Terms and Conditions (Effective August 15, 2013)

TABLE OF CONTENTS

SECTION 1 - POLICIES AND ENTREPRENEURIAL REWARD SYSTEM INCORPORATED INTO MEMBERSHIP AGREEMENT

1.1 - INTRODUCTION

1.2 - PURPOSE OF POLICIES

1.3 - CHANGES TO THE AGREEMENT

1.4 - DELAYS

1.5 - POLICIES AND PROVISIONS SEVERABLE

1.6 - WAIVER

SECTION 2 - BECOMING A MEMBER

2.1 - REQUIREMENTS TO BECOME A MARKETING MEMBER

2.2 - PRODUCT PURCHASES

2.3 – MARKETING MEMBER BENEFITS

2.4 - TERM AND RENEWAL OF YOUR DH MARKETING MEMBERSHIP

2.5 – REQUIREMENTS TO BECOME AN APPRECIATION MEMBER

2.6 – APPRECIATION MEMBER BENEFITS

2.7 – TERM AND RENEWAL OF YOUR DH APPRECIATION MEMBERSHIP

SECTION 3 - OPERATING A DH MARKETING MEMBERSHIP

3.1 - ADHERENCE TO THE DH MARKETING AND ENTREPRENEURIAL REWARD SYSTEM

3.2 - ADVERTISING

3.2.1 - GENERAL

3.2.2 - MEMBER WEB SITES

3.2.3 - ONLINE AUCTIONS AND OTHER ONLINE FORUMS

3.2.4 - DOMAIN NAMES

3.2.5 - TRADEMARKS AND COPYRIGHTS

3.2.6 - MEDIA AND MEDIA INQUIRIES

3.2.7 - UNSOLICITED EMAIL

3.2.8 - UNSOLICITED FAXES

3.2.9 - BUSINESS CARDS, TELEPHONE BOOK LISTINGS

3.3 - BONUS BUYING PROHIBITED

3.4 - BUSINESS ENTITIES

3.5 - CHANGE OF SPONSOR

3.5.1 - MISPLACEMENT

3.5.2 - CANCELLATION AND RE-APPLICATION

3.5.3 - WAIVER OF CLAIMS FOR UNAUTHORIZED ORGANIZATION CHANGES

3.6 - UNAUTHORIZED CLAIMS AND ACTION

3.6.1 - INDEMNIFICATION

3.6.2 - PRODUCT CLAIMS

3.6.3 - INCOME CLAIMS

3.7 - COMMERCIAL OUTLETS

3.8 - TRADE SHOWS, EXPOSITIONS AND OTHER SALES FORUMS

3.9 - CONFLICTS OF INTEREST

3.9.1 - NON SOLICITATION

3.9.2 - SALE OF COMPETING GOODS OR SERVICES

3.9.3 - MEMBER PARTICIPATION IN OTHER DIRECT SELLING PROGRAMS

3.9.4 - PLANNED COMMUNITY ACTIVITY (GENEALOGY) REPORTS

3.10 - TARGETING OTHER DIRECT SELLERS

3.11 - CROSS-SPONSORING

3.12 - ERRORS OR QUESTIONS

3.13 - GOVERNMENTAL APPROVAL OR ENDORSEMENT

3.14 - HOLDING APPLICATIONS OR ORDERS

3.15 - IDENTIFICATION

3.16 - INCOME TAXES

3.16.1 - NON-U.S. CITIZENS MEMBERSHIPS

3.17 - INDEPENDENT CONTRACTOR STATUS

3.18 - INSURANCE

3.19 - INTERNATIONAL MARKETING

3.20 - INVENTORY LOADING

3.21 - ADHERENCE TO LAWS AND ORDINANCES

3.22 - MINORS

3.23 – MULTIPLE MEMBERSHIPS

3.24 - ACTIONS OF HOUSEHOLD MEMBERS OR AFFILIATED INDIVIDUALS

3.25 - REQUESTS FOR RECORDS

3.26 - ASSIGNMENT OF A DH MEMBERSHIP

3.27 - SEPARATION OF A DH MEMBERSHIP ERS BENEFIT

3.28 - SPONSORING

3.29 - SUCCESSION

3.29.1 – TRANSFER/RE-ASSIGNMENT UPON DEATH OF AN MEMBER

3.29.2 – ASSIGNMENT UPON INCAPACITATION OF AN MEMBER

3.30 - TELEMARKETING TECHNIQUES

SECTION 4 - RESPONSIBILITIES OF MARKETING MEMBERS AND APPRECIATION MEMBERS

4.1 - CHANGE OF ADDRESS, TELEPHONE, AND E-MAIL ADDRESSES

4.2 - CONTINUING DEVELOPMENT OBLIGATIONS

4.2.1 - ONGOING TRAINING REGARDLESS OF THEIR LEVEL OF ACHIEVEMENT

4.2.2 - INCREASED TRAINING RESPONSIBILITIES

4.2.3 - ONGOING PLANNED COMMUNITY RESPONSIBILITIES

4.3 - NON-DISPARAGEMENT

4.4 - PROVIDING DOCUMENTATION TO APPLICANTS

4.5 - REPORTING POLICY VIOLATIONS

SECTION 5 – ENTREPRENEURIAL REWARD SYSTEM

5.1 – 5Q PROGRAM

5.2 - NO TERRITORY RESTRICTIONS

SECTION 6 – ENTREPRENEURIAL REWARD SYSTEM

6.1 - BONUS AND COMMISSION QUALIFICATIONS

6.2 - ADJUSTMENT TO BONUSES AND COMMISSIONS

6.2.1 - ADJUSTMENTS FOR RETURNED PRODUCTS

6.3 - REPORTS

SECTION 7 - PRODUCT GUARANTEES, RETURNS AND INVENTORY REPURCHASE

7.1 - PRODUCT GUARANTEE

7.2 - RETURN OF INVENTORY AND SALES AIDS BY MEMBERS UPON CANCELLATION

7.3 - PROCEDURES FOR ALL RETURNS

SECTION 8 - DISPUTE RESOLUTION AND DISCIPLINARY PROCEEDINGS

8.1 - DISCIPLINARY SANCTIONS

8.2 - GRIEVANCES AND COMPLAINTS

8.3 – CONFLICT RESOLUTION

SECTION 9 - PAYMENT AND SHIPPING

9.1 - RETURNED CHECKS

9.2 – RESTRICTION ON THIRD PARTY USE OF CREDIT CARDS AND CHECKING ACCOUNT ACCESS

9.3 – SALES TAX

SECTION 10 - INACTIVITY AND CANCELLATION

10.1 - EFFECT OF CANCELLATION

10.2 – INVOLUNTARY CANCELLATION

10.3 - VOLUNTARY CANCELLATION

SECTION 11 – DEFINITIONS

 

 

SECTION 1 - INTRODUCTION

1.1 - Policies and Procedures, Entrepreneurial Reward System and Membership Agreement.

 

directionH is a Private Membership Association comprised of Private Members operating only in the private domain while exercising our right of “freedom of association” as guaranteed by the 1st and 14th Amendments of the U.S. Constitution and equivalent provisions of the various State Constitutions, and the 5th Amendment of the U.S. Constitution as it was further defined by the U.S. Supreme Court with the Due Process Liberty Clause. This means that our association activities are restricted to the private domain only, and are under Constitutional laws and exercised as rights. Our activities are not in the public domain, which are under regulations established to manage privileges created through waiver of rights.

The directionH Membership has many benefits available to its Members.  Two of the benefits that are available are the directionH nutritional products and the Entrepreneurial Reward System (ERS).

The directionH basic Membership is an on-going Membership; however, to participate and/or purchase products or services the annual special assessment fee must be current and based upon level of Membership. The directionH Association has defined mandatory guidelines for Members participation in the Association. As an example, all products and services are for the exclusive use of directionH Members only.   Members who have decided to become a part of the directionH Private Membership Association do so based on Constitutional Rights.  It is agreed that these Policies and Procedures, in their present form and as amended at the sole discretion of directionH™ according to the provisions within the Articles of Association (hereafter “DH” or the “Association”), are incorporated into and form an integral part of the DH Membership Agreement. Throughout these Policies, when the term “Agreement” is used, it collectively refers to the DH Membership Application and Agreement, these Policies and Procedures, and the DH Marketing and Entrepreneurial Reward System, Terms and Conditions, Privacy Policy, and Refund Policy. These documents are incorporated by reference into the DH Membership Agreement (all in their current form and as amended by DH). It is the responsibility of each Member to read, understand, adhere to, and ensure that he or she is aware of and operating under the most current version of these documents collectively defined as the “DH Agreement”. When sponsoring or enrolling a new Member, it is solely the responsibility of the sponsoring Member to ensure that the applicant is provided with, or has online access to, the most current version of these Policies and Procedures and the DH Marketing and Entrepreneurial Reward System prior to his or her execution of the Membership Agreement.

1.2 - Purpose of Policies

DH is a Private Membership Association that offers its products exclusively through Independent Representative Members (here after “Member” or “Members”). It is important to understand that your success and the success of your fellow Members depend on the integrity of the men and women who share our products and services only through the member-to-member association. To clearly define the relationship that exists between Members and DH, and to explicitly set a standard for acceptable Association conduct, DH has established the Agreement.

By affixing a signature to any part of the Agreement, the Member thereby accepts the Agreement with any and all past, present and future amendments or modifications thereof  and hereby understands that they are bound to such Policies and Procedures, Rules, Terms and Conditions.

DH Members are required to comply with all of the Terms and Conditions set forth in the Agreement, as well as all federal, state, and local laws governing their DH business and their conduct. Because you may be unfamiliar with many of these standards of practice, it is very important that you read and abide by the Agreement. Please review the information in this document carefully. It explains and governs the relationship between you, as an independent Member and the Association. If you have any questions regarding any policy or rule, do not hesitate to seek an answer from DH.

1.3 - Changes to the Agreement

Because federal, state, and local laws as well as the business (societal) environment periodically change, DH reserves the right pursuant to the Articles of Association to amend the Agreement and its prices in its sole and absolute discretion. By signing the Membership Agreement, a Member agrees to abide by all amendments or modifications that DH elects to make. Amendments shall be effective 30 days after publication of notice that the Agreement has been modified. Notification of amendments shall be published by one or more of the following methods:  (1) posting on the Association’s official web site; (2) electronic mail (e-mail); (3) inclusion in Association periodicals; (4) inclusion in product orders or benefits bonus checks; or (5) special mailings. The continuation of a Member’s DH Membership or a Member’s acceptance of bonuses or commissions constitutes acceptance of any and all amendments.

1.4 - Delays

DH shall not be responsible for delays or failures in performance of its obligations when performance is made commercially impracticable due to circumstances beyond its reasonable control. This includes, without limitation: strikes, labor difficulties, riot, war, fire, death, curtailment of a party’s source of supply, or government decrees or orders or any circumstances which may affect liquidity.

1.5 - Policies and Provisions Severable

If any provision of the Agreement, in its current form or as may be amended, is found to be invalid or unenforceable for any reason, only the invalid portion(s) of the provision shall be severed and the remaining terms and provisions shall remain in full force and effect. The severed provision, or portion thereof, shall be reformed to reflect the purpose of the provision as closely as possible.

1.6 - Waiver

The Association never gives up its right to insist on compliance with the Agreement and with the applicable laws governing the conduct of the Association. No failure of DH to exercise any right or power under the Agreement or to insist upon strict compliance by a Member with any obligation or provision of the Agreement, and no custom or practice of the parties at variance with the terms of the agreement, shall constitute a waiver of DH’s right to demand exact compliance with the Agreement. Waiver by DH can be effectuated only in writing by an authorized officer of the Association. DH’s waiver of any particular breach by a Member shall not affect or impair DH’s rights with respect to any subsequent breach, nor shall it affect in any way the rights or obligations of any other Member. Any delay or omission by DH to exercise any right arising from a breach shall not affect or impair DH’s rights as to that or any subsequent breach. The existence of any claim or cause of action of a Member against DH shall not constitute a defense to DH’s enforcement of any term or provision of the Agreement.

Each Member, by affixing their seal hereto as a testament, accepts full responsibility with absolute waiver to any claims against DH and/or any other Member, for any outcomes; whether or not the outcomes meet expectations.

SECTION 2 - BECOMING A MEMBER

2.1 - Requirements to Become a Marketing Member

To become a DH Marketing Member, each applicant must:

• Be of the age of majority in his or her state of residence or have a legal guardian sign his or her application;

• Reside in the United States or U.S. Territories or country that DH has officially announced is open for business;

• Have a valid Social Security or Federal Tax ID number;

• Submit a properly completed Membership Application and Agreement to DH either in hard copy or online format;

• Members enrolling as a business entity must complete and submit a Membership Application and Agreement as the business entity.

● Membership fees for a Marketing Members are $49 annually and are non-refundable.

·         Accept all Terms and Conditions, Policies and Procedures of the Agreement in addition to the Articles of Association including provisions by which any Member may forfeit the opportunity to continue or renew their Membership if found in default.

2.2 - Product Purchases

No person is required to purchase DH products to become a Member. In order to familiarize new Members with DH products, services, sales techniques, sales aids, and other matters, the Association strongly encourages the Member attends one of DH’s training conferences and continually seeks out any additional training available.

2.3 – Marketing Member Benefits

Once the Membership Application and Agreement has been accepted by DH, the benefits of the Marketing and Entrepreneurial Reward System are available to the new Marketing Member. These benefits include the right to:

• Promote DH products and services;

• Participate in the DH Marketing and Entrepreneurial Reward System (receive bonuses and commissions, if eligible);

• Sponsor other individuals as Marketing Members or Appreciation Members and thereby build a Planned Private Membership Association Community (herein called Planned Community)  and progress through the DH Marketing and Entrepreneurial Reward System;

• Receive periodic DH literature and other DH communications;

• Sponsored support, service, training, motivational and recognition functions (upon payment of appropriate charges, if applicable) and;

• Participate in promotional and incentive contests and programs sponsored by DH for its Members.

2.4 - Term and Renewal of Your DH Marketing Membership

The term of the Membership Agreement for purchasing products and services is one year from the date of its acceptance by DH. Marketing Members must renew their Membership Agreement each year by paying an annual renewal fee of $49.00 before the anniversary date or during the month of their Membership Agreement anniversary. Appreciation Members must renew their Membership Agreement each year by paying an annual renewal fee of $10.00 on or before the anniversary date of their Membership Agreement. If the renewal fee is not paid within 30 days after the expiration of the current term of the Membership Agreement, the Membership Agreement will be canceled. Memberships may elect to utilize the Automatic Renewal Program (“ARP”). Under the ARP, the renewal fee will be charged to the Member’s credit card on file with the Association.

2.5 - Requirements to Become an Appreciation Member

To become a DH Appreciation Member, each applicant must:

• Be of the age of majority in his or her state of residence or have a legal guardian sign his or her application;

• Reside in the United States or U.S. Territories or country that DH has officially announced is open for business;

• Submit a properly completed Membership Application and Agreement to DH either in hard copy or online format;

● Memberships fees for an Appreciation are $10 annually and are non-refundable.

2.6 – Appreciation Member Benefits

Once the Membership Application and Agreement has been accepted by DH, the benefits of the Appreciation Member include the opportunity to purchase and use DH products and services.

2.7 – Term and Renewal of Your DH Appreciation Membership

Appreciation Members must renew their Membership Agreement each year by paying an annual renewal fee of $10.00 on or before the anniversary date of their Membership Agreement. If the renewal fee is not paid within 30 days after the expiration of the current term of the Membership Agreement, the Membership Agreement will be canceled. Memberships may elect to utilize the Automatic Renewal Program (“ARP”). Under the ARP, the renewal fee will be charged to the Member’s credit card on file with the Association.

SECTION 3 - OPERATING A DH Marketing Membership

3.1 - Adherence to the DH Marketing and Entrepreneurial Reward System

Members must adhere to the terms of the DH Marketing and Entrepreneurial Reward System as set forth in official DH literature. Member shall not offer the DH opportunity through, or in combination with, any other system, program, or method of marketing other than that specifically set forth in official DH literature.

Members shall not require or encourage other current or prospective Members to participate in DH in any manner that varies from the program as set forth in official DH literature.

Members shall not require or encourage other current or prospective Members to execute any agreement or contract other than official DH agreements and contracts in order to become a DH Member. Similarly, Members shall not require or encourage other current or prospective Members to make any purchase from, or payment to, any individual or other entity in order to participate in the DH Marketing and Entrepreneurial Reward System other than those purchases or payments identified as recommended or required in official DH literature.

Each Member, by affixing their seal hereto as a testament, accepts the responsibility of protecting from disclosure any proprietary information, processes, or technologies used within the Association. Each Member of the Association is bound by the member-to-member sharing of information regarding any information, system, processes, services, products and standards, both proprietary and common, which therefore precludes sharing of said information outside of the context and confines of the member-to-member boundaries established by the Membership Agreement signatories and the Articles of Association. This provision remains in effect in perpetuity even after termination of the Membership Agreement.

 

3.2 - Advertising

3.2.1 - General

All Members shall safeguard and promote the good reputation of DH and its products. The marketing and promotion of DH, the DH opportunity, the Marketing and Entrepreneurial Reward System, and DH products shall be consistent with Member interest, and must avoid all discourteous, deceptive, misleading, unethical or immoral conduct or practices.

To promote both the products and services, and the tremendous opportunity DH offers, Members must use the sales tools and support materials produced by DH. DH has carefully designed its products, product labels, Marketing and Entrepreneurial Reward System, and promotional materials to ensure that each aspect of DH is fair, truthful, substantiated, and complies with the vast and complex legal requirements of federal and state laws. If DH Members develop their own sales tools and promotional materials in order to promote DH’s products or the DH opportunity on blog sites, social networks, or other forums, notwithstanding their integrity and good intentions, there is a considerable likelihood that they would unintentionally violate any number of statutes or regulations affecting a DH business. These violations, although they may be relatively few in number, may jeopardize the DH opportunity for all Members. Accordingly, Members must not produce their own literature, advertisements, sales tools and promotional materials, or Internet web pages.

3.2.2 - Membership Web Sites

If a Members desires to utilize an Internet web page to promote his or her business, he or she must use an official DH replicated website. No websites other than DH provided replicated websites are permitted. Team Sites used for information and training are exempt as well as business web sites using DH website material with links to an official DH replicated website.

3.2.3 - Online Auctions and other Online Forums

Members may not sell DH products through online auction, barter, or brokerage sites, including but not limited to amazon.com, Craigslist, and eBay. DH is a Private Membership Association and as such only Members can purchase DH products and services. DH is not a public sales company.

Likewise, Members may not sell DH products to any person or business that intends to sell the products on any such site or to any person or business that is known to sell nutrition supplements or cosmetics on any such site. This Section 3.2.3 remains in effect even after termination of the Membership Agreement.

 

 

3.2.4 - Domain Names

Members may not use or attempt to register any of DH’s trade names, trademarks, service names, service marks, product names, designs, symbols, the Association’s name, or any derivative thereof, for any Internet domain name, URL or email address.

3.2.5 - Trademarks and Copyrights

DH will not allow the use of its trade names, trademarks, service names, service marks, product names, designs, or symbols by any person, including DH Members, without its prior, written permission. Members may not produce for sale or distribution any recorded Association events and speeches without written permission from DH nor may Members reproduce for sale or for personal use any recording of Association produced audio or video tape presentations.

3.2.6 - Media and Media Inquiries

Members must not attempt to respond to media inquiries regarding DH, its products or services, or their independent DH business. All inquiries by any type of media must be immediately referred to DH’s Compliance Department. This policy is designed to assure that accurate and consistent information is provided to the public as well as a proper public image.

3.2.7 - Unsolicited Email

DH does not permit Members to send unsolicited commercial emails unless such emails strictly comply with applicable laws and regulations including, without limitation, the federal CAN SPAM Act. Any email sent by a Member that promotes DH, the DH opportunity, or DH products and services must comply with the following:

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

ii. 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).

iii. The email must include the Member’s physical mailing address.

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

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

vi. All opt-out requests, whether received by email or regular mail, must be honored. If a Member receives an opt-out request from a recipient of an email, the Member must forward the opt-out request to the Association.

DH may periodically send commercial emails on behalf of Members. By entering into the Membership Agreement, Members agree that the Association may send such emails and that the Member’s physical and email addresses will be included in such emails as outlined above.

Members shall honor opt-out requests generated as a result of such emails sent by the Association.

3.2.8 - Unsolicited Faxes

Except as provided in this section, Members may not use or transmit unsolicited faxes or use an automatic telephone dialing system relative to the operation of their DH 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. The term “unsolicited faxes” means the transmission via telephone facsimile of any material or information advertising or promoting DH, its products, its Entrepreneurial Reward System or any other aspect of the Association which is transmitted to any person, except when a fax or e-mail is sent: (a) to any person with that person’s prior express invitation or permission; or (b) to any person with whom the Member has an established business or personal relationship. The term “established business or personal relationship” means a prior or existing relationship formed by a voluntary two way communication between a Member and a person, on the basis of: (a) an inquiry, application, purchase or transaction by the person regarding products offered by such Member; or (b) a personal or familial relationship, which relationship has not been previously terminated by either party.

3.2.9 - Business Cards, Telephone Book Listings

The name of DH and other names as may be adopted by DH are proprietary trade names, trademarks and service marks of DH. As such, these marks are of great value to DH and are supplied to Members for their use only in an expressly authorized manner. Use of DH name on any item not produced by the Association is prohibited except as follows: all Members may list themselves as an “Independent directionH Member” in the white or yellow pages of the telephone directory under their own name. No Member may place telephone directory display ads using DH’s name or logo. Members may not answer the telephone by saying “directionH”, “directionH Incorporated”, or in any other manner that would lead the caller to believe that he or she has reached corporate offices of DH.

3.3 - Bonus Buying Prohibited

Bonus buying is strictly and absolutely prohibited. “Bonus buying” includes: (a) the enrollment of individuals or entities without the knowledge of and/or execution of an Associate Membership Application and Agreement by such individuals or entities; (b) the fraudulent enrollment of an individual or entity as a Marketing Member or Appreciation Member; (c) the enrollment or attempted enrollment of non-existent individuals or entities as Marketing Members or Appreciation Members (“phantoms”); (d) purchasing excessive amounts of goods or services that cannot reasonably be used in a month; and/or (e) any other mechanism or artifice to qualify for rank advancement, incentives, prizes, commissions or bonuses that is not driven by bona fide product or service purchases by end user Members

Any infraction of 3.2 above is considered default subject to forfeiture of Membership and all benefits thereof, actual or accrued and additionally may result in legal action.

3.4 - Business Entities

A DH Member may participate in the DH ERS as an individual, a corporation or a trust by submitting a properly completed DH Membership Application and Agreement.

A DH Marketing Member operating as a business may change its status under the same sponsor from an individual to a corporation or trust, or from one type of entity to another with a properly executed DH Membership Application and Agreement online.

3.5 - Change of Sponsor

To protect the integrity of all Planned Communities and safeguard the hard work of all Members, DH strongly discourages changes in sponsorship. Maintaining the integrity of sponsorship is critical for the success of every Member and marketing organization.

Accordingly, the transfer of a DH Marketing Membership from one sponsor to another is rarely permitted. Requests for change of sponsorship must be submitted in writing to the Member Services Department, and must include the reason for the transfer. Transfers will only be considered in the following three circumstances:

3.5.1 - Misplacement

In cases in which the new Member is sponsored by someone other than the individual he or she was led to believe would be his or her Sponsor, a Member may request that he or she be transferred to another Planned Community with his or her entire marketing organization intact. Requests for transfer under this policy will be evaluated on a case-by-case basis and must be made by 5:00 p.m., Pacific Time, on or before the third business day following the date of the application. The request must be submitted to DH on the 72–Hour Correction Request Form, available from Member Services. The Member requesting the change has the burden of proving that he or she was placed beneath the wrong sponsor. It is up to DH’s discretion whether the requested change will be implemented.

3.5.2 – Cancellation and Re-Application

A Member may Cancel or Terminate their Membership, however, he or she may not re-enroll as a New Member for 90 days after DH has acknowledged their Termination.  If the Member re-enrolls the original Member’s Planned Community will remain in their original line of Placement and Sponsorship.

3.5.3 - Waiver of Claims for Unauthorized Organization Changes

In cases wherein the appropriate sponsorship change procedures have not been followed, and a Planned Community has been developed in the second business developed by a Member, DH reserves the sole and exclusive right to determine the final disposition of the Planned Community. Resolving conflicts over the proper placement of a Planned Community that has developed under an organization that has improperly switched sponsors is often extremely difficult.

THEREFORE, MEMBERS WAIVE ANY AND ALL CLAIMS AGAINST DH, ITS OFFICERS, DIRECTORS, MEMBERS, AGENTS AND EMPLOYEES THAT RELATE TO OR ARISE FROM DH’S DECISION REGARDING THE DISPOSITION OF ANY PLANNED COMMUNITY THAT DEVELOPS BELOW ANOTHER PLANNED COMMUNITY THAT HAS IMPROPERLY CHANGED LINES OF SPONSORSHIP.

3.6 - Unauthorized Claims and Action

3.6.1 - Indemnification

A Member is fully responsible for all of his or her verbal and written statements made regarding DH products, services, and the Marketing and Entrepreneurial Reward System which are not expressly contained in official DH materials. Members agree to indemnify DH and DH’s trustees, directors, officers, employees, and agents, and hold them harmless from any and all liability including judgments, civil penalties, refunds, attorney fees, court costs, or lost business incurred by DH as a result of the Member’s unauthorized representations or actions. This provision remains in effect in perpetuity even after termination of the Membership Agreement.

3.6.2 - Product Claims

No claims (which include personal testimonials) as to therapeutic, curative or beneficial properties of any products offered by DH may be made publically except those contained in official DH literature. In particular, no Member may make any claim that DH products are useful in the cure, treatment, diagnosis, mitigation or prevention of any diseases. Such statements can be perceived as medical or drug claims. Not only do such claims violate DH beliefs and policies, but they potentially violate federal and state laws and regulations, including the federal Food, Drug, and Cosmetic Act and Federal Trade Commission Act. Additionally, it should be understood through this Agreement that any education and/or information sharing regarding any products is reserved for the duly created private domain member-to-member sharing within the Private Membership Association domain.

3.6.3 - Income Claims

In their enthusiasm to enroll prospective Members, some Members are occasionally tempted to make income claims or earnings representations to demonstrate the inherent power of network marketing. This is counterproductive because new Members may become disappointed very quickly if their results are not as extensive or as rapid as the results others have achieved. At DH, we firmly believe that the DH income potential is great enough to be highly attractive, without reporting the earnings of others.

Moreover, the Federal Trade Commission and several states have laws or regulations that regulate or even prohibit certain types of income claims and testimonials made by persons engaged in network marketing. While Members may believe it beneficial to provide copies of checks, or to disclose the earnings of themselves or others, such approaches have legal consequences that can negatively impact DH as well as the Member making the claim unless appropriate disclosures required by law are also made contemporaneously with the income claim or earnings representation. Because DH Members do not have the data necessary to comply with the legal requirements for making income claims, a Member, when presenting or discussing the DH opportunity or Marketing and Entrepreneurial Reward System to a prospective Member, may not make income projections, income claims, or disclose his or her DH income (including the showing of checks, copies of checks, bank statements, or tax records).

3.7 - Commercial Outlets

There is no circumstance a Member may sell DH products from a commercial outlet or a service establishment. Members may display products; however, at no time may they deliver products or sell products to an individual who is not a directionH Member. DH products and services are only available to DH Private Association Members.

3.8 - Trade Shows, Expositions and Other Sales Forums

Members may display and/or sell DH Memberships at trade shows and professional expositions. Before submitting a deposit to the event promoter, Members must contact the Membership Services department in writing for conditional approval, as DH’s policy is to authorize only one DH Member per event. Final approval will be granted to the first Member who submits an official advertisement of the event, a copy of the contract signed by both the Member and the event official, and a receipt indicating that a deposit for the booth has been paid. Approval is given only for the event specified. Any requests to participate in future events must again be submitted to the Member Services Department. DH further reserves the right to refuse authorization to participate at any function which it does not deem a suitable forum for the promotion of its products, services, or the DH opportunity. Approval will not be given for swap meets, garage sales, flea markets or farmer’s markets as these events are not conducive to the professional image DH wishes to portray.

Each Member, by affixing their seal hereto as a testament, accepts full responsibility with absolute waiver to any claims made by any attendee against DH and/or any other Member for any incidents or events which may occur during the aforesaid approved venues.

3.9 - Conflicts of Interest

3.9.1 – Non-Solicitation

DH Members are free to participate in other Private Associations or other marketing business ventures or marketing opportunities. However, during the term of this Agreement, Members may not directly or indirectly recruit other DH Members for any other network marketing business.

Following the cancellation of a Member’s Independent Membership Agreement, and for a period of six calendar months thereafter, with the exception of those Members who are personally sponsored by the former Member, a former Member may not recruit any DH Member for another network marketing business. Members and the Association recognize that because network marketing is conducted through networks of independent contractors dispersed across the entire United States and internationally, and business is commonly conducted via the internet and telephone, an effort to narrowly limit the geographic scope of this non-solicitation provision would render it wholly ineffective. Therefore, Members and DH agree that this non-solicitation provision shall apply to all markets in which DH conducts business.

The term “Recruit” means the actual or attempted sponsorship, solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another Member to enroll or participate in another multilevel marketing, network marketing or direct sales opportunity.

3.9.2 - Sale of Competing Goods or Services

Members must not sell, or attempt to sell, any competing non-DH programs, products or services to DH Members. Any program, product or services in the same generic categories as DH products or services is deemed to be competing, regardless of differences in cost, quality or other distinguishing factors.

3.9.3 - Member Participation in Other Direct Selling Programs

If a Member is engaged in other non-DH direct selling programs, it is the responsibility of the Member to ensure that his or her DH Marketing Membership business is operated entirely separate and apart from any other program. To this end, the following must be adhered to:

• Members shall not display DH promotional material, sales aids, products or services with or in the same location as, any non-DH promotional material or sales aids, products or services.

• Members shall not offer the DH opportunity, products or services to prospective or existing Members in conjunction with any non-DH program, opportunity, product or service.

• Members may not offer any non-DH opportunity, products, services or opportunity at any DH related meeting, seminar or convention, or within two hours and a five mile radius of the DH event. If the DH meeting is held telephonically or on the internet, any non-DH meeting must be at least two hours before or after the DH meeting.

• DH Members understand that DH Association final decisions will be made by trustees after consideration of the recommendations of appropriate Association committees. No one member or manager can make policy decisions or approvals. Members will not solicit one or more association officers or managers for special favors or exceptions.

3.9.4 - Planned Community Activity (Genealogy) Reports

DH may, in its discretion, provide Members with a Planned Community genealogy report in conjunction with a Member’s replicated website. Access to a genealogy report is a privilege, and not a right. DH reserves the right to deny Members’ access to a genealogy report at its sole discretion.

All Planned Community Activity Reports and the information contained therein are confidential and constitute proprietary information and business trade secrets belonging to DH. Planned Community Activity Reports are provided to Members in strictest confidence and are made available to Members for the sole purpose of assisting Members in working with their respective Planned Community Organizations. Members should use their Planned Community Activity Reports to assist, motivate, and train their Planned Community Members. The Member and DH agree that, but for this agreement of confidentiality and nondisclosure, DH would not provide Planned Community Activity Reports to the Member. Therefore, if a Planned Community Activity Report is provided to a Member, the Member shall not, on his or her own behalf, or on behalf of any other person, partnership, association, corporation or other entity:

• Directly or indirectly disclose any information contained in any Planned Community Activity Report to any third party;

• Directly or indirectly disclose the password or other access code to his or her Planned Community Activity Report;

• Use the information to compete with DH or for any purpose other than promoting his or her DH Marketing Membership business;

• Recruit or solicit any Member of DH listed on any report, or in any manner attempt to influence or induce any Member of DH, to alter their business relationship with DH;

• Use or disclose to any person, partnership, association, corporation, or other entity any information contained in any Planned Community Activity Report; or

• Upon demand by the Association, any current or former Member will return the original and all copies of Planned Community Activity Reports to the Association.

3.10 - Targeting Other Direct Sellers

DH does not condone Members specifically or consciously targeting the sales force of another direct sales Association in order to recruit them to become Members of DH, nor does DH condone Members solicitation or enticement of members of the sales force of another direct sales Association in such a way that violates the terms of their contract with such other Association. Should a Member engage in such activity, they bear the risk of being sued by the other direct sales company. If any lawsuit, arbitration or mediation is brought against a Member alleging that he or she engaged in inappropriate recruiting activity of its sales force or customers, DH will not pay any of Member’s defense costs or legal fees, nor will DH indemnify the Member for any judgment, award, or settlement.

3.11 - Cross-Sponsoring

“Cross sponsoring” is defined as the enrollment of an individual into another Member’s Planned Community. Members shall not demean, discredit or defame other DH Members in an attempt to entice another Member to become part of the first Member’s marketing organization. This policy shall not prohibit the transfer of a DH business in accordance with Section 3.5.

3.12 - Errors or Questions

If a Member has questions about or believes any errors have been made regarding commissions, bonuses, Planned Community Activity Reports, or charges, the Member must notify DH in writing within 60 days of the date of the purported error or incident in question. DH will not be responsible for any errors, omissions or problems not reported to the Association within 60 days. If a Member has questions about or believes any errors have been made regarding commissions and/or bonuses, communications regarding such belief should only be directed through the above process of notification in writing and should not be discussed with any other Member(s).

3.13 - Governmental Approval or Endorsement

Members shall not represent or imply that DH has been “approved,” “endorsed” or otherwise sanctioned by any government agency.  It is hereby declared that we are exercising our right of “freedom of association” as guaranteed by the 1st and 14th Amendments of the U.S. Constitution and equivalent provisions of the various State Constitutions. This means that our association activities are restricted to the private domain only, and are under Constitutional laws and exercised as rights.

3.14 - Holding Applications or Orders

Members must not manipulate enrollments of new applicants and purchases of products. All Membership Applications and Agreements, and product orders must be sent to DH within 72 hours from the time they are signed by a Member, respectively.

3.15 - Identification

All Marketing Members are required to provide their Social Security Number, or a Federal Employer Identification Number, to DH on the Membership Application and Agreement. Upon enrollment, the Member will select unique Membership Identification name or number by which he or she will be identified. This name or number will be used to place orders, and track commissions and bonuses. The unique Member’s Identification name or number must not be used or assigned in a deceptive or fraudulent manner for any purpose including manipulation of any Planned Community or sales numbers by assigning orders or other activity to any other Member’s orders or activity.  Such prohibited activity constitutes default and subjects the Member(s) participating in such behavior to forfeiture and default up to and including loss of membership.

3.16 - Income Taxes

Each Member is responsible for accurately reporting and paying local, state, and federal taxes on any income generated as an Independent Member. If a DH business is tax exempt, the Federal tax identification number must be provided to DH. Every year, DH will provide an IRS Form 1099 MISC (Nonemployee Compensation) earnings statement to each U.S. resident who: 1) Had earnings of over $600 in the previous calendar year; or 2) Made purchases during the previous calendar year in excess of $5,000. DH reserves the right to make appropriate withholdings from any Member’s income if they provide an inaccurate social security number or Federal Tax Identification number.

3.16.1 - Non-U.S. Citizens Memberships

If a Member is not a United States citizen, the Member must submit a form W8-BIN. Otherwise DH will withhold the minimum amount allowed under the Internal Revenue Code or IRS Regulations.

3.17 - Independent Contractor Status

Members are independent contractors, and are not purchasers of a franchise or a business opportunity. The agreement between DH and its Members does not create an employer/employee relationship, agency, partnership or joint venture between the Association and the Member. A Member shall not be treated as an employee for his or her services or for Federal or State tax purposes. All Members are responsible for paying local, state, and federal taxes due from all compensation earned as a Member of the Association. The Member has no authority (expressed or implied), to bind the Association to any obligation. Each Member shall establish his or her own goals, hours, and methods of sale, so long as he or she complies with the terms of the Membership Agreement, these Policies and Procedures, Terms and Conditions, and applicable laws.

3.18 - Insurance

You may wish to arrange insurance coverage for your business. Your homeowner’s insurance policy does not cover business related injuries, or the theft of or damage to business equipment.  Contact your insurance agent to make certain that your business property is protected. This can often be accomplished with a simple “Business Pursuit” endorsement attached to your present home owner’s policy.

 

3.19 - International Marketing

DH has published or will publish a policy manual for each country in which it conducts or will conduct business. Members operating outside of the United States must comply with the policies of each country in which they operate. Copies of the international policy manuals are or will be available from Customer Service.

3.20 - Inventory Loading

Members must not influence or attempt to influence any other Members to buy more products than they can reasonably use.

3.21 - Adherence to Laws and Ordinances

Members shall comply with all federal, state, and local laws and regulations in the conduct of their Marketing Membership businesses. Many cities and counties have laws regulating certain home-based businesses. In most cases these ordinances are not applicable to Members because of the nature of their business. However, Members must obey those laws that do apply to them. If a city or county official tells a Member that an ordinance applies to him or her, the Member shall be polite and cooperative, and immediately send a copy of the ordinance to Member Services of DH. In most cases there are exceptions to the ordinance that may apply to DH Members.

3.22 - Minors

A person who is recognized as a minor in his/her state of residence may be a DH Member with the signature of their legal guardian.

3.23 - Multiple Memberships

There is only one Membership permitted per individual.  The Membership may be in the name of person, business entity, or company with the Member as the responsible person.

3.24 - Actions of Household Members or Affiliated Individuals

If any member of a Member’s immediate household engages in any activity which, if performed by the Member, would violate any provision of the Agreement, such activity will be deemed a violation by the Member and DH may take disciplinary action pursuant to the Statement of Policies against the Member. Similarly, if any individual Member as a corporation, partnership, trust or other business entity (collectively “affiliated individual”) violates the Agreement, such action(s) will be deemed a violation by the business entity, and DH may take disciplinary action against the entity. Likewise, if a Member enrolls in DH as a business entity, each shareholder, officer, member, partner, or other individual or entity with an ownership interest or management responsibility in the independent business shall be personally and individually bound to, and must comply with, the terms and conditions of the Agreement, and DH may take disciplinary action jointly and severally against each such individual with an ownership interest.  As an example, if a Business Entity has more than one individual all individuals must be Members to consume DH products or receive income from the directionH Entrepreneurial Reward System.

3.25 - Requests for Records

Any request from a Member for copies of invoices, applications, Planned Community activity reports, or other records will require a fee of $1.00 per page per copy. This fee covers the expense of mailing and time required to research files and make copies of the records.

3.26 – Assignment of a DH Membership

Although a DH Membership is privately owned, assignment or alteration of the Membership (e.g. adding a partner to a Membership in the name of a business entity) is subject to certain limitations. Prior to assigning a DH Membership, the assigning Member must notify DH’s Membership Services Department of his or her intent to assign the DH Membership and follow the procedures to secure the required signatures of all parties concerned.  No changes in line of sponsorship can result from the assignment of a DH Membership.

If a Member wishes to re-assign his or her DH Membership, the following criteria must be met:

• Protection of the existing line of sponsorship must always be maintained so that the DH ERS continues to be operated in that line of sponsorship.

• The assignee must become a qualified DH Member. If the assignee is an active DH Member, he or she must verify they will be able to support the new Membership Position.

• Before the assignment can be approved and finalized by DH, any debt obligations the assigning Member has with DH must be satisfied.

• The assigning Member must be in good standing and not in violation of any of the terms of the Agreement in order to be eligible to assign a DH Membership.

• While DH will not withhold approval of an assignment unreasonably, DH reserves the right to prevent such an assignment if the assignment imperils DH. If such an assignment is denied, DH may negotiate the assignment of the Membership position back to DH itself.

3.27 - Separation of a DH Membership ERS Benefit

DH Members sometimes operate their DH ERS as husband/wife partnerships (although each individually are members, one may be a Marketing Member and one an Appreciation Member, regular partnerships, corporations, or trusts. At such a time as a marriage may end in divorce or a corporation, partnership or trust (the latter three entities are collectively referred to herein as “entities”) may dissolve, arrangements must be made to assure that any separation or division of the ERS Benefits is accomplished so as not to adversely affect the interests and income of other Members up or down the line of sponsorship. If the separating parties fail to provide for the best interests of other Members and the Association in a timely fashion, DH will involuntarily terminate the Membership Agreement.

During the divorce or entity dissolution process, the parties must adopt one of the following methods of operation:

• One of the parties may, with consent of the other(s), operate the DH ERS pursuant to an assignment in writing whereby the relinquishing spouse, shareholders, partners or trustees authorize DH to deal directly and solely with the other spouse or non-relinquishing shareholder, partner or trustee.

• The parties may continue to operate the DH ERS jointly on a “business-as-usual” basis, whereupon all compensation paid by DH will be paid according to the status quo as it existed prior to the divorce filing or dissolution proceedings. This is the default procedure if the parties do not agree on the format set forth above.

Under no circumstances will the Planned Community Organization of divorcing spouses or a dissolving business entity be divided. Similarly, under no circumstances will DH split commission and bonus checks between divorcing spouses or members of dissolving entities. DH will recognize only one Planned Community Organization and will issue only one commission check per DH Membership per commission cycle. Commission checks shall always be issued to the same individual or entity.

In the event that parties to a divorce or dissolution proceeding are unable to resolve a dispute over the disposition of commissions and ownership of the ERS in a timely fashion as determined by the Association, the Membership Agreement shall be involuntarily canceled.

If a former spouse has completely relinquished all rights in the original DH ERS pursuant to a divorce, he or she is thereafter free to enroll under any sponsor of his or her choosing. In either case however, the former spouse or Member shall have no rights to any Members in their former Planned Community. They must develop the new Planned Community in the same manner as would any other new Member.

3.28 - Sponsoring

All active (Qualified) Marketing Members in good standing have the right to sponsor and enroll others into DH. Each prospective Member has the ultimate right to choose his or her own Sponsor. If two Members claim to be the Sponsor of the same new Member, the Association shall regard the first application received by the Association as controlling.

3.29 - Succession

Upon the death or incapacitation of a Member, his or her Membership may be passed on to his or her heirs. Appropriate legal documentation must be submitted to the Association to ensure the assignment is proper. Accordingly, a Member should consult an attorney to assist him or her in the preparation of a will or other testamentary instrument. Whenever a DH Membership is assigned by a will or other testamentary process, the beneficiary acquires the right to collect all bonuses and commissions of the deceased Member’s marketing organization provided the following qualifications are met. The successor(s) must:

• Execute a Membership Agreement;

• Comply with terms and provisions of the Agreement;

• Meet all of the qualifications for the deceased Member’s status;

• Bonus and commission checks of a DH ERS transferred pursuant to this section will be paid in a single check jointly to the devisees. The devisees must provide DH with an “address of record” to which all bonus and commission checks will be sent;

• If the Membership is bequeathed to joint devisees, they must form a business entity and acquire a federal taxpayer identification number. DH will issue all bonus and commission checks and one 1099 to the business entity.

3.29.1 - Transfer Upon Death of an Membership

To effect a testamentary transfer of a DH Membership, the executor of the estate must provide the following to DH: (1) an original death certificate; (2) certified letters testamentary or a letter of administration appointing an executor; (3) instructions from the authorized executor to DH specifying to whom the Membership and income should be assigned; and (4) a completed Membership Agreement executed by the beneficiary.

3.29.2 - Assignment Upon Incapacitation of a Member

To effectuate a transfer of a DH Membership because of incapacity, the successor must provide the following to DH: (1) a notarized copy of an appointment as trustee; (2) a notarized copy of the trust document or other documentation establishing the trustee’s right to administer the DH Membership; and (3) a completed Membership Agreement executed by the trustee.

3.30 - Telemarketing Techniques

The Federal Trade Commission and the Federal Communications Commission each have laws that restrict telemarketing practices. Both federal agencies (as well as a number of states) have “do not call” regulations as part of their telemarketing laws. Although DH does not consider Members to be “telemarketers” in the traditional sense of the word, these government regulations broadly define the term “telemarketer” and “telemarketing” so that your inadvertent action of calling someone whose telephone number is listed on the federal “do not call” registry could cause you to violate the law. Moreover, these regulations must not be taken lightly, as they carry significant penalties (up to $11,000.00 per violation). Therefore, Members must not engage in telemarketing in the operation of their DH ERS. The term “telemarketing” means the placing of one or more telephone calls to an individual or entity to induce the purchase of a DH product or service, or to recruit them for the DH opportunity. “Cold calls” made to prospective Members that promote either DH’s products or services or the DH opportunity constitute telemarketing and are prohibited. However, telephone call(s) placed to a prospective Member (a “prospect”) is permissible under the following situations:

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

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

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

• 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 months. Bear in mind, however, that if you engage in “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.

• In addition, Members shall not use automatic telephone dialing systems relative to the operation of their DH ERS. 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.

Members, having been duly notified of the above, do hereby accept full responsibility for their own actions  and do hereby absolutely indemnify DH from any claim of wrongdoing which may result from the Member’s actions in violation of the stated Policies.

SECTION 4 - RESPONSIBILITIES OF Marketing Members and Appreciation Members

4.1 - Change of Address, Telephone, and Email Addresses

To ensure timely delivery of products, support materials, and commission checks, it is critically important that the DH’s files are current. Street addresses are required for shipping since UPS cannot deliver to a post office box. Members planning to change their e-mail address or move must send their new address and telephone numbers to DH’s Corporate Offices to the attention of the Membership Services Department. To guarantee proper delivery, two weeks advance notice must be provided to DH on all changes.

4.2 - Continuing Development Obligations

4.2.1 - Ongoing Training Regardless of their Level of Achievement

Members have an ongoing obligation to continue to personally attend trainings or seminars held by DH in order to increase their product knowledge and gain new business acumen in order to enhance their DH ERS.

4.2.2 - Increased Training Responsibilities

As Members progress through the various levels of leadership, they will become more experienced in sales techniques, product knowledge, and understanding of the DH program. They will be called upon to share this knowledge with lesser experienced Members within their organization. DH reserves the right to adopt and use any such sales techniques or approaches for the betterment of the entire Association.

4.2.3 -Ongoing Planned Community Responsibilities

Regardless of their level of achievement, Members have an ongoing obligation to continue to personally promote DH through the generation of new Members and through servicing their existing Planned Community. DH reserves the right to intervene into any Planned Community if neglect or disinterest is determined to have occurred.

4.3 – Non-Disparagement

DH wants to provide its independent Members with the best products, Entrepreneurial Reward System, and service in the industry. Accordingly, we value your constructive criticisms and comments. All such comments should be submitted in writing to the Membership Services Department. Remember, to best serve you, we must hear from you! While DH welcomes constructive input, negative comments and remarks made in the field by Members about the Association, its products, or Entrepreneurial Reward System serve no purpose other than to sour the enthusiasm of other DH Members. For this reason, and to set the proper example for their Planned Community, Members must not disparage, demean, or make negative remarks about DH, other DH Members, DH’s products, the Marketing and Entrepreneurial Reward System, or DH’s directors, officers, or employees.

4.4 - Providing Documentation to Applicants

Members must provide or direct to the most current version of the Policies and Procedures and the Entrepreneurial Reward System to individuals whom they are sponsoring to become Members before the applicant signs a Membership Agreement. Additional copies of the Policies and Procedures can be downloaded from DH’s website.

 

 

4.5 - Reporting Policy Violations

Members observing a Policy violation by another Member should submit a written report of the violation directly to the attention of the DH Compliance Department. Details of the incidents such as dates, number of occurrences, persons involved, and any supporting documentation should be included in the report.

SECTION 5 - ENTREPRENEURIAL REWARD SYSTEM

5.1 – 5Q Program

The DH Marketing and Entrepreneurial Reward System is based on the use of DH products and services and sharing your experiences with others. The 5Q Program is designed to allow Members who have qualified for the 5Q Club to receive a 24BRAIN Kit with the qualifying monthly purchase volume by signing up 5 Members with in a calendar month. To qualify for the 5Q Club a Member has 60 days from the date of enrollment in DH to Sponsor 5 new Marketing Members.  Thereafter, in each calendar month that a Member of the 5Q Club Sponsors 5 new Marketing Members they will automatically receive a 24BRAIN™ kit the following month and be qualified for their personal purchasing volume.

5.2 - No Territory Restrictions

There are no exclusive territories granted to anyone. No franchise fees are required. This is not a franchise opportunity.

SECTION 6 – ENTREPRENEURIAL REWARD SYSTEM

6.1 - Bonus and Commission Qualifications

A Member must be active and in compliance with the Agreement to qualify for the Entrepreneurial Reward System. So long as a Member complies with the terms of the Agreement, DH shall pay commissions to such Member in accordance with the Marketing and Entrepreneurial Reward System. The minimum amount for which DH will issue a check is $10.00. If a Member’s bonuses and commissions do not equal or exceed $10.00, the Association will accrue the commissions and bonuses until they total $10.00. A check will be issued once $10.00 has been accrued.

If a Member fails to cash any commission, bonus, or other check from DH for a period of 180 days or more from the date of issue, DH, at its sole discretion, may void the check and in such event, a service fee will be applied of $15.00 per month until the amount owed has been reduced to $0.00. A Member may contact DH at any time to have the balance due to them paid immediately, subject to the limitations set forth in this Section 6.1. Likewise, if a Member fails to provide correct banking or address information required by DH to pay any commission, bonus, or other payment, for a period of 180 days or more from the date such payment is originally payable, DH, at its sole discretion, may immediately begin to charge the Member’s account a service fee of $15.00 per month until the amount due the Member has been reduced to $0.00.

6.2 - Adjustment to Bonuses and Commissions

6.2.1 - Adjustments for Returned Products

Members receive bonuses and commissions based on the actual sales of products and services from their Planned Community. When a product is returned to DH for a refund or is repurchased by the Association, the bonuses and commissions attributable to the returned or repurchased product(s) will be deducted, in the month in which the refund is given, and continuing every pay period thereafter until the commission is recovered from the up-line Members who received bonuses and commissions on the sales of the refunded products.

6.3 - Reports

All information provided by DH in online or telephonic Planned Community activity reports, including but not limited to Personal Commissionable Volume (or any part thereof) and Planned Community sponsoring activity is believed to be accurate and reliable. Nevertheless, due to various factors including but not limited to the inherent possibility of human and mechanical error; the accuracy, completeness, and timeliness of orders; denial of credit card and electronic check payments; returned products; credit card and electronic check charge-backs; the information is not guaranteed by DH or any persons creating or transmitting the information.

ALL PERSONAL PURCHASES AND PLANNED COMMUNITY SALES VOLUME INFORMATION IS PROVIDED “AS IS” WITHOUT WARRANTIES, EXPRESS OR IMPLIED, OR REPRESENTATIONS OF ANY KIND WHATSOEVER. IN PARTICULAR BUT WITHOUT LIMITATION THERE SHALL BE NO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR USE, OR NON INFRINGEMENT.

TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, DH AND/OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION WILL IN NO EVENT BE LIABLE TO ANY DISTRIBUTOR OR ANYONE ELSE FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT ARISE OUT OF THE USE OF OR ACCESS TO PERSONAL AND GROUP SALES VOLUME INFORMATION (INCLUDING BUT NOT LIMITED TO: LOST PROFITS, BONUSES, OR COMMISSIONS, LOSS OF OPPORTUNITY, AND DAMAGES THAT MAY RESULT FROM INACCURACY, INCOMPLETENESS,  INCONVENIENCE, DELAY, OR LOSS OF THE USE OF THE INFORMATION), EVEN IF DH OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

TO THE FULLEST EXTENT PERMITTED BY LAW, DH OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION SHALL HAVE NO RESPONSIBILITY OR LIABILITY TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY OR OTHER THEORY WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT OR TERMS AND CONDITIONS RELATED THERETO.

Access to and use of DH’s online and telephone reporting services and your reliance upon such information is at your own risk. All such information is provided to you “as is”. If you are dissatisfied with the accuracy or quality of the information, your sole and exclusive remedy is to discontinue use of and access to DH’s online and telephone reporting services and your reliance upon the information.

SECTION 7 - PRODUCT GUARANTEES, RETURNS AND INVENTORY REPURCHASE

7.1 - Product Guarantee

DH offers a 30-day money back satisfaction guarantee (less shipping charges and fees) to all Members. If for any reason a Member is dissatisfied with any DH product, he or she may return the unused portion of the product to DH for a full refund (less shipping charges) within 30 days from the date of purchase. Following this 30 day period, returned items must be in resalable (see definition of “Resalable” in Section 11) condition and will be subject to an additional 10% restocking fee. This product satisfaction guarantee applies only to DH products and does not apply to starter kits or sales aids purchased by Memberships.

Starter Kits and sales aids are subject to the refund provisions in Section 7.4, below. If a Member returns $300.00 or more of merchandise for a refund in any 12 consecutive month period (excluding damaged merchandise, which will be replaced), the return(s) constitute an inventory repurchase and DH will repurchase the goods pursuant to the terms of Section 7.4. and cancel the Membership Agreement.

7.2 - Return of Inventory and Sales Aids by Members upon Cancellation

Upon cancellation of a Member’s Agreement (within 30 days), the Member may return his or her Starter Kit and any products and sales aids held in his or her inventory for a refund. Members may only return Starter Kits, products and sales aids that he or she personally purchased from DH (purchases from other Members are not subject to refund) and which are in resalable (see Definition of “Resalable” in Section 11) condition and which have been purchased within one year prior to the date of cancellation. Upon receipt of a resalable Starter Kit and/or resalable products and sales aids within 30 days, the Member will be reimbursed 90% of the net cost of the original purchase price(s). Shipping charges incurred by a Member when the Starter Kit, products or sales aids were purchased will not be refunded. The refund will be paid according to the method chosen by DH. If a Member was paid a commission based on a product(s) that he or she purchased, and such product(s) is subsequently returned for a refund, the commission that was paid based on that product purchase will be deducted from the amount of the refund.

7.3 - Procedures for All Returns

The following procedures apply to all returns for a refund, repurchase, or exchange:

• All merchandise must be returned by the Member who purchased it directly from DH.

• All products to be returned must have a Return Authorization Number which is obtained by calling the Membership Services Department. This Return Authorization Number must be written on the carton returned.

• The return is accompanied by:

• A completed and signed Return Form;

• A copy of the original dated sales receipt; and

• The unused portion of the product in its original container.

• Proper shipping carton(s) and packing materials are to be used in packaging the product(s) being returned for replacement, and the best and most economical means of shipping is suggested. All returns must be shipped to DH shipping pre-paid. DH does not accept shipping-collect packages. The risk of loss in shipping for returned product belongs to the Member, and in the case of non-delivery, it is the responsibility of the Member to trace the shipment.

SECTION 8 - DISPUTE RESOLUTION AND DISCIPLINARY PROCEEDINGS

8.1 - Disciplinary Sanctions

Violation of the Agreement, the Policies and Procedures, violation of any common law duty, including but not limited to any applicable duty of loyalty, any illegal, fraudulent, deceptive or unethical business conduct, or any act or omission by a Member that, in the sole discretion of the Association may damage its reputation or goodwill (such damaging act or omission need not be related to the Member’s DH ERS), may result, at DH’s discretion, in one or more of the following corrective measures:

• Issuance of a written warning or admonition;

• Requiring the Member to take immediate corrective measures;

• Imposition of a fine, which may be withheld from bonus and commission checks;

• Loss of rights to one or more bonus and commission checks;

• DH may withhold from a Member all or part of the Member’s bonuses and commissions during the period that DH is investigating any conduct allegedly in violation of the Agreement. If a Member’s ERS is canceled for disciplinary reasons, the Member will not be entitled to recover any commissions withheld during the investigation period;

• Suspension of the individual’s Membership Agreement for one or more pay periods;

• Involuntary termination of the offender’s Membership Agreement;

• Suspension and/or termination of the offending Member’s DH website or website access;

• Any other measure expressly allowed within any provision of the Agreement of which DH deems practicable to implement and appropriate to equitably resolve injuries caused partially or exclusively by the Member’s policy violation or contractual breach;

• The Trustee(s) in consultation with the directionH Ethics Committee shall have the right to sanction a member upon unanimous vote of the Trustee(s), after a hearing of the facts where the member may be present after notification.  The sanctions include removal from active membership or imposing any other special and necessary conditions upon any member who shall discredit or bring harm to the Association in any manner.

     8.2 - Grievances and Complaints

When a Member has a grievance or complaint with another Member regarding any practice or conduct in relationship to their respective DH ERS, the complaining Member should first report the problem to his or her Sponsor who should review the matter and try to resolve it with the other party’s up-line sponsor. If the matter involves interpretation or violation of Association policy, it must be reported in writing to the Ethics Committee of the Association.

        The Trustees and the Ethics Committee will review the facts and their decision is final.

 

    8.3 – Conflict Resolution

As agreed in the Membership Application, all disputes within DH are internal matters and will be resolved through the good faith and participation of Members meeting in cooperation with the Trustees and the Ethics Committee of the Association.  Following consideration of all matters concerning the dispute the decisions of the Trustees and Ethics Committee will be considered final 

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SECTION 9 - PAYMENT AND SHIPPING

9.1 - Returned Checks

All checks returned by a Member’s bank for insufficient funds will be re-submitted for payment. A $35.00 returned check fee will be charged to the account of the Member. After receiving a returned check from a Member, all future orders must be paid by Credit Card, money order or cashier’s check. Any outstanding balance owed to DH by a Member for NSF checks and returned check fees will be withheld from subsequent bonus and commission checks.

9.2 - Restriction on Third Party Use of Credit Cards and Checking Account Access

Members shall not permit other Members to use his or her credit card, or permit debits to their checking accounts, to enroll or to make purchases from the Association, without written permission submitted to the Association. If credit card abuse or credit card charge backs occur, the Membership Agreement may be immediately cancelled.

 

9.3 - Sales Taxes

In designing the DH opportunity, one of our guiding philosophies has been to free Members from as many administrative, operational, and logistical tasks as possible. In doing so, Members are free to concentrate on those activities that directly affect their incomes, namely support of their Planned Communities, coaching Members, product sales and enrollment activities. To these ends, DH relieves Members of the burdens of collecting and remitting sales taxes, filing sales tax reports, and keeping records relative to sales taxes. By virtue of its operations, DH is not required to charge sales tax due to the location and product delivery options.  To be in compliance with the tax statues it is understood that all purchases by Members will either be shipped directly to the consuming Member or products may be picked up at the DH facility in Grants Pass, Oregon.

SECTION 10 - INACTIVITY AND CANCELLATION

10.1 - Effect of Cancellation

So long as a Member remains active and complies with the terms of the Membership Agreement, the Terms and Conditions, and these Policies and Procedures, DH shall pay ERS Benefits to such Member in accordance with the Marketing and Entrepreneurial Reward System. A Member’s ERS Benefits constitute the entire consideration for the Member’s efforts in generating new Members and all activities related to generating Members (including building a Planned Community organization). Following a Member’s nonrenewal of his or her special annual assessment fee they will no longer be eligible to receive the benefits of product purchases or the ERS. If a Member fails to renew the special annual assessment fee for 90 days following the anniversary date of their Membership, a Marketing Member will lose their position in the ERS Community. Once a Marketing Member has lost his or her position in the ERS Planned Community he or she may again become an active Member to purchase products or services and if a Marketing Member be eligible to participate in the ERS program by paying the special annual assessment fee based upon level of Membership and assuming a new position in the ERS Planned Community.

Following cancellation for inactivity, or voluntary or involuntary cancellation of his or her Membership Agreement (all of these methods are collectively referred to as “cancellation”), the former Member shall have no right, title, claim or interest to the Planned Community organization which he or she operated, or any ERS Benefits from the sales generated by the community.

A Member whose ERS opportunity is cancelled will lose all rights as a Member. This includes the right to promote products and services and the right to receive future ERS Benefits resulting from the activities of the Member’s former Planned Community. In the event of cancellation, Members agree to waive all rights they may have, including but not limited to property rights, to their former Planned Community organization and ERS Benefits derived from the sales and other activities of his or her former Planned Community organization.

Following a Member’s cancellation of his or her Membership Agreement, the former Member shall not hold himself or herself out as a DH Member, shall not be able to purchase DH products or use DH services, and shall not have the right to promote DH products or services. A Member whose Membership Agreement is canceled shall receive ERS Benefits only for the last full pay period he or she was active prior to cancellation (less any amounts withheld during an investigation preceding an involuntary cancellation).

10.2 - Involuntary Cancellation

A Member’s violation of any of the terms of the Agreement, including any amendments that may be made by DH in its sole discretion, may result in any of the sanctions listed in Section 8.1, including the cancellation of his or her Membership Agreement. Cancellation shall be effective on the date on which written notice is mailed, faxed, or delivered to an express courier, to the Member’s last known address (or fax number), or to his/her attorney, or when the Member receives actual notice of cancellation, whichever occurs first. Any remedies sought by the Member should there be a dispute must be sought according to the Terms and Conditions, Policies and Procedures agreed upon by the signing of the Membership Agreement.

10.3 - Voluntary Cancellation

A Member has a right to cancel his or her Membership at any time, regardless of reason. Cancellation must be submitted in writing to the Association at its principal business address. The written notice must include the Member’s signature, printed name, address, and Member Username.

SECTION 11 - DEFINITIONS

Active Member — A Member who satisfies the minimum 89 point Personal Commissionable Volume Requirements, as set forth in the ERS Plan, to ensure that he or she is eligible to receive bonuses and commissions.

Active Rank — The term “active rank” refers to the current rank of a Member, as determined by the DH Plan, for any month. To be considered “active” relative to a particular rank, a Member must meet the criteria set forth in the ERS Plan for his or her respective rank.

Agreement — The contract between the Association and each Member includes the Membership Application and Agreement, the DH Policies and Procedures, the DH Marketing and Entrepreneurial Reward System, the Terms and Conditions, the Privacy Policy, and the Refund Policy all in their current form and as amended by DH in its sole discretion. These documents are collectively referred to as the “Agreement.”

Appreciation Member — An individual or entity that purchases DH products or services, but who is not a Marketing Member.

·         All Appreciation Members have a yearly enrollment of $10

·         Eligible to Purchase Products Only

·         An Opportunity to Enhance their Personal Health Direction

Cancel — The termination of an Member’s Membership. Cancellation may be either voluntary or involuntary.

Level — The layers of Planned Community Members in a particular Member’s Planned Community Organization. This term refers to the relationship of a Member relative to a particular up-line Member, determined by the number of Members between them who are related by sponsorship.

Lifetime Member — An individual or entity that purchases DH products or services, and wishes to receive ERS benefits by sharing DH with others.

·         Eligible for Compensation Benefits in the ERS

·         Lifetime Members have no yearly enrollment fee

·         Eligible for participation in Association’s Bonus Pools

·         Eligible for Leadership pricing on all products and services

·         Eligible for Leadership pricing to attend events

·         Eligible for Leadership seating preference at events

·         Eligible for Universal Positions of Leadership

·         An Opportunity to Enhance their Personal Health Direction and the Health of Humankind…

Marketing Member — An individual or entity that purchases DH products or services, and wishes to receive ERS benefits DH with others.

·         Eligible for Compensation Benefits in the ERS

·         Eligible to purchase products at Marketing Member prices

·         All Marketing Members have a yearly enrollment fee of $49

·         An Opportunity to Enhance their Personal Health Direction and the Health of Humankind…

Official DH Material — Literature, audio or video tapes, and other materials developed, printed, published and distributed by DH or its authorized re-sellers to Members.

Personal Volume (PV) — The commissionable value of products sold in points in a calendar month by the Association to a Member.

Planned Community Activity Report — A report generated by DH, and available on a Member’s replicated website, that provides critical data relating to the identities of Members, ERS information, and enrollment activity of each Member’s Planned Community Organization. This report contains confidential and trade secret information which is proprietary to DH.

Rank — The “title” that a Member has achieved pursuant to the DH Marketing and Entrepreneurial Reward System.

Recruit — For purposes of DH’s Conflict of Interest Policy (Section 3.10), the term “Recruit” means the actual or attempted sponsorship, solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another DH Member or Appreciation Member to enroll or participate in another marketing sales opportunity.

Resalable — Sales aids shall be deemed “resalable” if each of the following elements is satisfied: 1) they are unopened and unused; 2) packaging and labeling has not been altered or damaged; 3) they are in a condition such that it is a commercially reasonable practice within the trade to promote the merchandise at full price; 4) it is returned to DH within one year from the date of purchase. Any merchandise that is clearly identified at the time of sale as nonreturnable, discontinued, or as a seasonal item, shall not be resalable.

Sponsor – A Member who enrolls another Member into the Association, and is listed as the Sponsor on the Membership Application and Agreement or enrollment on the DH website using the sponsors Username. The act of enrolling others and training them is called “sponsoring.”

Up-line – This term refers to the Member or Members above a particular Member in a sponsorship line up to the Association. Conversely stated, it is the line of sponsors that links any particular Member to the Association.




 

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