1. These terms and conditions (this "Agreement") outline the relationship between Scent-Sations, Inc. ("SS") and persons authorized to sell SS Products (each a "Distributor") and the rights and obligations of the parties. Distributors are deemed to have agreed to the terms of this Agreement. Any violation of any term of this Agreement may result in the termination of the Distributor, in SS's sole and absolute discretion.
2. The Distributor is an authorized representative for the sale of SS products.
Distributor Sales and Commission Structure
3. Participation in Program. A Distributor can participate in the sale of SS products and build a downline of other Distributors in order to be eligible for commissions (the "Program") in one of two ways:
4. Commissions. Distributors earn income through the direct sale of SS products and through commissions from sales of SS products ("Commission"). A Distributor's Commission is based on the sales made by other Distributors that are sponsored by that Distributor ("Sponsored Distributors") and in turn, the number of Distributors sponsored by these Sponsored Distributors (collectively, the Distributor's "Downline").
The percentage of Commission earned on these sales is based on the number of Active Distributors in the Distributor's Downline. In order to receive Commission in any month, a Distributor must be an Active Distributor, defined below.
An individual is considered to be a Sponsored Distributor of a Distributor (the "Sponsor") when he or she enrolls in the Program and refers to that Distributor as its Sponsor.
5. Active Distributor. An "Active Distributor" is a Distributor who has a current volume of $39.95 in every month. "Current Volume" is based on sales of SS products to non-Distributors. Current Volume is not based on a minimum purchase of SS products.
6. Current Volume. In the event that a Distributor fails to produce a Current Volume of $39.95 in any month, that Distributor will not be eligible to receive Commission in that month. That Distributor, however, will not permanently lose the right to receive Commission from its Downline. In the event that a Distributor fails to produce a Current Volume of $39.95 in any two (2) months in any calendar year, SS reserves the right to transfer the right to receive Commission from its Downline to that Distributor's Sponsor (and if the Sponsor is no longer eligible, the next person in the Downline that is eligible to receive Commission) ("Roll-Up"). If a Distributor's Downline is subject to a Roll-Up, that Distributor shall continue to have the right to purchase SS products at Associate Program rates and may rebuild its Downline. SS may re-instate a Distributor's right to receive Commission from its Downline in certain exceptional instances, in its sole and absolute discretion.
A Distributor will not lose its ability to purchase SS products at Associate Program rates unless it is in violation of this Agreement. There are no purchase or sales minimums in order for a Distributor to remain in the Program.
7. Additional orders. All Distributors are required to sell seventy percent (70%) of purchased SS products to non-Distributors prior to placing any additional orders for SS products. If a COTM member does not sell at least seventy percent (70%) of the SS products it has previously purchased to non-Distributors in any month, that COTM member is expected to cancel its product order for the following month and become an Associate Program member until such time as that Distributor has sold seventy percent (70%) of its purchased SS products to non-Distributors. This Distributor shall have the right to reinstate its COTM membership at any time.
8. Sales Records. Distributors are required to track their sales of SS products. Distributors' sales records are subject to review by SS. In the event that a Distributor fails to submit its sales records to SS upon request by SS or in the event that the sales records reflect that significant purchases were made by the Distributor that were not sold to non-Distributors, that Distributor shall be terminated from the Program immediately.
Applications for Distributorship
9. Age of Majority. All Distributors must be at least eighteen (18) years of age.
10. Multiple Applications. If an applicant submits multiple applications listing multiple sponsors, only the first completed form to be received by SS will be accepted. All others will be considered null and void.
11. No Simultaneous Interest. No person or entity is permitted to be a party to more than one distributorship, including but not limited to members of corporations, boards, trusts, partnerships, DBAs and personal agreements.
12. Joint Application. When a joint application is submitted by any persons or entities other than a legally married couple, as defined under Canadian law, the application must be signed by one or more legal representative(s) who has the power to bind the applying entity. An individual or DBA may apply using his or her social insurance number or GST number, while a partnership, corporation or statutory trust must use its GST number. The application will be classified as pending until all the requested documentation has been received and approved by SS.
13. Divorce/Separation. If a couple sharing a distributorship becomes legally separated or divorced under the Canadian Family Law Act or similar, SS will continue to pay Commission in accordance with its established procedure until it receives written legal notice signed and notarized by the necessary parties, outlining how future Commission should be paid.
14. Corporations, Trusts and Partnerships, DBAs. Corporations, trusts, partnerships and DBAs are eligible to become a Distributor; however no one person may participate in more than one distributorship. A distributorship may change status from individual to corporation, trust, partnership or DBA or from one of these entities to any other entity, with proper and complete documentation. Such a change in organizational structure or status, however, shall not affect the original marketing organization and the succeeding structure shall continue to be sponsored by the same sponsor as the original entity.
15. Assumed Names. A person or entity may apply under a legally registered assumed name, provided that the application includes the signatures of all persons acting under or holding an interest in the assumed name.
Non-Competition and Non-Solicitation
16. Non-Solicitation. The Distributor may not directly contact or solicit a manufacturer or supplier of SS products. Distributors may be active in other businesses but are expressly prohibited from attempting to solicit any SS customers or Distributors to work in said business. Distributors shall not offer the SS business opportunity in conjunction with any business opportunity or incentive that is not owned by SS. Distributors shall not use names, addresses, e-mail addresses, or phone numbers of SS customers or Distributors to market any products, services or business opportunities that are not related to the Program. If a Distributor is found to be in violation of this provision, that Distributor will have all Distributor rights and privileges immediately revoked and will forfeit its Downline and any current or future Commissions due. That Distributor may additionally be subject to legal action. The Distributor acknowledges that any violation of this provision will result in the immediate termination of the Distributor from the Program.
17. Non-Competition. No Distributor shall sell or present for sale any products or services unrelated to SS or the Program ("Outside Products") or discuss, present, or promote any business opportunities unrelated to SS or the Program ("Outside Opportunities") at any SS meeting, function, or any SS-related activity (collectively, "SS Events"). Further, no Distributor shall sell or present for sale any Outside Products or discuss, present or promote any Outside Opportunities immediately preceding or following an SS Event on the same premises as the SS Event.
Distributor Status
18. Independent Contractor Status. All SS Distributors are independent contractors, whose success or failure depends upon their unique efforts. The Distributor, its agents and/or employees shall, under no circumstances, be treated as or deemed to be agents, employees, or corporate representatives of SS. Distributors are not franchisees, joint ventures, partners, employees, or agents of SS. Distributors are strictly prohibited from stating or implying either orally, electronically, in writing or in any other manner, that they are franchisees, joint ventures, partners or employees of SS. All Distributors shall at all times conform to all government regulations governing independent contractor status. Neither the Distributor nor SS shall have any right to enter into contracts or commitments in the name of, or on behalf of, the other to bind the other in any way. Distributors shall be responsible for the payment of all federal, provincial and municipal taxes and any other tax required under any taxing agency. Distributors are responsible for payment of all sales taxes. The Distributor indemnifies SS for any damages suffered as a result of the Distributor's violation of this provision.
Advertising
19. No Misrepresentation. All advertising must be truthful and accurate. The stating of exaggerated claims or misleading information will jeopardize the Distributor's status and may result in termination of the Distributor.
20. Representations as to Income. The Distributor shall never represent, imply or state that profits are guaranteed. The Distributor shall make clear (in any live, online or written presentation) that compensation is based upon the sales of SS products. The Distributor shall make clear that all income earned by a Distributor is earned through the Distributor's unique efforts. All statements relating to income must include a reference to income earned by a typical Distributor. Any advertising promoting or representing salaried positions, management positions, hourly wages or guaranteed incomes is considered misleading and is prohibited. Violation of this provision will result in immediate termination of the Distributor.
21. No claims. The Distributor shall not make claims about SS products. No claims about products shall be made except what is made in literature provided by SS.
22. Newspapers. Distributors may place classified advertisements in newspapers provided that facts are presented in a truthful and accurate manner.
23. Trade Shows, Fairs, and Booths. Distributors may promote their business and products at trade shows, fairs, and booths. SS reserves the right to approve any use of its name or trademarks on signs and banners. Such approval must be secured before opening of the show.
24. Labeling, Packaging and Displaying Products. The Distributor shall not re-label or re-package any SS products.
25. Intellectual Property. The SS name, SS product names and other names as may be adopted by SS are proprietary trade names, trademarks and service marks of Scent-Sations, Inc. (collectively, the "Intellectual Property"). Use of the Intellectual Property in any advertising, promotion, or other material that is not produced by SS is strictly prohibited, unless approved in writing in advance by SS. Distributors may use the SS name in telephone book listings, on business cards and stationary in the following manner:
Additional Provisions Regarding Sales
26. International Sales. Distributors are NOT currently authorized to make sales outside of the United States, Canada and/or territories of the United States. No distributor may, in any unauthorized country, (1) conduct sales, enrollment or training meetings (2) enroll or attempt to enroll customers or distributors (3) conduct any activity for the purpose of selling SS products, establishing a marketing organization, or promoting the Program. A Distributor's violation of this provision will result in immediate termination of the Distributor and may result in the initiation of legal action against the Distributor.
27. Transfer of Distributorship. SS strongly discourages the transfer of Distributors from one sponsor to another. If a sponsorship change is requested within thirty (30) business days of Distributor's enrollment in the Program, the Distributor must obtain the written consent of its Sponsor. After the first thirty (30) business days of enrollment, the Distributor must obtain the written consent of its Sponsor and its first five (5) Sponsored Distributors (provided there are 5). All five Distributors and the sponsor must consent to the change of Sponsor. SS reserves the right to move a Distributor who accidentally enrolls under the wrong Sponsor through the website. SS reserves the right to move the new Distributor under its intended Sponsor within seven (7) business days of enrollment.
28. Confidential Information. Distributor and customer lists are owned by SS and may never be used for any commercial purpose without prior written consent of SS, during the term of this Agreement and for ninety (90) days thereafter.
29. Inventory Loading. Distributors may not encourage others in the Program to purchase unreasonable amounts of SS products. Distributors have a duty to report any such conduct to SS immediately.
30. Product/Literature Return. Any Distributor that chooses to terminate its distributorship may return literature and/or products that are in resalable condition at any time within thirty (30) days of purchase and receive a refund of the purchase price, less a fifteen percent (15%) restocking fee. Shipping costs of returned items shall be borne by the Distributor. Refused items will be refunded less a thirty percent (31%) restocking fee. Payment will be made within thirty (30) days of actual receipt of returned items. Deposits are refundable upon written request within sixty (60) days of termination of Distributorship. Defective product(s) may be returned for full refund. Shipping costs will be borne by SS for defective products. All product returns must have a Return Authorization Number received by calling corporate prior to shipping defective product(s). SS will NOT refund or replace any product that is returned for any other reason other than a defective product. SS will honor refund policies provided by any federal or provincial law applicable to Distributor.
31. Internet Policies. Distributors promote their business on Internet web sites that are designed and provided by SS. Only official SS web sites shall be permitted. The Distributor shall not market any SS products on Ebay or any other Internet or auction site. If a Distributor has a personal web page or a web page for another business, the Distributor can place a SS approved banner, information logo or approved verbiage on such web site that will link to the Distributor's SS web site. No SS banners or any other materials relating to SS may be placed on any web site that contains any pornographic or obscene material, or material that, at SS sole discretion, would tarnish or damage its image or reputation. Violation of this provision will lead to immediate termination of the Distributor.
32. Distributor Payment Information. Payment terms on Distributor purchases (COTM members and Associate Program members) are cash, debit, or credit card (prepaid or credit) with the exception of the COTM program which only accepts credit or prepaid cards (debit cards are also accepted as long as they are backed by Visa or Mastercard.) No credit purchases or C.O.D.s or personal checks are accepted. COTM members must maintain a valid credit card number on file for the monthly Autoship. If a COTM member's credit card declines for any reason, SS will continue to attempt to charge the credit card on file. Any changes to corporate data on file must be requested in writing via written correspondence, fax or email. Any cancellations, downgrades, holds, address or credit card changes MUST be received by the last business day of the month BEFORE the next set of Autoships run and they must be received by 12:00 PM EASTERN time to be in effect before the COTM Autoship runs the following business day. This applies to Autoships that run on the first AS WELL AS the 10th of the month.
33. Franchises. There are no franchises or exclusive territories within the United States or Canada as a part of SS's compensation plan. This does not limit SS from establishing licensed distribution points or other types of centers to assist in the development and operation of company programs.
34. Lead Assignment. SS is available to speak with all prospects who contact the home office. SS attempts to connect each prospect with a representative as soon as possible. If the lead does NOT know who prospected it SS will label it as an "orphan" and assign such leads to Distributors based on leadership status.
General Provisions
35. Consent to use of Information. By submitting any information such as an e-mail address or mailing address, the Distributor agrees to be on SS's mailing list, unless Distributor notifies SS otherwise.
36. Amendments to Agreement. SS shall have the right to amend this Agreement from time to time.
37. Assignment. A Distributorship can be inherited or bequeathed, but cannot be transferred or assigned during the lifetime of the Distributor without the prior written consent of SS, which consent will not be unreasonably withheld.
38. Governing Law. This agreement is governed under laws of the state of Pennsylvania. The parties agree that any claim, dispute or other difference between them shall be exclusively resolved by binding arbitration pursuant to Commercial Arbitration Rules of the American Arbitration Association with arbitration to occur in Wilkes Barre, Pennsylvania. Louisiana Distributors arbitrate at New Orleans, Louisiana.
39. Monthly Contest
This Agreement shall take effect upon the receipt and acceptance of the same by SS at its registered office in Wilkes-Barre, Pennsylvania.
Revised: 10/02/2008