBO Agreement, including these Policies and Procedures. g. Retirement: FurChange provides no retirement benefits to IBOs and IBOs are not permitted to assign or transfer their IBO Agreements upon retirement except as is otherwise permitted under this Section. h. All Other Transfers by IBOs Prohibited: Except as expressly permitted by this Section 13 and with lC prior written approval, IBOs shall not assign, sell, transfer, delegate, or otherwise dispose of, whether voluntarily or involuntarily, by operation of law or otherwise, the IBO Agreement or any rights or obligations under the IBO Agreement. Any purported assignment, sale, transfer, delegation, or other disposition, except as permitted herein, will be null and void. Subject to the foregoing, the IBO Agreement will be binding upon, and will inure to the benefit of, the parties and their respective successors and permitted assigns. SECTION 14: TERMINATION AND SUSPENSION a. Effect of Termination: Upon any expiration or termination of an IBO Agreement, the former IBO shall have no right, title, claim, or interest in the l8C Downline or the opportunity to receive any commissions or bonuses from sales generated by the IBO or their downline following the termination. An IBO whose IBO Agreement is terminated will lose all rights to participate in or benefit from the Compensation Plan and FurChange direct sales program. This includes the right to sell FurChange Products, act as a Sponsor, use any FurChange Trademarks or other FurChange marketing materials for any purpose, and the right to receive future commissions and bonuses or other income resulting from sales and other activities of the l8C former Downline. In the event Page 26
of termination, all licenses granted to the IBO pursuant to the IBO Agreement shall automatically terminate, and the terminated IBO agrees to waive all rights, if any, she or he may have, including any property rights, if any, to her or his former Downline and any bonuses, commissions, or other amounts derived from the future sales and other activities of such Downline. Former IBOs shall not hold themselves out as FurChange IBOs and shall not have the right to sell FurChange Products, sponsor other IBOs, or otherwise participate in the FurChange direct sales program. IBOs whose IBO Agreements are terminated shall receive bonuses and commissions for the last full bonus and commission periods in which they were active prior to termination (less any amounts withheld during any suspension preceding an involuntary termination, any outstanding balance that may exist on the l8C accounts, or any other amounts that may be owed to FurChange). FurChange will not be liable to any IBO for damages of any kind solely as a result of terminating an IBO Agreement in accordance with the Agreement including these Policies and Procedures, and termination of the IBO Agreement will be without prejudice to any other right or remedy FurChange may have under the IBO Agreement or applicable law. Upon any expiration or termination of the IBO Agreement, the following sections of these Policies and Procedures shall survive and continue: Section 6(g) (with respect to the confidentiality of Downline Business Reports), Sections 6(l) and 6(m) (in each case, with respect to any Confidential Information or Customer Data retained by IBOs after termination), Section 6(q), Section 6(r), Section 10(g), Section 11, Section 12(c), Section 14(a), Section 15, Section 16 and Section 17. b. Re-Enrollment: An IBO, who has voluntarily terminated, either through resignation or non-renewal, may re-enroll as an IBO by purchasing a Business Kit and the IBO will be provided a new ID#. Re-enrollment timelines: (i) if an IBO wishes to re-enroll within 6 months of the deactivation date, the IBO must remain under the same sponsor. (ii) If an IBO wishes to re-enroll more than 6 months after the deactivation date, the IBO enroll under any FC l8C u l8C Downline organization will remain with the Upline IBO, which is where it was placed when the IBO voluntarily terminated. c. Involuntary Termination: In addition to the imposition of any remedial actions by FurChange pursuant to Section 16, FurChange reserves the right to terminate the IBO Agreement of any IBO who, in the sole discretion of FurChange, has violated the terms of the IBO Agreement (including, but not limited to, the provisions of the IBO Application and these Policies and Procedures) or for acts or omissions which FurChange reasonably deems to be harmful to the interests of other IBOs or to FurChange. Involuntary termination shall be effective upon lC notice to the IBO. An IBO that has her or his IBO Agreement terminated on an involuntary basis may seek re-instatement by submitting a formal written request after the one year anniversary of the termination date. FurChange, however, reserves the right to reject any such request in its sole discretion. If FurChange accepts the reinstatement request, the IBO must complete a new IBO Agreement and purchase a new IBO Business Kit. A reinstated IBO will have no access or rights to any Downline organization that may have existed under the prior IBO Agreement. d. Cessation of Business: FurChange expressly reserves the right to terminate all IBO Agreements upon thirty (30) days written notice in the event it elects to: (1) cease business operations; (2) dissolve as a corporate entity; or (3) terminate distribution of its products and services via direct selling. e. Voluntary Termination: An IBO has the right to terminate the IBO Agreement at any time regardless of the reason. Notice of termination must be submitted in writing to FurChange and will be effective upon lC eceipt. The written notice must include the l8C signature, printed name, address, and Identification Number. Page 27
An IBO that terminates the IBO Agreement on a voluntary basis shall have the right to seek reinstatement to the FurChange program pursuant to the provisions of Section 14(b) above. The return of an IBO Business Kit is considered to be a voluntary termination by an IBO. f. Suspension: FurChange reserves the right to suspend any IBO who violates the terms of the IBO Agreement including these Policies and Procedures or for any acts or omissions which FurChange deems to be harmful or adverse to the best interest of other IBOs or FurChange. Depending upon the severity of the conduct giving rise to the suspension, the suspended IBO may be required to forfeit the right to any commissions or bonuses that would otherwise have been generated by the IBO during the suspension period. FurChange will determine the period of suspension and the severity of the sanctions based on the nature of the applicable violation. SECTION 15: REMEDIAL ACTIONS; GRIEVANCES AND COMPLAINTS a. Remedial Actions: FurChange reserves the right to enforce the terms of the IBO Agreement, including these Policies and Procedures, and to take remedial action as necessary to preserve the goals and purpose of the FurChange direct sales program. Breach of the IBO Agreement, including violation of these Policies and Procedures, including any illegal, fraudulent, deceptive, or unethical business conduct by any IBO may result, lC discretion, in one or more of the following corrective measures: (i) Issuance of a written warning and admonition; (ii) Requiring an IBO to take immediate corrective measures; (iii) Loss of rights to receive future commission or bonuses; (iv) Suspension of l8C A (v) l l8C A (vi) Any other measure or remedy expressly allowed by the IBO Agreement including these Policies and Procedures. In addition, in situations deemed appropriate by FurChange, FurChange may institute legal proceedings for damages, equitable relief, and any other remedies available to it. FurChange may withhold from an IBO all or part of l8C commissions and bonuses earned during the period that FurChange is investigating any impermissible or illegal conduct or breach of the IBO Agreement including these Policies and Procedures. If an IBO is terminated for breach of the IBO Agreement, the IBO shall not be entitled to recover any bonuses and commissions withheld pending the investigation. SECTION 16: WARRANTIES; LIMITATION OF LIABILITY; INDEMNIFICATION a. Warranty; Disclaimer: FurChange warrants to IBO that the FurChange Products as and when delivered by FurChange shall be free from material defects. lC sole obligation to IBO and l8C sole and exclusive remedy for breach of this warranty shall be to return any defective FurChange Product and receive a replacement or credit as described in Section 10. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, FURCHANGE DISCLAIMS ALL OTHER WARRANTIES WITH RESPECT TO THE FURCHANGE PRODUCTS, THE FURCHANGE DIRECT SALES PROGRAM, THE FURCHANGE COMPENSATION PLAN AND ANY OTHER SUBJECT MATTER OF THE IBO AGREEMENT, WHETHER EXPRESS, IMPLIED, OR STATUTORY, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, NONINFRINGEMENT, ACCURACY, OR COMPLETENESS OF CONTENT, RESULTS, LACK OF NEGLIGENCE, OR LACK OF WORKMANLIKE EFFORT. b. Limitation of Liability: NOTWITHSTANDING ANYTHING IN THE IBO AGREEMENT (INCLUDING THESE POLICIES AND PROCEDURES) TO THE CONTRARY OR ANY FAILURE OF ESSENTIAL PURPOSE, IN NO EVENT SHALL FURCHANGE OR ANY OF ITS RELATED PARTIES (AS DEFINED IN Page 28
SECTION 18(I) BE LIABLE TO IBO FOR ANY SPECIAL, INCIDENTAL, INDIRECT, PUNITIVE OR EXEMPLARY, OR CONSEQUENTIAL DAMAGES OF ANY KIND OR NATURE, INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOST PROFITS, LOST BUSINESS, AND LOST OPPORTUNITIES, HOWEVER CAUSED, ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE SUBJECT MATTER OF THIS AGREEMENT (INCLUDING BUT NOT LIMITED TO THE FURCHANGE PRODUCTS, FURCHANGE DIRECT SALES PROGRAM AND FURCHANGE COMPENSATION PLAN), WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT, OR OTHER THEORY OF LIABILITY (INCLUDING BUT NOT LIMITED TO NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE, EVEN IF FURCHANGE OR ANY OF ITS RELATED PARTIES HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. c. Indemnification: Each IBO agrees to indemnify, defend, and hold harmless FurChange (together with its Related Parties (as defined in Section 18(i), agents, other IBOs, stockholders, members, employees, directors, officers, and attorneys, collectively l fees) they may suffer or incur as a result of such l8C breach or alleged breach of the IBO Agreement including these Policies and Procedures. Without limitation of the foregoing, each IBO shall specifically indemnify the Indemnified Parties against any losses or liabilities they may suffer or incur as a result of such IBO being deemed an employee, agent, or holding any status other than an independent contractor, and such l8C tax liabilities. SECTION 17: MISCELLANEOUS a. Severability: If any provision of the IBO Agreement including these Policies and Procedures is determined by a court of competent jurisdiction to be invalid, void, or otherwise unenforceable, such provision will be enforced to the maximum extent possible so as to effect the intent of the parties, or, if incapable of such enforcement, will be deemed to be deleted from the IBO Agreement, and the remainder of the IBO Agreement and such provisions as applied to other persons, places, and circumstances will remain in full force and effect. b. Waivers: The waiver by either party of a breach of or a default under any provision of the IBO Agreement will not be effective unless in writing and will not be construed as a waiver of any subsequent breach of or default under the same or any other provision of the IBO Agreement, nor will any delay or omission on the part of either party to exercise or avail itself of any right or remedy that it has or may have under the IBO Agreement operate as a waiver of any right or remedy. c. Governing Law: The IBO Agreement is to be construed in accordance with and governed by the internal laws of the State of Texas without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Texas to the rights and duties of the parties. d. Right to Use Third Parties: Notwithstanding anything to the contrary in the IBO Agreement, FurChange may use consultants or other contractors in connection with the performance of its obligations and the exercise of its rights under the IBO Agreement. e. Force Majeure: FurChange shall not be liable to any IBO for failure or delay in performing its obligations under the IBO Agreement if such failure or delay is due to circumstances beyond its reasonable control, including acts of any governmental body, war, insurrection, sabotage, embargo, fire, flood, strike or other labor disturbance, interruption of or delay in transportation, unavailability of or interruption or delay in telecommunications or third party services, or inability to obtain raw materials, supplies, equipment, or power needed to perform under the IBO Agreement. f. Interpretation: Page 29
For purposes of interpreting the IBO Agreement, (i) headings are for reference purposes only and will not be deemed a part of the IBO Agreement; (ii) unless the context otherwise requires, the singular includes the plural, and the plural includes the singular; of similar import refer to the IBO Agreement as a whole and not to any particular section or paragraph;
g. Entire Agreement: The IBO Agreement, including these Policies and Procedures and the Compensation Plan constitutes the entire agreement between FurChange and the IBO, and such agreement supersedes all previous, contemporaneous, and inconsistent agreements, negotiations, representations, and promises between the parties, written or oral, regarding the subject matter of the agreement. There are no oral or written collateral representations, agreements, or understandings except as provided in the IBO Agreement. h. Notices: Except as otherwise expressly set forth in the IBO Agreement, all notices required or permitted by the IBO Agreement shall be in writing and sent to the party to be notified by registered or certified mail or delivered in person, and shall be deemed effective upon receipt. Notices to an IBO shall be sent to the address provided by the IBO on the IBO Application or subsequently submitted in writing by the IBO. Notices to FurChange shall be sent to FurChange (America) Inc., 415 E. Southlake Blvd., Suite 100, Southlake, Texas 76092. i. Dispute Resolution: Any controversy, claim, or dispute of whatever nature arising between an IBO, on the one hand, and FurChange and/or the Related Parties (as defined below), on the other, including but not limited to those arising out of or relating to the IBO Agreement or the breach thereof, or the commercial, economic, or other relationship of IBO and FurChange and/or the Related Parties (for purposes of this Section 17(i), each is u n, mediation, or arbitration, as provided in this Section 17(i). If a Dispute arises, the parties shall first attempt in good faith to resolve it promptly by negotiation. Any of the parties involved u u n arty setting forth the subject of the Dispute and the relief sought by the party providing the Dispute Notice, and designating a representative who has full authority to negotiate and settle the Dispute. Within 10 Business Days after the Dispute Notice is provided, each recipient u n solution to the Dispute, designating a representative who has full authority to negotiate and settle the Dispute. Within 20 Business Days after the Dispute Notice is provided, the representatives designated by the parties shall meet at a mutually acceptable time and place or by telephone, and thereafter as often as they reasonably deem necessary, to attempt to resolve the Dispute. At any time 20 Business Days or more after the Dispute Notice is provided, but prior to the initiation of arbitration, regardless of whether negotiations are continuing, any party may submit the Dispute to JAMS for mediation by providing notice of such request to all other concerned parties and providing such notice and a copy of all relevant Dispute Notices and notices responding thereto to JAMS. In such case, the parties shall cooperate with JAMS and with one another in selecting a mediator from the JAMS panel of neutrals and in promptly scheduling the mediation proceedings, and shall participate in good faith in the mediation either in person at a mutually acceptable time and place or by telephone, in accordance with the then-prevailing !AMS S Any Dispute not resolved in writing by negotiation or mediation shall be subject to and shall be settled exclusively by final , binding arbitration before a single arbitrator in San Francisco, California, in accordance with the then-prevailing Commercial Page 30
Arbitration Rules of the American Arbitration Association. No party may commence Arbitration with respect to any Dispute unless that party has pursued negotiation and, if requested, mediation, as provided herein, provided, however, that no party shall be obligated to continue to participate in negotiation or mediation if the parties have not resolved the Dispute in wri ting within 60 Business Days after the Dispute Notice was provided to any party or such longer period as may be agreed by the parties. Unless otherwise agreed by the parties, the mediator shall be disqualified from serving as arbitrator in the case. The arbitrator shall not have the power to alter, modify, amend, add to, or subtract from any provision of the IBO Agreement or to rule upon or grant any extension, renewal, or continuance of the IBO Agreement. The arbitrator shall not have the power to award special, incidental, indirect, punitive or exemplary, or consequential damages of any kind or nature, however caused. All communications, whether oral, written, or electronic, in any negotiation, mediation, or arbitration pursuant to this Section shall be treated as confidential and those made in the course of negotiation or mediation, including any offer, promise, or other statement, whether made by any of the parties, their agents, employees, experts, or attorneys, or by the mediator or any JAMS employee, shall also be treated as compromise and settlement negotiations for purposes of applicable rules of evidence and shall be inadmissible for any purpose, including impeachment, in any arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in negotiation or mediation. The costs of negotiation, mediation, and arbitration, including fees and expenses of any mediator, arbitrator, JAMS, the American Arbitration Association, or other persons independent of all parties acting with the consent of the parties to facilitate settlement, shall be shared in equal measure by IBO, on the one hand, and FurChange and any Related Parties involved on the other. The parties shall bear their own legal fees and expenses of negotiation, mediation, and arbitration. Although the IBO Agreement is made and entered into between IBO and FurChange, lC affiliates, owners, members, 8 -party beneficiaries of the IBO Agreement for purposes of the provisions of the IBO Agreement referring specifically to them, including this agreement to negotiate, mediate, and arbitrate. The parties acknowledge that nothing contained herein is intended to create any invol vement by, responsibility of, or liability for, the Related Parties with respect to any dealings between IBO and FurChange, and the parties further acknowledge that nothing contained herein shall be argued by either of them to constitute any waiver by the Related Parties of any defense which Related Parties may otherwise have concerning whether they can properly be made a party to any dispute between the other parties. Any party may seek specific performance of this Section, and any party may seek to compel each other party to comply with this Section by petition to any court of competent jurisdiction. The pendency of mediation shall not preclude a party from seeking provisional remedies in aid of the arbitration from a court of appropriate jurisdiction, and the parties agree not to defend against any application for provisional relief on the grounds that mediation is pending. The prevailing party in any proceeding
connection with such proceeding. If any portion of this Section is held to be unenforceable for any reason, the remainder shall remain in full force and effect. Nothing in this Section shall preclude any party from seeking interim or provisional relief concerning the Dispute, including a temporary restraining order, a preliminary injunction, or an order of attachment, either prior to or during negotiation, mediation, or arbitration. In the event any portion of the above provisions regarding arbitration are found to be unenforceable, such portion shall be severable from the remainder of the above provisions, which shall remain in full force and effect. Any amendment to this Section, or to the Dispute Resolution provision in the IBO Agreement, shall not apply to (1) a dispute arising prior to the effective date of such amendment; or (2) an IBO who voluntarily terminates or otherwise declines to participate in the FurChange direct sales program following the effective date of such amendment.
Jose Remo, JR., Petitioner, vs. The Hon. Intermediate Appellate Court and E.B. Marcha Transport Company, Inc., Represented by Apifanio B. Marcha, Respondents.