I. BECOMING AN ASSOCIATE

1.1 Independent Representative (Associate)

HempSMART Ltd., hereinafter “Company” or “HempSMART”, is a direct selling Company, marketing health-related and cosmetic products and other consumer products containing hemp and its derivatives to the consumer through Independent Representatives. The policies and procedures herein are applicable to all Independent Representatives (hereinafter “Associate”) of the Company.

  • As an Associate with HempSMART, you are required to understand and comply with the rules, regulations, policies and procedures contained in this handbook and any additional training materials provided by the company.

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

  • All Associates over the age of 18 must be the age of majority in the area in which they distribute Company products and services.

  • HempSMART honours and complies with all international, and local regulations governing direct sales, network marketing, of its products and requires every Associate in the program to do the same.

  • Unless waived in writing by the Company upon application, the Company will consider each married couple, whether married or a statutory recognised domestic partnership, a single Associate. 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 Associate, the nonparticipating spouse or statutory domestic partner may elect to become an Associate, but must join the same Associate position as his or her spouse or statutory domestic partner. The Company reserves the right to reject any applications for new Associates or applications for renewal. Should spouses divorce or should a statutory domestic partnership dissolve, they should notify the Company as to how the Associate position is to be managed thereafter. Otherwise, the Company will recognise the final judicial or adjudicatory disposition of the Associate position.

  • Associates are independent marketing representatives of the Company and are not to be considered purchasers of a franchise or a distributorship. The agreement between the Company and its Associates does not create an employer\employee relationship, agency, partnership, or joint venture between the Company and the Associates. Each Associate shall hold harmless the Company from any claims, damages or liabilities arising out of Associate’s business practices. Company Associates have no authority to bind the Company to any obligation. Each Associate is encouraged to set up his\her own hours and to determine his\her own methods of sale, so long as he\she complies with the policies and procedures of the Company.

  • Transaction Submission Integrity: It is essential to the success of the Company, its Associates 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, Associate applications, Associate communication, Associate 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 Associate may not communicate any transactions submissions on behalf of another Associate, Associate applicant or customer. An Associate may not use his or her credit card or bank account on behalf of another individual or Associate. This rule is applicable to any and all forms of transactions submissions, including, but not limited to, online, telephone, fax, email, etc.

1.2 Ethical Conduct

Associates will, at all times, conduct their business in a professional and ethical manner that is supportive to both the Company and other Associates. An Associate shall engage in no conduct which negatively impacts, disrupts or impairs the reputation or business of the Company, its products/services or other Associates, including, but not limited to: disparagement of the Company, its officers or employees, its products/services or other Associates; manipulation of the compensation plan or unauthorised manipulation of the placement program or genealogy structures; undermines or is at odds with the training systems utilised by and authorized by the Company; conduct which is abusive, disrespectful, bullying or intimidating of other Associates, customers, employees, or Associates of the Company; conduct that undermines the relationship between the Company and Associates or relationships between Associates; conduct which disrespects the privacy of other Associates; 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 Associates.

1.3 Personal and Family Use

The Company’s program is built upon retail sales to the ultimate consumer. The company also recognises that Associates 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 Associates 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. Associates 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.

1.4 Associate Sponsorship.

Any Associate, who sponsors other Associates, 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. Associates 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. Associates should be able to (but is not required to) provide evidence to the Company semiannually of ongoing fulfillment of sponsor responsibilities. If an Associate 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 Associates he or she has enrolled, irrespective of whether the Enroller is also the Sponsor of those Associates.

1.5 External Contracts

No Associate shall enter into any agreements or make purchases in the name of HempSMART. No Associate shall involve HempSMART in any contractual relationship. Associate’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 LTD. Each Associate shall hold harmless HempSMART from any claims, damages, or liabilities arising out of said HempSMART business practices.

1.6 Communication, Suggestions, Complaints

Communication is very important at HempSMART. It is crucial that Associates have all questions answered. To that end, Associates are encouraged to make inquiries and discuss issues. Every Associate 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.

1.7 Contractual Relationship

The policy statements that follow were established to explain and define the relationship and responsibilities between HempSMART and its Associates. The relationship begins with the completion of the HempSMART Associate 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 HempSMARTApplication. The application, the policies & procedures accompanying the application, and this Handbook thus constitute the entire understanding between Associate and HempSMART.

1.8 Acceptance of application

The term of this Agreement begins when a completed Associate 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 Associate is subject to all conditions set forth in this Policies & Procedures Manual.

  • Application. Please be sure to provide all information requested on the Associate Application. Failure to do so may result in the Application being denied.

  • Note to Applicant: It is imperative that you understand that the Associate Application (together with these policies and procedures) is a contract which gives you and HempSMART certain rights and imposes certain duties. If you have questions about any aspect of the application, you should consult an attorney. After reading these Policies & Procedures, by you putting a check in the online check box on the Associate Application portion of the HempSMART website you are legally binding yourself to each and every provision of the application and these Policies & Procedures once it is accepted by HempSMART.

II. SALES MANAGEMENT

2.1 Company Retail / 70 Percent 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 Associates 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 Associates should purchase products and services in commercially reasonable quantities, and under no circumstances may Associates 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 Associates, the Company enforces this rule through a verification program.

2.2 70 Percent Rule

  • Retail Rule: Although the primary function of the Company is to sell products and services to the general consuming public, the Company realises that its Associates may wish to purchase product for personal or family use in reasonable amounts. For this reason, the Company defines a retail sale to include sales to nonparticipants, as well as purchases for personal or family use in reasonable amounts, which are not made solely for purposes of qualification or advancement. 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 Associate will not be eligible for bonuses or overrides unless he or she has made five (5) requisite sales per month to nonparticipant retail customers.

  • Required Retail Sales: To qualify for leadership bonuses and awards, an Associate must achieve requisite personal volume to meet active status, and stated nonparticipant retail sales volume mandates. If active status is fulfilled Associates are encouraged to maintain a minimum of 5 ongoing preferred retail customers for nonparticipant retail sales. The company will track and measure the retail sales volume to maintain a 70% retail customer ratio. The company will provide retail programs and expects active Associates to contribute to the successfully maintaining the 70% retail customer ratio.

  • Ramp-up Grace Period: To be eligible for sales force down line commissions, an Associate, in addition to achieving stated personal and group volume requirements, shall strive for the stated retail sales requirements of five (5) recurring active customers in any one month. With the understanding that Associates will need time to build their book of business of active retail customers, Associates shall be allowed to ramp up their book of business. Each Leadership position has a larger personal sales volume requirement from 150 at Regional to 500 at Presidential. Anything volume over the accepted reasonable amount for persona and family use must be through retail sales to nonparticipant customers. If one of those customers shall discontinue, the Associate shall replace that retail customer with a new retail customer, so as to maintain the required retail customers per month.

  • 70 Percent Rule: As with other leading direct selling companies, the Company has adopted a 70 percent rule. Under this rule, Company Associates may not order additional product unless they have sold or used for personal or family use at least 70 percent of previously purchased inventory-type product. This verification form is also intended to support the 70 percent rule policy.

  • Retail Sales/70 Percent Rule Audit Verification Program: In its effort to support and enforce the retail sales/70 percent rule, the Company on a quarterly basis will conduct random audit verification follow-ups. The Company’s Compliance Department will contact Associates to further verify compliance with the retail sale/70 percent rule. Associates should maintain records and be prepared to assist the Company Compliance Department in its task.

2.3 Associate Tax Responsibilities

All Associates 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 Associate, then report and distribute applicable sales taxes to the taxing entity for the state in which the sale is made. Associates 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.

2.4 Associate Advertisements

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

  • No purchase or investment is necessary to become a Company Associate other than the purchase of, or payment fee for, a sales kit, which is sold “at Company cost.” 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.

  • A Company Associate may NOT produce, sell or distribute literature, video or audio, which is deceptively similar in nature to those produced, published and provided by the Company for its Associates. Nor may an Associate purchase, sell or distribute noncompany materials which imply or suggest that said materials originate from the Company.

  • 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.

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

  • 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 Associate may make any claim that the Company products are useful in 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 Food and Drug Administration.

2.5 Sales Kit

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 Associate Agreement, Associates specifically authorise this yearly fee to be charged to the Associate’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 Associate.

2.6 Trademark, Copyright, Trade Names, Advertising

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 Associate for Associate’s use only in an expressly authorised manner. Associate agrees not to advertise the Company products or services in any way other than the advertising or promotional materials made available to Associate by the Company. Associate 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.

  • The Associate, as an independent contractor, is fully responsible for all of his\her verbal and written statements made regarding the product or service and marketing program, which are not expressly contained in writing in the current Associate agreement, and advertising or promotional materials supplied directly by the Company. Associate 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 Associate’s unauthorised representations.

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

  • 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 Associates or any other person except as authorised by the Company. Permission to reproduce any materials will be considered only in extreme circumstances. Therefore, an Associate should not anticipate that approval will be granted.

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

  • A Company Associate may not produce, sell or distribute literature, video or audio, which are deceptively similar in nature to those produced, published and provided by the Company for its Associates. Nor may an Associate purchase, sell or distribute non-company materials which imply or suggest that said materials originate from the Company.

  • 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.

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

  • 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 Associate 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 Food and Drug Administration.

2.7 Recording Policy

Attendance at Company Events; use authorised 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.

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.

Audio, video, and cellular recordings: of Company related events are not permitted; all audio and video recording devices are prohibited on the premises except by the expressed written permission of Company. Any attempt by unauthorised 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.

Internet and Website Policy: The Company maintains an official corporate website. Associates are allowed to advertise on the internet through an approved Company program which allows Associates to choose from among Company home page designs that can be personalised with the Associate’s message and the Associate’s contact information. These websites link directly to the Company website giving the Associate a professional and Company-approved presence on the internet. Only these approved websites may be used by Associates. No Associate may independently design a website that uses the names, logos, product or service descriptions of the Company, nor may an Associate 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 Associate status.

Prohibition of Sales on Unauthorized Internet Sites: Except with written authorisation from the Company, an Associate may not sell nor promote Company products on unauthorised 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.

Unsolicited Email: The Company does not permit Associates to send unsolicited commercial email to others unless such emails strictly comply with applicable laws and regulations.

  • Any email sent by an Associate that promotes the Company, the Company opportunity or Company products and services must comply with the following:

  • There must be a functioning return email address to the sender.

  • 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).

  • The email must clearly and conspicuously disclose that the message is an advertisement or solicitation.

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

  • All opt-out requests, whether received by email or regular mail, must be honoured.If an Associate receives an opt-out request from a recipient of an email, the Associate must forward the opt-out request to the Company.

Unsolicited Spam: Except as provided in this section, Associates 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. Associates may send “general mailings” only to other Associates in their down line organisations 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:

  • Store or produce telephone numbers to be called, using a random or sequential number generator; and to dial such numbers.

  • 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:

  • To any person with that person’s prior express invitation or permission; or

  • To any person with whom the Associate 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 Associate and a person, on the basis of:

  • An inquiry, application, purchase or transaction by the person regarding products offered by such Associate; or

  • A personal or familial relationship, which relationship has not been previously terminated by either party.

2.8 Retail Establishments

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 Associate and must be preceded by a discussion where the Associate 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.

2.9 Trade Shows

With written authorisation from the Company, Company products or services and opportunity may be displayed at trade shows by Associates. Request for participation in trade shows must be received in writing by the Company at least two weeks prior to the show. Written authorisation from the Company must be received before participating in the trade show. Unless written authorisation 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 Associate may sell or promote the Company’s products or services or business opportunity at flea markets, swap meets, or garage sales.

2.10 International Sales

No Associate 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 EU/EAA or its possessions or territories to any other country. Associates 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 Associate position in that country. Any violation of this rule constitutes a material breach of this contract and is grounds for immediate termination of the Associate.

2.11 Change of Business Names

The Company reserves the right to approve or disapprove Associate’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 Associate, the organisation’s name and the names of the principals of the organization must appear on the Associate application/agreement along with a National Insurance number. It is prohibited to make changes to attempt to circumvent or violate Company rules on raiding, solicitation, targeting, cross-sponsoring or interference.

2.12 Cancelation

The Associate agreement may be canceled at any time and for any reason by an Associate notifying the Company in writing of the election to cancel.

2.13 Agreement Renewal

If an Associate elects not to renew his\her Associate agreement by not repurchasing the wholesale packet, all rights to bonuses, marketing position, and wholesale purchases cease. The terminated Associate‘s sales organisation shall be subject to placement in accordance with the then current published compensation plan presentation.

2.14 Product Repurchase

If the Associate has purchased products for inventory purposes or mandatory sales aids while the Associate agreement was in effect, all products in a resalable condition then in possession of the Associate, which have been purchased within 12 months of cancellation, shall be repurchased. 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. In addition, the company will honour statutory mandated buyback requirements of every jurisdiction.

2.15 Repayment of Commissions

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 Associate check payment. In the event that no commission is available for adjustment in the following month, the Associate who has received the commission shall repay the commission paid on the “reversed sale” within 30 days of the Company’s notice to repay.

2.16 Change of Products or Services

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.

2.17 Tax Compliance for Products

Each Associate shall comply with all regional and local HMRC taxes and regulations governing the sale of company products or services.

2.18 Protecting the Consumer and other Associates

  • Notwithstanding the Company’s longer retail customer guarantee policy, all retail sales must comply with the FTC Three-Day Cooling Off Rule, which requires statutory language and notice of cancellation on the retail sales receipt. The three-day right of cancellation must be orally explained to the customer and the customer must receive two copies of the notice of cancellation form.

  • Consumers must be provided accurate information regarding price, credit terms and terms of payment.

  • An Associate must take appropriate steps to safeguard and protect private information provided by a consumer, other Associates or prospective Associates.

2.19 Prohibition on Raiding and Cross-Solicitation

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 organisation. Raiding and solicitation actions in which Associates seek to raid and solicit other Associates 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 Associates 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 organisation. Therefore, Associates shall not directly or indirectly sell to, nor solicit from, other Company Associates non-company products or services, or in any way promote to other Company Associates business opportunities in marketing programs of other MLM or business opportunity companies at any time. A Company Associate shall not engage in any recruiting or promotion activity that targets Company Associates 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 Associate participate, directly or indirectly, in interference, raiding or solicitation activity of Company Associate 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 Associate agreement and for a period of one year after the termination of the Associate agreement. For the term of this agreement and for one year after termination hereof, an Associate shall not, directly or indirectly, recruit any of Company’s Associates to join other direct sales or network marketing companies nor solicit, directly or indirectly, Company’s Associates to purchase services or products, or in any other way interfere with the contractual relationships between Company and its Associates.

2.20 Confidential and Proprietary Reports

The Company is able to supply data processing information and reports to the Associate, which will provide information concerning the Associate’s down-line sales organization, product purchases and product mix. The Associate agrees that such information is proprietary and confidential to the Company and is transmitted to the Associate in confidence. The Associate 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 Associate and the Company agree that, but for this agreement of confidentiality and nondisclosure, the Company would not provide the above confidential information to the Associate. An Associate seeking to sell his/her Associate position must acknowledge and agree to this provision prior to the finalisation of the sale of their Associate position.

2.21 Vendor Confidentiality

The Company’s business relationship with its vendors, manufacturers and suppliers is confidential. An Associate 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 Associate contact.

2.22 Private information

An Associate shall take appropriate steps to safeguard the protection of all private information provided by a consumer, a prospective consumer and/or other Associates.

  • Term of Confidentiality: Except to the extent necessary to properly perform Associate services pursuant to this Agreement, Associate agrees to hold the Confidential and Proprietary information in the strictest secrecy, and covenants that, during the term of this Agreement and for a period of five (5) years thereafter or for so long as Associate is receiving commissions from HempSMART, whichever is longer; Associate will not directly or indirectly disclose to any person or entity, or otherwise utilise directly or indirectly any of the proprietary information, nor attempt to circumvent HempSMART by contacting or making any agreements directly with any of HempSMART’s providers.

2.23 Change in Status

  • Marriage/Statutory Domestic Partnership: Two Company Associates who marry or enter into a statutory domestic partnership, after having established their own individual Associate positions, may continue to operate their existing Associate 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 Associate 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 Associate position in one of the following manners:

  • Written agreement signed by both parties indicating who will retain the Associate position.

  • A court order delineating who receives custody over the Associate position.

  • Both parties may choose to retain their joint Associate position and operate it as a partnership.

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

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

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

  • Contact the Company within thirty (30) days of the disability and advise the Company of the Associate’s status and the plans for future management or cancellation of the Associate position.

  • Provide a court confirmed copy of appointment as legal representative or conservator.

  • Provide a court confirmed copy of document establishing right to administer the Company business.

  • Should the legal representative or conservator plan to continue the business of the Associate position, then he/she shall fill out a new Associate application/agreement and receive the required training consistent with the disabled Associate’s level at the time of disability.

  • These requirements shall be satisfied within a deadline of six months.

2.24 Sale or Transfer

An Associate may not sell, assign or otherwise transfer his or her Associate position, marketing position or other Associate rights without written application and approval by the Company. This paragraph is applicable to transfer of any interest in an entity that owns an Associate 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 Associate 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 Associate position must be offered in writing first to the Associate’s sponsor. If the sponsor declines the offer, the Associate may offer the Associate 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 Associate position. An Associate who sells his or her Associate position shall not be eligible to requalify as an Associate for a period of at least six months after the sale.

  • An Associate may not add a co-applicant to their Associate position and thereafter, remove their name from the Associate position, in an effort to circumvent the Company’s sale, assign, delegate or merger procedure. The primary Associate must wait twelve (12) months after adding a co-applicant to the Associate position before they are allowed to remove their name from the Associate 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 Associate 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 Associates, disrupting its relationship with customers, agents, representatives, 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 Associate seeking to sell or transfer his/her Associate position must acknowledge and agree to this provision prior to the finalisation of the sale or transfer of their Associate position.

2.25 Statement of Policies and Procedures

This statement of policies and procedures is incorporated into the Associate agreement and constitutes the entire agreement of the parties regarding their business relationship.

2.26 Company Right to Alter or Amend

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 Associate. 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.

2.27 Non-Individual Ownership

A partnership, corporation, limited liability company or other legal entity may be an Associate. However, no individual may participate in more than one (1) Associate 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.

  • An Associate 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.

  • To form a new Associate 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 authorised 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 Associate position within three (3) months of the submission of the form (unless it is the continuation of an existing Associate position that is changing its form of doing business).

2.28 Individual and Entity Ownership Information

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

  • No individual operating under a fictitious name and no partnership, corporation, limited liability company or other business entity may become a Company Associate without submitting an “Entity Information” form following enrollment of proprietorship, corporation, Limited Liability Company (LLC), trust or partnership.

2.29 Entity Guarantee for Owners

Although Company has offered Associates the opportunity to conduct their Associate position as corporate, LLC, trust, partnership or other form of legal entities, it is agreed that since the Associate 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 Associate 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 Associate position, any breaching actions by such parties that continue to have a beneficial financial interest, directly or indirectly, in the Associate position shall be attributable to the Associate position.

2.30 Members of Same Household; Responsibility

Members of Associate’s household may operate together as one Company Associate position, but may not become separate Company Associates. 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 recognises 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 organisation. Since the household member that has an ownership interest in the Company Associate 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 Associate position, subjecting the Associate position to discipline or termination.

2.31 Agreed Use of Associate Information

It is agreed that the Company is authorised to use Associate’s name, photograph, personal story and/or likeness in advertising or promotional materials and Associate waives all claims for remuneration for such use.

2.32 Disciplinary Actions

An Associate’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:

  • Issuance of a written warning or admonition.
  • Imposition of a fine, which may be imposed immediately or withheld from future commission checks.
  • Reassignment of all or part of an Associate’s organization.
  • Suspension, which may result in termination or reinstatement with conditions or restrictions.

III. TERMINATION

3.1 Termination

The Company reserves the right to terminate any Associate at any time for cause when it is determined that the Associate has violated the provisions of the Associate 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 Associate by mail at the latest address listed with the Company for the Associate. In the event of a termination, the terminated Associate agrees to immediately cease representing him/herself as an Associate.

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

  • If an Associate files a timely appeal of termination, the Company will review and reconsider the termination, consider any other appropriate action, and notify the Associate 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.

3.2 Appeal

A terminated Associate may appeal his or her termination by submitting a letter of appeal to HempSMART stating the grounds of the appeal. This letter must 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 Associate files a timely appeal, HempSMART shall, in its sole discretion, review and reconsider that termination and notify the Associate 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.

3.3 Voluntary Resignation

An Associate may voluntarily resign his or her Associate status by; 1) non-renewal or 2) sending a written notice to HempSMART that he or she desires to terminate his or her Associate 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 Associate who VOLUNTARILY resigns his or her Associate distributorship may reapply after waiting six (6) months from HempSMART’s receipt of the resignation before reapplication.

3.4 Effect of Resignation or Termination

Resignation or termination results in the Associate’s permanent loss of the rights to his or her sponsored Downline Organisation. HempSMART reserves the right to either move up the Downline Organisation to the next Associate in the resigning or terminating Associate’s Upline Organisation or to take the place of the resigning or terminating Associate in the Downline Organisation, at HempSMART’s discretion. All active customers of a resigned or terminated Associate will be considered customers of HempSMART. Furthermore, the resigning or terminated Associate shall have no right to purchase additional products as an Associate or receive additional compensation from HempSMART. If an Associate is terminated as an Associate of a HempSMART Associate in a foreign country, the Associate’s HempSMART distributorship that is governed by these Rules and Regulations can be terminated.

An Associate who has had his or her Associate status terminated by HempSMART may make reapplication as an Associate after waiting twelve (12) months from the date that the termination became effective. Termination is retroactive to the beginning of the month in which the termination is effective; thus, any payment of Commissions, Bonuses and/or Royalty Overrides will be made only for business completed during the last full month prior to termination. No terminated Associate shall represent themselves as an Associate of HempSMART products or services.

3.5 Compliance and Arbitration

These Policies and Procedures were created as guidelines for HempSMART and all Associates and serve to protect the rights of both parties. The Policies & Procedures ensure the proper operating of the HempSMART program for daily operations. Any Associate who violates any provision of the Associate Agreement which, by reference, includes all Policies & Procedures herein, may be promptly terminated by HempSMART. A termination cancels any and all rights and will be effective upon verification of said violation(s) and notification of the offending Associate by HempSMART.

In the event a dispute shall arise between the Associate and HempSMART as to their respective rights, duties and obligations under this Agreement, or in the event of a claim of breach of this Agreement by either party, such dispute shall be exclusively resolved by binding arbitration. The arbitrator may award, in addition to declaratory relief, preliminary and permanent injunctive relief and compensatory damages, and shall award reasonable attorney’s fees and cost to the prevailing party. The decision of the arbitrator shall be entitled to enforcement in any court of competent jurisdiction. This provision shall not be construed so as to prohibit HempSMART from obtaining preliminary and permanent injunctive relief in any court of competent jurisdiction.

IV. SPONSOR RESPONSIBILITY

4.1 Sponsors

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

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

  • As a convenience to its Associates, the Company may provide various methods of registering or informing the Company of newly sponsored Associates, including online Internet registration, telephone registration and facsimile registration. Until such time as the Company receives an application, either as hard copy or by e-mail, containing all appropriate information, as well as the signature of the proposed new Associate, the Company will only consider the internet, telephone, or e-mail registration in the category of “intended” recognition of sponsor. Thus, although the Company is attempting to create some convenience for its sponsoring Associates, it is the responsibility of the sponsoring Associate to cause delivery to the Company of a completed and signed Associate agreement if the sponsor is to expect formal recognition as the official sponsoring Associate.

  • There is no “magic” involved in the Company or in any business. Those who sponsor widely but who do not help new Associates develop their business will end up with limited success. Therefore, a responsibility of sponsorship is to work with new Associates, helping them learn the business and encouraging them during the critical early months.

  • Sponsors are not required to carry inventory of products or sales aids for new Associates. When tangible product is involved, Associates who do so, however, find building a major sales organisation much easier because of the decreased response time in meeting a new Associate’s needs.

When soliciting a prospective Associate to join the Company’s network program, the sponsoring Associate must clearly refer the following:

  1. Products: type, performance and quality of each product.
  2. Compensation plan
  3. Policies and Procedures.
  4. Associate’s rights and duties.
  5. Other important items that will affect the judgment of the prospective

4.2 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 organisation.

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 one (1) up line sponsor, plus the approval of two (2) leadership positions that are bronze level or above, and most importantly, from the HempSMART company office itself. HempSMART retains the authority for the first right of refusal.

  3. Resigning from the Company entirely and waiting six (6) months to reapply under the new sponsor.

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 Associates being removed from the original line of sponsorship.

V. ORDERING

5.1 Accurate Sales Records

The Company encourages each Associate 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 Associates only for personal consumption and for resale to consumers.

5.2 Rules and Restrictions

See specific addenda to the Associate agreement for specific states as to statutory purchasing limitations, buyback rules and other restrictions, disclosures and additional Associate 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.

5.3 HempSMART WEBSITE

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 Associate username and password (which should be kept confidential) to establish a login at wordpress-445928-1396809.cloudwaysapps.com. You must keep your password secure and order only on your own account. When you sign up as an Associate, HempSMART will create a replicating website that you can utilise. This replicated site can be utilised 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.

5.4 General Ordering Policies

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.

5.5 Back Orders

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.

5.6 Month-End Order Processing Cutoff

The month-end order processing cutoff is the last calendar day of the month at 11:59 p.m., General Mean Time (GMT). 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.

VI. SHIPPING

6.1 Shipping Method and Charges

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, Associate’s name and number, product code, product name, price, and the amount and method of payment. Associates should keep these packing slips for personal accounting records. Package tracking is available through most major carriers.

6.2 Shipping Discrepancies

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 Authorisation (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 protected]. An Associate Services representative will discuss the steps to rectify the situation and issue a Return Merchandise Authorisation (RMA) number.

VII. PRODUCT RETURNS

7.1 Return Policy

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 Associates who received compensation on such purchases.

7.2 Return Guidelines

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.

7.3 Non – Associate Returns

If you (as an Associate or professional account customer) sell product to non-Associates, the same return policy is applicable to the non-Associate as outlined in (Section 7.2). Any non-Associate 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 organisation. Damaged or incorrect shipments of products will not be subject to fees.

7.4 Returns of Inventory by the Associate

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.

7.5 Product Kits and Collections

All HempSMART product kits and product collections must be sold as a whole unit. Associates are prohibited from selling individual items from product kits and product collections separately and promoting such activity within the Associate’s business organisation.

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.

7.6 Return of Promotional Product(s)

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:

  • If a qualifying purchase is returned in whole or in part and negates your qualification to receive the complimentary promotional item(s), the complimentary item(s) must also be returned, or you will be charged for the free product(s).

  • If one of the promotional products is returned, HempSMART will not credit the Associate, as HempSMART will assume the returned item(s) is the promotional product(s). If all promotional products are returned, HempSMART will credit the for the product purchased.

VIII. TAX RESPONSIBILITIES

8.1 Income Claims

No income claims, income projections nor income representations may be made to prospective Associates. Obviously, any false, deceptive or misleading claims regarding the opportunity or product\service are prohibited. In their enthusiasm, Associates 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 Associates 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.

8.2 Representation of Status

In all cases, any reference the Associate makes to him/herself must clearly set forth the Associate’s independent status. For example, if the Associate 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 Associate.

8.3 Requests for Records

The Company will comply fully with all requests for records accompanied by a properly prepared and signed authorisation 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.

IX. MARKETING

9.1 Newspaper and Online Advertisements

Some Associates 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.

9.2 Sales Tools

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.
9.3 Telemarketing Techniques

Associates 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 Associates 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 Associate (a “prospect”) is permissible under the following situations:

  • 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.

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

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

  • If the Associate receives written and signed permission from the prospect authorising the Associate to call. The authorisation must specify the telephone number(s) which the Associate is authorised to call.

  • In addition, Associates 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.

9.4 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.

9.5 Internet and 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 authorised personal replicated websites of Associates. The following rules and guidelines, regarding social networking, are applicable:

  • The Company encourages Associates 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.

  • 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 products of the Company; or you may want to talk about how your life is improving. When others in the network hear your testimonial, they will naturally inquire … and that is the opportunity to send them to your authorised Company website. [It is extremely important that no claims are made in your testimony that has anything to do with curing, preventing or treating a disease.]

  • It is highly recommended by the company that you clear any post for compliance with our compliance department. Upon notifying the HempSMART compliance department via email at [email protected] for review, you may publish YouTube, Twitter, and other communications. You must supply for a link to the material you have posted for content review. In the event your material is found to be noncomplying, you will be required to remove it within 24 hours.

  • 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.

Positive Steps to Help Your Business:

  • Post as much as you like to your wall.
  • Comment as much as you like on your photos and links.
  • Post as many links on your page.

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 Associate 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.

9.6 Online Testimonials

Associates must monitor and evaluate customer testimonials while understanding guidelines.

A testimonial cannot make an express or implied representation that would be deceptive if the same representation were made directly by the advertiser. 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.

    • So please, DO NOT “LIKE” your customers’ disease-claim testimonials for your HempSMART products.

Bloggers or commenters must disclose the following:

  • When you receive a free product and review it
  • When you link to a product’s website and receive a commission (Associate links)
  • When you receive money, product, or services for posting about a product or company.

It’s important to be honest:

  • Don’t write about a product if you haven’t tried it.
  • If you were paid to try a product and you thought it was awful, don’t say it was great.
  • Don’t make claims about a product that cannot be substantiated. Example: “It will cure/prevent/treat (put any disease here)!”

9.7 General considerations

(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.

9.8 Consumer 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.

9.9 Expert Endorsements

(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)]

9.10 Endorsements by Organisations

Endorsements by organisations, 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 organisation’s endorsement must be reached by a process sufficient to ensure that the endorsement fairly reflects the collective judgment of the organisation. Moreover, if an organisation is represented as being expert, then, in conjunction with a proper exercise of its expertise in evaluating the product under (expert endorsements), it must utilise an expert or experts recognised as such by the organisation or standards previously adopted by the organisation and suitable for judging the relevant merits of such products. [See: 9.7 General considerations (d)]

9.11 Disclosure of Material Connections

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.

9.12 Internet Search Engine Optimisation

  • Associates may use, reference, or incorporate the Company names and trademarks in approved Internet advertising.

  • When participating in chat rooms and other social media, Company Associates 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.

  • Associates 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.

  • Associates may communicate the benefits of Company products on the Internet and on search engines in appropriate categories.

  • Associates may not use language that is sexually explicit, threatening, pornographic, violent or otherwise prohibited.

  • 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 Associate. All Internet advertising must clearly report that the ad is placed by an “Associate” of the Company.

  • Associates may use words from approved Company advertising as “key words” for the purpose of having communications found by search engines.

  • With the exception of the Associate’s authorised 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 Associates 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 Associate’s authorised replicated Company website.

  • Company Associates 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 Associate’s websites.

  • Determination of whether a link is objectionable is solely at the discretion of the Company.

  • Associates may not use tactics such as “cloaking” or other deceptive means on the Associate’s web pages (For example: Cloaking in Google terms means designing a website so that search engines see one thing and visitors see another.)

  • As a practical matter, Company Associates 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.

  • Company Associates 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.

9.13 Email

Associates may send “general mailings” only to Associates in their down-line organisations 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 Associate rights and benefits and the loss of Associate rights, including sales organisations and compensation. Various kinds of prohibited emails – either bulk or individual – include, but are not limited to the following:

  • 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 down-line organisation is subject to immediate discipline.

  • 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.

  • Third Party Approval for Mass Email: Companies that gather approval from enquiries, 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.

  • 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.

  • Specific 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.

  • Linking: No links may be made from an Associate website, except as provided or authorised by the Company. Authorised links include:

    • Links made from a Company Associate 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 Associate has with the Company.

    • Links from blogs and social networking sites joined for the purpose of networking, marketing, sponsoring, and selling the Company products.

    • 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.

    • 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.

9.14 Indemnification and Hold Harmless

The Associate 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 Associate’s business operations and representations made by Associate in the operation of his/her business, arising from the following:

Violation and/or lack of compliance with terms of the Associate 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 Associate business; Engaging in any conduct not authorised by the Company in the Company market program; Any fraud, negligence or willful misconduct in the operation of the Associate business; Misrepresentation or unauthorised representation regarding the Company’s product or service, marketing opportunity or potential or the Company’s marketing program; Failure to adhere to any 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 Associate as granted by the Company; Engaging in any activity over which Company has no effective control as to the actions of the Associate. Engaging in the general business operations of Associate’s business.

X. CONCLUSION

10.1 Entire Agreement

This Agreement constitutes the entire agreement between HempSMART and the Associate with respect to the subject matter hereof. This Agreement may be amended only in writing and executed by HempSMART.

10.2 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 authorised 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.

10.3 Partial Validity

Should any portion of these Rules and Regulations, of the Associate’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.

10.4 Modification

In order to maintain a viable marketing program and to comply with the changes in International, 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 Associate Compensation plan. All changes, upon notice by HempSMART shall become a binding part of the original Associate agreement.

10.5 Arbitration

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 Coventry, United Kingdom in accordance with the Commercial Rules of the American Arbitration Association.

10.6 Fire, Flood, Etc.

HempSMART shall not be responsible for acts beyond its control, including, but not limited to: fire, flood, earthquake, storms, power outages, labour difficulty, equipment failures, supplier problems, sharks, sickness, or other difficulties that might prevent HempSMART from fulfilling its obligations to its Associates.

HempSMART Policies and Procedures – 09.21.2020

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