BlackBox Cosmetics Policies & Procedures... page 1

Policies and Procedures

INDEPENDENT SALES ASSOCIATE POLICIES AND PROCEDURES

1. BlackBox Cosmetics, LLC, hereinafter "Company," is a direct selling Company marketing consumer end cosmetic products and services to the consumer through Independent Sales Associates(ISAs), hereinafter "ISA, ISAs, or ISA's". The policies and procedures herein are applicable to all ISAs of the Company.

2. An ISA is one who has completed a Company application and agreement and has been accepted by the Company as an ISA. The Company reserves the right to accept or reject anyone as an ISA.

3. All ISAs must be the age of majority in the state in which they sell/distribute Company products and services.

4. Unless waived in writing by the Company upon application, the Company will consider each married couple a single ISA. Husbands and wives may not sponsor each other directly or indirectly, nor have different sponsors. If one spouse is already an ISA, the other spouse may elect to participate under that ISA agreement with his/her spouse. The Company reserves the right to reject any applications for new ISAs or applications for renewal. Should a husband/wife ISA divorce, they should notify the Company as to how the ISA Agreement is to be managed thereafter. Otherwise, the Company will recognize the final judicial or adjudicatory disposition of the ISA Agreement.

5. ISAs are independent marketing representatives of the Company and are not to be considered purchasers of a franchise or a distributorship. The agreement between the Company and its ISAs does not create an employeremployee relationship, agency, partnership, or joint venture between the Company and the ISAs. Each ISA shall hold harmless the Company from any claims, damages or liabilities arising out of ISA's business practices. Company ISAs have no authority to bind the Company to any obligation. Each ISA is encouraged to set up hisher own hours and to determine hisher own methods of sale, so long as heshe complies with the policies and procedures of the Company.

6. Transaction Submission Integrity. a. It is essential to the success of the Company, its ISAs and customers that submissions of transactions to the Company maintain integrity of communication. It is to be expected that all transactions submissions to the Company, including, but not limited to, ISA applications, ISA communication, ISA financial transactions and consumer transactions, be submitted by the individual or entity involved in the transaction. Third party submission of any and all transactions submissions is prohibited. An ISA may not communicate any transactions submissions on behalf of another ISA, ISA applicant or customer. An ISA may not use his or her credit card or bank account on behalf of another individual or ISA. This rule is applicable to any and all forms of transactions submissions, including, but not limited to, online, telephone, fax, email, etc. b. Purchases made through the BlackBox Cosmetics' shopping cart system must be shipped to the end customer unless otherwise approved by the company. Since the age and condition of the product is paramount to the reputation of BlackBox Cosmetics, the corporate office has to be in control of what the customer and new ISA receives. BlackBox Cosmetics processes the order online through our payment system and is ultimately responsible for its condition. We have no way of knowing what condition the kits or products will be in if the selling ISA assumes this responsibility. , e.g., was opened, tampered with, sat in a hot car for weeks, is 8 months old... BlackBox Cosmetics is responsible for returns up to 14 days and must maintain control in the delivery of the product. Products purchased by ISAs for the intent of selling retail do not go through our shopping cart system when the ISA resells them. So these products are not BlackBox Cosmetics's responsibility except in the case of faulty mechanisms or damaged product. BlackBox Cosmetics replaces malfunctioning or damaged product. Although there is a large profit margin with bulk ordering and retailing the products, ISAs should consider their responsibility to the end customer before doing so. In addition, new ISAs receive an enrollment folder with marketing & sales items. These items change from time-to-time and are often updated. Since these items come with the ISA Enrollment Package, this is another important reason that items purchased from the BlackBox Cosmetics' system must be shipped to the end customer by the corporate office.

7. In the conduct of its business, the ISA shall safeguard and promote the reputation of the products and services of the Company and shall refrain from all conduct which might be harmful to such reputation of the Company or to the marketing of such products and services or inconsistent with the public interest, and shall avoid all discourteous, deceptive, misleading, unethical or immoral conduct or practices. An ISA shall not interfere with, harass or undermine another ISA and, at all times, shall respect the privacy of other ISAs. An ISA must not disparage the Company, its affiliate entities, other Company ISAs, Company products and/or services, the marketing and compensation plans, or Company employees.

8. The company's program is built upon retail sales to the ultimate consumer. The company also recognizes that ISAs may wish to purchase product in reasonable amounts for their own personal or family use. For this reason, a retail sale for bonus purposes shall include sales to non-participants, as well as sales to ISAs for personal or family use which are not made for purposes of qualification or advancement. It is company policy, however, to strictly prohibit the purchase of product solely for the purpose of qualifying for bonuses or advancement in the marketing program. ISAs must fulfill published personal and downline retail sales requirements, including requisite retail sales to non-participants, as well as supervisory responsibilities, to qualify for bonuses, overrides or advancements. Commissions are paid to the responsible salesperson with no sales requirements or quotas. Sales organization or downline overrides are paid to the upline sponsors only when they have activity for said month in their own personal shopping cart. This can be retail or wholesale shopping activity in any amount. There is no minimum activity, sales, and/or purchases required. This ensures that sponsors are indeed active in the business and hold a supervisory role in which they are being paid overrides.

9. Anyone who enrolls as an ISA with the Company must maintain certain responsibilities and functions as part of the position. Sales commission is paid to the ISA at the percentage noted in the Compensation Agreement. Bonuses are paid for sales exceeding levels noted in the Compensation Agreement. Any ISA who wishes to sponsor other ISAs may receive organization overrides by fulfilling their duties as a sponsor and adhering to the guidelines set forth by the Company to ensure compliance. ISAs must have ongoing contact, communication and management supervision with his or her sales organization. Examples of such supervision may include, but are not limited to: newsletters, written correspondence, personal meetings, telephone contact, voice mail, electronic mail, training sessions, accompanying individuals to sales meetings and Company training, and sharing genealogy information with those sponsored. Any ISA who sponsors other ISAs must fulfill the obligation of performing a bona fide supervisory, distributing, and selling function in the sale or delivery of product to the ultimate consumer and in the training of those sponsored. Sales organization overrides are paid to sponsoring ISAs for the purpose of compensating them for this role that would otherwise be placed on the Company or unfairly passed to other sponsors higher in the organization. The only means by which the Company can best determine a sponsoring ISA’s involvement with the Company and its duties of sponsorship is by activity in the sponsoring ISA’s wholesale and/or retail shopping cart. No activity within any ISA’s shopping cart for the month is deemed an inactive account. Sponsorship overrides are not paid to a sponsor with an inactive shopping cart. No activity within any ISA’s shopping cart account for more than one year is deemed abandoned and will be closed and removed from the system at the Company’s discretion. Abandoned/Closed accounts are permanently deleted and cannot be recovered.

10. Company Retailing Policy. The Company sales and marketing program is based upon retail sales to the ultimate consumer. Every aspect of the program is designed to assist our ISAs in the marketing of fine products to the general consuming public. As a consumer safeguard, of the utmost importance to the Company is the policy that ISA's should purchase products in commercially reasonable quantities, and under no circumstances may ISAs cause others to purchase products in amounts that are not reasonably expected to be sold to the consuming public or in unreasonable amounts for personal or family use. In furtherance of these policies, the company has adopted specific rules on retail sales and retailing referenced as the Company retail rules. In the interest of protecting the consumer and the opportunity of its ISAs, the Company enforces this rule through a verification program. This program is in place for the benefit of the ISAs and the Company as a whole. Complying with state and federal laws and standard ethical business practices will allow us to be good stewards in our communities and prosper as a Company and ISAs. Retail Sales Rule Audit Verification Program. In its effort to support and enforce the retail sales rule, the Company may conduct random audit verification follow-ups. Representatives of the Company may contact ISAs to further verify compliance with the retail sale rule. ISAs should maintain records and be prepared to assist company representatives in their task. Company Retail Rule. Although the primary function of the Company is to sell products to the general consuming public, the Company realizes that its ISAs may wish to purchase product for personal or family use in reasonable amounts. For this reason, the Company defines a retail sale to include sales to non-participants, as well as purchases for personal or family use in reasonable amounts, which are not made solely for purposes of qualification or advancement. Notwithstanding this policy, the Company, in order to specifically further retail selling and to stay within state and federal laws regarding direct selling, has adopted a requirement that restricts an ISA from getting paid commissions, bonuses or overrides on all tier levels on an ISA enrollment fee that is not part of the ISA Package. Some state laws require a certain percentage of all direct sales go towards product. The ISA package falls within this requirement, since over 71% of the purchase will go towards the Product. An ISA Enrollment Fee alone does not meet this requirement and will not be part of the shopping cart system and therefore will not be part of the commission, bonus, and override system. ISAs that wish to sponsor a new ISA that does not want the ISA Package may do so by calling the corporate office. Sponsoring ISAs will be paid on the new ISA's shopping cart sales just as with any other ISA. This policy is only in respect to the actual enrollment fee charged to become an ISA without purchase of product (ISA Package). The policy is in place to make sure that ISAs are not benefiting from the enrollment of new ISAs alone. This is a product driven & ethical company and it is an important feature at BlackBox Cosmetics.

11. Bonuses or contest awards may be provided at the discretion of the Company.

12. All ISAs are responsible for paying local, state and federal taxes due on earnings from commissions or any other earnings generated as a seller of Company products. This includes contest winnings and awards from the Company. If collection of sales tax is imposed on online businesses at the state or federal level, the Company will collect sales tax where applicable on behalf of the ISA, then report and distribute applicable sales taxes to the taxing entity for the state in which the sale is made.

13. Company ISAs shall not advertise Company products and/or marketing plans except as specifically approved by the Company. Company ISAs agree to make no false or fraudulent representations about the Company, the products, the Company compensation plan, or income potentials.

14. All ISAs are required to pay the ISA Enrollment/Subscription Fee at the time of submission of their ISA application to the Company. The ISA Enrollment Fee is "at Company cost." This sum is not a service or franchise fee, but rather is strictly to offset costs incurred by the Company for ongoing sales and marketing materials support in both written, electronic, and online media formats... including product, service, and training updates, website, shopping cart, & ISA's replicated website & shopping cart development, website & shopping cart maintenance & hosting, accounting, technical support, and management of marketing sales activity, and management of both the ISA's business and sales organization. No product purchase by the ISA is required. Although not expected to occur, merchant/data processing fees, if any, could be deducted from commissions and bonuses.

 

15. Trademark, Trade Names, Advertising.

a. The name of the Company and other names as may be adopted by the Company are proprietary trade names and trademarks of the Company. As such, these marks are of great value to the Company and are supplied to the ISA for ISA's use only in an expressly authorized manner. The ISA agrees not to advertise the Company products in any way other than the advertising or promotional materials made available to the ISA by the Company. The ISA agrees not to use any written, printed, recorded or any other material in advertising, promoting or describing the products or services or the Company marketing program, or in any other manner, any material which has not been copyrighted and supplied by the Company, unless such material has been submitted to the Company and approved in writing by the Company before being disseminated, published or displayed.

b. The ISA, as an independent contractor, is fully responsible for all of hisher verbal and written statements made regarding the product or service and marketing program which are not expressly contained in writing in the current ISA agreement, and advertising or promotional materials supplied directly by the Company. The ISA agrees to indemnify the Company and hold it harmless from any and all liability including judgments, civil penalties, refund, attorney fees, court costs or lost business incurred by the Company as a result of any ISA's unauthorized representations.

c. The Company will not permit the use of its copyrights, designs, logos, trade names, trademarks, etc. without its permission.

d. All Company materials, whether printed, on film, produced by sound recording, or on the internet, are copyrighted and may not be reproduced in whole or in part by ISAs or any other person except as authorized by the Company.

e. A Company ISA may not produce, use or distribute any information relative to the contents, characteristics or properties of Company product or service which has not been provided directly by the Company. This prohibition includes but is not limited to print, audio or video media.

f. A Company ISA may not produce, sell or distribute literature, films or sound recordings which are deceptively similar in nature to those produced, published and provided by the Company for its ISAs. Nor may an ISA purchase, sell or distribute non-company materials which imply or suggest that said materials originate from the Company.

g. Any display ads or institutional or trademark advertising copy, other than covered in the foregoing rules, must be submitted to the Company and approved in writing by the Company prior to publication.

h. All advertising copy, direct mailing, radio, TV, newspaper and display copy must be approved in writing before being disseminated, published or displayed with the exception of blind ads where no reference is made to the Company name or product name.

16. Internet and Website Policy. The Company maintains an official corporate website. ISAs are allowed to advertise on the internet through an approved Company program which allows ISAs to choose from various Company marketing tools that can be personalized with the ISA's message and the ISA's contact information. These tools link directly to the Company website or ISA's replicated website giving the ISA a professional and Company-approved presence on the internet. These approved tools may be used by ISAs. No ISA may independently design a website without Company permission that uses the ,names, logos, product descriptions of the Company, nor may an ISA use "blind" ads on the internet making product or income claims which are ultimately associated with Company products or the Company's compensation plan. Any person using Company names, logos, trademarks, etc. on the internet or any other advertising medium, except as permitted by Company Policies & Procedures, shall be subject to immediate discipline, including termination of ISA status.

17. Prohibition of Sales on Unauthorized Internet Sites. Except with written authorization from the Company, an ISA may not sell nor promote Company products on unauthorized internet sites, including, but not limited to auction sites such as eBay, nor internet shopping sites such as Amazon, nor internet malls. Approvals may be given for shops owned by ISAs and only in the case that the ISA is selling products at Company online retail prices. This policy is in place to protect the integrity of the ISA Sales Organization System. BlackBox Cosmetics' administration must protect every ISA's ability to sell the products and make sure that customers must go through an ISA to purchase said products. Customers can not purchase products for less than retail unless they are an ISA themselves. For this reason, ISAs will not be able to approach chain or corporate owned retail businesses. If a customer is able to purchase BlackBox Cosmetics' products at, e.g., Macy's, Saks Fifth Avenue, or even Target... there would be no reason for someone to purchase products from an ISA. This might be great for BlackBox Cosmetics and the one Independent Sales Person, but would ruin the business for every other ISA. BlackBox Cosmetics has chosen a direct sales model and it will be strictly upheld.

 

18. Unsolicited E-mail. The Company does not permit ISAs to send unsolicited commercial e-mail to others unless such e-mails strictly comply with applicable laws and regulations including, without limitation, the federal CAN SPAM Act. Any e-mail sent by an ISA that promotes the Company, the Company opportunity or Company products and services must comply with the following:

a. There must be a functioning return e-mail address to the sender.

b. There must be a notice in the e-mail that advises the recipient that he or she 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 him or her (a functioning "opt-out" notice).

c. The e-mail must clearly and conspicuously disclose that the message is an advertisement or solicitation.

d. The use of deceptive subject lines and/or false header information is prohibited.

e. All opt-out requests, whether received by e-mail or regular mail, must be honored. If an ISA receives an opt-out request from a recipient of an e-mail, the ISA must remove the recipient immediately.

19. Unsolicited Faxes and Spam. Except as provided in this section, ISAs may not use or transmit unsolicited faxes, mass e-mail distribution, unsolicited e-mail, or "spamming" or use an automatic telephone dialing system relative to the operation of their Company businesses. Unsolicited broadcast distribution of e-mail or other distribution that may be defined as "bulk mail" or "SPAM" is strictly prohibited. ISAs may send "general mailings" only to other ISAs in their downline sales organizations and their direct up-line sponsors. Any other bulk use of e-mail is prohibited. The term "automatic telephone dialing system" means equipment, which has the capacity to: a. Store or produce telephone numbers to be called, using a random or sequential number generator; and b. To dial such numbers. The terms "unsolicited faxes" and "unsolicited e-mail" mean the transmission via telephone facsimile or electronic mail, respectively, of any material or information advertising or promoting the Company, its products, its compensation plan or any other aspect of the Company which is transmitted to any person, except that these terms do not include a fax or email:

a. To any person with that person's prior express invitation or permission; or

b. To any person with whom the ISA has an established business or personal relationship. The term "established business or personal relationship" means a prior or existing relationship formed by a voluntary two-way communication between a an ISA and a person, on the basis of: (1) An inquiry, application, purchase or transaction by the person regarding products offered by such ISA; or (2) A personal or familial relationship, which relationship has not been previously terminated by either party.

20. Retail Establishments. Company products or services may only be displayed and sold in retail establishments upon the following conditions:

21. Trade Shows. With written authorization from the Company, Company products or services and opportunity may be displayed at trade shows by ISAs. Request for participation in trade shows must be received in writing by the Company at least two weeks prior to the show. Written authorization from the Company must be received before participating in the trade show. Unless written authorization is secured from the Company, Company products and opportunity are the only products and/or opportunity that may be offered in the trade show booth. Only Company produced marketing materials may be displayed or distributed.

22. International Sales. ISAs who choose to sponsor internationally may do so only in countries in which the Company can ship its products without interference and in a timely and reasonable manner. Purchases may be required to be picked up by the customer or ISA with a purchase receipt at the nearest Customs department. The Company will not be responsible for returned shipments that were not picked up within the time allocated by that country's Customs department. ISAs in countries outside of the U.S.A. are responsible for paying taxes to and following any laws imposed by the country in which they reside and/or do business. Any violation of this rule constitutes a material breach of this contract and is grounds for immediate termination of the ISA Agreement.

23. The Company reserves the right to approve or disapprove ISA's change of business names, formation of partnerships, corporations, and trusts for tax, estate planning, and limited liability purposes. If the Company approves such a change by an ISA, the organization's name and the names of the principals of the organization must appear on the ISA application agreement along with a social security number or federal identification number. It is prohibited to make changes to attempt to circumvent or violate Company rules on raiding, solicitation, targeting, cross-sponsoring or interference.

 

24. Although there is no ISA renewal fee charged to maintain this agreement, the ISA agreement may be canceled at any time and for any reason by an ISA notifying the Company in writing of the election to cancel or be removed from our ISA mailing list.

 

25. If an ISA elects to cancel his or her ISA agreement, all rights to commissions, bonuses, marketing position, and overrides will cease after the final compensation payment is made at the end of the month. The terminated ISA's sales organization shall remain in the sales organization of his/her upline organization and direct sponsor. Any purchases made in the now terminated ISAs shopping cart and past sales organization will continue to pay out organization commissions to the upline sponsors. ISAs cannot hold more than one position in the organization, nor can the company award the position to another party. Thus all proceeds that would normally go to the terminated ISA are deemed BlackBox Cosmetics' company property.

 

26. Since the Company markets tangible products that have a limited shelf life and are marketed on the basis of freshness, it has adopted these buyback rules to promote consumer protection standards. The Company strongly suggests ISA's sale product using their BlackBox Cosmetics' replicated shopping cart. However, the Company realizes there are certain circumstances where having product "on hand", e.g., trade shows, retail shops, large home-based parties, is desirable. Taking this into account, an ISA should never purchase more product or inventory than they can reasonably resale within 30 days. At its discretion, the Company will consider taking a return on perfectly conditioned product in resale condition minus shipping costs to and from the purchasing ISA... within 15 days of purchase. There will be a 10% restocking fee and all commissions and bonuses to the selling ISA and sponsoring organization will be forfeited or reduced from future commissions and bonuses. In addition... due the the time and financial expense involved in processing returned bulk orders, the ISA returning product will no longer be eligible for bulk product purchases. This policy includes full and half case purchases of kits and individual products. If the ISA has purchased products for inventory purposes while the ISA agreement was in effect and has canceled, the Company will repurchase the products at the ISA's purchase price minus shipping costs if they were purchased within 15 days of cancellation and the products are in resale condition. The canceling ISA will be responsible for return shipping costs. In addition, the company will honor statutory mandated buyback requirements of every jurisdiction.

27. The Company shall be entitled to change product or service prices at any time and without notice, and to make changes in the statement of policy and procedures.

28. Each ISA shall comply with all state and local taxes and regulations governing the sale of Company products.

29. All ISA enrollment fees and product purchases fall under the FTC Three-Day Cooling Off Rule which allows the customer/new ISA to cancel their purchase and receive a refund. ISA enrollment fees will be refunded immediately upon written notice of cancellation. Product purchases will be refunded upon their return arrival at BlackBox Cosmetics. ISAs must explain the three-day right of cancellation to their customers and the ISAs they sponsor. The Company will inform the customer and ISA of their right to cancel their ISA Agreement and/or product purchase within the 3 day cooling off period.

30. Company ISAs, as independent contractors, are free to sell or market consumer products or services other than the Company's products with certain restrictions. However, a company ISA shall not engage in any recruiting or promotion activity that targets company ISAs, sales representatives, or distributors for opportunities or products of other direct selling companies or business opportunities, either directly or indirectly, by themselves or in conjunction with others, nor shall an ISA participate, directly or indirectly, in interference, raiding or solicitation activity of Company ISAs for other direct selling companies or business opportunities. Additionally, no recruiting for other business ventures is authorized at any company function. Failure to comply with this recruiting and cross-sponsoring policy shall cause a Company ISAs Agreement to be subject to cancellation.

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