hempSMART Inc., hereinafter “Company,” is a direct selling Company, marketing health-related products and other consumer products to the consumer through Independent Representatives. The policies and procedures herein are applicable to all Independent Representatives (hereinafter “Affiliate”) of the Company.
Affiliates will, at all times, conduct their business in a professional and ethical manner that is supportive to both the Company and other Affiliates. An Affiliate shall engage in no conduct which negatively impacts, disrupts or impairs the reputation or business of the Company, its products/services or other Affiliates, including, but not limited to: disparagement of the Company, its officers or employees, its products/services or other Affiliates; manipulation of the compensation plan or unauthorized manipulation of the placement program or genealogy structures; undermines or is at odds with the training systems utilized by and authorized by the Company; conduct which is abusive, disrespectful, bullying or intimidating of other Affiliates, customers, employees, or Affiliates of the Company; conduct that undermines the relationship between the Company and Affiliates or relationships between Affiliates; conduct which disrespects the privacy of other Affiliates; conduct which is false, fraudulent, dishonest or deceptive in any way; or any other conduct which the Company deems disreputable or, in any way, negatively impacts the Company or other Affiliates.
The Company’s program is built upon retail sales to the ultimate consumer. The company also recognizes that Affiliates may wish to purchase product or service in reasonable amounts for their own personal or family use. For this reason, a retail sale for bonus purposes shall include sales to nonparticipants, as well as sales to Affiliates 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 or service solely for the purpose of qualifying for bonuses or advancement in the marketing program. Affiliates must fulfill published personal and down line retail sales requirements, including requisite retail sales to nonparticipants, as well as supervisory responsibilities, to qualify for bonuses, overrides or advancements.
Any Affiliate, who sponsors other Affiliates, must fulfill the obligation of performing a bona fide supervisory position in the training or guidance of those sponsored for the purpose of selling product to the ultimate consumer. Affiliates 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, e-mail, training sessions, accompanying individuals to Company training, sharing genealogy information with those sponsored, and website navigation. Affiliates should be able to (but is not required to) provide evidence to the Company semiannually of ongoing fulfillment of sponsor responsibilities. If an Affiliate is an Enroller in the marketing program entitled to Enroller bonuses, then the Enroller is obligated to the same responsibilities of supervisory, communication and training activities with respect to Affiliates he or she has enrolled, irrespective of whether the Enroller is also the Sponsor of those Affiliates.
No Affiliate shall enter into any agreements or make purchases in the name of hempSMART™. No Affiliate shall involve hempSMART™ in any contractual relationship. Affiliate’s cannot and will not sign any contract, rent or lease office space or equipment, open any bank account, secure credit, cash any negotiable instrument, make purchases or enter into agreements of any kind in the name of hempSMART™. Each Affiliate shall hold harmless hempSMART™ from any claims, damages, or liabilities arising out of said hempSMART™ business practices.
Communication is very important at hempSMART™. It is crucial that Affiliates have all questions answered. To that end, Affiliates are encouraged to make inquiries and discuss issues. Every Affiliate will be given the opportunity to discuss whatever he/she wishes with management to whatever level is necessary to receive due consideration for his/her ideas.
The policy statements that follow were established to explain and define the relationship and responsibilities between hempSMART™ and its Affiliates. The relationship begins with the completion of the hempSMART™ Affiliate Application in hard copy or online format, which constitutes a binding agreement between the parties, and the policy statements contained in this Handbook are, by reference, an integral part of that hempSMART™ Application. The application, the policies & procedures accompanying the application, and this Handbook thus constitute the entire understanding between Affiliate and hempSMART™.
The term of this Agreement begins when a completed Affiliate Application is received, processed and accepted by hempSMART™, which reserves the right, in its sole discretion, to decline any application it receives. This Agreement will continue until terminated in accordance with the provisions of the termination section of this Policy and Procedure manual. The Affiliate is subject to all conditions set forth in this Policies & Procedures Manual.
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 Affiliates in the marketing of our products and services to the general consuming public. As a dual consumer safeguard, of the utmost importance to the Company is the policy that Affiliates should purchase products and services in commercially reasonable quantities, and under no circumstances may Affiliates cause others to purchase products or services 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/70 percent rules. In the interest of protecting the consumer and the opportunity of its Affiliates, the Company enforces this rule through a verification program.
All Affiliates 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 and services. The Company will collect sales tax on behalf of the Affiliate, then report and distribute applicable sales taxes to the taxing entity for the state in which the sale is made. Affiliates may apply for a waiver of this practice by submitting a copy of their sales and use tax number (and a statement that they are wholesale purchasers purchasing for resale) acquired through their local taxing authorities.
Company Affiliates shall not advertise Company products and services and/or marketing plans except as specifically approved by the Company. Company Affiliates agree to make no false or fraudulent representations about the Company, the products, the Company compensation plan, or income potentials.
As an extension to the initial “at cost” sales kit, a modest yearly fee will be charged for expanded “at cost” (wholesale) ongoing sales abilities, marketing materials support, back office accounting review, training updates, replicated website privilege, and communication tools to support the sales and marketing process. By submitting this Affiliate Agreement, Affiliates specifically authorize this yearly fee to be charged to the Affiliate’s on-file debit or credit card (or other form of payment acceptable to the Company) each year for as long as he or she remains an Affiliate.
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 Affiliate for Affiliate’s use only in an expressly authorized manner. Affiliate agrees not to advertise the Company products or services in any way other than the advertising or promotional materials made available to Affiliate by the Company. Affiliate 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.
Company products or services may be displayed and sold in retail establishments, the sale of such products or services within such retail facilities must be conducted by an Affiliate and must be preceded by a discussion where the Affiliate introduces the prospect to the products or services and opportunity just as they would if they had met outside of the retail facility. Company produced literature, banners, or signage only may be displayed on a shelf, counter, or wall and must be displayed by itself. Special pricing at the amount of 30% off the retail value of the product is the mandated price when being sold to store front owners or retail establishments. From time to time, the Company may announce policies and rules that expand or contract restrictions on sales in retail establishments.
With written authorization from the Company, Company products or services and opportunity may be displayed at trade shows by Affiliates. 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 or services and opportunity are the only products or services and/or opportunity that may be offered in the trade show booth. Only Company produced marketing materials may be displayed or distributed. No Affiliate may sell or promote the Company’s products or services or business opportunity at flea markets, swap meets, or garage sales.
No Affiliate may export or sell directly or indirectly to others who export the Company’s products, literature, sales aids or promotional material relating to the Company, its products or services or the Company’s program from the United States or its possessions or territories to any other country. Affiliates who choose to sponsor internationally may do so only in countries in which the Company has registered to operate its business and must comply fully with the Rules of Operation of a Company Affiliate position in that country. Any violation of this rule constitutes a material breach of this contract and is grounds for immediate termination of the Affiliate.
The Company reserves the right to approve or disapprove Affiliate’s change of business names, formation of partnerships, corporations, limited liability companies, trusts or other legal entities for tax, estate planning, and limited liability purposes. If the Company approves such a change by Affiliate, the organization’s name and the names of the principals of the organization must appear on the Affiliate 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.
The Affiliate agreement may be canceled at any time and for any reason by an Affiliate notifying the Company in writing of the election to cancel.
If an Affiliate elects not to renew his\her Affiliate agreement by not repurchasing the wholesale packet, all rights to bonuses, marketing position, and wholesale purchases cease. The terminated Affiliate’s sales organization shall be subject to placement in accordance with the then current published compensation plan presentation.
If the Affiliate has purchased products for inventory purposes or mandatory sales aids while the Affiliate agreement was in effect, all products in a resalable condition then in possession of the Affiliate, which have been purchased within 12 months of cancellation, shall be repurchased. [Note: DSA member companies and multilevel distribution statute states mandate 12 months. Thus, 12 months is recommended.] The repurchase shall be at a price of not less than ninety percent (90%) of the original net cost to the participant returning such goods, taking into account any sales made by or through such participant prior to notification to the Company of the election to cancel. Buyback is 12 months in Massachusetts, Maryland, Montana, Georgia, Louisiana, Wyoming, Texas, Oklahoma, Idaho, Utah, Washington and Puerto Rico. In addition, the company will honor statutory mandated buyback requirements of every jurisdiction. A Montana resident may cancel his or her Agreement within 15 days from the date of enrollment, and may return his or her starter kit for a full refund within such time period.
The Company shall be entitled to repayment of any commission previously paid on a sale of product/service if the product/service purchase is cancelled or reversed or a refund paid for a terminated purchase. The Company shall recover the commission by adjustment on the next month’s Affiliate check payment. In the event that no commission is available for adjustment in the following month, the Affiliate who has received the commission shall repay the commission paid on the “reversed sale” within 30 days of the Company’s notice to repay.
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.
Each Affiliate shall comply with all state and local taxes and regulations governing the sale of Company products or services.
Prohibition on Raiding and Cross-Solicitation of Products or Other MLM and/or Business Opportunities. The Company takes seriously its responsibility to protect the livelihood of its sales force and to the hard work invested to build a sales organization. Raiding and solicitation actions in which Affiliates seek to raid and solicit other Affiliates in the sales organization to non-company products and services and to other MLM/business opportunities, severely undermines the marketing program of the Company, interferes with the relationship between the Company and its sales force and destroys the livelihood of other Affiliates who have worked hard to build their own business, the business of their sales force and benefits they have earned by helping to build a sales organization. Therefore, Affiliates shall not directly or indirectly sell to, nor solicit from, other Company Affiliates non-company products or services, or in any way promote to other Company Affiliates business opportunities in marketing programs of other MLM or business opportunity companies at any time. A Company Affiliate shall not engage in any recruiting or promotion activity that targets Company Affiliates 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 Affiliate participate, directly or indirectly, in interference, raiding or solicitation activity of Company Affiliate for other direct selling companies or business opportunities. Unless approved in writing by the Company, this prohibition includes sales or solicitation of non-company products or services at meetings organized for Company sales, promotion, training recruitment, demonstration, etc. This prohibition on targeting, interference, soliciting and raiding shall be in effect during the term of the Affiliate agreement and for a period of one year after the termination of the Affiliate agreement. For the term of this agreement and for one year after termination hereof, an Affiliate shall not, directly or indirectly, recruit any of Company’s Affiliates to join other direct sales or network marketing companies nor solicit, directly or indirectly, Company’s Affiliates to purchase services or products, or in any other way interfere with the contractual relationships between Company and its Affiliates.
The Company is able to supply data processing information and reports to the Affiliate, which will provide information concerning the Affiliate’s down-line sales organization, product purchases and product mix. The Affiliate agrees that such information is proprietary and confidential to the Company and is transmitted to the Affiliate in confidence. The Affiliate 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. The Affiliate and the Company agree that, but for this agreement of confidentiality and nondisclosure, the Company would not provide the above confidential information to the Affiliate. An Affiliate seeking to sell his/her Affiliate position must acknowledge and agree to this provision prior to the finalization of the sale of their Affiliate position.
The Company’s business relationship with its vendors, manufacturers and suppliers is confidential. An Affiliate 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 Affiliate contact.
An Affiliate shall take appropriate steps to safeguard the protection of all private information provided by a consumer, a prospective consumer and/or other Affiliates.
An Affiliate may not sell, assign or otherwise transfer his or her Affiliate position, marketing position or other Affiliate rights without written application and approval by the Company. This paragraph is applicable to transfer of any interest in an entity that owns an Affiliate position, including but not limited to a corporation, partnership, limited liability company, trust or other non-individual legal entity. This sale or transfer of an Affiliate position must also obtain written approval of the immediate one (1) up line sponsor, plus the approval of two (2) leadership positions that are bronze level or above. The Affiliate position must be offered in writing first to the Affiliate’s sponsor. If the sponsor declines the offer, the Affiliate may offer the Affiliate position for sale to other entities. The Company reserves the right to review, modify, or refuse any sale or transfer agreement and will verify the waiver(s) from the up-line sponsor and leaders in the event the up-line sponsor declines to purchase the Affiliate position. An Affiliate who sells his or her Affiliate position shall not be eligible to requalify as an Affiliate for a period of at least six months after the sale.
This statement of policies and procedures is incorporated into the Affiliate agreement and constitutes the entire agreement of the parties regarding their business relationship.
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 Affiliate. 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.
A partnership, corporation, limited liability company or other legal entity may be an Affiliate. However, no individual may participate in more than one (1) Affiliate position in any form without the express prior written permission of the Company. Only in the most extreme and extraordinary circumstances will this be considered.
Although Company has offered Affiliates the opportunity to conduct their Affiliate position as corporate, LLC, trust, partnership or other form of legal entities, it is agreed that since the Affiliate position entity is under the control of its owners or principals, the actions of individual owners or beneficiaries as they may affect the Company and the Affiliate position are also critical to Company’s business. Therefore it is agreed that actions of the ownership entity shareholders, members, 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, partnership or other legal entity.
Members of Affiliate’s household may operate together as one Company Affiliate position, but may not become separate Company Affiliates. Household is defined as spouses and dependents. Note: Children of legal age to contract and at least 18 years of age are not considered a part of their parents’ household.
It is agreed that the Company is authorized to use Affiliate’s name, photograph, personal story and/or likeness in advertising or promotional materials and Affiliate waives all claims for remuneration for such use.
An Affiliate’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:
The Company reserves the right to terminate any Affiliate at any time for cause when it is determined that the Affiliate has violated the provisions of the Affiliate 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 Affiliate by mail at the latest address listed with the Company for the Affiliate. In the event of a termination, the terminated Affiliate agrees to immediately cease representing him/herself as an Affiliate.
A terminated Affiliate may appeal his or her termination by submitting a letter of appeal to hempSMART™ stating the grounds of the appeal. This letter must be sent Certified U.S. Mail, and must be received by hempSMART™ within fifteen (15) days of the date of delivery of the termination notice from hempSMART™. If hempSMART™ has not received a letter of appeal by that deadline, the termination automatically shall become final. If an Affiliate files a timely appeal, hempSMART™ shall, in its sole discretion, review and reconsider that termination and notify the Affiliate of its decision. If the appeal is denied, the termination shall stand and shall be retroactive to the date of the original termination notice. The decision of hempSMART™ shall be final and subject to no further review.
An Affiliate may voluntarily resign his or her Affiliate status by; 1) non-renewal or 2) sending a NOTARIZED written notice to hempSMART™ that he or she desires to terminate his or her Affiliate status. Voluntary resignation is effective 30 days after the date renewal was due, or upon receipt of such notice by hempSMART™ at its corporate headquarters, as applicable. An Affiliate who VOLUNTARILY resigns his or her Affiliate distributorship may reapply after waiting six (6) months from hempSMART’s receipt of the resignation before reapplication.
All Affiliates have the right to sponsor others. In addition, every person has the ultimate right to choose his/her own sponsor. If two Affiliates should claim to be the sponsors of the same new Affiliate, the Company shall regard the first application received by the corporate home office as controlling.
When soliciting a prospective Affiliate to join the Company’s network program, the sponsoring Affiliate must clearly refer the following:
Transfer is rarely permitted and is actively discouraged. Maintaining the integrity of sponsorship is absolutely mandatory for the success of the overall organization.
Transfers will generally be approved in three (3) circumstances only:
In cases of unethical sponsoring, the individual may be transferred with any down-lines intact; in all other events, the individual alone is transferred without any down-line Affiliates being removed from the original line of sponsorship.
The Company encourages each Affiliate 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 Affiliates only for personal consumption and for resale to consumers.
See specific addenda to the Affiliate agreement for specific states as to statutory purchasing limitations, buyback rules and other restrictions, disclosures and additional Affiliate rights and responsibilities. In any state with a business opportunity statute, required expenditures during the first six months shall not exceed the statutory amount that initiates applicability of the state business opportunity statute.
The hempSMART™ website makes ordering and accessing information online quick and easy. Available 24 hours a day, 7 days a week, the website allows you to place online orders. You will need your Affiliate username and password (which should be kept confidential) to establish a login at cdistro.com. You must keep your password secure and order only on your own account. When you sign up as an Affiliate, hempSMART will create a replicating website that you can utilize. This replicated site can be utilized for keeping track of orders, and for orders You will also answer a security question in case you lose any of your information, so please retain your hempSMART™ information in a safe and secure location.
On mail orders with invalid or incorrect payment types, or anything else that may prevent hempSMART™ from placing the order, hempSMART™ will attempt to contact you by phone or email to correct the order. HempSMART™ will make one attempt to correct the order. If this attempt is unsuccessful after five business days, the order will be cancelled.
With the exception of fast start bonuses on registration packs, for orders to be counted in a given month, they must be received and accepted on or before the last day of the month. Changes made to pending orders that have not yet shipped will keep the original date the order was entered. This may affect commission qualification for that particular month.
Fast start bonuses are paid weekly on packet sales or personal purchases made throughout the given week.
If an item ordered is out of stock or discontinued, it is your responsibility to verify that the products in your order are available when shipped.
No COD orders will be accepted.
Payment plans are not allowed when purchasing product. The balance must be paid in full before the order will be shipped.
HempSMART™ does not offer back orders. Please review the website to clarify whether a product is in stock. hempSMART™ will be diligent to make sure that supply is accessible to you as soon as possible.
The month-end order processing cutoff is the last calendar day of the month at 11:59 p.m., Eastern Time (ET). All mailed-in orders must be postmarked by the last day of the month and received within the next three business days of the following month. If not received within the following three business days, the orders will be credited to the following month. All days are considered business days except for Sunday and holidays when the mail is not delivered or when the hempSMART™ office is closed. Only mail-in orders fall under the three-day business exception.
Domestic orders are generally shipped within five to seven business days (excluding weekends and holidays). A packing slip is included in each shipment. It contains the order number, Affiliate’s name and number, product code, product name, price, and the amount and method of payment. Affiliates should keep these packing slips for personal accounting records. Package tracking is available through most major carriers.
When you receive an order, you should check the products against the packing slip to make certain there is no discrepancy or damage. Please notify hempSMART™ of any shipping discrepancies or damage as soon as possible. Failure to notify hempSMART™ of any shipping discrepancy or damage within five business days of receipt of shipment will forfeit your right to request a correction.
The Return Merchandise Authorization (RMA) number is required for the processing of all shipping discrepancies or damage claims.
If the RMA number is not included, hempSMART™ will not process shipping discrepancies, issue credits, or replace damaged products.
The RMA will be included in each order when packaged for return.
To correct any problems you may have encountered with your shipments, please contact: email@example.com. An Affiliate Services representative will discuss the steps to rectify the situation and issue a Return Merchandise Authorization (RMA) number.
HempSMART™ reserves the right to review each return or exchange on a case-by-case basis. Returns will cause promotions, credits, commissions, and bonuses to be adjusted or reversed, both for the person making the return and for any up-line Affiliates who received compensation on such purchases.
If you are dissatisfied with any hempSMART™ product, you may return:
Any unopened product within 30 days after shipment for a full refund in the same method of payment of the purchase price, shipping, and applicable sales tax.
Any opened product within 30 days after shipment is eligible for a full refund in the same method of payment of the purchase price, shipping, and applicable sales tax.
If you (as an Affiliate or professional account customer) sell product to non-Affiliates, the same return policy is applicable to the non-Affiliate as outlined in (Section 7.2). Any non-Affiliate is responsible for returning the product to hempSMART™ within 30 days of receiving it. HempSMART™ will accept returns and will provide a full refund in the same method of payment of the purchase price, shipping, and applicable sales tax.
Excessive returns may be deemed an abuse of hempSMART™ return policy and may result in suspension of your return privileges and/or sales organization. Damaged or incorrect shipments of products will not be subject to fees.
If you choose to terminate the Agreement, you may return any product inventory or sales aids purchased in the preceding 12 months for a refund if you are unable to sell or use the merchandise. You may return only products and sales aids that are in resalable condition, unless otherwise required by law. Resalable condition is defined as the same unopened condition as it was purchased new.
You must return the products to hempSMART™, prepay the shipping charges, and include a letter explaining that you wish to terminate the Agreement and receive a refund. Upon receipt of the products, you will be reimbursed 90% of the net cost of original purchase price, less shipping charges. hempSMART™ will deduct from the reimbursement any commissions, bonuses, or other incentives received by you as a result of the product you are returning. If your account is terminated, you have 30 days from the date of termination to make arrangements with hempSMART™ regarding the repurchase of all returnable products. You acknowledge that you will be unable to return products more than 30 days from the date of termination.
All hempSMART™ product kits and product collections must be sold as a whole unit. Affiliates are prohibited from selling individual items from product kits and product collections separately and promoting such activity within the Affiliate’s business organization.
Any product kit and/or collection returned to hempSMART™ must be complete; otherwise, the kit and/or collection will not be eligible for an exchange or refund. No individual items from a kit and/or collection will be eligible for a refund.
For any complimentary item(s) received by the purchaser via a qualifying purchase or through a buy- one-get-one-free promotion or other promotion, returns will be handled as follows:
Notwithstanding the provisions of Sections 3 and 7, if you are a resident of the State of Montana and you cancel the Affiliate Agreement within 15 days of the date of enrollment, you may return the kit to hempSMART™ for a 100% refund.
Although CBD produced from agricultural hemp is federally legal and is being legally sold in all of the 50 U.S. states, it is very important that all Affiliates are diligent to study and abide by local laws. Some States and Counties may have focused and or complicated laws when it comes to hemp based CBD products due to timely transitions in law making policies and education. Nebraska and Indiana are still within these processes of changing laws and it is the opinion of hempSMART™ that they should be avoided when selling hempSMART™ products until those laws stabilize. If the Affiliate does decide to sell within these States, THEY DO SO AT THEIR OWN RISK AND ASSUME FULL LEGAL RESPONSIBILITY.
No income claims, income projections nor income representations may be made to prospective Affiliates. Obviously, any false, deceptive or misleading claims regarding the opportunity or product\service are prohibited. In their enthusiasm, Affiliates are occasionally tempted to represent hypothetical income figures based upon the inherent power of network marketing as actual income projections. This is counter-productive, since new Affiliates 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.
In all cases, any reference the Affiliate makes to him/herself must clearly set forth the Affiliate’s independent status. For example, if the Affiliate 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 Affiliate.
If the Affiliate is a non-U.S. citizen/resident, then he/she hereby confirms that he/she is not a citizen or resident of the United States, and is obliged to inform the Company of this status. The Affiliate agrees that, if the Affiliate engages in any activities related to the Company while physically present in the United States, the Affiliate will (1) inform the Company about such activities, (2) submit a completed IRS Form 8233* or other appropriate identified IRS Form, such as Form W-8, to the Company if requested by the Company, completed as directed by the Company, for the year in which such activities occur and for each year thereafter, and (3) inform the Company of the aggregate dollar amount of the sales of the Affiliate or the Affiliate’s down line that, as reasonably determined by the Affiliate, are attributable to activities that the Affiliate performed while physically present in the United States (including an explanation of how the Affiliate calculated the amount). The Affiliate understands that, if the Affiliate engages in any such activities in any year, the Company may be required to (1) withhold a portion of each payment to the Affiliate in that year and each subsequent year and (2) report a portion of each payment to the IRS on IRS Form 1042 and report the same to the IRS on IRS Form 1042-S.
* IRS Form 8233 is applicable for distributors in certain countries that are parties to a U.S. tax treaty.
The Company will honor enforceable court orders, garnishments, support orders, etc. that have been properly registered in the jurisdiction where the Company is headquartered or registered to do business as an out of state corporation. The Company will also honor any enforceable Federal Tax Lien.
Assuming proper jurisdiction, the Company will comply with all subpoenas duces tecum demanding financial compensation records of an Affiliate in his/her capacity as an independent contractor with the Company.
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.
Some Affiliates use classified advertising in the newspapers or online, such as Craig’s List, to find prospects. The following rules apply:
Any printed materials, including business cards and stationery, will be available on the hempSMART™ website. These are preapproved materials by hempSMART™ and are the only physical sales tools that are allowed for use.
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 Affiliates 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, Affiliates must not engage in telemarketing in the operation of their Company businesses. 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 Affiliates 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 Affiliate (a “prospect”) is permissible under the following situations:
Any inquiries by the media are to be referred immediately to the Company. This policy is to assure accuracy and consistent public image.
If done correctly and in compliance with Company policies, social networking may be useful in driving traffic to the official Company website and to Company authorized personal replicated websites of Affiliates. The following rules and guidelines, regarding social networking, are applicable:
2. Activities to Avoid:
An Affiliate must treat Facebook or any other online forum just like real life but in the virtual space. Your property is your page while other people’s pages are their property; and this “ownership” must be respected as if it were the real property of your neighbor. This simple approach will keep you out of trouble with social networking sites and help us maintain the integrity of the Company.
Affiliates must monitor and evaluate customer testimonials while understanding federal guidelines.
The FTC Act requires, and the Guides advise, that testimonials must “reflect the honest opinions, findings, beliefs, or experiences of the endorser” and, when specific results are claimed, the testimonial must reflect a “typical consumer experience.” A testimonial cannot make an express or implied representation that would be deceptive if the same representation were made directly by the advertiser. The FTC can impose liability on both the advertiser and the endorser for such deceptive representations. That means testimonials on a company’s website or other media under its ownership or control, such as Facebook pages and Twitter accounts, must be objectively true, not misleading, and the company must have adequate substantiation for all non-subjective product claims. Any material connection between the endorser and advertiser must also be clearly and conspicuously disclosed.
Bloggers or commenters must disclose the following:
It’s important to be honest:
(a) Endorsements must reflect the honest opinions, findings, beliefs, or experience of the endorser. Furthermore, an endorsement may not convey any express or implied representation that would be deceptive if made directly by the advertiser.
(b) The endorsement message need not be phrased in the exact words of the endorser, unless the advertisement affirmatively so represents. However, the endorsement may not be presented out of context or reworded so as to distort in any way the endorser’s opinion or experience with the product. An advertiser may use an endorsement of an expert or celebrity only so long as it has good reason to believe that the endorser continues to subscribe to the views presented. An advertiser may satisfy this obligation by securing the endorser’s views at reasonable intervals where reasonableness will be determined by such factors as new information on the performance or effectiveness of the product, a material alteration in the product, changes in the performance of competitors’ products, and the advertiser’s contract commitments.
(c) When the advertisement represents that the endorser uses the endorsed product, the endorser must have been a bona fide user of it at the time the endorsement was given. Additionally, the advertiser may continue to run the advertisement only so long as it has good reason to believe that the endorser remains a bona fide user of the product. [See General considerations (b) regarding the “good reason to believe” requirement]
(d) Advertisers are subject to liability for false or unsubstantiated statements made through endorsements, or for failing to disclose material connections between themselves and their endorsers. Endorsers also may be liable for statements made in the course of their endorsements.
(a) An advertisement employing endorsements by one or more consumers about the performance of an advertised product or service will be interpreted as representing that the product or service is effective for the purpose depicted in the advertisement. Therefore, the advertiser must possess and rely upon adequate substantiation, including, when appropriate, competent and reliable scientific evidence, to support such claims made through endorsements in the same manner the advertiser would be required to do if it had made the representation directly, i.e., without using endorsements. Consumer endorsements themselves are not competent and reliable scientific evidence.
(b) An advertisement containing an endorsement relating the experience of one or more consumers on a central or key attribute of the product or service also will likely be interpreted as representing that the endorser’s experience is representative of what consumers will generally achieve with the advertised product or service in actual, albeit variable, conditions of use. Therefore, an advertiser should possess and rely upon adequate substantiation for this representation. If the advertiser does not have substantiation that the endorser’s experience is representative of what consumers will generally achieve, the advertisement should clearly and conspicuously disclose the generally expected performance in the depicted circumstances, and the advertiser must possess and rely on adequate substantiation for that representation.
(a) Whenever an advertisement represents, directly or by implication, that the endorser is an expert with respect to the endorsement message, then the endorser’s qualifications must in fact give the endorser the expertise that he or she is represented as possessing with respect to the endorsement.
(b) Although the expert may, in endorsing a product, take into account factors not within his or her expertise (e.g., matters of taste or price), the endorsement must be supported by an actual exercise of that expertise in evaluating product features or characteristics with respect to which he or she is expert, and which are relevant to an ordinary consumer’s use of or experience with the product and are available to the ordinary consumer. This evaluation must have included an examination or testing of the product at least as extensive as someone with the same degree of expertise would normally need to conduct in order to support the conclusions presented in the endorsement. To the extent that the advertisement implies that the endorsement was based upon a comparison, such comparison must have been included in the expert’s evaluation; and as a result of such comparison, the expert must have concluded that, with respect to those features on which he or she is expert, and which are relevant and available to an ordinary consumer, the endorsed product is at least equal overall to the competitors’ products. Moreover, where the net impression created by the endorsement is that the advertised product is superior to other products with respect to any such feature or features, then the expert must in fact have found such superiority. [See: 9.7 General considerations (d)]
Endorsements by organizations, especially expert ones, are viewed as representing the judgment of a group whose collective experience exceeds that of any individual member, and whose judgments are generally free of the sort of subjective factors that vary from individual to individual. Therefore, an organization’s endorsement must be reached by a process sufficient to ensure that the endorsement fairly reflects the collective judgment of the organization. Moreover, if an organization is represented as being expert, then, in conjunction with a proper exercise of its expertise in evaluating the product under (expert endorsements), it must utilize an expert or experts recognized as such by the organization or standards previously adopted by the organization and suitable for judging the relevant merits of such products. [See: 9.7 General considerations (d)]
When there exists a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement (i.e., the connection is not reasonably expected by the audience), such connection must be fully disclosed. For example, when an endorser who appears in a television commercial is neither represented in the advertisement as an expert nor is known to a significant portion of the viewing public, then the advertiser should clearly and conspicuously disclose either the payment or promise of compensation prior to and in exchange for the endorsement or the fact that the endorser knew or had reason to know or to believe that if the endorsement favored the advertised product some benefit, such as an appearance on television, would be extended to the endorser.
Affiliates may use, reference, or incorporate the Company names and trademarks in approved Internet advertising.
Affiliates may send “general mailings” only to Affiliates in their down-line organizations and their direct up-line enrolls. Any other bulk use of email is prohibited by the Company and will result in immediate discipline which may result in termination of Affiliate rights and benefits and the loss of Affiliate rights, including sales organizations and compensation. Various kinds of prohibited emails – either bulk or individual – include, but are not limited to the following:
Federal and State Regulatory Agencies rarely approve or endorse direct selling programs. Therefore, Affiliates may not represent that the Company’s program has been approved or endorsed by any governmental agency.
The Affiliate 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 Affiliate’s business operations and representations made by Affiliate in the operation of his/her business, arising from the following:
Violation and/or lack of compliance with terms of the Affiliate 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 Affiliate business; Engaging in any conduct not authorized by the Company in the Company market program; Any fraud, negligence or willful misconduct in the operation of the Affiliate business; Misrepresentation or unauthorized representation regarding the Company’s product or service, marketing opportunity or potential or the Company’s marketing program; 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; Engaging in any action which exceeds the scope of authority to the Affiliate as granted by the Company; Engaging in any activity over which Company has no effective control as to the actions of the Affiliate. Engaging in the general business operations of Affiliate’s business.
This Agreement constitutes the entire agreement between hempSMART™ and the Affiliate with respect to the subject matter hereof. This Agreement may be amended only in writing and executed by hempSMART™.
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.
These rules are reasonably related to Federal and State laws of the United States and shall be governed and construed in accordance with the laws of the State of California, USA in all respects thereby. The parties agree that jurisdiction and venue shall lie with the place of acceptance of the Affiliate application.
Should any portion of these Rules and Regulations, of the Affiliate’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.
In order to maintain a viable marketing program and to comply with the changes in International, Federal, State, or Local laws, or economic conditions, hempSMART™ may modify its customer services, charges, marketing programs, and may alter the Policies & Procedures and Rules & Regulations from time to time, as well as modify its Affiliate Compensation plan. All changes, upon notice by hempSMART™ shall become a binding part of the original Affiliate agreement.
Both parties agree that they will do their utmost in all circumstances and conditions to make an amicable settlement of any dispute or controversy, which may arise among them during the continuance of this Agreement. If, at any time, a dispute arises involving the interpretation of the Agreement or any other matter hereunder, the issues shall be submitted for settlement by arbitration in San Diego, California in accordance with the Commercial Rules of the American Arbitration Association.
HempSMART™ shall not be responsible for acts beyond its control, including, but not limited to: fire, flood, earthquake, storms, power outages, labor difficulty, equipment failures, supplier problems, sickness, sharks, or other difficulties that might prevent hempSMART™ from fulfilling its obligations to its Affiliates.