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GREEN COMPASS, LLC
STATEMENT OF POLICIES AND PROCEDURES
  1. Green Compass, LLC, hereinafter "Company," is a direct selling Company marketing healthrelated products, and other consumer products to the consumer through Independent Advocates. The policies and procedures herein are applicable to all Independent Advocates (hereinafter "IA") of the Company.
  2. An IA is one who has completed a Company application and agreement and has been accepted by the Company as an IA. The Company reserves the right to accept or reject anyone as an IA.
  3. All IAs must be the age of majority in the state in which they distribute Company products and services.
  4. Unless waived in writing by the Company upon application, the Company will consider each married couple, whether married or a statutory recognized domestic partnership, a single IA. Neither spouses, nor statutory domestic partners, may sponsor each other directly or indirectly, nor have different sponsors. If one spouse or a statutory domestic partner is already an IA, the nonparticipating spouse or statutory domestic partner may elect to become an IA but must join the same IA position as his or her spouse or statutory domestic partner. The Company reserves the right to reject any applications for new IAs or applications for renewal. Should spouses divorce or should a statutory domestic partnership dissolve, they should notify the Company as to how the IA position is to be managed thereafter. Otherwise, the Company will recognize the final judicial or adjudicatory disposition of the IA position.
  5. IAs are independent marketing associates of the Company and are not to be considered purchasers of a franchise or a distributorship. The agreement between the Company and its IAs does not create an employeremployee relationship, agency, partnership, or joint venture between the Company and the IAs. Each IA shall hold harmless the Company from any claims, damages or liabilities arising out of IA's business practices. Company IAs have no authority to bind the Company to any obligation. Each IA 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. It is essential to the success of the Company, its IAs 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, IA applications, IA communication, IA 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 IA may not communicate any transactions submissions on behalf of another IA, IA applicant or customer. An IA may not use his or her credit card or bank account on behalf of another individual or IA. This rule is applicable to any and all forms of transactions submissions, including, but not limited to, online, telephone, fax, email, etc.
  7. Ethical Conduct. IAs will, at all times, conduct their business in a professional and ethical manner that is supportive to both the Company and other IAs. An IA shall engage in no conduct which negatively impacts, disrupts or impairs the reputation or business of the Company, its products/services or other IAs, including, but not limited to: disparagement of the Company, its officers or employees, its products/services or other IAs; 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 IAs, customers, employees, or affiliates of the Company; conduct that undermines the relationship between the Company and IAs or relationships between IAs; conduct which disrespects the privacy of other IAs; 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 IAs.
  8. Company IAs shall not advertise Company products and services and/or marketing plans except as specifically approved by the Company. Company IAs agrees to make no false or fraudulent representations about the Company, the products, the Company compensation plan, or income potentials.
  9. In all literature and communication by an IA, including but not limited to literature produced and distributed by the IA, video, audio, and online materials, personal testimonials, and social media posts, IAs should not make or insinuate any medical claims state or suggest that a Product will treat or prevent a disease or other medical condition. Unauthorized medical claims are dangerous to consumers who could abandon proper medical treatment for their conditions and can also be a liability for the Company. Medical claims may not be used in association with the Company Products. IAs should always caution customers to see their doctor before using a Product. For more information, please refer to Section 16(i) in these Policies.
  10. The company's program is built upon retail sales to the ultimate consumer. The company also recognizes that IAs may wish to purchase product or service in reasonable amounts for their own personal or family use. For this reason, a retail sale is a sale to a non-participant of the income opportunity. 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. IAs 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.
  11. Any IA, who sponsors other IAs, 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. IAs 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, and accompanying individuals to Company training, sharing genealogy information with those sponsored. IAs should be able to provide evidence to the Company semiannually of ongoing fulfillment of sponsor responsibilities. If an IA 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 IAs he or she has enrolled, irrespective of whether the Enroller is also the Sponsor of those IAs.
  12. Company Retail 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 IAs in the marketing of fine products and services to the general consuming public. As a dual consumer safeguard, of the utmost importance to the Company is the policy that IAs should purchase products and services in commercially reasonable quantities, and under no circumstances may IAs 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. In the interest of protecting the consumer and the opportunity of its IAs, the Company enforces this rule through a verification program.

    Company Retail.
    1. Retail Rule.
      Although the primary function of the Company is to sell products and services to the general consuming public, the Company realizes that its IAs may wish to purchase product for personal or family use in reasonable amounts. For this reason, a retail sale is a sale to a non-participant of the income opportunity. This is a standard followed by leading direct selling companies. Notwithstanding this policy, the Company, in order to specifically further retail selling, has adopted a requirement that an IA will not be eligible for bonuses or overrides unless he or she has made five 5 requisite sales per month to non-participant retail customers.
    2. Required Retail Sales:
      To qualify for leadership bonuses and awards, an IA must achieve requisite personal volume to meet active status and stated non-participant retail sales volume mandates. If active status is fulfilled, in order to be eligible for leadership bonuses and awards, the IA must also generate the following nonparticipant retail sales volume, $300.00, or maintain the following number of individual non-participant retail customers, five (5), or the following number of ongoing preferred customers, five (5), or combination thereof.
    3. Ramp-up Grace Period.
      To be eligible for sales force downline commissions, an IA, in addition to achieving stated personal and group volume requirements, shall demonstrate stated retail sales requirements of five (5) recurring active customers in any one month. With the understanding that IAs will need time to build their book of business of active retail customers, IAs shall be allowed to ramp up their book of business to the minimum five (5) monthly retail customers over the first six (6) months in the business at the rate of one (1) additional active retail customer per month. Thus, in the sixth month of the business, and thereafter, an IA must demonstrate a minimum of five (5) retail customers per month in order to be eligible to receive downline sales bonuses and commissions. If, after achieving five (5) retail customers, if one of those customers shall discontinue, the IA shall replace that retail customer with a new retail customer, so as to maintain five (5) retail customers per month.
  13. Sales Volume Qualification by Order Taking. As with other leading direct selling companies, the Company has adopted minimum personal and group sales volume requirements. With respect to tangible products, which may be offered for purchase for resale, minimum sales volume requirements may also be fulfilled by taking orders from retail customers which will be fulfilled or drop-shipped by the Company directly to the retail customer.
  14. All IAs 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 IA, then report and distribute applicable sales taxes to the taxing entity for the state in which the sale is made. IAs 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.
  15. No purchase or investment is necessary to become a Company IA other than the purchase of, or payment fee for, a sales kit which is sold "at Company cost." (Purchase is optional in North Dakota). This "at cost" sales kit fee covers basic and ongoing sales and marketing materials and support in both written and electronic and online media formats, including product and service updates.

    As an extension to the initial "at cost" sales kit, a $9.99 monthly fee will be charged for expanded "at cost" ongoing sales and marketing materials support, including back office accounting review, training updates, replicated website and communication tools to support the sales and marketing process. By submitting this IA Agreement, IAs specifically authorizes this monthly fee to be charged to the IA’s on-file debit or credit card (or other form of payment acceptable to the Company) each month for as long as he or she remains an IA.

    Additionally, a $29.99 annual renewal fee will be applied to all advocates who join the Company after on, or after, June 15, 2020. This fee will be automatically applied to the IAs card on file on the anniversary of their enrollment date. By submitting this IA Agreement, IAs specifically authorizes this annual fee to be charged to the IA’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 IA. Advocates who joined the company prior to June 15, 2020, will incur their first annual fee renewal on February 1, 2022 and This fee will be automatically applied to the IAs card on file on February 1 of each following year for as long as he or she remains an IA.

    Please note that both fees associated with the marketing materials support and annual renewal are non-commissionable.
  16. Trademark, Copyright, Trade Names, Advertising.
    1. 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 IA for IA's use only in an expressly authorized manner. IA agrees not to advertise the Company products or services in any way other than the advertising or promotional materials made available to IA by the Company. IA 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.
    2. The IA, 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 IA agreement, and advertising or promotional materials supplied directly by the Company. IA 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 IA's unauthorized representations.
    3. The Company will not permit the use of its copyrights, designs, logos, trade names, trademarks, etc. without its prior written permission.
    4. All Company marketing materials or published intellectual property, whether printed, on video, audio, or on the internet, are copyrighted and may not be reproduced in whole or in part by IAs or any other person except as authorized by the Company. Permission to reproduce any materials will be considered only in extreme circumstances. Therefore, an IA should not anticipate that approval will be granted.
    5. A Company IA 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, online or video media.
    6. A Company IA may not produce, sell or distribute literature, video or audio or online, which are deceptively similar in nature to those produced, published and provided by the Company for its IAs. Nor may an IA purchase, sell or distribute non-company materials which imply or suggest that said materials originate from the Company.
    7. 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.
    8. All advertising copy, direct mailing, radio, TV, newspaper, online 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.
    9. No claims as to therapeutic or curative properties about the products may be made except those officially approved in writing by the Company or as contained in the official Company literature. In particular, no IA may make any claim that the Company products are useful in the treatment or cure of any disease. Such statements can be perceived as medical claims. Not only is this totally against Company policy, but it is also against the laws governed by the United States Food and Drug Administration.
  17. Recording Policy; Waiver of Right to Publicity.
    1. Attendance at Company Events; use authorized in Company media. Company events may be recorded by Company. Images, video and audio of people attending or participating in a Company related event may be used in Company published media in business support materials, and for promotions. By registering and attending a Company related event, you agree to allow Company to use your image, video, audio and personal information in these recordings.
    2. Private Video and Recording of Events Prohibited. Audio, video and cellular recording of Company related events is strictly prohibited as they are governed by an all-rights-reserved copyright policy. In accordance with this policy, Company prohibits any and all personal recordings of any Company related event. This includes all Company related conferences, leadership or team meetings, training sessions, etc. All audio and video recording devices are prohibited on the premises except by the expressed written permission of Company. Any attempt by unauthorized personnel to record these events may result in the confiscation of and forfeiture of the recording device. No recording devices will be allowed into Company related events, and all bags, briefcases, and backpacks are subject to be searched.
    3. IAs grant Company an irrevocable license to reproduce and use their name, photograph, video, personal story, testimonial, and/or likeness in its advertising or promotional materials, including but not limited to use in online forums. IAs waive all claims for remuneration for such use and all rights to inspect or ap-prove all draft, beta, preliminary, and finished material.
  18. The Company maintains an official corporate website. IAs are allowed to advertise on the internet through an approved Company program which allows IAs to choose from among Company home page designs that can be personalized with the IA's message and the IA's contact information. These websites link directly to the Company website giving the IA a professional and Company-approved presence on the internet. Only these approved websites may be used by IAs. No IA may independently design a website that uses the names, logos, product or service descriptions of the Company, nor may an IA use "blind" ads on the internet making product or income claims which are ultimately associated with Company products, services 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 Rules and Regulations, shall be subject to immediate discipline, including termination of IA status.
  19. Prohibition of Sales on Unauthorized Internet Sites. Except with written authorization from the Company, an IA 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 or Craig's List, nor internet malls.
  20. Unsolicited Email. The Company does not permit IAs to send unsolicited commercial email to others unless such emails strictly comply with applicable laws and regulations including, without limitation, the federal CAN SPAM Act.

    Any email sent by an IA that promotes the Company, the Company opportunity or Company products and services must comply with the following:
    1. There must be a functioning return email address to the sender.
    2. There must be a notice in the email that advises the recipient that he or she may reply to the email, via the functioning return email address, to request that future email solicitations or correspondence not be sent to him or her (a functioning "opt-out" notice).
    3. The email must clearly and conspicuously disclose that the message is an advertisement or solicitation.
    4. The use of deceptive subject lines and/or false header information is prohibited.
    5. All opt-out requests, whether received by email or regular mail, must be honored. If an IA receives an opt-out request from a recipient of an email, the IA must forward the opt-out request to the Company.
  21. Unsolicited Spam. Except as provided in this section, IAs may not use or transmit unsolicited spam, mass email distribution, unsolicited email, or "spamming" or use an automatic telephone dialing system relative to the operation of their Company businesses. Unsolicited broadcast distribution of email or other distribution that may be defined as "bulk mail" or "SPAM" is strictly prohibited. IAs may send "general mailings" only to other IAs in their downline organizations and their direct up-line sponsors. Any other bulk use of email is prohibited.

    The term "automatic telephone dialing system" means equipment, which has the capacity to:
    1. Store or produce telephone numbers to be called, using a random or sequential number generator; and
    2. To dial such numbers.
    3. The terms "unsolicited faxes" and "unsolicited email" 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:
    4. To any person with that person’s prior express invitation or permission; or
    5. To any person with whom the IA 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 an IA and a person, on the basis of:
      1. An inquiry, application, purchase or transaction by the person regarding products offered by such IA; or
      2. A personal or familial relationship, which relationship has not been previously terminated by either party.
  22. Retail Establishments. Company products or services may only be displayed and sold in retail establishments where the nature of the business is to make appointments with customers (such as salons, doctors' offices, and health clubs where appointments are made for personal training or classes are scheduled) the sale of such products or services within such retail facilities must be conducted by an IA and must be preceded by a discussion where the IA 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. Products or services may not be sold from a shelf or taken from a display for purchase by a customer. Company products or services may not be sold in any retail establishment, even by appointment, if competitive products or services are sold in the establishment. From time to time, the Company may announce policies and rules that expand or contract restrictions on sales in retail establishments.
  23. Trade Shows. With written authorization from the Company, Company products or services and opportunity may be displayed at trade shows by IAs. 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 IA may sell or promote the Company's products or services or business opportunity at flea markets, swap meets, or garage sales.
  24. International Sales. No IA 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. IAs 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 IA position in that country. Any violation of this rule constitutes a material breach of this contract and is grounds for immediate termination of the IA.
  25. The Company reserves the right to approve or disapprove IA'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 IA, the organization's name and the names of the principals of the organization must appear on the IA 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.
  26. The IA agreement may be canceled at any time and for any reason by an IA notifying the Company in writing of the election to cancel.
  27. If an IA elects not to renew hisher IA agreement, all rights to bonuses, marketing position and wholesale purchases cease. The terminated IA's sales organization shall be subject to placement in accordance with the then current published compensation plan presentation.
  28. 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 IA check payment. In the event that no commission is available for adjustment in the following month, the IA who has received the commission shall repay the commission paid on the "reversed sale" within 30 days of the Company’s notice to repay.
  29. Each IA shall comply with all state and local taxes and regulations governing the sale of Company products or services.
  30. Protecting the Consumer and other IAs
    1. Consumers must be provided accurate information regarding price, credit terms and terms of payment.
    2. An IA must take appropriate steps to safeguard and protect private information provided by a consumer, other IAs or prospective IAs.
    3. The Company is committed to providing IAs with a work environment free from harassment, intimidation, and abuse from other IAs, employees, vendors, and any other associated with Green Compass. Therefore, harassment of any kind will not be tolerated and is strictly prohibited, such as: derogatory or threatening comments, inappropriate sexual behavior including but not limited to unwelcome sexual advances or requests for sexual favors, displaying visual images of a sexual nature, physical or verbal harassment, or violent behavior. IAs are encouraged to report any type of harassment incidents immediately. Green Compass will not tolerate acts or threats of violence and will investigate all reports.
  31. 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 IAs seek to raid and solicit other IAs 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 IAs 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, IAs shall not directly or indirectly sell to, nor solicit from, other Company IAs non-company products or services, or in any way promote to other Company IAs business opportunities in marketing programs of other MLM or business opportunity companies at any time. A Company IA shall not engage in any recruiting or promotion activity that targets Company IAs 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 IA participate, directly or indirectly, in interference, raiding or solicitation activity of Company IA 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 IA agreement and for a period of one year after the termination of the IA agreement. For the term of this agreement and for one year after termination hereof, an IA shall not, directly or indirectly, recruit any of Company's IAs to join other direct sales or network marketing companies nor solicit, directly or indirectly, Company's IAs to purchase services or products, or in any other way interfere with the contractual relationships between Company and its IAs.

    Should IAs engage in solicitation and/or enticement of members of another direct sales company to sell or distribute Green Compass products to, they bear the risk of being sued by the other direct sales company. If any lawsuit, arbitration, or mediation is brought against an IA alleging that they engaged in inappropriate recruiting activity of another company’s sales force or Customers, Company will not pay any of IA’s defense costs or legal fees, nor will Company indemnify the IA for any judgment award, or settlement.
  32. On a periodic basis, the Company will supply data processing information and reports to the IA, which will provide information concerning the IA’s downline sales organization, product purchases and product mix. The IA agrees that such information is proprietary and confidential to the Company and is transmitted to the IA in confidence. The IA 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 IA and the Company agree that, but for this agreement of confidentiality and nondisclosure, the Company would not provide the above confidential information to the IA. An IA seeking to sell his/her IA position must acknowledge and agree to this provision prior to the finalization of the sale of their IA position.
  33. Vendor Confidentiality. The Company's business relationship with its vendors, manufacturers and suppliers is confidential. An IA shall not contact, directly or indirectly, or speak to or communicate with any Associate of any supplier or manufacturer of the Company except at a Company sponsored event at which the Associate 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 IA contact.
  34. An IA shall take appropriate steps to safeguard the protection of all private information provided by a consumer, a prospective consumer and/or other IAs.
  35. Change in Status.

    Marriage/Statutory Domestic Partnership: Two Company IAs who marry or enter into a statutory domestic partnership, after having established their own individual IA positions, may continue to operate their existing IA positions, as long as they do not originate from the same line. If they originate from the same line, then the couple has the choice of either selling or resigning from one of their IA positions, at their discretion.

    Divorce/Dissolution: Should a couple become divorced or enter into a dissolution, they agree to notify the Company as to who will assume responsibility for the IA position in one of the following manners:
    1. Written notarized agreement signed by both parties indicating who will retain the IA position.
    2. A court order delineating who receives custody over the IA position.
    3. Both parties may choose to retain their joint IA position and operate it as a partnership.


    The divorced/dissolved IA may apply for a new IA position without having to wait 12 months.

    Death: Upon the death of an IA, the rights and responsibilities of the IA position may be passed on to the rightfully legally documented heir as long as that person has filled out a new IA application/agreement and completed the required training.

    Disability: Should an IA become disabled to the extent that he/she can no longer fulfill the required duties of the Company IA, such disabled IA’s legal Associate or conservator shall:

    1. Contact the Company within thirty (30) days of the disability and advise the Company of the IA’s status and the plans for future management or cancellation of the IA position.
    2. Provide notarized or court confirmed copy of appointment as legal Associate or conservator.
    3. Provide notarized or court confirmed copy of document establishing right to administer the Company business.
    4. Should the legal Associate or conservator plan to continue the business of the IA position, then he/she shall fill out a new IA application/agreement and receive the required training consistent with the disabled IA’s level at the time of disability.
    5. These requirements shall be satisfied within a deadline of six months.
  36. Sale or Transfer. An IA may not sell, assign or otherwise transfer his or her IA position, marketing position or other IA rights without written application and approval by the Company. This paragraph is also applicable to transfer of any interest in an entity that owns an IA position, including but not limited to a corporation, partnership, limited liability company, trust or other non-individual legal entity. The potential buyer must be at the equivalent or higher rank as the selling IA or have been a Company IA for at least a one-year period prior to the sale. The IA position must be offered in writing first to the IA's sponsor. If the sponsor declines the offer, the IA may offer the IA position for sale to other qualified Company IAs, but only on the same terms and conditions as offered to the sponsor. An IA who sells his or her IA position shall not be eligible to requalify as an IA for a period of at least six months after the sale. The Company reserves the right to review the sale agreement and to verify waiver from the upline sponsor in the event the upline sponsor declines to purchase the IA position.

    An IA may not add a co-applicant to their IA position and thereafter, remove their name from the IA position, in an effort to circumvent the Company’s sale, assign, delegate or merger procedure. The primary IA must wait twelve (12) months after adding a co-applicant to the IA position before they are allowed to remove their name from the IA position. 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 IA agrees that he/she shall not, directly or indirectly, disrupt, damage, impair or interfere with the business of the Company, whether by way of interfering with, or raiding its employees or IAs, disrupting its relationship with customers, agents, Associates, 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 IA seeking to sell or transfer his/her IA position must acknowledge and agree to this provision prior to the finalization of the sale or transfer of their IA position.
  37. This statement of policies and procedures is incorporated into the IA agreement and constitutes the entire agreement of the parties regarding their business relationship.
  38. 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 IA. 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. Please note that this provision does not apply to the dispute resolution in section 67, as this may only be modified by way of mutual consent.
  39. Non-Individual Ownership. A partnership, corporation, limited liability company or other legal entity may be an IA. However, no individual may participate in more than one (1) IA 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.
    1. An IA position may change status under the same sponsor from individual to partnership, corporation, limited liability company or other form of legal entity or from partnership to corporation with proper and complete legal documentation.
    2. To form a new IA position as a partnership, corporation, limited liability company or other type of legal entity or to change status to one of these forms of business, you must request a partnership/corporation/limited liability form from the corporate home office. This form must be submitted detailing all partners, stockholders, members, officers and directors in the partnership, corporation, limited liability company or other analogous positions in other forms of legal entities. The partner, officer, member or other person who submits the form must be authorized to enter into binding contracts on behalf of the partnership, corporation, legal liability company or other form of legal entity. In addition, by submitting the partnership/corporation/limited liability company form, such person and the legal entity for whom the person is acting certifies that no person with an interest in the business has had an interest in an IA position within three (3) months of the submission of the form (unless it is the continuation of an existing IA position that is changing its form of doing business).
  40. Individual and Entity Ownership Information.
    1. An individual can have only one IA position in the Company. He/she may not own any other IA position, either individually or jointly, nor may he/she participate as a partner, owner, stockholder, trustee, director, or association member in more than one IA position in any form.
    2. An individual shall provide the Company with a Social Security Number or a Taxpayer Identification Number (TIN) on an IAS W-9 form. No individual operating under a fictitious name and no partnership, corporation, limited liability company or other business entity may become a Company IA without submitting an “Entity Information” form following enrollment of proprietorship, corporation, Limited Liability Company (LLC), trust or partnership.
      1. Proprietorship: A certified 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: IAS acceptance only. The name on the IAS 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 IAS 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.
  41. Entity Guarantee for Owners: Although Company has offered IAs the opportunity to conduct their IA position as corporate, LLC, trust, partnership or other form of legal entities, it is agreed that since the IA 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 IA 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.

    In the event that any of the ownership entity shareholders, members, officers, directors, trustees, beneficiaries, agents, employees or other related parties shall terminate ownership interests in the IA position, any breaching actions by such parties that continue to have a beneficial financial interest, directly or indirectly, in the IA position shall be attributable to the IA position.
  42. Members of Same Household; Responsibility. Members of IA’s household may operate together as one Company IA position, but may not become separate Company IAs. 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. Company recognizes that members of the same household may belong to competing direct selling opportunities. Although the actions of the parties are normally in good faith, in some circumstances, there is an abuse of relationships in which the non-company household member is engaged in recruitment, solicitation or raiding of the Company sales organization. Since the household member that has an ownership interest in the Company IA position is in the best position to be responsible to prevent raiding or cross-sponsoring activity by their co-household member, the cross-recruiting activity of the non-company household member shall be attributed to the Company IA position, subjecting the IA position to discipline or termination.
  43. It is agreed that Company is authorized to use IA’s name, photograph, personal story and/or likeness in advertising or promotional materials and IA waives all claims for remuneration for such use.
  44. Disciplinary Actions. An IA'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:
    1. Issuance of a written warning or admonition.
    2. Imposition of a fine, which may be imposed immediately or withheld from future commission checks.
    3. Reassignment of all or part of an IA's organization.
    4. Suspension, which may result in termination or reinstatement with conditions or restrictions.
    5. Termination of the IA.
  45. The Company reserves the right to terminate any IA at any time for cause when it is determined that the IA has violated the provisions of the IA 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 IA by mail at the latest address listed with the Company for the IA. In the event of a termination, the terminated IA agrees to immediately cease representing him/herself as an IA.
  46. The Company reserves the right to terminate any IA based on consecutive inactivity demonstrated by the IA.
  47. Termination.
    1. When a decision is made to terminate an IA, the Company will inform the IA in writing that the IA is terminated immediately, effective as of the date of the written notification. The termination notice will be sent by certified mail to the IA's address on file with the Company.
    2. The IA 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 IA'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.
    3. If an IA files a timely appeal of termination, the Company will review and reconsider the termination, consider any other appropriate action, and notify the IA 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.
  48. All IAs have the right to sponsor others. In addition, every person has the ultimate right to choose his/her own sponsor. If two IAs should claim to be the sponsors of the same new IA, the Company shall regard the first application received by the corporate home office as controlling.
    1. As a general rule, it is good practice to regard the first IA to meaningfully work with a prospective IA as having first claim to sponsorship, but this is not necessarily controlling. Basic tenets of common sense and consideration should govern.
    2. As a convenience to its IAs, the Company may provide various methods of registering or informing the Company of newly sponsored IAs, including online internet registration, telephone registration and facsimile registration. Until such time as the Company receives an application, either as hard copy or by facsimile, containing all appropriate information, as well as the signature of the proposed new IA, the Company will only consider the internet, telephone or facsimile registration in the category of "intended" recognition of sponsor. Thus, although the Company is attempting to create some convenience for its sponsoring IAs, it is the responsibility of the sponsoring IA to cause delivery to the Company of a completed and signed IA agreement if the sponsor is to expect formal recognition as the official sponsoring IA.
    3. There is no "magic" involved in the Company or in any business. Those who sponsor widely but who do not help new IAs develop their business meet with limited success. Therefore, a responsibility of sponsorship is to work with new IAs, helping them learn the business and encouraging them during the critical early months.
    4. Sponsors are not required to carry inventory of products or sales aids for new IAs. When tangible product is involved, IAs who do so, however, find building a major sales organization much easier because of the decreased response time in meeting a new IA's needs.
    5. When soliciting a prospective IA to join the Company’s network program, the IA must clearly explain the following:
      1. Products: type, performance and quality of each product.
      2. Compensation plan and IA fees
      3. Policies and Procedures.
      4. IA’s rights and duties.
      5. Other important items that will affect the judgment of the prospective IA.
  49. 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.
    1. 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 six (6) months to reapply under the new sponsor.
    2. 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 IAs being removed from the original line of sponsorship.
  50. The Company encourages each IA 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 IAs only for personal consumption and for resale to consumers.
  51. See specific addenda to the IA agreement for specific states as to statutory purchasing limitations, buyback rules and other restrictions, disclosures and additional IA 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.
  52. Income Claims. No income claims, income projections nor income representations may be made to prospective IAs. Obviously, any false, deceptive or misleading claims regarding the opportunity or productservice are prohibited. In their enthusiasm, IAs 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 IAs 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 an effort to conduct best business practices, Company has developed the Income Disclaimer Statement (“IDS”). The Company IDS is designed to convey truthful, timely, and comprehensive information regarding the income that Green Compass IAs earn. In order to accomplish this objective, a copy of the IDS must be presented to all prospective IAs. A copy of the IDS must be presented to a prospective IA anytime the Compensation Plan is presented or discussed, or any type of income claim or earnings representation is made.

    The terms “income claim” and /or “earnings representation” (collectively “income claim”) includes but is not limited to the following: (1) statements of average earnings, (2) statements of non-average earnings, (3) statements of earnings ranges, (4) income testimonials, (5) lifestyle claims, and (6) hypothetical claims. Examples of “statements of non-average earnings” include, “Our number one IA earned over a million dollars last year” or “Our average-ranking IA makes five thousand per month.” An example of a “statement of earnings ranges” is “The monthly income for our higher-ranking IAs is ten thousand dollars on the low end to thirty thousand dollars a month on the high end.”
  53. Representation of Status. In all cases, any reference the IA makes to him/herself must clearly set forth the IA's independent status. For example, if the IA 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 IA.
  54. Tax Reporting Applicable to Non-U.S. Citizen/Residents. If a Company IR is a non-resident of the U.S., and physically engages in business activity through an actual presence in the U.S., the IR is obliged to inform the Company and comply with all U.S. tax and immigration laws.
  55. Enforcement of Judgment, Garnishments, Support Orders, Federal Tax Liens, etc. against Company Independent Advocates . 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.
  56. Subpoenas Duces Tecum (Demands for Records). Assuming proper jurisdiction, the Company will comply with all subpoena’s duces tecum demanding financial compensation records of an IA in his/her capacity as an independent contractor with the Company.
  57. 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.
  58. Newspaper and Online Advertisements. Some IAs use classified advertising in the newspapers or online, such as Craig's List, to find prospects. The following rules apply:
    • No advertisement may imply that a "job" or "position" is available.
    • No specific income can be promised.
    • Advertisements must contain no misleading facts or distortions of the Company opportunity or product line.
  59. Business Cards and Stationery. Any printed materials, including business cards and stationery, must be approved by the Company in advance. 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 IA.
  60. 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 IAs 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, IAs 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 IAs 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 IA (a "prospect") is permissible under the following situations:
    1. 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.
    2. The prospect’s personal inquiry or application regarding a product or service offered by the IA, within the three (3) months immediately preceding the date of such a meeting.
    3. If the IA has an established business relationship with the prospect. An "established business relationship" is a relationship between an IA and a prospect based on the prospect’s purchase, rental or lease of goods or services from the IA, or a financial transaction between the prospect and the IA within the eighteen (18) months immediately preceding the date of a telephone call to induce the prospect’s purchase of a product or service.
    4. If the IA receives written and signed permission from the prospect authorizing the IA to call. The authorization must specify the telephone number(s) which the IA is authorized to call.
    5. In addition, IAs 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.
  61. 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.
  62. Social Networking. 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 IAs. The following rules and guidelines, regarding social networking, are applicable:
    1. The Company encourages IAs to join online forums, discussion groups, blogs, and other forms of Internet communication for the purpose of communicating the benefits of Company products and opportunity. Internet social networking is similar to telephoning, emailing, and other technology-assisted communication: it is not a violation so long as it complies with the general policies and procedures governing claims and contacting. Social networks include such sites as Facebook, LinkedIn, Twitter, and so on. Additionally, there are social networks of like-minded persons. You may find social networks by doing a Google search using varying topics.
    2. You must comply with the rules associated with websites and networks. For instance, some sites prohibit the marketing of financial opportunity or the selling of products. On such sites, you may instead choose to share your testimonial of benefits from the technology of the Company; or you may want to talk about how your life is improving. However, IAs are prohibited from making any medical claims or insinuations on social media even through personal testimonials. When others in the network hear your testimonial, they will naturally inquire, and that is the opportunity to send them to your authorized Company website.
    3. Upon notifying the Company Compliance Department via email for review, you may publish YouTube, Twitter and other communications. You must supply for content review a link to the material you have posted. In the event your material is found to be non-complying, you will be required to remove it within 24 hours.
    4. If you are on Facebook or other social networking sites, join our "Fans" or comparable pages. Here are some guidelines for you to follow as you use Facebook, or other social networking sites, to grow your business online.
      1. Positive Steps to Help Your Business:
        1. Post as much as you like to your wall.
        2. Comment as much as you like on your photos and links.
        3. Post as many links on your page.

      2. Activities to Avoid:
        • Do not send more than the allowed friend invites per day or your account may be deactivated.
        • Do not post anything to someone’s wall about the Company if they have asked you to stop.
        • Do not send emails with links to anyone you do not know unless they have asked for the link.
        • Do not post more than the allowed times per day to anyone else’s walls, as deactivation may occur.

      An IA 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.
  63. Internet Search Engine Optimization.
    1. IAs may use, reference, or incorporate the Company names and trademarks in approved Internet advertising.
    2. When participating in chat rooms and other social media, Company IAs may use approved Company language (as represented in the brochures, promotional and training materials of the Company and on the Company website) for the purpose of discussing the Company products and opportunity.
    3. IAs may use the language of approved Company literature for Internet advertising. Company trademarks, trade names, or product names, or any variations thereof, may not be used in search engines.
    4. IAs may communicate the benefits of Company products on the Internet and on search engines in appropriate categories.
    5. IAs may not use language that is sexually explicit, threatening, pornographic, violent or otherwise prohibited.
    6. In no way should any independent website or link give the impression of being the official website of the Company, rather than that of a Company IA. All Internet advertising must clearly report that the ad is placed by an "IA" of the Company.
    7. IAs may use words from approved Company advertising as "key words" for the purpose of having communications found by search engines.
    8. With the exception of the IA’s authorized hosted Company website, the use of the Company name within a URL address/domain name, directory, file name, e-mail address, official title for a social media account, or any derivative thereof, is not permitted (by way of example, but not limited to the varying derivatives of the name of the Company that use the Company name in the URL or domain name. Company IAs may not use any domain name or email address that includes any reference, whether abbreviated or not, to the Company name, products or services, except in connection with the Company IA’s authorized replicated Company website.
    9. Company IAs may not publish, post, or distribute any material on their websites or in conversation or postings on the Internet, including blogs and social networking in connection with the Company that is defamatory, libelous, disparaging, threatening, offensive, harassing, abusive, obscene, pornographic, in violation of applicable law or that inhibits others from enjoying the Company’s main website or the Company IAs’ websites.
    10. Determination of whether a link is objectionable is solely at the discretion of the Company.
    11. IAs may not use tactics such as "cloaking" or other deceptive means on the IAs’ web pages (For example: Cloaking in Google terms means designing a website so that search engines see one thing and visitors see another.)
    12. As a practical matter, Company IAs should make sure that any advertising through digital media, such as the Internet and email, is fully compliant with Company policies and procedures, Internet Compliance Department and existing laws and regulations.
    13. Company IAs may not sell or advertise products over the Internet through independently designed shopping carts or websites that use the names, logos, product or income testimonials, compensation plan or product description(s) of the Company. IAs may send "general mailings" only to IAs in their downline organizations and their direct upline enrolls. Any other bulk use of email is prohibited by the Company and will result in immediate discipline which may result in termination of IA rights and benefits and the loss of IA rights, including sales organizations and compensation. Various kinds of prohibited emails – either bulk or individual – include, but are not limited to the following:
      1. Totally Unsolicited or Blind Mass Email. Many "lists" that can be purchased for distribution over the Internet have been illicitly compiled and result in completely unsolicited information being sent to uninterested parties. Since the expense is so low to distribute to these lists, they are even more prevalent than bulk-mailings through traditional channels. Any use of a list not specifically approved by the Company or compiled from a legitimate genealogical listing of the emailer’s downline organization is subject to immediate discipline.
      2. Hidden Approval Mass Email. Sites that garner approval by having hidden, discreet or non-prominent "buttons" that are selected by default rather than choice are illegal. For instance, if it is necessary to de-select approval to keep from being added to a list (rather than requesting to be added), the resulting list is illegal. Many supposedly "approved lists" have in fact been gathered illicitly through this means.
      3. Third Party Approval for Mass Email. Companies that gather approval from inquiries, then sell the lists to third parties where the person giving approval is not informed that a third party will contact them, compile illegal lists. These companies frequently distribute to many third parties who "bury" the user with many emails.
      4. Legal and Ethical Email Communication. Email is by its nature personal and mutual: An appropriate Company email is a communication in which both parties are interested. Rather than requiring denial to terminate ("If you want your name removed from this list …"), it requires consent to initiate. Any email communication which violates this premise is potentially illegal and subjects the author to disciplinary review.
      5. Specifically Illegal Practices: False Reply-To Address. Any attempt to disguise the identity of the emailer will be taken as evidence for the intent of fraud and subject the sender to immediate discipline.
      6. Linking. No links may be made from an IA website, except as provided or authorized by the Company. Authorized links include:
        • Links made from a Company IA website for the purpose of Company communication, so long as such communication does not violate the terms and conditions of this agreement and such agreements as a Company IA has with the Company.
        • Links from blogs and social networking sites joined for the purpose of networking, marketing, sponsoring, and selling the Company products.
    14. Lawful use of the Internet. The Company supports all laws and regulations regarding use of the Internet, the Worldwide Web, and all other communication technologies. Any person associated with the Company program found in violation of said rules and regulations, including, but not limited to spamming (unsolicited bulk contact using the Internet), etc., is subject to immediate discipline.
    15. Internet Banner Advertising, etc. Banner advertising is bound by the same policies and procedures affecting other forms of advertising and must conform to general policies and procedures.
  64. Federal and state regulatory agencies rarely approve or endorse direct selling programs. Therefore, IAs may not represent that the Company's program has been approved or endorsed by any governmental agency.
  65. Indemnification and Hold Harmless. The IA 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 IA's business operations and representations made by IA in the operation of his/her business, arising from the following:
    1. Violation and/or lack of compliance with terms of the IA 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 IA business;
    2. Engaging in any conduct not authorized by the Company in the Company market program;
    3. Any fraud, negligence or willful misconduct in the operation of the IA business;
    4. Misrepresentation or unauthorized representation regarding the Company's product or service, marketing opportunity or potential or the Company's marketing program;
    5. 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;
    6. Engaging in any action which exceeds the scope of authority to the IA as granted by the Company;
    7. Engaging in any activity over which Company has no effective control as to the actions of the IA.
    8. Engaging in the general business operations of IA’s business.
  66. Policy on Reclassification to Preferred Retail Customer. Our company is dedicated to the movement of our product/services to the ultimate user. Of course, that individual may be a non-participant retail customer or an independent representative who purchases for personal or family use.

    However, we have often seen that many of our independent representatives continue to purchase our product/services, notwithstanding that the pursuit of the opportunity is really an insufficient priority to earn a meaningful income.

    In our direct selling industry's current legal environment, federal and state consumer agencies have asked that direct selling companies identify the distinction between those customers who actively pursue the opportunity and those who continue to buy product/service even when no meaningful income is available, i.e., non-participant retail customers.

    Therefore, the Company has adopted an automatic Reclassification program that automatically reclassifies non-earning independent representatives to preferred retail customers, all the while providing superb discount pricing, special customer benefits, generous customer appreciation referral rewards and the right, after a waiting period based on customer referral activity, to re-sign up as an active independent representative in a reserved genealogical downline position.

    Reclassification occurs after 6 months of consecutive inactivity. Please see our program presentation for complete details. The summary features of the Reclassification program are that the Company will:
    1. Adopt an automatic reclassification to preferred customer status, with preferred and favorable pricing, for distributors who have remained inactive for 6 consecutive months.
    2. Preserve a ghost position, in the genealogy, for reclassified individuals if they elect to apply again, in the future, to be an independent distributor.
    3. Offer generous customer appreciation referral rewards to existing preferred customers.
  67. Dispute Resolution. For claims seeking $10,000.00 or more that arise from or relate to the Agreement, prior to filing as set forth below, the parties shall meet in good faith and attempt to resolve such dispute through confidential non-binding mediation. One individual who is mutually acceptable to the parties shall be appointed as mediator. If the Parties cannot agree on a mediator, the complaining party shall request a mediator be appointed by the American Arbitration Association (“AAA”). The mediation shall occur within sixty (60) days from the date on which the mediator is appointed. The mediator’s fees and costs, as well as the costs of holding and conducting the mediation, shall be divided equally between the parties. Each party shall pay its portion of the anticipated shared fees and costs at least ten (10) days in advance of the mediation. Each party shall pay its own attorney’s fees, costs, and individual expenses associated with conducting and attending the mediation. Mediation shall be held in Wilmington, North Carolina and shall last no more than two business days.

    Except as otherwise provided in the Agreement, any controversy or claim arising out of or relating to the Agreement, or the breach thereof, shall be settled through confidential arbitration. The Parties waive rights to trial by jury or to any court. This arbitration provision applies to claims that were not successfully resolved through the foregoing mediation process as well as claims for less than $10,000.00 not subject to the mediation requirement. The arbitration shall be filed with, and administered by, the American Arbitration Association in accordance with the AAA’s Commercial Arbitration Rules and Mediation Procedures, which are available on the AAA’s website at www.adr.org. Copies of the AAA’s Commercial Arbitration Rules and Mediation Procedures will also be emailed to IA’s upon request to Green Compass’ customer Service Department. Notwithstanding the rules of the AAA, unless otherwise stipulated by the Parties, the following shall apply to all Arbitration actions:
    • The Federal Rules of Evidence shall apply in all cases;
    • The Parties shall be entitled to all discovery rights permitted by the Federal Rules of Civil Procedure;
    • The Parties shall be entitled to bring motions under Rules 12 and/or 56 of the Federal Rules of Civil Procedure;
    • The Federal Arbitration Act shall govern all matters relating to arbitration. The law of the State of North Carolina, without regard to principles of conflicts of laws, shall govern all other matters relating to or arising from the Agreement,
    • The arbitration hearing shall commence no later than 365 days from the date on which the arbitrator is appointed, and shall last no more than five business days;
    • The Parties shall be allotted equal time to present their respective cases;
    • The arbitration shall be brought on an individual basis and not as part of a class or consolidated action.

    All arbitration proceedings shall be held in Wilmington, North Carolina. There shall be one arbitrator selected from the panel that the AAA provides. Each party to the arbitration shall be responsible for its own costs and expenses of arbitration, including legal and filing fees. The decision of the arbitrator shall be final and binding on the parties and may, if necessary, be reduced to a judgment in any court to which the Parties have consented to jurisdiction as set forth in the Agreement. This agreement to arbitrate shall survive the cancellation or termination of the Agreement.

    The parties, their respective agents and attorneys, and the arbitrator shall maintain the confidentiality of the arbitration proceedings and shall not disclose to any third party:
    • The substance of, facts underlying, or basis for, the controversy, dispute, or claim;
    • The substance or content of any settlement offer or settlement discussions or offers associated with the dispute;
    • The pleadings, the content of any pleadings, and exhibits to the pleadings, filed in any arbitration proceeding;
    • The content of any testimony or other evidence presented at an arbitration hearing or obtained through discovery in arbitration;
    • The terms or amount of any arbitration award;
    • The rulings of the arbitrator on the procedural and/or substantive issues involved in the case.

    If a Party violates its confidentiality obligations under this arbitration policy, the nonbreaching party shall incur significant damages to its reputation and goodwill that shall not be readily calculable.

    Therefore, if a Party, its attorneys or agents breach the confidentiality provisions of this policy, the nonbreaching Party shall be entitled to liquidated damages in the amount of $25,000.00 per violation. Every disclosure of each allegation, pleading, claim or other prohibited disclosure shall constitute a separate violation. The Parties agree that this liquidated damage amount is reasonable and waive all claims and defenses that it constitutes a penalty.

    Nothing in the Agreement shall prevent either party from applying to and obtaining from any court to which the Parties have consented to jurisdiction as set forth in the Agreement a temporary restraining order, preliminary or permanent injunction, or other equitable relief to safeguard and protect its intellectual property rights, trade secrets, and/or confidential information, including but not limited to enforcement of its rights under the Non-solicitation provisions of the Agreement.
  68. Liquidated Damages. In any case which arises from or relates to the wrongful termination of an IA’s Agreement and/or independent business, the parties agree that damages will be extremely difficult to ascertain. Therefore, the parties stipulate that if the involuntary termination of an IA’s Agreement and/or loss of their independent business is proven and held to be wrongful under any theory of law, IA’s sole remedy shall be liquidated damages calculated as follows:
    • For IAs at the “Paid As” rank 1-Star Master Director and 2-Star Master Director, liquidated damages shall be in the amount of his/her gross compensation that he/she earned pursuant to Green Compass’ Compensation plan in the twelve (12) months immediately preceding the termination.
    • For IAs at the “Paid As” 3-Star Master Director, liquidated damages shall be in the amount of his/her gross compensation that he/she earned pursuant to Green Compass’ Compensation plan in the twenty-four (24) months immediately preceding the termination.

    Gross compensation shall include commissions and bonuses earned by the IA pursuant to Green Compass’ Compensation plan as well as retail profits earned by IA for the sale of Company products.

    The Parties agree that the foregoing liquidated damage schedule is fair and reasonable.

    An IA’s “Paid As” rank is the rank or title at which they actually qualified to earn compensation under the Green Compass Compensation plan during a pay-period. For purposes of this Policy, the relevant pay-period to determine an IA’s “Paid As” rank is the pay-period during which the IA’s business is placed on suspension or terminated, whichever occurs first. The “Paid As” rank differs from the “Title Rank,” which is the highest title or rank that an IA has ever achieved under the Green Compass Compensation plan.
  69. 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.
  70. Class Action Waiver. Any action brought by an IA shall be brought on an individual basis, and not on behalf of a class or on a consolidated basis. IAs waive all rights to bring an action against Green Compass, LLC, its officers, owners, directors, employees and agents as a class or consolidated action.
  71. Governing Law. These rules are reasonably related to the laws of the state of North Carolina and shall be governed in all respects thereby. The parties agree that jurisdiction and venue shall lie with the place of acceptance of the IA application, the state of North Carolina.
  72. Partial Validity. Should any portion of these Rules and Regulations, of the IA'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.


Green Compass, LLC Policies and Procedures 06/15/2020
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