STATEMENT OF POLICIES
Effective January 1, 2017

SECTION 1 – CORPORATE MISSION STATEMENT

At Docflowers our mission is to empower all people to empower people and free themselves from artificial limitations that keep them from experiencing pure health, pure abundance and pure joy. We strive to manifest excellence in every aspect of our business. We are committed to always doing the right thing by putting people first.

It is with great anticipation of your success that Docflowers presents you this Statement of Policies and urges you to follow it closely and completely.

SECTION 2 – INTRODUCTION

2.1 – Policies and Distributor Benefits Incorporated into Distributor Agreement
This Statement of Policies, in its present form and as amended at the sole discretion of Docflowers, llc. (hereafter “Docflowers” or the “Company”), are incorporated into, and form an integral part of, the Docflowers Independent Distributor Agreement. Throughout these Policies, when the term “Agreement” is used, it collectively refers to the Docflowers Distributor Application and Agreement, the Statement of Policies, the Docflowers Distributor Benefits Program, and the Docflowers Business Entity Registration form (if applicable). These documents are incorporated by reference into the Docflowers Independent Distributor Agreement (all in their current form and as amended by Docflowers). It is the responsibility of each Docflowers Independent Distributor (hereafter “Distributor”) to read, understand, adhere to, and ensure that he or she is aware of and operating under the most current version of this Statement of Policies. When enrolling or enrolling a new Distributor, it is the responsibility of the enrolling Distributor to ensure that the applicant is provided with, or has online access to, the most current version of this Statement of Policies and the Docflowers Distributor Benefits Program prior to his or her execution of the Independent Distributor Agreement.

2.2 – Purpose of Policies
Docflowers is a direct sales company that markets its products through Independent Distributors. Your success and the success of your fellow Distributors depend on the integrity of the men and women who market Docflowers products. To clearly define the relationship that exists between our Distributors and Docflowers, and to set a standard for acceptable business conduct, Docflowers has established the Independent Distributor Agreement.

Docflowers Distributors 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 Docflowers 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 carefully review the information in this Statement of Policies. It sets forth the respective duties, responsibilities, and obligations governing the relationship between you, as an Independent Distributor, and the Company. If you have any questions regarding any policy or rule, do not hesitate to seek an answer from Docflowers. Your best interests are always served by seeking the advice of your attorney when you have questions regarding your particular situation.

2.3 – Modifications to the Agreement
In order to maintain a viable business and to comply with governing federal, state, and local laws, and economic conditions, Docflowers reserves the right to amend the Agreement and its prices in its sole and absolute discretion. Such modifications shall be immediately binding upon notice of any such modifications. Notification of amendments shall be published by one or more of the following methods: (1) posting on the Company’s official web site; (2) electronic mail (e-mail); (3) inclusion in Company periodicals; (4) inclusion in product orders or bonus checks; or (5) special mailings. By signing the Distributor Agreement, an Distributor agrees to abide by all amendments or modifications that Docflowers elects to make. The continuation of an Distributor’s Docflowers business or an Distributor’s acceptance of bonuses or bonuses also constitutes acceptance of any and all amendments.

2.4 – Delays
Docflowers shall not be responsible for processing or shipping 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.

2.5 – 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 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.

2.6 – Waiver
The Company never gives up its right to insist on compliance with the Agreement and all applicable laws governing the conduct of a business. Failure by Docflowers to exercise any right or power under the Agreement or to insist upon strict compliance by an Distributor with any obligation or provision of the Agreement, shall not constitute a waiver of Docflowers’s right to demand exact compliance with the Agreement. Nor shall any custom or practice of the parties that is at variance with the terms of the Agreement constitute a waiver. Waiver by Docflowers of any violation of any provision of the Agreement can be effectuated only in writing by an authorized officer of the Company. Docflowers ’s waiver of any particular breach by an Distributor shall not affect or impair Docflowers ’s rights with respect to any subsequent breach, nor shall it affect in any way the rights or obligations of any other Distributor. Nor shall any delay or omission by Docflowers to exercise any right arising from a breach affect or impair Docflowers’s rights as to that or any subsequent breach.

The existence of any claim or cause of action of an Distributor against Docflowers shall not constitute a defense to Docflowers ’s enforcement of any term or provision of the Agreement.

SECTION 3 – BECOMING AN AFFILIATE
Distributors are independent contractors of the Company who have been granted a non-exclusive authorization to sell Docflowers products in accordance with the terms and conditions set forth by the Company. Acceptance by the Company of an Distributor Application does not constitute the sale of a franchise or distributorship.

3.1 – Independent Contractor Status
Distributors are independent contractors, and are not purchasers of a franchise or a business opportunity. The agreement between Docflowers and its Distributors does not create an employer/employee relationship, agency, partnership, or joint venture between the Company and the Distributor. The Distributor shall not be treated as an employee for his or her services or for Federal or State tax purposes. All Distributors are responsible for paying local, state, and federal taxes due from all compensation earned as an Distributor of the Company. The Distributor has no authority (expressed or implied), to bind the Company to any obligation. Each Distributor shall establish his or her own goals, hours, and methods of sale, so long as he or she complies with the terms of the Distributor Agreement, this Statement of Policy, and applicable laws.

3.2 – Application Requirements
To become an Docflowers Distributor, each applicant must:

a) Be of contractual age (usually 18) in the jurisdiction in which they reside;
b) Reside in the United States or U.S. Territories or country that Docflowers has officially announced is open for business;
c) Provide a valid Social Security or Federal Tax ID number, required by federal law for income reporting purposes;
d) Accurately complete and submit an Distributor Application and Agreement to Docflowers either in hard copy or online format.
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3.3 – Applying as a Business Entity
A corporation, limited liability company (LLC) partnership or trust (collectively referred to in this section as a “Business Entity”) may apply to be an Docflowers Distributor by submitting its Certificate of Incorporation, Partnership Agreement or trust documents (these documents are collectively referred to as the “Entity Documents”) to Docflowers, along with a properly completed Business Entity Registration form. An Docflowers business may change its status under the same enroller from an individual to a business entity or from one type of entity to another. There is a $50.00 fee for each change requested, which must be included with the written request and the completed Distributor Application and Agreement. To be considered, the Business Entity Registration form must be signed by all of the shareholders, partners or trustees. Members of the entity are jointly and severally liable for any indebtedness or other obligation to Docflowers.

To prevent the circumvention of Section 4.25 (regarding transfers and assignments of Docflowers business), if an additional partner, shareholder, member, or other business entity Distributor is added to a business entity, the original applicant must remain as a party to the original Distributor Application and Agreement. If the original Distributor wants to terminate his or her relationship with the Company, he or she must transfer or assign his or her business in accordance with Section 4.25. If this process is not followed, the business shall be canceled upon the withdrawal of the original Distributor. All bonus and commission checks will be sent to the address of record of the original Distributor. Please note that the modifications permitted within the scope of this paragraph do not include a change of Enrollment. Changes of Enrollment are addressed in Section 4.5. There is a $50.00 fee for each change requested, which must be included with the written request and the completed Distributor Application and Agreement. Docflowers may, at its discretion, require notarized documents before implementing any changes to an Docflowers business. Please allow thirty (30) days after the receipt of the request by Docflowers for processing

3.4 – Distributor Benefits
Once an Distributor Application and Agreement has been accepted by Docflowers, the benefits of the Distributor Benefits Program and the Distributor Agreement are available to the new Distributor. These benefits include the right to:

a) Sell Docflowers products;
b) Participate in the Docflowers Distributor Benefits (receive bonuses, if eligible);
c) Enroller others as Customers, or Distributors into the Docflowers business and thereby build a sales and marketing organization and progress through the Docflowers Distributor Benefits program;
d) Receive periodic Docflowers literature and other Docflowers communications;
e) Participate in Docflowers -Enrolled support, training, motivational and recognition functions, upon payment of appropriate charges, if applicable; and
f) Participate in promotional and incentive contests and programs Enrolled by Docflowers for its Distributors.

3.5 – Starter Kit and Product Purchases
Docflowers does not require the purchase of a Starter Kit. However, the company provides an online product and service portfolio, sales aids, and marketing techniques to assist its Distributors in building their independent sales and marketing organization. Distributors may terminate their agreement at will pursuant to Section 8.3. No person is required to purchase Docflowers products to become an Docflowers Distributor.

3.6 – Term and Renewal of Your Docflowers Business
The term of the Distributor Agreement is one year from the date of its acceptance by Docflowers (subject to reclassification pursuant to Section 11 below). Distributors must renew their Distributor Agreement each year by generating a minimum of 100 Points via Customer orders on or before the anniversary date of their Distributor Agreement. If the Distributor has not generated 100 Points in Customer orders within 60 days after the expiration of the current term of the Distributor Agreement, the Distributor Agreement will be canceled and the former Distributor will be reclassified to Customer status.

SECTION 4 – OPERATING AN Docflowers BUSINESS

4.1 – Adherence to the Docflowers Distributor Benefits Program
Distributors shall adhere to the terms of the Docflowers Distributor Benefits Program as set forth in official Docflowers literature and shall refrain from offering the Docflowers opportunity through, or in combination with, any other system, program, or method of marketing other than that specifically set forth in official Docflowers literature. Distributors shall not require or encourage other current or prospective Customers or Distributors to participate in Docflowers in any manner that varies from the program as set forth in official Docflowers literature. Distributors shall not require or encourage other current or prospective Customers or Distributors to execute any agreement or contract other than official Docflowers agreements and contracts in order to become an Docflowers Distributor.

Similarly, Distributors shall not require or encourage other current or prospective Customers or Distributors to make any purchase from, or payment to, any individual or other entity to participate in the Docflowers Distributor Benefits Program other than those purchases or payments identified as recommended or required in official Docflowers literature.

4.2 – Advertising
4.2.1 – General
All Distributors shall safeguard and promote the good reputation of Docflowers and its products. The marketing and promotion of Docflowers, the Docflowers opportunity, the Distributor Benefits Program, and Docflowers products shall be consistent with the public interest, and must avoid all discourteous, deceptive, misleading, unethical or immoral conduct or practices.

To promote both the products and the tremendous opportunity Docflowers offers, Distributors should use the sales tools and support materials produced by Docflowers. The rationale behind this requirement is simple: Docflowers has carefully designed its products, product labels, Distributor Benefits Program, and promotional materials to ensure that each aspect of Docflowers is fair, truthful, substantiated, and complies with the vast and complex legal requirements of federal and state laws. If Docflowers Distributors were allowed to develop their own sales tools and promotional materials notwithstanding their integrity and good intentions, the likelihood that they would unintentionally violate any number of statutes or regulations affecting an Docflowers business is almost certain. These violations, although they may be relatively few in numbers, would jeopardize the Docflowers opportunity for all Distributors.

Accordingly, Distributors may only use literature, advertisements, sales tools and promotional materials, or Internet web pages created using the Company’s preapproved electronic marketing system.

Distributors who have achieved Rank 8 (PM 1) or higher may create and publish their own marketing materials, advertising materials, and/or other sales aids provided these are submitted to the company for pre-approval before they can be used or made public. Unless the Distributor receives specific written approval to use such tools, the request shall be deemed denied. All independently produced material must display the Docflowers Independent Distributor logo in a prominent position at the top of the page.

Docflowers will not permit Distributors to sell independently-produced sales aids (including websites) to other Docflowers Distributors. Therefore, Distributors who receive authorization from Docflowers to produce their own sales aids may not sell such material to any other Docflowers Distributor. Distributors may make approved material available to their personally enrolled Downline organization free of charge if they wish, but may not charge other Docflowers Distributors for the material.

Docflowers further reserves the right to rescind approval for any sales tools, promotional materials, advertisements, or other literature, and Distributors waive all claims for damages or remuneration arising from or relating to such rescission.

4.2.2 – Distributor Web Sites
If an Distributor wishes to utilize an Internet web page to promote his or her business, he or she may do so through the Company’s official electronic marketing system, using official Docflowers templates. Alternatively, Distributors may develop their own web pages, however, any Distributor who does so: (a) must use the text of the Company’s official web site; and (b) may not supplement the content of his or her web site with text from any source other than the Company. Distributors who develop or publish their own web sites must register their site(s) with the Company and receive written approval from the Company prior to the site(s) public availability.

If an Distributor wishes to register their site with Docflowers, they must pay a $50 review fee. This review fee must be paid on an annual basis and is non-refundable, even if the subject website is not approved for registration. If the renewal fee is not paid, prior approval of the website may be withdrawn. Docflowers reserves the right to refuse to register or to revoke the registration of any Distributor-developed website that does not comply with the above requirements or otherwise violates any provision of this Statement of Policies. In the event an Distributor developed website is approved for registration by Docflowers, the Company will supply the Distributor an Docflowers Certified Website logo for use on the approved website homepage for one year.

4.2.3 – Blogs, Chat Rooms, Social Distributors, Online Auctions, and other Online Forums
When participating in online blogs, chat rooms, social Distributors, or any other online forum, Distributors agree that they shall not promote or make claims about the Docflowers opportunity or Docflowers products unless such claims and promotions are in compliance with the requirements of Sections 4.6.2 and 4.6.3 below. The sale or advertisement of Docflowers products in any online auction sites is strictly prohibited.

4.2.4 – Domain Names
Distributors may not use or attempt to register any of Docflowers ’s trade names, trademarks, service names, service marks, product names, the Company’s name, or any derivative thereof, for any Internet domain name. Distributors wishing to use personal domain names to market their Docflowers business may do so provided the domain name has been approved by the Company and the domain points directly to the Distributor’s replicating Docflowers website.

4.2.5 – Search Engine Marketing
Distributors wishing to engage in search engine marketing to drive traffic to their approved Distributor web sites (see Section 4.2.2 above) may do so provided they do not use any of the Company’s trade names or trademarks as search terms or key words. Nor may any deceptive terms such as “direct site”, “official site”, “official Docflowers website”, etc. appear in any Distributor Enrolled links or ads that are displayed on any search result page.

4.2.6 – Trademarks and Copyrights
Docflowers will not allow the use of its trade names, trademarks, designs, or symbols by any person, including Docflowers Distributors, without its prior, written permission. Distributors may use only the Independent Docflowers Distributor logo developed for them by the Company.

Distributors may not produce for sale or distribution any recorded Company events and speeches without written permission from Docflowers. Nor may Distributors reproduce for sale or for personal use any recording of Company-produced presentations, either audio or visual.

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

4.2.8 – Telemarketing
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 Docflowers does not consider Distributors 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, Distributors must not engage in telemarketing in the operation of their Docflowers businesses. The term “telemarketing” means the placing of one or more telephone calls to an individual or entity to induce the purchase of an Docflowers product, or to recruit them for the Docflowers opportunity. “Cold calls” made to prospective Customers or Distributors that promote either Docflowers’s products or the Docflowers opportunity constitute telemarketing and are prohibited. However, a telephone call(s) placed to a prospective Customer or Distributor (a “prospect”) is permissible under the following situations:

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

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

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

d) 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, Distributors shall not use automatic telephone dialing systems relative to the operation of their Docflowers business. 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.

By submitting an Distributor Agreement to Docflowers, applicants and Distributors grant permission to Docflowers to contact them by telephone, SMS, email, and/or fax to promote the sale of Docflowers products and to promote the Docflowers opportunity.

4.2.9 – Unsolicited Email
Docflowers does not permit Distributors 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 an Distributor that promotes Docflowers, the Docflowers opportunity, or Docflowers products must comply with the following:

a) The email must clearly and conspicuously disclose that the message is an advertisement or solicitation.
b) The use of deceptive subject lines and/or false header information is prohibited.
c) The email must include the Distributor’s physical mailing address.
d) There must be a functioning return email address to the sender.
e) There must be a functioning opt-out notice in the email that advises the recipient that he or she may reply to the email, via the return email address, to request that future email solicitations or correspondence not be sent to him or her.
f) All opt-out requests, whether received by email or regular mail, must be honored. If an Distributor receives an opt-out request from a recipient of an email, the Distributor must forward the opt-out request to the Company.

Docflowers may periodically send commercial emails on behalf of Distributors. By entering into the Distributor Agreement, Distributor agrees that the Company may send such emails and that the Distributor’s physical and email addresses will be included in such emails as outlined above. Distributors shall honor opt-out requests generated as a result of such emails sent by the Company.

4.2.10 – Unsolicited Faxes
Except as provided in this section, Distributors may not use or transmit unsolicited faxes relative to the operation of their Docflowers business. The term “unsolicited faxes” means the transmission via telephone facsimile of any material or information advertising or promoting Docflowers, its products, its Distributor Benefits Program or any other aspect of the company which is transmitted to any person (a) without that person’s prior express invitation or permission; or (b) the Distributor has not established a 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 Distributor and a person, on the basis of: (a) an inquiry, application, purchase or transaction by the person regarding products offered by such Distributor; or (b) a personal or familial relationship, which relationship has not been previously terminated by either party.

4.3 – Bonus Buying Prohibited
Docflowers strictly and absolutely prohibits bonus buying. “Bonus buying” includes: (a) the enrollment of individuals or entities without their knowledge; (b) the fraudulent enrollment of an individual or entity as an Distributor or Customer; (c) the enrollment or attempted enrollment of non-existent individuals or entities as Distributors or Customers (“phantoms”); (d) Purchasing Docflowers products on behalf of another Distributor or Customer, or under another Distributor’s or Preferred Customer’s I.D. number, to qualify for bonuses; (e) purchasing excessive amounts of goods that cannot reasonably be used or resold in a month; and/or (f) any other mechanism or artifice to qualify for rank advancement, incentives, prizes, bonuses or bonuses that is not driven by bona fide product purchases by end user consumers.

4.4 – Changes to a Business Entity
Each Distributor must immediately notify Docflowers of all changes to type of business entity they utilize in operating their businesses and the addition or removal of business associates. Changes shall be processed annually by November 30 to become effective on January 1 of the following year.

4.5 – Change of Enroller
Maintaining the integrity of Enrollment is vital for the success of every Distributor and marketing organization. Accordingly, the transfer of an Docflowers business from one Enroller to another is rarely permitted. Requests for change of Enroller must be submitted in writing to the Compliance Department, must include the reason for the transfer, and must contain signed authorization from the original Enroller. Any such requests are subject to approval by Docflowers.

To protect the integrity of all marketing organizations and safeguard the hard work of all Distributors, Docflowers will only authorize direct line changes in Enrollment that are submitted within the weekly Cycle wherein a person was enrolled and before bonuses have been calculated, and must be initiated by the currently listed Enroller.

Such changes must receive final approval in writing from Docflowers, and the effects of enrollment changes shall only apply to future qualifications and bonus computations, which shall only take effect once Docflowers has approved and processed the changes. In no event shall bonuses be adjusted retroactively, and only one change in enrollment is allowed in the event that Docflowers grants approval.

4.5.1 – Misplacement
A request for change of placement must be submitted within the weekly Cycle wherein the enrollment took place and must be requested by the current listed Enroller. An Distributor can only be moved inside the same Enroller’s organization. If approved, an Distributor is placed in the first available open position on the date that the change is made. An Distributor that has earned a commission or achieved rank is not eligible for placement changes. Please note that decisions made for any change request – enroller or placement – are at the sole discretion of the Company.

4.5.2 – Upline Approval
The Distributor seeking to change enroller must submit a properly completed and fully executed Enroller Transfer Form which includes the written approval of his or her immediate Enroller. Photocopied or facsimile signatures are not acceptable. All Distributor signatures must be notarized. The Distributor who requests the transfer must submit a fee of $50.00 for administrative charges and data processing. If the transferring Distributor also wants to move any of the Distributors in his or her marketing organization, each Downline Distributor must also obtain a properly completed Enrollment Transfer Form and return it to Docflowers with the $50.00 change fee (i.e., the transferring Distributor and each Distributor in his or her marketing organization multiplied by $50.00 is the cost to move an Docflowers business.) Downline Distributors will not be moved with the transferring Distributor unless all of the requirements of this paragraph are met. Transferring Distributors must allow 10 business days after the receipt of the Enrollment Transfer Forms by Docflowers for processing and verifying change requests.

In cases wherein the appropriate Enrollment change procedures have not been followed, and a downline organization has been developed in the second business developed by an Distributor, Docflowers reserves the sole and exclusive right to determine the final disposition of the Downline organization. Resolving conflicts over the proper placement of a Downline that has developed under an organization that has improperly switched enrollers is often extremely difficult. Therefore, AFFILIATES WAIVE ANY AND ALL CLAIMS AGAINST Docflowers THAT RELATE TO OR ARISE FROM Docflowers’S DECISION REGARDING THE DISPOSITION OF ANY DOWNLINE ORGANIZATION THAT DEVELOPS BELOW AN ORGANIZATION THAT HAS IMPROPERLY CHANGED LINES OF ENROLLMENT.

4.5.3 – Cancellation and Re-application
An Distributor may legitimately change organizations by voluntarily canceling his or her Docflowers business and remaining inactive (i.e., no purchases of Docflowers products for resale, no sales of Docflowers products, no enrolling, no attendance at any Docflowers functions, participation in any other form of Distributor activity, or operation of any other Docflowers business) for six (6) full calendar months. Following the six month period of inactivity, the former Distributor may reapply under a new Enroller, however, the former Distributor’s Downline will remain in their original line of Enrollment. Docflowers will consider waiving the six month waiting period only under exceptional circumstances. Such requests for waiver must be submitted to Docflowers in writing.

4.6 – Unauthorized Claims and Actions
4.6.1 – Indemnification
An Distributor is fully responsible for all of his or her verbal and written statements made regarding Docflowers products and the Distributor Benefits Program which are not expressly contained in official Docflowers materials. Distributors agree to indemnify Docflowers and Docflowers’s 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 Docflowers as a result of the Distributor’s unauthorized representations or actions. This provision shall survive the termination of the Distributor Agreement.

4.6.2 – Product Claims
Except for information contained in official Docflowers literature, Distributors may not make any claims (which include personal testimonials) as to any therapeutic, curative or beneficial properties of any products offered by Docflowers. In particular, no Distributor may make any claim that Docflowers 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 Docflowers policies, but they potentially violate federal and state laws and regulations, including the federal Food, Drug, and Cosmetic Act and Federal Trade Commission Act.

4.6.3 – Income Claims
In their enthusiasm to enroll prospective Distributors, some Distributors are occasionally tempted to make income claims or earnings representations to demonstrate the inherent power of Distributor Marketing. This is counterproductive because new Distributors may become disappointed very quickly if their results are not as extensive or as rapid as the results others have achieved. At Docflowers, we firmly believe that the Docflowers 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 Distributor Marketing. While Distributors 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 Docflowers as well as the Distributor making the claim unless appropriate disclosures required by law are also made contemporaneously with the income claim or earnings representation. Because Docflowers Distributors do not have the data necessary to comply with the legal requirements for making income claims, an Distributor, when presenting or discussing the Docflowers opportunity or Distributor Benefits Program to a prospective Distributor, may not make income projections, income claims, or disclose his or her Docflowers income (including the showing of checks, copies of checks, bank statements, or tax records).

4.6.4 – Income Disclosure Statement (“IDS”)
The Docflowers IDS is designed to convey truthful, timely, and comprehensive information regarding the income that Docflowers Distributors earn. A copy of the IDS must be presented to a prospective Distributor (someone who is not a party to a current Docflowers Distributor Agreement) anytime the Distributor Benefits Program is presented or discussed, or any type of income claim or earnings representation is made.

The terms “income claim” and/or “earnings representation” (collectively “income claim”) include: (1) statements of average Distributor earnings, (2) statements of non-average earnings, (3) statements of earnings ranges, (4) income testimonials, (5) lifestyle claims, and (6) hypothetical claims. Examples of “statements of non-average earnings” include, “Our number one Distributor earned $XXX last year” or “Our average (rank) makes $XXX per month.” An example of a “statement of earnings ranges” is “The monthly income for (rank) is $XXX on the low end to $YYY on the high end.”

A lifestyle income claim typically includes statements (or pictures) involving large homes, luxury cars, exotic vacations, or other items suggesting or implying wealth. They also consist of references to the achievement of one’s dreams, having everything one always wanted, and are phrased in terms of “opportunity” or “possibility” or “chance.” Claims such as “My Docflowers income exceeded my salary after six months in the business,” or “Our Docflowers business has allowed my wife to come home and be a full-time mom” also fall within the purview of “lifestyle” claims.

A hypothetical income claim exists when you attempt to explain the operation of the Distributor Benefits Program through the use of a hypothetical example. Certain assumptions are made regarding the: (1) number of Distributors enrolled, (2) number of down-line Distributors, (3) average product volume per Distributor, and (4) total organizational volume. Running these assumptions through the Distributor Benefits Program yields income figures which constitute income claims.

In any non-public meeting (e.g., a home meeting, one-on-one, regardless of venue) with a prospective Distributor or Distributors in which the Distributor Benefits Program is discussed or any type of income claim is made, you must provide the prospect(s) with a copy of the IDS. In any meeting that is open to the public in which the Distributor Benefits Program is discussed or any type of income claims is made, you must provide every prospective Distributor with a copy of the IDS and you must display at least one 3 foot x 5 foot poster board in the front of the room in reasonably close proximity to the presenter(s). In any meeting in which any type of video display is utilized (e.g., monitor, television, projector, etc.) a slide of the IDS must be displayed continuously throughout the duration of any discussion of the Distributor Benefits Program or the making of an income claim.

Copies of the IDS may be printed or downloaded without charge from the corporate website.

An Distributor who develops sales aids and tools (as provided in Section 4.2.1 above) in which the Distributor Benefits Program or income claims are present must incorporate the most current IDS into each such sales aid or tool prior to submission to the Company for review.

4.7 – Commercial Outlets
Distributors may not sell Docflowers products from a commercial outlet, nor may Distributors display or sell Docflowers products or literature in any retail establishment. Display of Docflowers literature and products is permitted in service-oriented establishments that function by appointment only.

4.8 – Trade Shows, Expositions and Other Sales Forums
Distributors may display and/or sell Docflowers products at trade shows and professional expositions Before submitting a deposit to the event promoter, Distributors must contact the Compliance Department in writing for conditional approval, as Docflowers’s policy is to authorize only one Docflowers business per event.

Final approval will be granted to the first Distributor who submits an official advertisement of the event, a copy of the contract signed by both the Distributor and the event official, and a receipt indicating that a deposit for the booth has been paid. Approval is given only for one event at a time. Any requests to participate in future events must again be submitted for approval. Docflowers 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 or the Docflowers opportunity. Please allow a minimum of 10 business days for the authorization process.

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 Docflowers wishes to portray.

4.9 – Conflicts of Interest
4.9.1 – Non Solicitation
Docflowers Distributors are free to participate in other marketing business ventures or marketing opportunities. However, during the term of this Agreement, Distributors may not directly or indirectly recruit other Docflowers Distributors or Customers for any other Distributor marketing business.

Following the cancellation of an Distributor’s Independent Distributor Agreement, and for a period of six calendar months thereafter, with the exception of an Distributor who is personally Enrolled by the former Distributor, a former Distributor may not Recruit any Docflowers Distributor or Preferred Customer for another Distributor marketing business. Distributors and the Company recognize that because Distributor marketing is conducted through Distributors of independent contractors dispersed globally, 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, Distributors and Docflowers agree that this non-solicitation provision shall apply to all markets in which Docflowers conducts business.

The term “Recruit” means the actual or attempted solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another Docflowers Distributor or Customer to enroll or participate in another Network Marketing, Distributor Marketing or Direct Sales opportunity. The conduct described in the preceding sentence constitutes recruiting even if the Distributor’s actions are in response to an inquiry made by another Distributor or Customer.

4.9.2 – Sale of Competing Goods
Distributors must not sell, or attempt to sell, any competing non-Docflowers programs, products or services to Docflowers Customers or Distributors. Any program, product or services in the same generic categories as Docflowers products or services is deemed to be competing, regardless of differences in cost, quality or other distinguishing factors. Any exception to this rule, based on extraordinary circumstances, must be granted in writing by Docflowers Compliance.

4.9.3 – Distributor Participation in Other Direct Selling Programs
If an Distributor is engaged in other non-Docflowers direct selling programs, it is the responsibility of the Distributor to ensure that his or her Docflowers business is operated entirely separate and apart from any other program. To this end, the following must be adhered to:

a) Distributors shall not display Docflowers promotional material, sales aids, or products with or in the same location (physical or virtual) as, any non-Docflowers promotional material or sales aids, products or services.
b) Distributors shall not offer the Docflowers opportunity or products to prospective or existing Customers or Distributors in conjunction with any non-Docflowers program, opportunity, product or service.
c) Distributors may not offer any non-Docflowers opportunity, products, services or opportunity at any Docflowers -related meeting, seminar or convention, or within two hours and a five mile radius of the Docflowers event. If the Docflowers meeting is held telephonically or on the internet, any non-Docflowers meeting must be at least two hours before or after the Docflowers meeting, and on a different conference telephone number or internet web address from the Docflowers meeting.

4.9.4 – Downline Activity (Genealogy) Reports
Downline Activity Reports are available for Distributor access and viewing at Docflowers’s official website. Distributor access to their Downline Activity Reports is password protected. All Downline Activity Reports and the information contained therein are confidential and constitute proprietary information and business trade secrets belonging to Docflowers. Downline Activity Reports are provided to Distributors in strictest confidence and are made available to Distributors for the sole purpose of assisting Distributors in working with their respective Downline Organizations in the development of their Docflowers business. Distributors should use their Downline Activity Reports to assist, motivate, and train their Downline Distributors. The Distributor and Docflowers agree that, but for this agreement of confidentiality and nondisclosure, Docflowers would not provide Downline Activity Reports to the Distributor. An Distributor shall not, on his or her own behalf, or on behalf of any other person, partnership, association, corporation or other entity:

a) Directly or indirectly disclose any information contained in any Downline Activity Report to any third party;
b) Directly or indirectly disclose the password or other access code to his or her Downline Activity Report;
c) Use the information to compete with Docflowers or for any purpose other than promoting his or her Docflowers business; or
d) Recruit or solicit any Distributor or Preferred Customer of Docflowers listed on any report or in any manner attempt to influence or induce any Distributor or Customer of Docflowers, to alter their business relationship with Docflowers.

Upon demand by the Company, any current or former Distributor will return any original and all copies of Downline Activity Reports to the Company (whether printed or in digital format).

4.9.5 – Leads Received From Docflowers
Docflowers may developed a lead generation program whereby the Company acquires leads of prospective Customers and Distributors and sells or otherwise distributes them to qualified Distributors. When an Distributor receives any such lead from the Company, the Distributor agrees that he or she shall use such lead solely for the purpose of promoting the Docflowers products and opportunity to the prospective Customer or Distributor. The Distributor further agrees that he or she shall not use the information contained in the lead to promote any non-Docflowers product, service or opportunity.

4.10 – Targeting Other Direct Sellers
Docflowers does not condone Distributors specifically or consciously targeting the sales force of another direct sales company to sell Docflowers products or to become Distributors for Docflowers, nor does Docflowers condone Distributors solicitation or enticement of members of the sales force of another direct sales company to violate the terms of their contract with such other company. Should Distributors engage in such activity, they alone bear the risk of being sued by the other direct sales company. If any lawsuit, arbitration or mediation is brought against an Distributor alleging that he or she engaged in inappropriate recruiting activity of a company’s sales force or Customers, Docflowers will not pay any of Distributor’s defense costs or legal fees, nor will Docflowers indemnify the Distributor for any judgment, award, or settlement.

4.11 – Cross-Enrolling
Actual or attempted cross enrolling is strictly prohibited. “Cross enrolling” is defined as the enrollment of an individual who or entity that already has a current Customer or Distributor Agreement on file with Docflowers, or who has had such an agreement within the preceding six calendar months, within a different line of Enrollment. The use of a spouse’s or relative’s name, trade names, DBAs, assumed names, corporations, partnerships, trusts, federal ID numbers, fictitious ID numbers, any straw-man or other artifice to circumvent this policy is prohibited. Distributors shall not demean, discredit or defame other Docflowers Distributors in an attempt to entice another Distributor to become part of the first Distributor’s marketing organization. This policy shall not prohibit the transfer of an Docflowers business in accordance with Section 4.25.

If Cross Enrolling is discovered, it must be brought to the Company’s attention immediately. Docflowers may take disciplinary action against the Distributor that changed organizations and/or those Distributors who encouraged or participated in the Cross Enrolling. Docflowers may also move all or part of the offending Distributor’s down-line to his or her original down-line organization if the Company deems it equitable and feasible to do so. However, Docflowers is under no obligation to move the Cross Enrolled Distributor’s down-line organization, and the ultimate disposition of the organization remains within the sole discretion of Docflowers . Distributors waive all claims and causes of action against Docflowers arising from or relating to the disposition of the Cross Enrolled Distributor’s down-line organization.

4.12 – Errors or Questions
If an Distributor has questions about or believes any errors have been made regarding bonuses, Downline Activity Reports, or charges, the Distributor must notify Docflowers in writing within 30 days of the date of the purported error or incident in question. Docflowers will not be responsible for any errors, omissions or problems not reported to the Company within 30 days.

4.13 – Governmental Approval or Endorsement
Neither federal nor state regulatory agencies nor officials approve or endorse any direct selling or Distributor marketing companies or programs. Therefore, Distributors shall not represent or imply that Docflowers or its Distributor Benefits Program have been “approved,” “endorsed” or otherwise sanctioned by any government agency.

4.14 – Holding Applications or Orders
Distributors must not manipulate enrollments of new applicants and purchases of products. All Distributor Applications and Agreements, and product orders must be sent to Docflowers within 72 hours from the time they are signed by an Distributor or placed by a Customer, respectively.

4.15 – Identification
All Distributors are required to provide their Social Security Number, or a Federal Employer Identification Number to Docflowers to receive compensation. Docflowers uses this information for income reporting purposes only. Upon enrollment, the Company will provide a unique Distributor Identification Number to the Distributor by which he or she will be identified. This number will be used to place orders, and track bonuses.

Under its right of contract, Docflowers retains the right to revoke any application from an Distributor who does not provide a valid Social Security Number or Federal Employer Identification Number and any earnings will be forfeited.

4.16 – Income Taxes
Each Distributor is responsible for paying local, state and federal taxes on any income generated as an Independent Distributor. If an Docflowers business is tax exempt, the Federal tax identification number must be provided to Docflowers. Every year, Docflowers will provide an IRS Form 1099 MISC (Non-employee Compensation) earnings statement to each U.S. resident who: 1) Had earnings in excess of the annual minimum as established by the Internal Revenue Service in the previous calendar year; or 2) Made purchases during the previous calendar year in excess of $5,000.

4.17 – Insurance
Distributors may wish to arrange insurance coverage for their business. Typically, a homeowner’s insurance policy does not cover business-related injuries or the theft of or damage to inventory or business equipment. Distributors should contact their insurance agent to make certain that their business property is protected. This can often be accomplished with a simple “Business Pursuit” endorsement attached to your present home owner’s policy.

4.18 – International Marketing
Because of critical legal and tax considerations, Docflowers must limit the resale of Docflowers, products, and the presentation of the Docflowers business to prospective Customers and Distributors located within the United States and U.S. Territories and those other countries that the Company has announced are officially opened for business. Moreover, allowing a few Distributors to conduct business in markets not yet opened by Docflowers would violate the concept of affording every Distributor the equal opportunity to expand internationally.

Docflowers shall hold Distributors personally liable for losses related to illegal business activities in unauthorized markets, and Distributors agree to indemnify Docflowers and Docflowers’s 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 Docflowers as a result of an Distributor’s unauthorized violation of this policy. This provision shall survive the termination of the Distributor Agreement.

Accordingly, Distributors are authorized to sell Docflowers products and enroll Customers or Distributors only in the countries in which Docflowers is authorized to conduct business, as announced in official Company literature. Docflowers products or sales aids cannot be shipped into or sold in any foreign country. Distributors may sell, give, transfer, or distribute Docflowers products or sales aids only in their home country. In addition, no Distributor may, in any unauthorized country: (a) conduct sales, enrollment or training meetings; (b) enroll or attempt to enroll potential Customers or Distributors; or (c) conduct any other activity for the purpose of selling Docflowers products, establishing a marketing organization, or promoting the Docflowers opportunity. Distributors understand that conducting any pre-launch activity in countries not officially open for Docflowers business is against company policy and may be illegal in some countries

4.19 – Inventory Loading
Distributors must never purchase more products than they can reasonably use or sell to retail Customers in a month, and must not influence or attempt to influence any other Distributor to buy more products than they can reasonably use or sell to retail Customers in a month. For the protection of new Distributors, initial orders may not exceed $1,500.

By placing additional orders, Distributors certify that at least 70% of their previously purchased inventory has been sold or consumed. Distributors may be asked to verify retail sales, and the company reserves the right to decline an Distributor’s orders if retail sales verification cannot be confirmed.

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

4.21 – Minors
A person who is recognized as a minor in his/her state of residence may not be an Docflowers Distributor. Distributors shall not enroll or recruit minors into the Docflowers program.

4.22 – Position Holder Restrictions
An individual may operate or have an ownership interest, legal or equitable, as a sole proprietorship, partner, shareholder, trustee, or beneficiary, in one Docflowers business.

An Distributor may not have a simultaneous beneficial interest or participate in more than one Affiliation without the written consent of the company. A beneficial interest includes but is not limited to any ownership, interest, equitable interest, any rights to present or future benefits, financial or otherwise, unless otherwise approved by the company. An Distributor shall not have an ownership interest in, operational or management control of, or derive any benefits directly or indirectly from any subsequent team membership not in the same line of Enrollment as the individual’s initial business center.

Husbands and wives or common-law couples (collectively “spouses”) who wish to maintain separate Docflowers business centers may do so, but must join the same line of Enrollment as his or her spouse and be directly Enrolled by the Original Enroller. Change of the Original Enroller is not permitted. The actions of one spouse will be attributed to both spouses and will result in disciplinary action against both spouses. Once enrolled a spouse may not be moved.

An Distributor’s position may be converted into a business entity pursuant to Section 4.4 above. In order to maintain the integrity of the Docflowers Distributor Benefits Program, an individual wishing to conduct business as an entity may not maintain a separate Affiliation under his or her name.

4.23 – Actions of Household Members or Distributord Individuals
If any member of an Distributor’s immediate household engages in any activity which, if performed by the Distributor, would violate any provision of the Agreement, such activity will be deemed a violation by the Distributor and Docflowers may take disciplinary action pursuant to the Statement of Policies against the Distributor. Similarly, if any individual associated in any way with a corporation, partnership, trust or other entity (collectively “Distributord individual”) violates the Agreement, such action(s) will be deemed a violation by the entity, and Docflowers may take disciplinary action against the entity.

4.24 – Requests for Records
Any request from an Distributor for copies of invoices, applications, Downline 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.

4.25 – Sale, Transfer or Assignment of Docflowers Business
Although an Docflowers business is a privately owned, independently operated business, the sale, transfer or assignment of an Docflowers business is subject to certain limitations. If an Distributor wishes to sell his or her Docflowers business, the following criteria must be met:

a) Protection of the existing line of Enrollment must always be maintained so that the Docflowers business continues to be operated in that line of Enrollment.
b) The buyer or transferee must become a qualified Docflowers Distributor. If the buyer is an active Docflowers Distributor, he or she must first terminate his or her Docflowers business and wait six calendar months before acquiring any interest in a different Docflowers business.
c) Before the sale, transfer or assignment can be finalized and approved by Docflowers, any debt obligations the selling Distributor has with Docflowers must be satisfied.
d) The selling Distributor must be in good standing and not in violation of any of the terms of the Agreement in order to be eligible to sell, transfer or assign an Docflowers business.
e) Docflowers must approve any sale or transfer in writing.

Prior to selling an Docflowers business, the selling Distributor must notify Docflowers’s Compliance Department in writing of his or her intent to sell the Docflowers business. No changes in line of Enrollment can result from the sale or transfer of an Docflowers business. An Distributor may not sell, transfer or assign individual business centers; if a business is sold, transferred or assigned, all business centers must be included in the transaction.

4.26 – Separation of an Docflowers Business
Docflowers Distributors sometimes operate their Docflowers businesses as husband-wife partnerships, regular partnerships, corporations, or trusts. At such 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 business is accomplished so as not to adversely affect the interests and income of other businesses up or down the line of Enrollment. If the separating parties fail to provide for the best interests of other Distributors and the Company in a timely fashion, Docflowers will involuntarily terminate the Distributor Agreement.

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

a) One of the parties may, with consent of the other(s), operate the Docflowers business pursuant to an assignment in writing whereby the relinquishing spouse, shareholders, partners or trustees authorize Docflowers to deal directly and solely with the other spouse or non-relinquishing shareholder, partner or trustee.
b) The parties may continue to operate the Docflowers business jointly on a “business-as-usual” basis, whereupon all compensation paid by Docflowers 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 Downline Organization of divorcing spouses or a dissolving business entity be divided. Similarly, under no circumstances will Docflowers split commission and bonus checks between divorcing spouses or members of dissolving entities. Docflowers will recognize only one Downline Organization and will issue only one commission check per Docflowers business 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 bonuses and ownership of the business in a timely fashion as determined by the Company, the Distributor Agreement shall be involuntarily canceled.

If a former spouse has completely relinquished all rights in the original Docflowers business pursuant to a divorce, he or she is thereafter free to enroll under any enroller of his or her choosing without waiting six calendar months. In the case of business entity dissolutions, the former partner, shareholder, member, or other entity Distributor who retains no interest in the business must wait six calendar months from the date of the final dissolution before re-enrolling as an Distributor. In either case however, the former spouse or business Distributor shall have no rights to any Distributors in their former organization or to any former retail Customer. They must develop the new business in the same manner as would any other new Distributor.

4.27 – Enrolling
All active Customers and Distributors in good standing have the right to enroller and enroll others into Docflowers . Each prospective Customer or Distributor has the ultimate right to choose his or her own Enroller. If two Distributors claim to be the Enroller of the same new Distributor or Customer, the Company shall regard the first application received by the Company as controlling.

4.28 – Succession
Upon the death or incapacitation of an Distributor, his or her business may be passed to his or her heirs. Appropriate legal documentation as described in sections 4.29 and 4.30 must be submitted to the Company to ensure the transfer is proper. Accordingly, an Distributor should consult an attorney to assist him or her in the preparation of a will or other testamentary instrument. Whenever an Docflowers business is transferred by a will or other testamentary process, the beneficiary acquires the right to collect all bonuses and bonuses of the deceased Distributor’s marketing organization provided the following qualifications are met. The successor(s) must:

a) Execute an Distributor Agreement;
b) Comply with terms and provisions of the Agreement; and
c) Meet all of the qualifications for the deceased Distributor’s status.

Bonus and commission checks of an Docflowers business transferred pursuant to this section will be paid in a single check jointly to the devisees. The devisees must provide Docflowers with an “address of record” to which all bonus and commission checks will be sent. If the business is bequeathed to joint devisees, they must form a business entity and acquire a federal taxpayer Identification number. Docflowers will issue all bonus and commission checks and one 1099 to the business entity.

4.29 – Transfer Upon Death of an Distributor
To effect a testamentary transfer of an Docflowers business, the successor must provide the following to Docflowers : (1) an original death certificate; (2) a notarized copy of the will or other instrument establishing the successor’s right to the Docflowers business; and (3) a completed and executed Distributor Agreement.

4.30 – Transfer Upon Incapacitation of an Distributor
To effectuate a transfer of an Docflowers business because of incapacity, the successor must provide the following to Docflowers: (1) a notarized copy of an appointment as trustee or conservator; (2) a notarized copy of the trust document or other documentation establishing the trustee’s right to administer the Docflowers business; and (3) a completed Distributor Agreement executed by the trustee or conservator.

SECTION 5 – RESPONSIBILITIES OF AFFILIATES

5.1 – Change of Address, Telephone, and E-Mail Addresses
To ensure timely delivery of products, support materials, and commission checks, it is critically important that the Docflowers’s files are always kept current. Street addresses are required for shipping since the carrier under contract cannot deliver to a post office box. Distributors planning to change their e-mail address or move must send their new address and telephone number(s) to Docflowers’s Corporate Offices to the attention of the Distributor Services Department. To guarantee proper delivery, two weeks advance notice must be provided to Docflowers on all changes.

5.2 – Ongoing Training and Development Obligations
Any Distributor who enrolls another Distributor into Docflowers must perform a bona fide assistance and training function to ensure that his or her Downline is properly operating his or her Docflowers business. Distributors must have ongoing contact and communication with the Distributors in their Downline Organizations. Examples of such contact and communication may include, but are not limited to: personal meetings, telephone contact, voice mail, electronic mail, and the accompaniment of Downline Distributors to Docflowers meetings, training sessions, and other functions. Upline Distributors are also responsible to motivate and train new Distributors in Docflowers product knowledge, effective sales techniques, the Docflowers Distributor Benefits Program, and compliance with this Statement of Policies. Communication with and the training of down-line Distributors must not, however, violate Section 4.2 (regarding the development of Distributor-produced sales aids and promotional materials).
Distributors should monitor the Distributors in their Down-line Organizations to guard against Downline Distributors making improper product or business claims, or engaging in any illegal or inappropriate conduct.

As Distributors progress through the various levels of leadership, they will become more experienced in sales techniques, product knowledge, and understanding of the Docflowers program. They will be called upon to share this knowledge with lesser experienced Distributors within their organization.

Regardless of their level of achievement, Distributors have an ongoing obligation to continue to personally promote sales through the generation of new Customers and through servicing their existing Customers.

5.3 – Non Disparagement
Docflowers wants to provide its independent Distributors with the best products, Distributor Benefits Program, and service in the industry. Accordingly, we value your constructive criticisms and comments. All such comments should be submitted in writing to the Compliance Department. Remember, to best serve you, we must hear from you! While Docflowers welcomes constructive input, negative comments and remarks made in the field by Distributors about the Company, its products, or Distributor Benefits Program serve no purpose other than to sour the enthusiasm of other Docflowers Distributors. For this reason, and to set the proper example for their Downline, Distributors must not disparage, demean, or make negative remarks about Docflowers, other Docflowers Distributors, Docflowers ’s products, the Distributor Benefits Program, or Docflowers ’s directors, officers, or employees.

5.4 – Providing Documentation to Applicants
Distributors must provide the most current version of the Statement of Policies and the Distributor Benefits Program to individuals whom they are enrolling to become Distributors before the applicant signs an Distributor Agreement. Additional copies of the Statement of Policies can be downloaded from Docflowers’s website.

5.5 – Reporting Policy Violations
Distributors observing a Policy violation by another Distributor should submit a written report of the violation directly to the attention of the Docflowers 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 6 – SALES REQUIREMENTS

6.1 – Product Sales
The Docflowers Distributor Benefits Program is based on the sale of Docflowers products to end consumers. Distributors must fulfill personal and Down-line Organization retail sales requirements (as well as meet other responsibilities set forth in the Agreement) to be eligible for bonuses and advancement to higher levels of achievement. The following sales requirements must be satisfied for Distributors to be eligible for bonuses:

a) Distributors must satisfy the Point and Organization Point requirements to fulfill the requirements associated with their rank as specified in the Docflowers Distributor Benefits Program. “Points” includes purchases made by the Distributor and purchases made by the Distributor’s personal Customers. Organization Points shall include the total sales Points of all Distributors in his or her marketing organization, but shall not include the Distributor’s Points.

b) At least 70% of an Distributor’s total monthly Points must be sold to end product consumers.

c) Docflowers recommends that Distributors service at least three to five retail Customers each rolling 5-week qualification period.

6.2 – No Territory Restrictions
There are no exclusive territories granted to anyone. No franchise fees are required.

6.3 – Sales Receipts
All Distributors must provide their retail Customers with two copies of an official Docflowers sales receipt at the time of sale. These receipts set forth the Customer Satisfaction Guarantee as well as any consumer protection rights afforded by federal or state law. Distributors must maintain all retail sales receipts for a period of two years and furnish them to Docflowers at the Company’s request. Records documenting the purchases of Distributors’ Customers and Internet Customers will be maintained by Docflowers.

Remember that Customers must receive two copies of the sales receipt. In addition, Distributors must orally inform the buyer of his or her cancellation rights.

SECTION 7 – BONUSES

7.1 – Bonus Qualifications
An Distributor must be active and in compliance with the Agreement to qualify for bonuses. So long as an Distributor complies with the terms of the Agreement, Docflowers shall pay bonuses to such Distributor in accordance with the Distributor Benefits Program. The minimum amount for which Docflowers will issue payment is $25. If an Distributor’s bonuses do not equal or exceed $25, the Company will accrue the bonuses and bonuses until they total $25. A payment will be issued once $25 has been accrued.

7.2 – Adjustment to Bonuses and Bonuses
7.2.1 – Adjustments for Returned Products
Distributors receive bonuses and bonuses based on the actual sales of products to end consumers. When a product is returned to Docflowers for a refund or is repurchased by the Company, the following may occur at the Company’s discretion: (1) any bonuses attributable to the returned or repurchased product(s) will be deducted, in the rolling 5-week period in which the refund is given, and continuing every pay period thereafter until the commission is recovered, from the Distributors who received bonuses on the sales of the refunded products; or (2) the Distributors who earned bonuses based on the sale of the returned products will have the corresponding Points deducted from their Organization Points in the next month and all subsequent months until it is completely recovered.

7.3 – Reports
All information provided by Docflowers in online or telephonic Downline activity reports, including but not limited to Points and Organization Points (or any part thereof), and Downline enrolling 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 Docflowers or any persons creating or transmitting the information.

ALL PERSONAL AND GROUP 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, Docflowers AND/OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION WILL IN NO EVENT BE LIABLE TO ANY AFFILIATE OR ANYONE ELSE FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT ARISE OUT OF THE USE OF OR ACCESS TO POINT AND ORGANIZATION POINT INFORMATION (INCLUDING BUT NOT LIMITED TO LOST PROFITS, BONUSES, LOSS OF OPPORTUNITY, AND DAMAGES THAT MAY RESULT FROM INACCURACY, INCOMPLETENESS, INCONVENIENCE, DELAY, OR LOSS OF THE USE OF THE INFORMATION), EVEN IF Docflowers 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, Docflowers 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 Docflowers’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 Docflowers’s online and telephone reporting services and your reliance upon the information.

SECTION 8 – PRODUCT GUARANTEES, RETURNS AND INVENTORY REPURCHASE

8.1 – Customer and Preferred Customer Product Guarantee
Docflowers offers a 100% 30 day money-back satisfaction guarantee (less shipping charges) to all Customers, or Customers who purchase product directly from the Company.

8.2 – Returns by Retail Customers
Docflowers offers, through its Distributors, a 100% 30-day money-back guarantee to all retail Customers. Every Distributor is bound to honor the retail Customer guarantee. If, for any reason, a retail Customer is dissatisfied with any Docflowers product, the retail Customer may return the unused portion of the product to the Distributor from whom it was purchased, within thirty (30) days, for a replacement, exchange or a full refund of the purchase price (including shipping costs). When an Distributor issues a refund to a retail Customer pursuant to this policy, the Distributor may return the product to Docflowers for an exchange. In order to receive the exchange, the Distributor must (a) return the product within 10 days of the date that the product was received from the retail Customer; and (b) send a copy of the retail sales receipt with the returned product.

A retail Customer who makes a purchase of $25.00 or more has three business days (72 hours) after the sale or execution of a contract to cancel the order and receive a full refund consistent with the cancellation notice on the order form. When an Distributor makes a sale or takes an order from a retail Customer who cancels or requests a refund within the 72 hour period, the Distributor must promptly refund the Customer’s money as long as the products are returned to the Distributor in substantially as good condition as when received. Additionally, Distributors must orally inform Customers of their right to rescind a purchase or an order within 72 hours, and ensure that the date of the order or purchase is entered on the order form. All retail Customers must be provided with two copies of an official Docflowers sales receipt at the time of the sale. The back of the receipt provides the Customer with written notice of his or her rights to cancel the sales agreement.

8.3 – Return of Inventory and Sales Aids by Distributors Upon Cancellation
Upon cancellation of an Distributor’s Agreement, the Distributor may return any products and sales aids held in his or her inventory for a refund. Distributors may only return products and sales aids that: (a) he or she personally purchased from Docflowers (purchases from other Distributors or third parties are not subject to refund); (b) are in Resalable condition (see Definition of “Resalable” below); and (c) were purchased within one year prior to the date of cancellation. Upon receipt of Resalable products and sales aids, the Distributor will be reimbursed 90% of the net cost of the original purchase price(s). Shipping charges incurred by an Distributor when the Starter Kit, products or sales aids were purchased will not be refunded. If the purchases were made through a credit card, the refund will be credited back to the same account. If an Distributor 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.

8.3.1 – Montana Residents
As with all Distributors, a Montana resident may cancel his or her Distributor Agreement at will.

8.4 – Procedures for All Returns
The following procedures apply to all returns for refund, repurchase, or exchange:

a) All merchandise must be returned by the Distributor or Customer who purchased it directly from Docflowers.
b) All products to be returned must have a Return Authorization Number which is obtained by calling the Distributor Services Department. This Return Authorization Number must be written on each carton returned.
c) The return must be accompanied by a copy of the original dated retail sales receipt.
d) 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 Docflowers shipping pre-paid. Docflowers does not accept shipping-collect packages. The risk of loss in shipping for returned product shall be on the Distributor. If returned product is not received by the Company’s Distribution Center, it is the responsibility of the Distributor to trace the shipment.
e) If an Distributor is returning merchandise to Docflowers that was returned to him or her by a personal retail Customer, the product must be received by Docflowers within ten (10) days from the date on which the retail Customer returned the merchandise to the Distributor, and must be accompanied by the sales receipt the Distributor gave to the Customer at the time of the sale.

No refund or replacement of product will be made if the conditions of these rules are not met.
SECTION 9 – DISPUTE RESOLUTION AND DISCIPLINARY PROCEEDINGS

9.1 – Disciplinary Sanctions
Violation of the Agreement, this Statement of Policies, 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 an Distributor that, in the sole discretion of the Company may damage its reputation or goodwill (such damaging act or omission need not be related to the Distributor’s Docflowers business), may result, at Docflowers ‘s discretion, in one or more of the following corrective measures:

• Issuance of a written warning or admonition;
• Requiring the Distributor to take immediate corrective measures;
• Imposition of a fine, which may be withheld from bonus checks;
• Loss of rights to one or more bonus checks;
• Withholding from an Distributor all or part of the Distributor’s bonuses during the period that Docflowers is investigating any conduct allegedly violative of the Agreement. If an Distributor’s business is canceled for disciplinary reasons, the Distributor will not be entitled to recover any bonuses withheld during the investigation period;
• Reassignment of all or part of their marketing organization.
• Suspension of the individual’s Distributor Agreement for one or more pay periods;
• Involuntary termination of the offender’s Distributor Agreement;
• Suspension and/or termination of the offending Distributor’s Docflowers website or website access;
• Any other measure expressly allowed within any provision of the Agreement or which Docflowers deems practicable to implement and appropriate to equitably resolve injuries caused partially or exclusively by the Distributor’s policy violation or contractual breach;
• In situations deemed appropriate by Docflowers, the Company may institute legal proceedings for monetary and/or equitable relief.

Each violation is reviewed on a case by case basis and all disciplinary actions are at the sole discretion of Docflowers. The Company will make every attempt to follow due process and allow the Distributor to defend their position and provide evidence that refutes any alleged violation(s).

9.2 – Grievances and Complaints
When an Distributor has a grievance or complaint with another Distributor regarding any practice or conduct in relationship to their respective Docflowers businesses, the complaining Distributor should first report the problem to his or her Enroller who should review the matter and try to resolve it with the other party’s Upline Enroller. If the matter involves interpretation or violation of Company policy, it must be reported in writing to the Compliance Department at the Company. The Compliance Department will review the facts and attempt to resolve the issue.

9.3 – Mediation
Prior to instituting arbitration, the parties shall meet in good faith and attempt to resolve any dispute arising from or relating to the Agreement through non-binding mediation. One individual who is mutually acceptable to the parties shall be appointed as mediator. The mediator’s fees and costs, as well as the costs of holding and conducting the mediation, shall be divided equally between the parties. Each party shall pay its portion of the anticipated shared fees and costs at least 10 days in advance of the mediation. Each party shall pay its own attorney’s fees, costs, and individual expenses associated with conducting and attending the mediation. Mediation shall be held in the city of Van Nuys, California and shall last no more than two business days.

9.4 – Arbitration
If mediation is unsuccessful, any controversy or claim arising out of or relating to the Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Distributors waive all rights to trial by jury or to any court. All arbitration proceedings shall be held in the city of Salt Lake City, Utah. All parties shall be entitled to all discovery rights pursuant to the Federal Rules of Civil Procedure. There shall be one arbitrator, an attorney at law, who shall have expertise in business law transactions with a strong preference being an attorney knowledgeable in the direct selling industry, selected from the panel which the American Arbitration Panel provides. Each party to the arbitration shall be responsible for its own costs and expenses of arbitration, including legal and filing fees. The decision of the arbitrator shall be final and binding on the parties and may, if necessary, be reduced to a judgment in any court of competent jurisdiction. This agreement to arbitration shall survive any termination or expiration of the Agreement.

Notwithstanding the foregoing, nothing in this Statement of Policies shall prevent Docflowers from applying to and obtaining from any court having jurisdiction a writ of attachment, a temporary injunction, preliminary injunction, permanent injunction or other relief available to safeguard and protect Docflowers ’s interest prior to, during or following the filing of any arbitration or other proceeding or pending the rendition of a decision or award in connection with any arbitration or other proceeding.

9.5 – Governing Law, Jurisdiction and Venue
Jurisdiction and venue of any matter not subject to arbitration shall reside exclusively in Salt Lake County, Utah. The Federal Arbitration Act shall govern all matters relating to arbitration. The law of the State of Utah shall govern all other matters relating to or arising from the Agreement. Notwithstanding the foregoing, and the mediation and arbitration provisions set forth in Sections 9.3 and 9.4 above, residents of the State of Louisiana shall be entitled to bring an action against Docflowers in their home forum and pursuant to Louisiana law.

SECTION 10 – PAYMENT AND SHIPPING

10.1 – Payments
Docflowers accepts payments in the forms of Visa, MasterCard, American Express or Discover Card. The Company will not process orders that are not accompanied by full and proper payment.

The Company will not be responsible for the loss of any bonuses or other payments because of declined payments, delays or errors in orders, charges, receiving agreements or other acts outside the control of the company.

10.2 – Restrictions on Third Party Use of Credit Cards and Checking Account Access
Distributors shall not permit other Distributors or Customers to use his or her credit card, or permit debits to their checking accounts, to Enroll in or to make purchases from the Company, unless an authorization letter is on file with the Company prior to the transaction.

10.3 – Sales Taxes
In designing the Docflowers opportunity, one of our guiding philosophies has been to free Distributors from as many administrative, operational, and logistical tasks as possible. In doing so, Distributors are free to concentrate on those activities that directly affect their incomes, namely product sales and enrollment activities. To these ends, Docflowers relieves Distributors of the burdens of collecting and remitting sales taxes, filing sales tax reports, and keeping records relative to sales taxes.

By virtue of its business operations, Docflowers is required to charge sales taxes on all purchases made by Distributors and Customers, and remit the taxes charged to the respective states. Accordingly, Docflowers will collect and remit sales taxes on behalf of Distributors, based on the suggested retail price of the products, according to applicable tax rates in the state or province to which the shipment is destined.

SECTION 11 – INACTIVITY, RECLASSIFICATION & CANCELLATION

11.1 – Effect of Cancellation
So long as an Distributor remains active and complies with the terms of the Distributor Agreement and this Statement of Policies, Docflowers shall pay bonuses to such Distributor in accordance with the Distributor Benefits Program. An Distributor’s bonuses constitute the entire consideration for the Distributor’s efforts in generating sales and all activities related to generating sales (including building a Downline organization). Following an Distributor’s cancellation for inactivity, or voluntary or involuntary cancellation of his or her Distributor Agreement (all of these methods are collectively referred to as “cancellation”), the former Distributor shall have no right, title, claim or interest to the marketing organization which he or she operated, or any bonus from the sales generated by the organization. An Distributor whose business is cancelled will lose all rights as an Distributor. This includes the right to sell Docflowers products and services and the right to receive future bonuses, or other income resulting from the sales and other activities of the Distributor’s former Downline sales organization. In the event of cancellation, Distributors agree to waive all rights they may have, including but not limited to property rights, to their former Downline organization and to any bonuses, bonuses or other remuneration derived from the sales and other activities of his or her former Downline organization.

Following an Distributor’s cancellation of his or her Distributor Agreement, the former Distributor shall not hold himself or herself out as an Docflowers Distributor and shall not have the right to sell Docflowers products or services. An Distributor whose Distributor Agreement is canceled shall receive bonuses and bonuses 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).

11.2 – Cancellation Due to Inactivity
If an Distributor has not earned a bonus for six consecutive months (and thus become “inactive”), his or her Distributor Agreement shall be canceled for inactivity and the Distributor shall be reclassified as a Customer.

11.2.1 – Reclassification Following Cancellation Due to Inactivity
If an Distributor does not earn a commission or bonus for six consecutive months, his or her Distributor Agreement will be cancelled for inactivity. If he or she is on the Company’s FlexiOrder program, the FlexiOrder agreement shall remain in force and the former Distributor shall be reclassified as a Customer. If the former Distributor was not on FlexiOrder, he or she will be reclassified as a Customer and entitled to continue purchasing products directly from the company at the Suggested Retail Price.

11.3 – Involuntary Cancellation
An Distributor’s violation of any of the terms of the Agreement, including any amendments that may be made by Docflowers in its sole discretion, may result in any of the sanctions listed in Section 9.1, including the involuntary cancellation of his or her Distributor Agreement. Cancellation shall be effective on the date on which written notice is mailed, faxed, or delivered to an express courier, to the Distributor’s last known address (or fax number), or to his/her attorney, or when the Distributor receives actual notice of cancellation, whichever occurs first.

Docflowers reserves the right to terminate all Distributor Agreements upon thirty (30) days written notice in the event that it elects to: (1) cease business operations; (2) dissolve as a corporate entity; or (3) terminate distribution of its products via direct selling.

11.4 – Voluntary Cancellation
A participant in this Distributor marketing plan has a right to cancel at any time, regardless of reason. Cancellation must be submitted in writing to the Company at its principal business address. The written notice must include the Distributor’s signature, printed name, address, and Distributor I.D. Number. If an Distributor was on the Company’s FlexiOrder program at the time of cancellation, the FlexiOrder agreement shall remain in force unless the Distributor also specifically requests that the FlexiOrder agreement be cancelled. If the former Distributor does not request that the FlexiOrder agreement be cancelled, he or she shall be reclassified as a Customer.

11.5 – Non-renewal
An Distributor may also voluntarily cancel his or her Distributor Agreement by failing to renew the online version of the Agreement at least annually. The Company may also elect not to renew an Distributor’s Agreement.

SECTION 12 – DEFINITIONS

Active Distributor — An Distributor who satisfies the minimum Point requirements, as set forth in the Docflowers Distributor Benefits Program, to ensure that he or she is eligible to receive bonuses and bonuses.

Active Rank — The term “active rank” refers to the current rank of an Distributor, as determined by the Docflowers Distributor Benefits Program, for any bonus qualification period. To be considered “active” relative to a particular rank, an Distributor must meet the criteria set forth in the Docflowers Distributor Benefits Program for his or her respective rank. (See the definition of “Rank” below.)

Agreement — The contract between the Company and each Distributor includes the Distributor Application and Agreement, the Docflowers Statement of Policies, the Docflowers Distributor Benefits Program, and the Business Entity Form (where appropriate), all in their current form and as amended by Docflowers in its sole discretion. These documents are collectively referred to as the “Agreement.”

FlexiOrder — A standing order that is automatically processed and shipped approximately every 30 days to Distributors participating in the FlexiOrder program. Payment for FlexiOrders is automatically charged to the participating Distributor’s credit or debit card, as specified by the Distributor. Participation in the FlexiOrder program is OPTIONAL for Distributors.

Automatic Telephone Dialing System: Any 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.

Cancel — The termination of an Distributor’s business. Cancellation may be either voluntary, involuntary, through non-renewal or inactivity.

Distributor Benefits Program: The guidelines and referenced literature for describing how Distributors can generate bonuses and bonuses.

Customers — Individuals or entities who purchase Docflowers products but do not enroll as Docflowers Distributors. Customers may purchase products at the Suggested Retail Price through an Distributor’s website or via the Docflowers Customer program.

Enroller — Also referred to as “Enroller”. An Distributor who introduces and enrolls a Customer, Preferred Customer, or a new Distributor to Docflowers and is listed as the Enroller on the Distributor Application and Agreement. Because of placement and spillover, the Enroller/Enroller might not also be the new Distributor’s Placement Upline. See the definition of “Placement” below.

Genealogy Report — A monthly report generated by Docflowers that provides critical data relating to the identities of Distributors, sales information, and enrollment activity of each Distributor’s Marketing Organization. This report contains confidential and trade secret information which is proprietary to Docflowers.

Points — The commissionable value of Docflowers products purchased directly from Docflowers through an Distributor’s binary organization. Group Volume does not include the Personal Volume of the subject Distributor. (Distributor Starter Kits and sales aids have no Point value.)

Immediate Household — Heads of household and dependent family members residing in the same house.

Leg — Each one of the individuals enrolled immediately underneath you and their respective marketing organizations represents one “Leg” in your marketing organization. Each Distributor has two Legs—a Left Leg and a Right Leg.

Level — The layers of Downline Distributors in a particular Distributor’s Marketing Organization. This term refers to the relationship of an Distributor relative to a particular Upline Distributor, determined by the number of Distributors between them who are related by enrollment or placement Enrollment. For example, if A enrolls B, who enrolls C, who enrolls D, who enrolls E, then E is on A’s fourth level.

Marketing Organization — The Customers, Customers and Distributors Enrolled below a particular Distributor.

Official Docflowers Material — Literature, audio or video tapes, and other materials developed, printed, published and distributed by Docflowers to Distributors.

Personal Production — Moving Docflowers products to an end consumer for personal use.

Points — An arbitrary value assigned to each Docflowers product that is used to track business activity, qualify for bonuses and bonuses, and calculate bonuses.

Points — The total volume of Points generated by an Distributor in a calendar month based on sales: (1) by the Company to the Distributor; and (2) by the Company to the Distributor’s Internet Customers and personally enrolled Customers. Points from personal Distributor purchases only contribute 30% toward meeting Point requirements.

Customer — A Customer uses Orders Docflowers products but does not engage in building a business.

Placement Upline — An Distributor under whom an Enroller or Enroller places a new Distributor, and is listed as the “Placement” on the Distributor or Customer Application and Agreement.

Recognition Title — The highest “title” that an Distributor has achieved pursuant to the Docflowers Distributor Benefits Program. Titles are used to recognize productivity at corporate events and in official publications and are permanent until a higher recognition title is achieved. May also be referred to as Recognition Rank, but can differ from an Distributor’s Active Rank (see definition of “Active Rank” above).

Recruit — For purposes of Docflowers ’s Conflict of Interest Policy (Section 4.9), the term “Recruit” means the actual or attempted Enrollment, solicitation, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another Docflowers Distributor or Customer to enroll or participate in another Distributor marketing or direct sales opportunity.

Resalable — Products and 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 sell the merchandise at full price; 4) it is returned to Docflowers within one year from the date of purchase; 5) the product contains current Docflowers labeling. Any merchandise that is clearly identified at the time of sale as nonreturnable, discontinued, or as a seasonal item, shall not be resalable.

Enroller — Also referred to as “Enroller”. An Distributor who introduces and enrolls a Customer, or another Distributor to Docflowers, and is listed as the Enroller on the Distributor Application and Agreement. because of placement, the Enroller might not also be the new Distributor’s Placement Upline (See “Placement Upline” above). The act of enrolling others and training them to become Distributors is called “enrolling.”

Upline — This term refers to the Distributor or Distributors above a particular Distributor in a Enrollment or placement line up to the Company. Conversely stated, it is the line of enrollers that links any particular Distributor to the Company.