Policies & Procedures... page 2

 

31. Business Report Confidentiality. On a regular basis, the Company will supply data processing information and reports to the ISA, which will provide information concerning the ISAs downline sales organization, product purchases and product mix. The ISA agrees that such information is proprietary and confidential to the company and is transmitted to the ISA in confidence. The ISA agrees that he or she will not disclose such information to any third party directly or indirectly, nor use the information to compete with the company directly or indirectly during or after the term of the agreement. An ISA seeking to sell his/her ISA business/sales organization must acknowledge and agree to this provision prior to the finalization of the sale of their ISA business/sales organization.

32. Vendor Confidentiality. The Company's business relationship with its vendors, manufacturers and suppliers is confidential. An ISA shall not contact, directly or indirectly, or speak to or communicate with any representative of any supplier or manufacturer of the Company except at a Company sponsored event at which the representative is present at the request of the Company. Violation of this regulation may result in termination and possible claims for damages if the vendor/manufacturer's association is compromised by the ISA contact.

33. Change in Status. Divorce: Should a married couple who share an ISA business/sales organization become divorced, they agree to notify the Company as to who will assume responsibility for their ISA business/sales organization in one of the following manners:

a) Written notarized agreement signed by both parties indicating who will retain the ISA business/sales organization.

b) A court order delineating who receives custody over the ISA business/sales organization.

c) Both parties may choose to retain their joint ISA business/sales organization and operate it as a partnership. The divorced ISA may apply for a new ISA once the divorce is court documented. Death: Upon the death of an ISA, the rights and responsibilities of the ISA may be passed on to the rightfully legally documented heir as long as that person has filled out a new ISA application and has received proper Company training. Disability: Should an ISA become disabled to the extent that he/she can no longer fulfill the required duties of a Company ISA, such disabled ISA's legal representative or conservator shall:a) Contact the Company within thirty (30) days of the disability and advise the company of the ISA's status and the plans for future management or cancellation of the ISA business/sales organization. b) Provide notarized or court confirmed copy of appointment as legal representative or conservator. c) Provide notarized or court confirmed copy of document establishing right to administer the company business.

d) Should the legal representative or conservator plan to continue the business of the ISA, then he/she shall fill out a new ISA application and receive the required training consistent with the disabled ISA's level at the time of disability. These requirements shall be satisfied within a deadline of six months.

34. Sale or Transfer. An ISA may not sell, assign or otherwise transfer his or her ISA business/sales organization, marketing position or other ISA business/sales organization rights without written application and approval by the Company. An ISA may not hold more than one position in the organization or company and thus is ineligible to purchase another ISA's BlackBox Cosmetics' business or organization. This paragraph is also applicable to transfer of any interest in an entity that owns more than 51% of an ISA business/sales organization, including but not limited to corporation, partnership, trust or other non-individual entity. An ISA may not add a co-applicant to their ISA business/sales organization and thereafter, remove their name from the ISA business/sales organization, as an effort to circumvent the Company's sale, assign, delegate or merger procedure. The primary ISA must wait twelve (12) months after adding a co-applicant to the ISA business/sales organization before they are allowed to remove their name from the ISA business/sales organization. It is prohibited to use a sale or transfer to attempt to circumvent Company policy on raiding, soliciting, cross-sponsoring or interference. For the term of three (3) years after sale or transfer, an ISA agrees that he/she shall not, directly or indirectly, disrupt, damage, impair or interfere with the business of Company, whether by way of interfering with, or raiding its employees or ISAs, disrupting its relationship with customers, agents, representatives, distributors, suppliers, vendors or manufacturers or otherwise. "Disrupting" or "interfering" shall include, but not be limited to, direct or indirect solicitation or recruitment for other direct selling business opportunities or products or services of other direct selling companies. An ISA seeking to sell or transfer his/her ISA business/sales organization must acknowledge and agree to this provision prior to the finalization of the sale or transfer of their ISA business/sales organization.

35. This statement of policies and procedures is incorporated into the Independent Sales Associate (ISA) agreement and constitutes the entire agreement of the parties regarding their business relationship.

36. The Company expressly reserves the right to alter or amend prices, Rules and Regulations, Policies and Procedures, product availability and compensation plan. Upon notification, in writing, such amendments are automatically incorporated as part of the agreement between the Company and the ISA. Company communication of changes may include, but shall not be limited to mail, email, fax, posting on the Company website, publication in company newsletters or magazines, etc.

37. Non-Individual Ownership. A partnership or corporation may be an ISA with approval from the Company. However, no individual may participate in more than one (1) ISA business/sales organization.

a. If approved by the Company, an ISA business/sales organization may change status under the same sponsor from individual to partnership or corporation or from partnership to corporation with proper and complete documentation.

b. To form a new ISA business/sales organization as a partnership or corporation or to change status to one of these forms of business, you must request a partnership/corporation form from the corporate home office. This form must be submitted detailing all partners, stockholders, officers or directors in the partnership or corporation. The partner or officer who submits the form must be authorized to enter into binding contracts on behalf of the partnership or corporation. In addition, by submitting the partnership/corporation form, you certify that no person with an interest in the business has had an interest in a ISA business/sales organization within three (3) months of the submission of the form (unless it is the continuation of an existing ISA business/sales organization that is changing its form of doing business).

38. Individual and Entity Ownership Information.

a. An individual can have only one ISA business/sales organization in the company. He/she may not own any other ISA business/sales organization, either individually or jointly, nor may he/she participate as a partner, owner, stockholder, trustee, director, or association member in more than one ISA business/sales organization in any form.

b. An individual shall provide the Company with a Social Security Number or a Taxpayer Identification Number (TIN). No individual operating under a fictitious name and no partnership, corporation or other business entity may become a company ISA without submitting an "Entity Information" form following enrollment of proprietorship, corporation, Limited Liability Corporation (LLC), trust or partnership. (1) Proprietorship: A copy of fictitious name filing must be submitted, plus a W-9 form. (2) Corporation: Copies of articles of incorporation are required, including the page with state seals and notarization. These articles will show who the principals are and prove validation of Federal ID Number/Business Number/E.I.N, plus a W-9 form. (3) LLC: IRS acceptance only. The name on the IRS acceptance is required to state the LLC in order to use it as an LLC, plus a W-9 form. (4) Trust: An affidavit of trust with the notarized copy of the power of attorney is necessary. If Federal ID Number is to be used and is not noted in the affidavit, an IRS acceptance will be required, plus a W-9 form. (5) Partnership: To register as a partner, complete the partnership portion of the Entity Information form, along with all signatures that apply, plus a W-9 form.

39. Entity Guarantee for Owners: Although Company has offered ISAs the opportunity to conduct their ISA business/sales organization as corporate, LLC, trust or partnership entity, those entities are under the control of its owners and principals, the actions of individual owners or beneficiaries as they may affect Company's business. Therefore, it is agreed that actions of individual owners or beneficiaries as they may affect Company and the ISA business/sales organization are also critical to Company's business. Therefore it is agreed that actions of the ownership entity shareholders, officers, directors, trustees, beneficiaries, agents, employees or other related or interested parties and the actions of such parties, which are in contravention to Company's policies shall be attributable to the corporate, LLC, trust or partnership entity. In the event that any of the ownership entity shareholders, officers, directors, trustees, beneficiaries, agents, employees or other related parties shall terminate ownership interests in the ISA business/sales organization, any breaching actions by such parties that continue to have a beneficial financial interest, directly or indirectly, in the ISA business/sales organization shall be attributable to the ISA business/sales organization.

40. Disciplinary Actions. An ISA's violation of any policies and procedures, the agreement, terms and conditions or any illegal, fraudulent, deceptive, or unethical business conduct may result, at the Company's discretion, in one or more of the following disciplinary actions:

a. Issuance of a written warning or admonition.

b. Imposition of a fine, which may be imposed immediately or withheld from future commission checks.

c. Reassignment of all or part of a ISA's organization.

d. Suspension, which may result in termination or reinstatement with conditions or restrictions.

e. Termination of the ISA.

41. The Company reserves the right to terminate any ISA business/sales organization at any time for cause when it is determined that the ISA has violated the provisions of the ISA agreement, including the provisions of these policies and procedures as they may be amended or the provisions of applicable laws and standards of fair dealing. Such involuntary termination shall be made by the Company at its discretion. Upon an involuntary termination, the Company shall notify the ISA by mail at the latest address listed with the Company for the ISA. In the event of a termination, the terminated ISA agrees to immediately cease representing him/herself as an ISA.

42. Termination.

a. When a decision is made to terminate an ISA business/sales organization, the Company will inform the ISA in writing that the ISA business/sales organization is terminated immediately, effective as of the date of the written notification. The termination notice will be sent by certified mail to the ISA's address on file with the Company.

b. The ISA will have 15 days from the date of mailing of the certified letter in which to appeal the termination in writing, and provide written response to the finding of violations of Company agreement, policies and/or rules. The ISA's appeal and/or response correspondence must be received by the Company within 20 days of the Company's termination letter. If the appeal is not received within the 20 day period, the termination will be automatically deemed final.

c. If an ISA files a timely appeal of termination, the Company will review and reconsider the termination, consider any other appropriate action, and notify the ISA of its decision. The decision of the Company will be final and subject to no further review. In the event the termination is not rescinded, the termination will be effective as of the date of the Company's original termination notice.

43. All ISAs have the right to sponsor others. In addition, every person has the ultimate right to choose his/her own sponsor. If two ISAs should claim to be the sponsors of the same new ISA, the Company shall regard the first application received by the corporate home office as controlling.

a. As a general rule, it is good practice to regard the first ISA to meaningfully work with a prospective ISA as having first claim to sponsorship, but this is not necessarily controlling. Basic tenets of common sense and consideration should govern.

b. As a convenience to its ISAs, the Company may provide various methods of registering or informing the Company of newly sponsored ISAs, including hard copy written registration, online internet registration, telephone registration and facsimile registration.

c. Success is based on the efforts of ISAs training the new ISAs they have sponsored. Those who sponsor many, but who do not help their new ISAs develop their business meet with limited success. Therefore, a responsibility of sponsorship is to work with new ISAs, helping them learn the business and encouraging them during the critical early months.

d. Sponsors are not required to carry inventory of products or sales aids when recruiting new ISAs. When tangible product is involved, ISAs who do so, however, find building a major sales organization much easier. ISA's that wish to carry product should take care to show the product in the best possible condition. The products were created with the belief that a professional, high-quality image should match the contents of the product. A great first impression is critical. ISA's should consider keeping their samples in new condition and remove any lotion, smudges, and/or fingerprints from the bottles before presentation.

44. Transfer of Sponsorship. Transfer is rarely permitted and is actively discouraged. Maintaining the integrity of sponsorship is absolutely mandatory for the success of the overall organization.

a. Transfers will generally be approved in three (3) circumstances only: (1) In the case of unethical sponsoring by the original sponsor. In such cases, the Company will be the final authority. (2) With the written approval of the immediate five (5) upline sponsors. (3) Resigning from the Company entirely and waiting three (3) months to reapply under the new sponsor.

b. In cases of unethical sponsoring, the individual may be transferred with any downlines intact; in all other events, the individual alone is transferred without any downline ISAs being removed from the original line of sponsorship.

45. To be eligible for monthly sponsored commissions, overides, bonuses, and/or prizes, the ISA must comply with: a. Supervisory responsibility requirements as outlined herein. b. Retail sales rules outlined in this agreement. c. Policies & Procedures and the ISA Agreement

46. The Company encourages each ISA to keep accurate sales records. The program is based upon retail sales to the ultimate consumers; therefore, all forms of stockpiling or pyramiding are prohibited. Products and services are offered to ISAs only for personal consumption and for resale to consumers.

47. Some states have specific limitations on the amount of product any sales representative of a company can purchase or stock for resale to consumers. For this reason, we suggest ISAs keep a limited amount of product on hand for demonstration and sales purposes. The products are meant to be used within a limited amount of time and with the highest possible nutrient value intact. Stocking product defeats this purpose and should be avoided. Customers should be directed to the ISA's shopping cart on the Internet whenever possible. ISAs can purchase product form their own shopping cart to be shipped or delivered to the end customer whenever the customer does not have Internet access. Statutory limitations will be recognized and imposed on ISA's that the Company deems is stocking product.

48. Income Claims. No income claims, income projections nor income representations may be made to prospective ISAs. Obviously, any false, deceptive or misleading claims regarding the opportunity or products are prohibited. In their enthusiasm, ISAs are occasionally tempted to represent hypothetical income figures based upon the inherent power of exponential growth & direct marketing as actual income projections. This is counter-productive, since new ISAs may be quickly disappointed if their results are not as extensive or as rapid as a hypothetical model would suggest. The Company believes firmly that the income potential is great enough to be highly attractive in reality without resorting to artificial and unrealistic projections.

49. Representation of Status. In all cases, any reference the ISA makes to him/herself must clearly set forth the ISA's independent status. For example, if the ISA has a business telephone, the telephone may not be listed under the Company's name or in any other manner which does not disclose the independent contractor status of the ISA.

50. Judgment and Tax Liens. The Company will comply fully with any court order or instruction/demand by any government taxing authorities within the United States, Canada, and any other country we deem appropriate that orders, instructs or demands the withholding of an ISA's earnings from his/her ISA business/sales organization with the Company.

51. Subpoenas Duces Tecum (Demands for Records). Assuming proper jurisdiction, the Company will comply with all subpoenas duces tecum demanding financial compensation records of an ISA in his/her capacity as an independent contractor with the Company.

52. Requests for Records. The Company will comply fully with all requests for records accompanied by a properly prepared and signed Authorization by the person whose records are being sought. The Company will comply fully with all requests for records by government agencies with the authority to request such records and accompanied by the requisite legal documentation.

53. Advertisements. Some ISAs use advertising in all forms to find prospects. The following rules apply: a. No advertisement may imply that a "job" or "position" is available. b. No specific income can be promised. c. Advertisements must contain no misleading facts or distortions of the Company opportunity or product line.

54. Business Cards and Stationery. Any printed materials, including business cards and stationery, must be approved by the Company in advance unless purchased at an authorized Company printer with pre-approved templates and Company artwork, logos, and marks. Criteria for approving these materials will include a judgment regarding the quality of the materials as well as properly setting forth the independent status of the ISA. All other forms of marketing material and changes must be approved by the Company.

55. Telemarketing Techniques. The Federal Trade Commission and the Federal Communications Commission each have laws that restrict telemarketing practices. Both federal agencies (as well as a number of states) have "do not call" regulations as part of their telemarketing laws. Although the Company does not consider ISAs to be "telemarketers" in the traditional sense of the word, these government regulations broadly define the term "telemarketer" and "telemarketing" so that your inadvertent action of calling someone whose telephone number is listed on the federal "do not call" registry could cause you to violate the law. Moreover, these regulations must not be taken lightly, as they carry significant penalties. Therefore, ISAs must not engage in telemarketing in the operation of their ISA business/sales organization. The term "telemarketing" means the placing of one or more telephone calls to an individual or entity to induce the purchase of a Company product or service, or to recruit them for the Company opportunity. "Cold calls" made to prospective customers or ISAs that promote either Company products or services or the Company opportunity constitute telemarketing and are prohibited. However, a telephone call(s) placed to a prospective customer or ISA(a "prospect") is permissible under the following situations:

a. You may call family members, personal friends, and acquaintances. An "acquaintance" is someone with whom you have at least a recent first-hand relationship within the preceding three (3) months. Bear in mind, however, that if you make a habit of "card collecting" with everyone you meet and subsequently calling them, the FTC may consider this a form of telemarketing that is not subject to this exemption. Thus, if you engage in calling "acquaintances," you must make such calls on an occasional basis only and not make this a routine practice.

b. The prospect's personal inquiry or application regarding a product or service offered by the ISA, within the three (3) months immediately preceding the date of such a meeting.

c. If the ISA has an established business relationship with the prospect. An "established business relationship" is a relationship between an ISA and a prospect based on the prospect's purchase, rental or lease of goods or services from the ISA, or a financial transaction between the prospect and the ISA within the eighteen (18) months immediately preceding the date of a telephone call to induce the prospect's purchase of a product or service.

d. If the ISA receives written and signed permission from the prospect authorizing the ISA to call. The authorization must specify the telephone number(s) which the ISA is authorized to call.

e. In addition, ISAs shall not use automatic telephone dialing systems relative to the operation of their Company businesses. 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.

56. BlackBox Cosmetics' has a responsibility to its customers above and beyond all other aspects of the business. It is the customer's choice to purchase from whichever BlackBox Cosmetics' salesperson/ISA they wish. This makes it imperative that you maintain a presence or roll in your customer's experience. Otherwise they may reach out to another salesperson/ISA for assistance.

57. Press Inquiries. Any inquiries by the media are to be referred immediately to the Company. This policy is to assure accuracy and consistent public image.

58. Federal and state regulatory agencies rarely approve or endorse direct selling programs. Therefore, ISAs may not represent that the Company's program has been approved or endorsed by any governmental agency.

59. Indemnification and Hold Harmless. The ISA hereby indemnifies and releases Company, its officers, directors, agents and assigns and holds harmless from and against the full amount of any and all claims, causes of action, judicial and administrative proceedings suits, charges, liabilities, losses, damages, costs and expenses, including without limitation court costs and reasonable fees and expenses of attorneys and consultants, which are or may be made, filed or assessed against Company at any time arising out of ISA's business operations and representations made by the ISA in the operation of his/her business, arising from the following:

a. Violation and/or lack of compliance with terms of the ISA's agreement, policies and procedures, rules and regulations, marketing program manual or guidelines or any other directive from the Company as to method and manner of operation of the ISA's business;

b. Engaging in any conduct not authorized by the Company in the Company market program;

c. Any fraud, negligence or willful misconduct in the operation of the ISA's business;

d. Misrepresentation or unauthorized representation regarding the Company's product or service, marketing opportunity or potential or the Company's marketing program;

e. Failure to adhere to any federal, state or local law, regulation, ordinance and/or any order or rule issue by any court of appropriate jurisdiction;

f. Engaging in any action which exceeds the scope of authority to the ISA as granted by the Company;

g. Engaging in any activity over which Company has no effective control as to the actions of the ISA.

h. Engaging in the general business operations of ISA's business.

60. Product Returns and Delivered Product. The Company will accept product returns from customers with a full refund (minus shipping charges & the ISA Enrollment Fee) within 14 days of purchase. ISA commissions and bonuses will be adjusted to reflect the return. In the case of faulty product or equipment, the Company will immediately ship a replacement. Products shipped and mark delivered by the postal service, but reported stolen by the customer may be replaced one (1) time by BlackBox Cosmetics at a loss to the Company at our discretion. However, no commissions, bonuses, and/or overrides will be paid on stolen product marked delivered, since the postal delivery company will not reimburse for delivered product. In addition, we may require delivery confirmation on future shipments to an address with a reported stolen package.

61. Waiver. The Company never gives up its right to insist on compliance with these rules or with the applicable laws governing the conduct of a business. This is true in all cases, both specifically expressed and implied, unless an officer of the Company who is authorized to bind the Company in contracts or agreements specifies in writing that the Company waives any of these provisions. In addition, any time the Company gives permission for a breach of the rules, that permission does not extend to future breaches. This provision deals with the concept of "waiver," and the parties agree that the Company does not waive any of its rights under any circumstances short of the written confirmation alluded to above.

62. Governing Law. These rules are reasonably related to the laws of the state of Florida and shall be governed in all respects thereby. The parties agree that jurisdiction and venue shall lie with the place of acceptance of the ISA's application, the state of Florida. 63. Partial Validity. Should any portion of these Rules and Regulations, of the ISA's application and agreement, or of any other instruments referred to herein or issued by the Company be declared invalid by a court of competent jurisdiction, the balance of such rules, applications, or instruments shall remain in full force and effect.

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