AMA Nation Independent Associate
Policies and Procedures
America Approved Energy
Services Direct, LLC.
STATEMENT OF POLICIES and PROCEDURES
Effective 12-1-2009
SECTION 1 - CORPORATE MISSION STATEMENT
Our mission is to deliver products, services, and information to consumers about the benefits of energy savings. We expect each member of our company and family to be committed to excellence and to acting and operating with the highest moral and ethical standards. We also expect everyone to have fun and be proud of what we are building.
SECTION 2 - INTRODUCTION
2.1 - Policies and Compensation Plan Incorporated into Consultant Agreement
These Policies and Procedures, in their present form and as amended at the sole discretion of America Approved Energy Services Direct, LLC. (hereafter "AAESD" or the "Company"), are incorporated into, and form an integral part of, the AAESD Consultant Agreement. Throughout these Policies, when the term "Agreement" is used, it collectively refers to the AAESD Independent Consultant Application and Agreement, these Policies and Procedures, the AAESD Marketing and Compensation Plan, and the AAESD Business Entity Registration Form (if applicable). These documents are incorporated by reference into the AAESD Consultant Agreement (all in their current form and as amended by AAESD). It is the responsibility of each Consultant to read, adhere to, and ensure that he or she is aware of and operating under the most current version of these Policies and Procedures. When sponsoring or enrolling a new Consultant, it is the responsibility of the sponsoring Consultant to ensure that the applicant is provided with, or has online access to, the most current version of these Policies and Procedures and the AAESD Marketing and Compensation Plan prior to his or her execution of the Consultant Agreement.
2.2 - Changes to the Agreement
AAESD reserves the right to amend the Agreement and its prices in its sole and absolute discretion. By signing the Consultant Agreement, a Consultant agrees to abide by all amendments or modifications that AAESD elects to make. Amendments shall be effective 30 days after publication of notice that the Agreement has been modified. Notification of amendments shall be published by one or more of the following methods: (1) posting on the Company's official web site; (2) electronic mail (e-mail); (3) fax-on-demand; (4) voice mail system broadcast; (5) inclusion in Company periodicals; (6) inclusion in product orders or bonus checks; or (7) special mailings. The continuation of a Consultant's AAESD business or a Consultant's acceptance of bonuses or commissions constitutes acceptance of any and all amendments.
2.3 - Delays
AAESD shall not be responsible for delays or failures in performance of its obligations when performance is made commercially impracticable due to circumstances beyond its reasonable control. This includes, without limitation, strikes, labor difficulties, riot, war, fire, death, curtailment of a party's source of supply, or government decrees or orders.
2.4 - Policies and Provisions Severable
If any provision of the Agreement, in its current form or as may be amended, is found to be invalid or unenforceable for any reason, only the invalid portion(s) of the provision shall be severed and the remaining terms and provisions shall remain in full force and effect. The severed provision, or portion thereof, shall be reformed to reflect the purpose of the provision as closely as possible.
2.5 - Waiver
The Company never gives up its right to insist on compliance with the Agreement and with the applicable laws governing the conduct of a business. No failure of AAESD to exercise any right or power under the Agreement or to insist upon strict compliance by a Consultant with any obligation or provision of the Agreement, and no custom or practice of the parties at variance with the terms of the Agreement, shall constitute a waiver of AAESD's right to demand exact compliance with the Agreement. Waiver by AAESD can be effectuated only in writing by an authorized officer of the Company. AAESD's waiver of any particular breach by a Consultant shall not affect or impair AAESD's rights with respect to any subsequent breach, nor shall it affect in any way the rights or obligations of any other Consultant. Nor shall any delay or omission by AAESD to exercise any right arising from a breach affect or impair AAESD's rights as to that or any subsequent breach.
The existence of any claim or cause of action of a Consultant against AAESD shall not constitute a defense to AAESD's enforcement of any term or provision of the Agreement.
SECTION 3 - BECOMING A CONSULTANT
3.1 - Requirements to Become a Consultant
To become an AAESD Consultant, each applicant must:
a) Be of the age of majority in his or her state of residence;
b) Reside in the United States, a U.S. Territory, or any country that AAESD has officially announced is open for business;
c) Have a valid Social Security or Federal Tax ID number;
d) Purchase an AAESD Starter Kit (optional in North Dakota);
e) Submit a properly completed Consultant Application and Agreement to AAESD either in hard copy or online format; and
f) Submit an IRS Form W-9. If a valid Form W-9 is not received by the Company within 60 days from the date of the Applicant's enrollment, the enrollment process will not be finalized
and the Applicant shall not be permitted to become a Consultant, sell AAESD products or services, or participate in the AAESD Compensation Plan.
3.2 - No Product Purchases Required
No person is required to purchase AAESD products, services or sales aids, or to pay any charge or fee to become a Consultant. In order to familiarize new Consultants with AAESD products, services, sales techniques, sales aids, and other matters, the Company requires that they purchase a Starter Kit. AAESD will repurchase Resalable kits from any Consultant who terminates his or her Consultant Agreement pursuant to the terms of Section 8.1.
3.3 - Consultant Benefits
Once a Consultant Application and Agreement has been accepted by AAESD, the benefits of the Marketing and Compensation Plan and the Consultant Agreement are available to the new Consultant. These benefits include the right to:
a) Sell AAESD products and services;
b) Participate in the AAESD Marketing and Compensation Plan (receive bonuses and commissions, if eligible);
c) Sponsor other individuals as Customers or Consultants into the AAESD business and thereby, build a Marketing Organization and progress through the AAESD Marketing and Compensation Plan;
d) Receive periodic AAESD literature and other AAESD communications;
e) Participate in AAESD-sponsored support, service, training, motivational and recognition functions, upon payment of appropriate charges, if applicable; and
f) Participate in promotional and incentive contests and programs sponsored by AAESD for its Consultants.
SECTION 4 - OPERATING AN AAESD BUSINESS
4.1 - Adherence to the AAESD Marketing and Compensation Plan
Consultants must adhere to the terms of the AAESD Marketing and Compensation Plan as set forth in official AAESD literature. Consultants shall not offer the AAESD opportunity through, or in combination with, any other system, program, or method of marketing other than that specifically set forth in official AAESD literature. Consultants shall not require or encourage other current or prospective Customers or Consultants to execute any agreement or contract other than official AAESD agreements and contracts in order to become an AAESD Consultant. Similarly, Consultants shall not require or encourage other current or prospective Customers or Consultants to make any purchase from, or payment to, any individual or other entity to participate in the AAESD Marketing and Compensation Plan other than those purchases or payments identified as recommended or required in official AAESD literature.
4.2 - Advertising
4.2.1 - General
All Consultants shall safeguard and promote the good reputation of AAESD and its products. The marketing and promotion of AAESD, the AAESD opportunity, the Marketing and Compensation Plan, AAESD products and services must avoid all discourteous, deceptive, misleading, unethical or immoral conduct or practices.
To promote both the products and services, and the income opportunity AAESD offers, Consultants must use the sales aids and support materials produced by AAESD. The Company has carefully designed its products, product labels, Marketing and Compensation Plan, and promotional materials to ensure that they are promoted in a fair and truthful manner, that they are substantiated, and that the materials comply with the requirements of federal and state laws.
ACCORDINGLY, CONSULTANTS MUST SUBMIT ALL WRITTEN SALES AIDS, PROMOTIONAL MATERIALS, ADVERTISEMENTS, AND OTHER LITERATURE TO THE COMPANY FOR APPROVAL. UNLESS THE CONSULTANT RECEIVES SPECIFIC WRITTEN APPROVAL TO USE SUCH TOOLS, THE REQUEST SHALL BE DEEMED DENIED.
AAESD will not permit Consultants to sell sales aids to other AAESD Consultants. Therefore, Consultants who receive authorization from AAESD to produce their own sales aids may not sell such material to any other AAESD Consultant. Consultants may make approved material available to other Consultants free of charge if they wish, but may not charge other AAESD Consultants for the material.
AAESD further reserves the right to rescind approval for any sales tools, promotional materials, advertisements, or other literature, and Consultants waive all claims for damages or remuneration arising from or relating to such rescission.
4.2.2 - Consultant Web Sites -
If a Consultant desires to utilize an Internet web page to promote his or her business, he or she may do so through the Company's replicated website program. This program permits Consultants to advertise on the Internet and to personalize the website with the Consultant's message and the Consultant's contact information. These websites seamlessly link directly to the official AAESD website giving the Consultant a professional and Company-approved presence on the Internet. A Consultant may independently design a website with prior written approval of AAESD, but any such website may not use the names, logos, or product descriptions of AAESD. A Consultant may not use "blind" ads on the Internet without prior written approval of AAESD. The use of any other Internet website or web page without prior written approval of AAESD to in any way promote the sale of AAESD products, the AAESD opportunity, or the Marketing and Compensation Plan is a breach of the Agreement and may result in any of the disciplinary sanctions set forth in Section 9.1.
4.2.3 - Blogs, Chat Rooms, Social Networks, Online Auctions, and other Online Forums Consultants may use online blogs, chat rooms and social networks sites to promote the opportunity and products of AAESD as long as the Consultant safeguards the good reputation of AAESD and its products. The marketing and promotion of AAESD, the AAESD opportunity, the Marketing and Compensation Plan, AAESD products and services must avoid all discourteous, deceptive, misleading, unethical or immoral conduct or practices.
4.2.4 - Domain Names and Email Addresses
Consultants may not use or attempt to register any of AAESD's trade names, trademarks, service names, service marks, product names, the Company's name, or any derivative thereof, for any Internet domain name. Nor may Consultants incorporate or attempt to incorporate any of the Company's trade names, trademarks, service names, service marks, product names, the Company's name, or any derivative thereof, into any electronic mail address.
4.2.5 - Trademarks and Copyrights
AAESD will not allow the use of its trade names, trademarks, designs, or symbols by any person, including AAESD Consultants, without its prior, written permission. Consultants may not produce for sale or distribution any recorded Company events and speeches without written permission from AAESD nor may Consultants reproduce for sale or for personal use any recording of Company-produced audio or video tape presentations.
4.2.6 - Media and Media Inquiries
Consultants must not attempt to respond to media inquiries regarding AAESD, its products or services, or their independent AAESD business. All inquiries by any type of media must be immediately referred to AAESD's Office of the President. This policy is designed to assure that accurate and consistent information is provided to the public as well as a proper public image.
4.2.7 - Unsolicited Email
AAESD does not permit Consultants to send unsolicited commercial emails unless such emails strictly comply with applicable laws and regulations including, without limitation, the federal CAN SPAM Act. Any email sent by a Consultant that promotes AAESD, the AAESD opportunity, or AAESD products and services must comply with the following:
a) There must be a functioning return email address to the sender.
b) There must be a notice in the email that advises the recipient that he or she may reply to the email, via the functioning return email address, to request that future email
solicitations or correspondence not be sent to him or her (a functioning "opt-out" notice).
c) The email must include the Consultant's physical mailing address.
d) The email must clearly and conspicuously disclose that the message is an advertisement or solicitation.
e) The use of deceptive subject lines and/or false header information is prohibited.
f) All opt-out requests, whether received by email or regular mail, must be honored. If a Consultant receives an opt-out request from a recipient of an email, the Consultant must forward the opt-out request to the Company.
AAESD may periodically send commercial emails on behalf of Consultants. By entering into the Consultant Agreement, Consultant agrees that the Company may send such emails and that the Consultant's physical and email addresses will be included in such emails as outlined above. Consultants shall honor opt-out requests generated as a result of such emails sent by the Company.
4.2.8 - Unsolicited Faxes
Except as provided in this section, Consultants may not use or transmit unsolicited faxes or use an automatic telephone dialing system relative to the operation of their AAESD businesses. The term "automatic telephone dialing system" means equipment which has the capacity to: (a) store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers. The term "unsolicited faxes" means the transmission via telephone facsimile of any material or information advertising or promoting AAESD, its products, the Marketing and Compensation Plan or any other aspect of the company which is transmitted to any person, except that these terms do not include a fax: (a) to any person with that person's prior express invitation or permission; or (b) to any person with whom the Consultant has an established business or personal relationship. The term "established business or personal relationship" means a prior or existing relationship formed by a voluntary two way communication between a Consultant and a person, on the basis of: (a) an inquiry, application, purchase or transaction by the person regarding products offered by such Consultant; or (b) a personal or familial relationship, which relationship has not been previously terminated by either party.
4.2.9 - Use of AAESD Trademarks and Trade Names
The name of AAESD and other names as may be adopted by AAESD are proprietary trade names, trademarks and service marks of AAESD. As such, these marks are of great value to AAESD and are supplied to Consultants for their use only in an expressly authorized manner. Use of AAESD name on any item not produced by the Company is prohibited except as follows:
Consultant's Name
Independent AAESD Consultant
Consultants may list themselves as an "Independent AAESD Consultant" in the white or yellow pages of the telephone directory under their own name. No Consultant may place telephone directory display ads using AAESD's name or logo. Consultants may not answer the telephone by saying "AAESD", "AAESD LLC", or in any other manner that would lead the caller to believe that he or she has reached corporate offices of AAESD.
4.3 - Bonus Buying Prohibited
Bonus buying is strictly and absolutely prohibited. "Bonus buying" includes any mechanism or artifice to qualify for rank advancement, incentives, prizes, commissions or bonuses that is not driven by bona fide product or service purchases by end user consumers. This includes the submission of an unauthorized request for service of an individual's or entity's electric service provider ("slamming").
4.4 - Business Entities
A corporation, limited liability company (LLC), partnership or trust (collectively referred to in this section as a "Business Entity") may apply to be an AAESD Consultant by submitting a Consultant Application and Agreement, a properly completed Business Entity Registration Form, and a properly completed IRS Form W-9 to AAESD. If a Consultant enrolls online, the Business Entity Registration Form and the IRS Form W-9 must be submitted to AAESD within 30 days of the online enrollment. The IRS Form W-9 can be submitted electronically or via hard copy. (If the Form W-9 is not received within the 30-day period, the Consultant Agreement shall automatically terminate.) The Business Entity Registration Form must be signed by all of the shareholders, members, partners, trustees, or other parties with any ownership interest in, or management responsibilities for, the Business Entity (collectively "Affiliated Parties"). The Business Entity, as well as all Affiliated Parties, is individually, jointly and severally liable for any indebtedness to AAESD, compliance with the AAESD Policies and Procedures, the AAESD Consultant Agreement, and all other obligations to AAESD.
To prevent the circumvention of Sections 4.26 (regarding transfers and assignments of AAESD business) and 4.5 (regarding Sponsorship Changes), if any Affiliated Party wants to terminate his or her relationship with the Business Entity or AAESD, the Affiliated Party must terminate his or her affiliation with the Business Entity, notify AAESD in writing that he or she has terminated his/her affiliation with the Business Entity, and must comply with the provisions of Section 4.25. In addition, the party foregoing their interest in the Business Entity may not participate in any other AAESD business for six consecutive calendar months in accordance with Section 4.5.3. If the Business Entity wishes to bring on any new Affiliated Party, it must adhere to the requirements of Section 4.25.
The modifications permitted within the scope of this Section 4.4 do not include a change of sponsorship. Changes of sponsorship are addressed in Section 4.5, below.
4.4.1 - Changes to a Business Entity
An AAESD business may change its status under the same sponsor from an individual to a partnership, LLC, corporation or trust, or from one type of entity to another. There is a $25.00 fee for each change requested, which must be included with the written request and the completed Consultant Application and Agreement. Such changes shall be processed only once per year and must be submitted by November 30 to become effective on January 1 of the following year. In addition, Consultants operating their AAESD businesses utilizing a business entity must notify AAESD of the addition or removal of any officers, directors, shareholders, managers, members or business associates of the business entity. AAESD may, at its discretion, require notarized documents before implementing any changes to an independent AAESD business. Please allow 30 days after the receipt of the request by AAESD for processing.
4.5 - Change of Sponsor
To protect the integrity of all Marketing Organizations and safeguard the hard work of all Consultants, AAESD strongly discourages changes in sponsorship. Maintaining the integrity of sponsorship is critical for the success of every Consultant and Marketing Organization. Accordingly, the transfer of an AAESD business from one sponsor to another is rarely permitted.
Requests for change of sponsorship must be submitted in writing to the Consultant Services Department, and must include the reason for the transfer. Transfers will only be considered in the following three circumstances:
4.5.1 - Misplacement
In cases in which the new Consultant is sponsored by someone other than the individual he or she was led to believe would be his or her Sponsor, a Consultant may request that he or she be transferred to another organization with his or her entire Marketing Organization intact. Requests for transfer under this policy will be evaluated on a case-by-case basis and must be made within 60 days from the date of enrollment. The Consultant requesting the change has the burden of proving that he or she was placed beneath the wrong sponsor. It is up to AAESD's discretion whether the requested change will be implemented.
4.5.2 - Upline Approval
The Consultant seeking to transfer submits a properly completed and fully executed Sponsorship Transfer Form which includes the written approval of his or her immediate Five (5) upline Consultants. Photocopied or facsimile signatures are not acceptable. All Consultant signatures must be notarized. The Consultant who requests the transfer must submit a fee of $50.00 for administrative charges and data processing. If the transferring Consultant also wants to move any of the Consultants in his or her Marketing Organization, each downline Consultant must also obtain a properly completed Sponsorship Transfer Form and return it to AAESD with the $50.00 change fee (i.e., the transferring Consultant and each Consultant in his or her Marketing Organization multiplied by $50.00 is the cost to move an AAESD business.) Downline Consultants will not be moved with the transferring Consultant unless all of the requirements of this paragraph are met. Transferring Consultants must allow thirty (30) days after the receipt of the Sponsorship Transfer Forms by AAESD for processing and verifying change requests.
In cases wherein the appropriate sponsorship change procedures have not been followed, and a Marketing Organization has been developed in the second business developed by a Consultant, AAESD reserves the sole and exclusive right to determine the final disposition of the Marketing Organization. Resolving conflicts over the proper placement of a downline that has developed under an organization that has improperly switched sponsors is often extremely difficult. Therefore, CONSULTANTS WAIVE ANY AND ALL CLAIMS AGAINST AAESD THAT RELATE TO OR ARISE FROM AAESD'S DECISION REGARDING THE DISPOSITION OF ANY MARKETING ORGANIZATION THAT DEVELOPS BELOW AN ORGANIZATION THAT HAS IMPROPERLY CHANGED LINES OF SPONSORSHIP.
4.5.3 - Cancellation and Re-application
A Consultant may legitimately change organizations by voluntarily cancelling his or her AAESD business and remaining inactive (i.e., no purchases of AAESD products for resale, no sales of AAESD products, no sponsoring, no attendance at any AAESD functions, and no participation in any other form of Consultant activity or operation of any other AAESD business) for six (6) full calendar months. Following the six month period of inactivity, the former Consultant may reapply under a new Sponsor, however, the former Consultant's Marketing Organization will remain in the original line of sponsorship. AAESD will consider waiving the six month waiting period under exceptional circumstances. Such requests for waiver must be submitted to AAESD in writing.
4.6 - Unauthorized Claims and Actions
4.6.1 - Indemnification
A Consultant is fully responsible for all of his or her verbal and written statements made regarding AAESD products, services, and the Marketing and Compensation Plan which are not expressly contained in official AAESD materials. Consultants agree to indemnify AAESD and AAESD'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 AAESD as a result of the Consultant's unauthorized representations or actions. This provision shall survive the termination of the Consultant Agreement.
4.6.2 - Product/Service Claims
No claims (which include personal testimonials) as to benefits or properties of any products or services offered by AAESD may be made except those contained in official AAESD literature.
4.6.3 - Claiming to be a Customer
Consultants are strictly prohibited from holding themselves out as a Customer. Consultants shall neither perform third-party verification ("TPV") for the real Customer nor interfere with TPV by guiding a Customer's answers or remaining on the line during the recorded TPV call. Consultants shall not complete or fill-in any enrollment documents for a Customer, sign any enrollment documents for a Customer, or act on behalf of the Customer.
4.6.4 - Income Claims
Because AAESD Consultants do not have the data necessary to comply with the legal requirements for making income claims, a Consultant, when presenting or discussing the AAESD opportunity or Marketing and Compensation Plan to a prospective Consultant, may not make income projections, income claims, or disclose his or her AAESD income (including the showing of checks, copies of checks, bank statements, or tax records).
4.6.5 - Income Disclosure Statement
AAESD's corporate ethics compel us to do not merely what is legally required, but rather, to conduct the absolute best business practices. To this end, we will develop the AAESD Income Disclosure Statement ("IDS") as soon as we have sufficient date with which to prepare it. (NOTE -- The AAESD IDS will be available shortly after the six month anniversary of AAESD's official launch. The requirements of this section need not be met until after the AAESD IDS is available.) The AAESD IDS will convey truthful, timely, and comprehensive information regarding the income that AAESD Consultants earn. In order to accomplish this objective, a copy of the IDS must be presented to all prospective Consultants (when it becomes available).
A copy of the IDS must be presented to a prospective Consultant (someone who is not a party to a current AAESD Consultant Agreement) anytime the Compensation Plan is presented or discussed, or any type of income claim or earnings representation is made.
The terms "income claim" and/or "earnings representation" (collectively "income claim") include: (1) statements of average earnings, (2) statements of actual earnings, (3) statements of non-average or non-actual earnings (projected earnings), (4) statements of earnings ranges, (5) income testimonials, (6) lifestyle claims, and (7) hypothetical claims.
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 AAESD income exceeded my salary after six months in the business," or "Our AAESD business has allowed my wife to come home and be a full-time mom" also fall within the purview of "lifestyle" claims.
In any non-public meeting (e.g., a home meeting, one-on-one, regardless of venue) with a prospective Consultant or Consultants in which the Compensation Plan 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 Compensation Plan is discussed or any type of income claims is made, you must provide every prospective Consultant 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 Compensation Plan or the making of an income claim.
When it becomes available, copies of the IDS may be printed or downloaded without charge from the corporate website at http://AMANation.com.
Consultants who develop sales aids and tools in which the Compensation Plan or income claims are present must incorporate the IDS into each such sales aid or tool prior to submission to the Company for review.
Consultants may display and/or sell AAESD products at trade shows and professional expositions. Before submitting a deposit to the event promoter, Consultants must contact the Consultant Services Department in writing for conditional approval, as AAESD's policy is to authorize only one AAESD business per event. Final approval will be granted to the first Consultant who submits an official advertisement of the event, a copy of the contract signed by both the Consultant and the event official, and a receipt indicating that a deposit for the booth has been paid. Approval is given only for the event specified. Any requests to participate in future events must again be submitted to the Consultant Services Department. AAESD further reserves the right to refuse authorization to participate at any function which it does not deem a suitable forum for the promotion of its products, services, or the AAESD opportunity. Approval will not be given for swap meets, garage sales, flea markets or farmer's markets as these events are not conducive to the professional image AAESD wishes to portray.
4.8 - Conflicts of Interest
AAESD Consultants are free to participate in other multilevel or network marketing business ventures or marketing opportunities (collectively "network marketing"). However, during the term of this Agreement, Consultants may not directly or indirectly Recruit other AAESD Consultants or Customers for any other network marketing business.
Following the cancellation of a Consultant's Independent Consultant Agreement, and for a period of six calendar months thereafter, with the exception of a Consultant who was personally sponsored by the former Consultant, a former Consultant may not Recruit any AAESD Consultant or Customer for another network marketing business. Consultants and the Company recognize that because network marketing is conducted through networks of independent contractors dispersed across the entire United States and internationally, and business is commonly conducted via the internet and telephone, an effort to narrowly limit the geographic scope of this non-solicitation provision would render it wholly ineffective. Therefore, Consultants and AAESD agree that this non-solicitation provision shall apply to all markets in which AAESD conducts business.
The term "Recruit" means the actual or attempted sponsorship, solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another AAESD Consultant or Customer to enroll or participate in another multilevel marketing, network marketing or direct sales opportunity. The conduct described in the preceding sentence constitutes recruiting even if the Consultant's actions are in response to an inquiry made by another Consultant or Customer.
4.8.2 - Consultant Participation in Other Direct Selling Programs If a Consultant is engaged in other non-AAESD direct selling programs, it is the responsibility of the Consultant to ensure that his or her AAESD business is operated entirely separate and apart from any other program in which the Consultant participates. To this end, the following must be adhered to:
a) Consultants shall not display AAESD promotional materials, sales aids, products or services with or in the same location as any non-AAESD promotional materials, sales aids, products or services. b) Consultants shall not offer the AAESD opportunity, products or services to prospective or existing Customers or Consultants in conjunction with any non-AAESD program, opportunity, product or service. c) Consultants may not offer any non-AAESD opportunity, products, services, or opportunity at any AAESD-related meeting, seminar or convention, or within two hours and a five mile radius of the AAESD event. If the AAESD meeting is held telephonically or on the internet, any non-AAESD meeting must be at least two hours before or after the AAESD meeting, and on a different conference telephone number or internet web address from the AAESD meeting.
Downline Activity Reports are available for Consultant access and viewing at the Back Office of each Consultant's replicated AAESD website. Consultant 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 AAESD. Downline Activity Reports are provided to Consultants in strictest confidence and are made available to Consultants for the sole purpose of assisting Consultants in working with their respective Marketing Organizations in the development of their AAESD business. Consultants should use their Downline Activity Reports to assist, motivate, and train their downline Consultants. The Consultant and AAESD agree that, but for this agreement of confidentiality and nondisclosure, AAESD would not provide Downline Activity Reports to the Consultant. A Consultant 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 contained in any Downline Activity Report to compete with AAESD or for any purpose other than promoting or supporting his or her AAESD business; or
d) Recruit or solicit any Consultant or Customer listed on any Downline Activity Report, or in any manner attempt to influence or induce any Consultant or Customer to alter their
business relationship with AAESD.
4.8.4 Buying Customers and Side Deals – Buying customers or paying others not contracted with AAESD to solicit customers on your behalf is strictly forbidden. Side deals include any attempt to circumvent the compensation plan by paying a person or entity to enroll customers on your behalf.
Upon demand by the Company, any current or former Consultant will return the original and all copies of Downline Activity Reports to the Company.
4.9 - Targeting Other Direct Sellers
AAESD does not condone Consultants specifically or consciously targeting the sales force of another direct sales company to sell AAESD products or to become Consultants for AAESD, nor does AAESD condone Consultants 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 Consultants engage in such activity, they bear the risk of being sued by the other direct sales company. If any lawsuit, arbitration or mediation is brought against a Consultant alleging that he or she engaged in inappropriate recruiting activity of its sales force or customers, AAESD will not pay any of Consultant's defense costs or legal fees, nor will AAESD indemnify the Consultant for any judgment, award, or settlement.
4.10 - Cross-Sponsoring
Actual or attempted cross sponsoring is strictly prohibited. "Cross sponsoring" is defined as the enrollment or attempted enrollment of an individual who or entity that already has a current Customer or Consultant Agreement on file with AAESD, or who has had such an agreement within the preceding six calendar months, within a different line of sponsorship. The use of a spouse's or relative's name, trade names, DBAs, assumed names, corporations, partnerships, trusts, federal ID numbers, fictitious ID numbers or any straw-man or other artifice to circumvent this policy is prohibited. Consultants shall not demean, discredit or defame other AAESD Consultants in an attempt to entice another Consultant to become part of the first Consultant's Marketing Organization. This policy shall not prohibit a sponsorship change in accordance with Section 4.5.
If Cross Sponsoring is discovered, it must be brought to the Company's attention immediately. AAESD may take disciplinary action against the Consultant that changed organizations and/or those Consultants who encouraged or participated in the Cross Sponsoring. AAESD may also move all or part of the offending Consultant's Marketing Organization to his or her original Marketing Organization if the Company deems it equitable and feasible to do so. However, AAESD is under no obligation to move the Cross Sponsored Consultant's Marketing Organization, and the ultimate disposition of the organization remains within the sole discretion of AAESD. Consultants waive all claims and causes of action against AAESD arising from or relating to the disposition of the Cross Sponsored Consultant's Marketing Organization.
4.11 - Errors or Questions
If a Consultant has questions about or believes any errors have been made regarding commissions, bonuses, Downline Activity Reports, or charges, the Consultant must notify AAESD in writing within 60 days of the date of the purported error or incident in question. AAESD will not be responsible for any errors, omissions or problems not reported to the Company within 60 days.
Neither federal nor state regulatory agencies or officials "approve" or endorse any utility, direct selling, network marketing companies or programs. Therefore, Consultants shall not represent or imply that AAESD, its products or services, or its Marketing and Compensation Plan have been "approved," "endorsed" or otherwise sanctioned by any government agency.
4.13 - Holding Applications or Orders
Consultants must not manipulate enrollments of new applicants and purchases of products. All Consultant Applications and Agreements, and product orders must be sent to AAESD within 72 hours from the time they are signed by a Consultant or placed by a customer, respectively.
4.14 - Identification
All Consultants are required to provide their Social Security Number, or a Federal Employer Identification Number to AAESD on the Consultant Application and Agreement. Upon enrollment, the Company will provide a unique Consultant Identification Number to the Consultant by which he or she will be identified. This number will be used to place orders, and track commissions and bonuses.
4.15 - Income Taxes
Each Consultant is responsible for paying local, state and federal taxes on any income generated as an Independent Consultant. If an AAESD business is tax exempt, the Federal tax identification number must be provided to AAESD. Every year, AAESD will provide an IRS Form 1099 MISC (Non-employee Compensation) earnings statement to each U.S. resident who: 1) Had earnings of over $600 in the previous calendar year; or 2) Made purchases during the previous calendar year in excess of $5,000.
4.16 - Independent Contractor Status
Consultants are independent contractors, and are not purchasers of a franchise or a business opportunity. The agreement between AAESD and its Consultants does not create an employer/employee relationship, agency, partnership, or joint venture between the Company and the Consultant. Consultants shall not be treated as an employee for his or her services or for Federal or State tax purposes. All Consultants are responsible for paying local, state, and federal taxes due from all compensation earned as a Consultant of the Company. The Consultant has no authority (expressed or implied), to bind the Company to any obligation. Each Consultant shall establish his or her own goals, hours, and methods of sale, so long as he or she complies with the terms of the Consultant Agreement, these Policies and Procedures, and applicable laws.
You may wish to arrange insurance coverage for your business. Your homeowner's insurance policy does not cover business-related injuries, or the theft of or damage to inventory or business equipment. Contact your insurance agent to make certain that your business property is protected. This can often be accomplished with a simple "Business Pursuit" endorsement attached to your present home owner's policy.
4.18 - International Marketing
Because of critical legal, regulatory, and tax considerations, AAESD must limit the sale of AAESD products and services, and the presentation of the AAESD business to prospective customers and Consultants 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 Consultants to conduct business in markets not yet opened by AAESD would violate the concept of affording every Consultant the equal opportunity to expand internationally.
Accordingly, Consultants are authorized to offer AAESD products and services and to enroll Customers, only in the U.S. States in which AAESD is authorized to conduct business, as announced in official Company literature. Consultants are authorized to enroll Consultants only in the countries in which AAESD is authorized to conduct business. AAESD sales aids cannot be shipped into or sold in any foreign country. Consultants may sell, give, transfer, or distribute AAESD products or sales aids only in their home country. In addition, no Consultant may, in any unauthorized country: (a) conduct sales, enrollment or training meetings; (b) enroll or attempt to enroll potential Customers or Consultants; or (c) conduct any other activity for the purpose of selling AAESD products or services, establishing a Marketing Organization, or promoting the AAESD opportunity.
4.19 - Adherence to Laws and Ordinances
Consultants 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 Consultants because of the nature of their business. However, Consultants must obey those laws that do apply to them. If a city or county official tells a Consultant that an ordinance applies to him or her, the Consultant shall be polite and cooperative, and immediately send a copy of the ordinance to the Compliance Department of AAESD. In many cases there are exceptions to the ordinance that may apply to AAESD Consultants.
4.20 - Minors
A person who is recognized as a minor in his/her state of residence may not be an AAESD Consultant. Consultants shall not enroll or recruit minors into the AAESD program.
A Consultant may operate or have an ownership interest, legal or equitable, as a sole proprietorship, partner, shareholder, trustee, or beneficiary, in only one AAESD business. No individual may have, operate or receive compensation from more than one AAESD business. Individuals of the same family unit may not enter into or have an interest in more than one AAESD Business. A "family unit" is defined as spouses and dependent children living at or doing business at the same address.
In order to maintain the integrity of the AAESD Marketing and Compensation Plan, husbands and wives or common-law couples (collectively "spouses") who wish to become AAESD Consultants must be jointly sponsored as one AAESD business. Spouses, regardless of whether one or both are signatories to the Consultant Application and Agreement, may not own or operate any other AAESD business, either individually or jointly, nor may they participate directly or indirectly (as a shareholder, partner, trustee, trust beneficiary, or any other legal or equitable ownership) in the ownership or management of another AAESD business in any form.
An exception to the one business per Consultant/household rule will be considered on a case by case basis if two Consultants marry or in cases of a Consultant receiving an interest in another business through inheritance. Requests for exceptions to policy must be submitted in writing to the Office of the President.
If any member of a Consultant's immediate household engages in any activity which, if performed by the Consultant, would violate any provision of the Agreement, such activity will be deemed a violation by the Consultant and AAESD may take disciplinary action pursuant to these Policies and Procedures against the Consultant. Similarly, if any individual associated in any way with a Business Entity Consultant violates the Agreement, such action(s) will be deemed a violation by the Business Entity Consultant, and AAESD may take disciplinary action against the Business Entity. Likewise, if a Consultant enrolls in AAESD as a Business Entity, each shareholder, officer, member, partner, or other individual or entity with an ownership interest or management responsibility in the Business Entity shall be personally and individually bound to, and must comply with, the terms and conditions of the Agreement.
4.23 - Requests for Records
Any request from a Consultant 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.
4.24 - Roll-up of Marketing Organization
When a vacancy occurs in a Marketing Organization due to the termination of an AAESD business, each Consultant in the first level immediately below the terminated Consultant on the date of the cancellation will be moved to the first level ("front line") of the terminated Consultant's sponsor. For example, if A sponsors B, and B sponsors C1, C2, and C3, if B terminates her business, C1, C2, and C3 will "roll-up" to A and become part of A's first level.
4.25 - Sale, Transfer or Assignment of AAESD Business
Although an AAESD business is a privately owned, independently operated business, the sale, transfer or assignment of an AAESD business, and the sale, transfer, or assignment of an interest in a Business Entity that owns or operates an AAESD business, is subject to certain limitations. If a Consultant wishes to sell his or her AAESD business, or an individual or entity wishes to sell his or her interest in a Business Entity that owns or operates an AAESD business, the following criteria must be met:
a) The Company must be offered the right of first refusal to purchase the business under the same terms pursuant to which the Consultant receives a bona fide offer from a third-party purchaser.
b) The buyer or transferee must become a qualified AAESD Consultant. If the buyer is an active AAESD Consultant, he or she must first terminate his or her AAESD business and wait six calendar months before acquiring any interest in a different AAESD business.
c) Before the sale, transfer or assignment can be finalized and approved by AAESD, any debt obligations the selling party has with AAESD must be satisfied.
d) The selling party 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 AAESD business.
Prior to selling an AAESD business or a Business Entity interest, the selling party must notify AAESD's Compliance Department in writing and advise of his or her intent to sell the AAESD business or the Business Entity interest. The selling party must receive written approval from the Compliance Department before proceeding with the sale. AAESD reserves the right to request additional documentation that may be necessary to analyze the transaction between the buyer and seller. No changes in line of sponsorship can result from the sale or transfer of an AAESD business.
4.26 - Separation of an AAESD Business
AAESD Consultants sometimes operate their AAESD businesses as husband-wife partnerships, regular partnerships, corporations, LLCs, trusts, or other Business Entities. At such time as a marriage may end in divorce or a corporation, LLC, partnership, trust, or other Business Entity 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 sponsorship.
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 AAESD business pursuant to an assignment in writing whereby the relinquishing spouse, shareholders, partners or trustees authorize AAESD to deal directly and solely with the other spouse or non-relinquishing shareholder, partner or trustee.
b) The parties may continue to operate the AAESD business jointly on a "business-as-usual" basis, whereupon all compensation paid by AAESD 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 Marketing Organization of divorcing spouses or a dissolving business entity be divided. Similarly, under no circumstances will AAESD split commission and bonus checks between divorcing spouses or members of dissolving entities. AAESD will recognize only one Marketing Organization and will issue only one commission check per AAESD 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 commissions and ownership of the business in a timely fashion as determined by the Company, the Consultant Agreement shall be involuntarily canceled.
If a former spouse has completely relinquished all rights in the original AAESD business pursuant to a divorce, he or she is thereafter free to enroll under any sponsor 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 affiliate who retains no interest in the business must wait six calendar months from the date of the final dissolution before re-enrolling as a Consultant. In either case, the former spouse or business affiliate shall have no rights to any Consultants 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 Consultant.
CONSULTANTS MUST NEVER CHANGE, ALTER, OR SWITCH, OR ATTEMPT TO CHANGE, ALTER, OR SWITCH, THE SERVICE PROVIDER OF ANY INDIVIDUAL OR ENTITY TO AAESD OR ITS PROVIDER UNLESS SUCH INDIVIDUAL OR ENTITY HAS AUTHORIZED THE TRANSFER TO ANOTHER PROVIDER REPRESENTED BY AAESD BY SIGNING A LETTER OF AUTHORIZATION ("LOA") OR OTHER FORMS THAT MAY BE REQUIRED CONSENTING TO CHANGE TO AAESD'S SERVICE PROVIDER.
4.28 - Sponsoring
All active Consultants in good standing have the right to sponsor and enroll others into AAESD. Each prospective Customer or Consultant has the ultimate right to choose his or her own Sponsor. If two Consultants claim to be the Sponsor of the same new Consultant or Customer, the Company shall regard the first application received by the Company as controlling.
When sponsoring a new Consultant through the online enrollment process, the Sponsor may assist the applicant in filling-out the online application materials. However, the applicant must personally review and agree to the online application and agreement terms and conditions, AAESD's Policies and Procedures, and the AAESD Compensation Plan. The Sponsor may not fill-out the online application and agreement on behalf of the applicant or agree to these materials on behalf of the applicant.
4.30 - Succession
Upon the death or incapacitation of a Consultant, his or her business may be passed to his or her heirs. Appropriate legal documentation must be submitted to the Company to ensure the transfer is proper. Accordingly, a Consultant should consult an attorney to assist him or her in the preparation of a will or other testamentary instrument. Whenever an AAESD business is transferred by a will or other testamentary process, the beneficiary acquires the right to collect all bonuses and commissions of the deceased Consultant's Marketing Organization provided the following qualifications are met. The successor(s) must:
a) Execute a Consultant Agreement;
b) Comply with terms and provisions of the Agreement; and
c) Meet all of the qualifications for the deceased Consultant's status.
The devisee(s) must provide AAESD 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. AAESD will issue all bonus and commission checks and one 1099 to the business entity.
4.30.1 - Transfer Upon Death of a Consultant
To effectuate a testamentary transfer of an AAESD business, the executor of the estate of the deceased Consultant must provide the following to AAESD: (1) an original death certificate; (2) a notarized copy of the will or other instrument establishing the successor's (or successors') right to the AAESD business; (3) certified letters testamentary or a letter of administration appointing the executor; and (4) written instructions from the authorized executor to AAESD specifying to whom the business and income should be transferred.
4.30.2 - Transfer Upon Incapacitation of a Consultant
To effectuate a transfer of an AAESD business because of incapacity, the successor must provide the following to AAESD: (1) a notarized copy of an appointment as trustee; (2) a notarized copy of the trust document or other documentation establishing the trustee's right to administer the subject AAESD business; and (3) a completed Consultant Agreement executed by the trustee.
4.31 - Telemarketing Techniques
The Federal Trade Commission and the Federal Communications Commission each have laws that restrict telemarketing practices. Both federal agencies (as well as a number of states) have "do not call" regulations as part of their telemarketing laws. Although AAESD does not consider Consultants 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, Consultants must not engage in telemarketing in the operation of their AAESD businesses. The term "telemarketing" means the placing of one or more telephone calls to an individual or entity to induce the purchase of an AAESD product or service, or to recruit them for the AAESD opportunity. "Cold calls" made to prospective customers or Consultants that promote either AAESD's products or services or the AAESD opportunity constitute telemarketing and are prohibited. However, a telephone call(s) placed to a prospective customer or Consultant (a "prospect") is permissible under the following situations:
a) If the Consultant has an established business relationship with the prospect. An "established business relationship" is a relationship between a Consultant and a prospect based on the prospect's purchase, rental, or lease of goods or services from the Consultant, or a financial transaction between the prospect and the Consultant, 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 Consultant, within the three (3) months immediately preceding the date of such a call.
c) If the Consultant receives written and signed permission from the prospect authorizing the Consultant to call. The authorization must specify the telephone number(s) which the Consultant 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.
e) In addition, Consultants shall not use automatic telephone dialing systems relative to the operation of their AAESD businesses. The term "automatic telephone dialing system" means equipment which has the capacity to: (a) store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers.
4.32 - Back Office Access
AAESD makes online back offices available to its Consultants. Back offices provide Consultants access to confidential and proprietary information that may be used solely and exclusively to promote the development of a Consultant's AAESD business and to increase sales of AAESD products. However, access to a back office is a privilege, and not a right. AAESD reserves the right to deny Consultants' access to the back office at its sole discretion.
SECTION 5 - RESPONSIBILITIES OF CONSULTANTS
5.1 - Change of Contact Information
To ensure timely delivery of products, support materials, and commission checks, it is critically important that the AAESD's files are current. Street addresses are required for shipping. Consultants planning to change their contact information or move must update their contact information via the Back Office function of the Consultant's replicated AAESD website ~or~ send their new contact information to AAESD's Corporate Offices to the attention of the Consultant Services Department. To guarantee proper delivery, two weeks advance notice must be provided to AAESD on all changes.
5.2 - Continuing Development Obligations
5.2.1 - Ongoing Training
Any Consultant who sponsors another Consultant into AAESD must perform a bona fide assistance and training function to ensure that his or her Marketing Organization is properly operating his or her AAESD business. Consultants must have ongoing contact and communication with the Consultants in their Marketing Organizations. Examples of such contact and communication may include, but are not limited to: newsletters, written correspondence, personal meetings, telephone contact, voice mail, electronic mail, and the accompaniment of downline Consultants to AAESD meetings, training sessions, and other functions. Upline Consultants are also responsible to motivate and train new Consultants in AAESD product knowledge, effective sales techniques, the AAESD Marketing and Compensation Plan, and compliance with Company Policies and Procedures. Communication with and the training of downline Consultants must not, however, violate Section 4.2 (regarding the development of Consultant-produced sales aids and promotional materials).
Consultants should monitor the Consultants in their Marketing Organizations to guard against downline Consultants making improper product or business claims, or engaging in any illegal or inappropriate conduct.
5.2.2 - Increased Training Responsibilities
As Consultants progress through the various levels of leadership, they will become more experienced in sales techniques, product knowledge, and understanding of the AAESD program. They will be called upon to share this knowledge with lesser experienced Consultants within their organization.
5.2.3 - Ongoing Sales Responsibilities
Regardless of their level of achievement, Consultants have an ongoing obligation to continue to personally promote sales through the generation of new customers and through servicing their existing customers.
5.3 - Nondisparagement
AAESD wants to provide its Independent Consultants with the best products, compensation plan, and service in the industry. Accordingly, we value your constructive criticisms and comments. All such comments should be submitted in writing to the Office of the President. Remember, to best serve you, we must hear from you! While AAESD welcomes constructive input, negative comments and remarks made in the field by Consultants about the Company, its products, or Compensation Plan serve no purpose other than to sour the enthusiasm of other AAESD Consultants. For this reason, and to set the proper example for their Marketing Organization, Consultants must not disparage, demean, or make negative remarks about AAESD, other AAESD Consultants, AAESD's products, the Compensation Plan, or AAESD's directors, officers, or employees.
5.4 - Providing Documentation to Applicants
Consultants must provide the most current version of the Policies and Procedures and the Compensation Plan to individuals whom they are sponsoring to become Consultants before the applicant signs a Consultant Agreement. Additional copies of Policies and Procedures and Compensation Plan can be downloaded from AAESD's website.
5.5 - Reporting Policy Violations
Consultants observing a Policy violation by another Consultant should submit a written report of the violation directly to the attention of the AAESD Compliance Department. Details of the incidents such as dates, number of occurrences, persons involved, and any supporting documentation should be included in the report.
5.6 - Vendor Confidentiality/Communications
AAESD's business relationships with its marketing alliances, vendors, suppliers, Company associates or former employees within or outside the corporate workplace are confidential, proprietary, and not to be circumvented by either the Consultant or the vendor. A Consultant shall not contact, directly or indirectly, or speak to or communicate with any representative, agent, or employee of any supplier, vendor, agent, or former employee of AAESD except at an AAESD-sponsored event at which the representative is present at the request of AAESD or as otherwise expressly permitted in writing by AAESD. Violation of this provision may result in termination of the Consultant and possible claims of damages against the Consultant and/or the vendor. Questions regarding any of these businesses should be directed to the Compliance Department.
SECTION 6 - SALES REQUIREMENTS
6.1 - Product Sales
The AAESD Marketing and Compensation Plan is based on the sale of AAESD products and services to end consumers. Consultants must fulfill personal and Marketing Organization retail sales requirements (as well as meet other responsibilities set forth in the Agreement) to be eligible for bonuses, commissions and advancement to higher levels of achievement. The following sales requirements must be satisfied for Consultants to be eligible for commissions:
a) Consultants must satisfy the volume requirements to fulfill the requirements associated with their rank as specified in the AAESD Marketing and Compensation Plan. For the purposes of determining eligibility in the AAESD Marketing and Compensation Plan, only volume generated by AAESD Customers will count toward eligibility.
b) At least 70% of a Consultant's total monthly compensation must be derived from sales to retail Customers.
c) Consultants must develop or maintain at least five customers every month.
d) When enrolling customers, you must provide to them all of the costs involved with the service. This includes all of the following (if applicable):
i. Cost per kilowatt-hour or therm;
ii. Monthly service fees;
iii. One-time service fees;
iv. Taxes and surcharges;
v. Time-of-day or other usage limitations; and
vi. Other costs.
All of this information is available for download at the company website.
6.2 - No Territory Restrictions
There are no exclusive territories granted to anyone. No franchise fees are required.
6.3 - Sales Receipts
All Consultants must provide their retail customers with two copies of an official AAESD sales receipt at the time of the sale. These receipts set forth the Customer Satisfaction Guarantee as well as any consumer protection rights afforded by federal or state law. Records documenting the purchases of Consultants' Customers will be maintained by AAESD.
Remember that retail customers must receive two copies of the sales receipt. In addition, Consultants must orally inform the buyer of his or her cancellation rights.
SECTION 7 - BONUSES AND COMMISSIONS
A Consultant must be active and in compliance with the Agreement to qualify for bonuses and commissions. So long as a Consultant complies with the terms of the Agreement, AAESD shall pay commissions to such Consultant in accordance with the Marketing and Compensation Plan. AAESD uses pay cards to provide earned compensation to Consultants. At a Consultant's option, he or she may notify AAESD that he or she would prefer to be paid via a check. The minimum amount for which AAESD will issue a check is $50.00. If a Consultant's bonuses and commissions do not equal or exceed $50.00, the Company will accrue the commissions and bonuses until they total $50.00. A check will be issued once $50.00 has been accrued. AAESD may charge a $5.00 per check charge for Consultants that elect to be paid by check.
Notwithstanding the foregoing, all commissions and bonuses accrued on behalf of a Consultant, regardless of the amount, will be paid to the Consultant at the end of each fiscal year.
7.2 - Adjustment to Bonuses and Commissions
Consultants receive bonuses and commissions based on the actual sales of products and services to end consumers. When a product is returned to AAESD for a refund or repurchase, or a service is cancelled and the customer is entitled to a refund, either of the following may occur at the Company's discretion: (1) the bonuses and commissions attributable to the returned or repurchased product or the refunded service will be deducted, in the month in which the refund is given and continuing every pay period thereafter until the bonuses and commissions are recovered, from the Consultants who received bonuses and commissions on the sales of the refunded product or cancelled service; or (2) the Consultants who earned commissions or bonuses based on the sale of the returned product or cancelled service will have the corresponding points deducted from their Group Volume in the next month and all subsequent months until such points are completely recovered.
7.2.2 - Hard Copy Bonus and Commission Checks
The Company pays commissions and bonuses via direct deposit via direct payment onto a Company-provided debit card. There is no charge for such direct deposits. A Consultant may, however, request payment by hard-copy check. In that event, the Company will deduct a $5.00 processing fee from each hard-copy check issued to the Consultant.
7.2.3 - Tax Withholdings
If a Consultant fails to submit an IRS Form W-9, AAESD will deduct the necessary back-up withholdings from the Consultant's bonus and commission checks as required by law.
7.3 - Reports
All information provided by AAESD in online or telephonic Downline Activity Reports, including but not limited to personal and group sales volume (or any part thereof), and downline sponsoring activity is believed to be accurate and reliable. Nevertheless, due to various factors including, but not limited to, the inherent possibility of human, digital, 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 AAESD or any persons creating or transmitting the information.
ALL PERSONAL AND GROUP SALES VOLUME INFORMATION IS PROVIDED "AS IS" WITHOUT WARRANTIES, EXPRESS OR IMPLIED, OR REPRESENTATIONS OF ANY KIND WHATSOEVER. IN PARTICULAR BUT WITHOUT LIMITATION THERE SHALL BE NO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR USE, OR NON INFRINGEMENT.
TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, AAESD AND/OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION WILL IN NO EVENT BE LIABLE TO ANY CONSULTANT OR ANYONE ELSE FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT ARISE OUT OF THE USE OF OR ACCESS TO PERSONAL AND/OR GROUP SALES VOLUME INFORMATION (INCLUDING BUT NOT LIMITED TO LOST PROFITS, BONUSES, OR COMMISSIONS, LOSS OF OPPORTUNITY, AND DAMAGES THAT MAY RESULT FROM INACCURACY, INCOMPLETENESS, INCONVENIENCE, DELAY, OR LOSS OF THE USE OF THE INFORMATION), EVEN IF AAESD 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, AAESD 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 AAESD'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 AAESD's online and telephone reporting services and your reliance upon the information.
SECTION 8 - RETURNS AND REPURCHASES
8.1 - Return of Starter Kit and Sales Aids by Consultants Upon Cancellation Upon cancellation of a Consultant's Agreement, the Consultant may return his or her Starter Kit and sales aids for a refund. In order to receive a refund from AAESD pursuant to this policy, the following requirements must be met:
a) The items being returned must have been personally purchased by the Consultant from AAESD (purchases from other Consultants or third parties are not subject to refund); b) The items must be in Resalable condition (see Definition of "Resalable" below); and c) The items must have been purchased from AAESD within one year prior to the date of cancellation.
Upon receipt of a Resalable Starter Kit and/or Resalable sales aids, the Consultant will be reimbursed 90% of the net cost of the original purchase price(s). Shipping charges incurred by a Consultant when the items 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 a Consultant was paid a bonus or commission based on a product that he or she purchased, and such product is subsequently returned for a refund, the bonus and/or commission that was paid to the Consultant based on that product purchase will be deducted from the amount of the refund.
Starter Kits 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) they are returned to AAESD within one year from the date of purchase; and 5) the product contains current AAESD labeling. Any merchandise that is clearly identified at the time of sale as nonreturnable, discontinued, or as a seasonal item, shall not be Resalable.
8.1.1 - Montana Residents
A Montana resident may cancel his or her Consultant Agreement within 15 days from the date of enrollment, and may return his or her Starter Kit for a full refund within such time period.
8.2 - Procedures for All Returns
The following procedures apply to all returns for refund, repurchase, or exchange:
a) All merchandise must be returned by the Consultant who purchased it directly from AAESD.
b) All products to be returned must have a Return Authorization Number which is obtained by calling the Consultant Services Department. This Return Authorization Number must be written on each carton returned.
c) The return is accompanied by:
i. a completed and signed Return Form;
ii. a copy of the original dated retail sales receipt; and
iii. the item in its original container.
d) Proper shipping carton(s) and packing materials are to be used in packaging the items (s) being returned, and the best and most economical means of shipping is suggested. All returns must be shipped to AAESD shipping pre-paid. AAESD does not accept shipping-collect packages. The risk of loss in shipping for returned product shall be on the Consultant. If returned product is not received by the Company's Distribution Center, it is the responsibility of the Consultant to trace the shipment.
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, these Policies and Procedures, violation of any common law duty, including but not limited to any applicable duty of loyalty, any illegal, fraudulent, deceptive or unethical business conduct, or any act or omission by a Consultant that, in the sole discretion of the Company may damage its reputation or goodwill (such act or omission need not be related to the Consultant's AAESD business), may result, at AAESD's discretion, in one or more of the following corrective measures:
a) Issuance of a written warning or admonition;
b) Requiring the Consultant to take immediate corrective measures;
c) Imposition of a fine, which may be withheld from bonus and commission checks;
d) Loss of rights to one or more bonus and commission checks;
e) AAESD may withhold from a Consultant all or part of the Consultant's bonuses and commissions during the period that AAESD is investigating any conduct allegedly violative of the Agreement. If a Consultant's business is canceled for disciplinary reasons, the Consultant will not be entitled to recover any commissions withheld during the investigation period;
f) Suspension of the individual's Consultant Agreement for one or more pay periods;
g) Suspension and/or termination of the offending Consultant's AAESD website or website access;
h) Involuntary termination of the offender's Consultant Agreement; or
i) Any other measure expressly allowed within any provision of the Agreement or which AAESD deems practicable to implement and appropriate to equitably resolve injuries caused partially or exclusively by the Consultant's policy violation or contractual breach.
In situations deemed appropriate by AAESD, the Company may institute legal proceedings for monetary and/or equitable relief.
9.2 - Grievances and Complaints
When a Consultant has a grievance or complaint with another Consultant regarding any practice or conduct in relationship to their respective AAESD businesses, the complaining Consultant should first report the problem to his or her Sponsor who should review the matter and try to resolve it with the other party's upline sponsor. If the matter involves interpretation or violation of Company policy, it must be reported in writing to the Consultant Services Department at the Company. The Consultant Services Department will review the facts and attempt to resolve it.
9.3 - Mediation
Prior to instituting an arbitration as provided in Section 9.4 below, 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 attorneys fees, costs, and individual expenses associated with conducting and attending the mediation. Mediation shall be held in the City of Ft Myers, Florida 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. Consultants waive all rights to trial by jury or to any court. All arbitration proceedings shall be held in the City of Ft Myers, Florida, unless the laws of the state in which a Consultant resides expressly require the application of its laws, in which case the arbitration shall be held in the capital of that state. All parties shall be entitled to all discovery rights pursuant to the Federal Rules of Civil Procedure, and the Federal Rules of Evidence shall apply. 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 Association 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.
The parties and the arbitrator shall maintain the confidentiality of the entire arbitration process and shall not disclose to any person not directly involved in the arbitration process:
a) The substance of, or basis for, the controversy, dispute or claim;
b) The content of any testimony or other evidence presented at an arbitration hearing or obtained through discovery in arbitration;
c) The terms or amount of any arbitration award; or
d) The rulings of the arbitrator on the procedural and substantive issues involved in the case.
Notwithstanding the foregoing, nothing in these Policies and Procedures shall prevent AAESD 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 AAESD'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 Lee County, State of Florida. The Federal Arbitration Act shall govern all matters relating to arbitration. The law of the State of Florida shall govern all other matters relating to or arising from the Agreement.
9.5.1 - Louisiana Residents
Notwithstanding the foregoing and the mediation and arbitration provisions in Sections 9.3 and 9.4, residents of the State of Louisiana shall be entitled to bring an action against AAESD in their home forum and pursuant to Louisiana law.
SECTION 10 - PAYMENT AND SHIPPING
All checks returned by a Consultant's bank for insufficient funds will be re-submitted for payment. A $25.00 returned check fee will be charged to the account of the Consultant. After receiving a returned check from a customer or a Consultant, all future orders must be paid by Credit Card, money order or cashier's check. Any outstanding balance owed to AAESD by a Consultant for NSF checks and returned check fees will be withheld from subsequent bonus and commission checks.
10.2 - Restrictions on Third Party Use of Credit Cards and Checking Account Access
A Consultant shall not permit other Consultants or Customers to use his or her credit card, or permit debits to his or her checking accounts, to enroll or to make purchases from the Company.
10.3 - Sales Taxes
In designing the AAESD opportunity, one of our guiding philosophies has been to free Consultants from as many administrative, operational, and logistical tasks as possible. In doing so, Consultants are free to concentrate on those activities that directly affect their incomes, namely product sales and enrollment activities. To these ends, AAESD relieves Consultants 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, AAESD is required to charge sales taxes on all purchases made by Consultants and Customers, and remit the taxes charged to the respective states. Accordingly, AAESD will collect and remit sales taxes on behalf of Consultants, 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. If a Consultant has submitted, and AAESD has accepted, a current Sales Tax Exemption Certificate and Sales Tax Registration License, sales taxes will not be added to the invoice and the responsibility of collecting and remitting sales taxes to the appropriate authorities shall be on the Consultant. Exemption from the payment of sales tax is applicable only to orders which are shipped to a state for which the proper tax exemption papers have been filed and accepted. Applicable sales taxes will be charged on orders that are drop-shipped to another state. Any sales tax exemption accepted by AAESD is not retroactive.
SECTION 11 - INACTIVITY AND CANCELLATION
So long as a Consultant remains active and complies with the terms of the Consultant Agreement and these Policies and Procedures, AAESD shall pay commissions to such Consultant in accordance with the Marketing and Compensation Plan. A Consultant's bonuses and commissions constitute the entire consideration for the Consultant's efforts in generating sales and all activities related to generating sales (including building a Marketing Organization). Following a Consultant's non-renewal of his or her Consultant Agreement, cancellation for inactivity, or voluntary or involuntary cancellation of his or her Consultant Agreement (all of these methods are collectively referred to as "cancellation"), the former Consultant shall have no right, title, claim or interest to the Marketing Organization which he or she operated, or any commission or bonus from the sales generated by the organization. A Consultant whose business is cancelled will lose all rights as a Consultant. This includes the right to sell AAESD products and services and the right to receive future commissions, bonuses, or other income resulting from the sales and other activities of the Consultant's former Marketing Organization. In the event of cancellation, Consultants agree to waive all rights they may have, including but not limited to property rights, to their former Marketing Organization and to any bonuses, commissions or other remuneration derived from the sales and other activities of his or her former Marketing Organization.
Following a Consultant's cancellation of his or her Consultant Agreement, the former Consultant shall not hold himself or herself out as an AAESD Consultant and shall not have the right to sell AAESD products or services. A Consultant whose Consultant Agreement is canceled shall receive commissions 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).
If a Consultant has not earned a bonus or commission for six consecutive months (and thus become "inactive"), his or her Consultant Agreement shall be canceled for inactivity.
A Consultant's violation of any of the terms of the Agreement, including any amendments that may be made by AAESD in its sole discretion, may result in any of the sanctions listed in Section 9.1, including the involuntary cancellation of his or her Consultant Agreement. Cancellation shall be effective on the date on which written notice is mailed, emailed, faxed, or delivered to an express courier for delivery, to the Consultant's last known address, email address, or fax number, or to his or her attorney, or when the Consultant receives actual notice of cancellation, whichever occurs first.
AAESD reserves the right to terminate all Consultant 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.
A participant in this network 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 Consultant's signature, printed name, address, and Consultant I.D. Number.
11.5 - Exceptions to Activity Requirements
11.5.1 - Maternity
A Consultant shall be exempt from meeting her or his Personal Volume and Group Volume requirements for a period of four (4) months following the birth or adoption of a child.
11.5.2 - Military Deployment
Military personnel shall be exempt from meeting their Personal Volume and Group Volume requirements during the term of active duty deployment into a foreign country.
SECTION 12 - DEFINITIONS
Active Customer - A Customer who purchases AAESD products or energy through an AAESD Provider.
Active Consultant - A Consultant who satisfies the minimum group volume requirements, as set forth in the AAESD Marketing and Compensation Plan, to ensure that he or she is eligible to receive bonuses and commissions for a particular month.
Active Rank - The term "active rank" refers to the current rank of a Consultant, as determined by the AAESD Marketing and Compensation Plan, for any month. To be considered "active" relative to a particular rank, a Consultant must meet the criteria set forth in the AAESD Marketing and Compensation Plan for his or her respective rank. (See the definition of "Rank" below.)
Agreement - The contract between the Company and each Consultant includes the Consultant Application and Agreement, the AAESD Policies and Procedures, the AAESD Marketing and Compensation Plan, and the Business Entity Registration Form (where appropriate), all in their current form and as amended by AAESD in its sole discretion. These documents are collectively referred to as the "Agreement."
Cancel - The termination of a Consultant's business. Cancellation may be either voluntary, involuntary, through non-renewal or inactivity.
Customer - An individual who registers with AAESD as a Customer pursuant to AAESD's Customer Program.
Downline Activity Report - An online report generated by AAESD that provides critical data relating to the identities of Consultants, sales information, and enrollment activity of each Consultant's Marketing Organization. This report contains confidential and trade secret information which is proprietary to AAESD.
Downline Leg - Each one of the individuals enrolled immediately underneath you and their respective Marketing Organizations represents one "leg" in your Marketing Organization.
Group Volume (GV) - The commissionable value of AAESD products or services sold by a Consultant's Marketing Organization. Group Volume does not include the Personal Volume of the subject Consultant. (Starter Kits and sales aids have no Sales Volume.)
Immediate Household - Heads of household and dependent family members residing in the same house.
Level - The layers of downline Customers and Consultants in a particular Consultant's Marketing Organization. This term refers to the relationship of a Consultant relative to a particular upline Consultant, determined by the number of Consultants between them who are related by sponsorship. For example, if A sponsors B, who sponsors C, who sponsors D, who sponsors E, then E is on A's fourth level.
Marketing Organization - The Customers and Consultants sponsored below a particular Consultant.
Official AAESD Material - Literature, audio or video tapes, and other materials developed, printed, published and distributed by AAESD to Consultants.
Personal Production - Moving AAESD products or services to an end consumer for personal use.
Personal Volume (PV) - A Consultant's Personal Volume includes the commissionable value of services and products purchased in a month: (1) by the Consultant; and (2) by the Consultant's personally enrolled Customers or website customers.
Provider - A Provider is the supplier of energy or products to AAESD
Rank - The "title" that a Consultant has achieved pursuant to the AAESD Marketing and Compensation Plan.
Recruit - For purposes of AAESD's Conflict of Interest Policy (Section 4.9), the term "recruit" means the actual or attempted sponsorship, solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another AAESD Consultant or Customer to enroll or participate in another multilevel marketing, network marketing or direct sales opportunity. Except in California, the foregoing conduct constitutes recruiting even if the Consultant's actions are in response to an inquiry by another Consultant or Customer.
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) they are returned to AAESD within one year from the date of purchase; and 5) the product contains current AAESD labeling. Any merchandise that is clearly identified at the time of sale as nonreturnable, discontinued, or as a seasonal item, shall not be Resalable.
Retail Customer - An individual who purchases AAESD products from a Consultant or energy from one of our energy providers but who is not a participant in the AAESD compensation plan.
Retail Sales - Sales to a Retail Customer. If a sale is made to a customer who subsequently submits an AAESD Consultant Agreement within 30 days from the date of the sale, or if an immediate household family member of the Customer submits an AAESD Consultant Agreement within 30 days of the sale, such sale shall not constitute a Retail Sale. A Consultant's personal purchases from AAESD do not constitute Retail Sales.
Roll-Up - The method by which a vacancy in a Marketing Organization left by a Consultant whose Consultant Agreement has been canceled is filled.
Sponsor - A Consultant who enrolls a Customer or another Consultant into the Company, and is listed as the Sponsor on the Consultant Application and Agreement. The act of enrolling others and training them to become Consultants is called "sponsoring."
Starter Kit - A selection of AAESD training materials and business support literature that each new Consultant is required to purchase. The Starter Kit is sold to Consultants at the Company's cost.
Upline - This term refers to the Consultant or Consultants above a particular Consultant in a sponsorship line up to the Company. Conversely stated, it is the line of sponsors that links any particular Consultant to the Company.
Services Direct, LLC.
STATEMENT OF POLICIES and PROCEDURES
Effective 12-1-2009
SECTION 1 - CORPORATE MISSION STATEMENT
Our mission is to deliver products, services, and information to consumers about the benefits of energy savings. We expect each member of our company and family to be committed to excellence and to acting and operating with the highest moral and ethical standards. We also expect everyone to have fun and be proud of what we are building.
SECTION 2 - INTRODUCTION
2.1 - Policies and Compensation Plan Incorporated into Consultant Agreement
These Policies and Procedures, in their present form and as amended at the sole discretion of America Approved Energy Services Direct, LLC. (hereafter "AAESD" or the "Company"), are incorporated into, and form an integral part of, the AAESD Consultant Agreement. Throughout these Policies, when the term "Agreement" is used, it collectively refers to the AAESD Independent Consultant Application and Agreement, these Policies and Procedures, the AAESD Marketing and Compensation Plan, and the AAESD Business Entity Registration Form (if applicable). These documents are incorporated by reference into the AAESD Consultant Agreement (all in their current form and as amended by AAESD). It is the responsibility of each Consultant to read, adhere to, and ensure that he or she is aware of and operating under the most current version of these Policies and Procedures. When sponsoring or enrolling a new Consultant, it is the responsibility of the sponsoring Consultant to ensure that the applicant is provided with, or has online access to, the most current version of these Policies and Procedures and the AAESD Marketing and Compensation Plan prior to his or her execution of the Consultant Agreement.
2.2 - Changes to the Agreement
AAESD reserves the right to amend the Agreement and its prices in its sole and absolute discretion. By signing the Consultant Agreement, a Consultant agrees to abide by all amendments or modifications that AAESD elects to make. Amendments shall be effective 30 days after publication of notice that the Agreement has been modified. Notification of amendments shall be published by one or more of the following methods: (1) posting on the Company's official web site; (2) electronic mail (e-mail); (3) fax-on-demand; (4) voice mail system broadcast; (5) inclusion in Company periodicals; (6) inclusion in product orders or bonus checks; or (7) special mailings. The continuation of a Consultant's AAESD business or a Consultant's acceptance of bonuses or commissions constitutes acceptance of any and all amendments.
2.3 - Delays
AAESD shall not be responsible for delays or failures in performance of its obligations when performance is made commercially impracticable due to circumstances beyond its reasonable control. This includes, without limitation, strikes, labor difficulties, riot, war, fire, death, curtailment of a party's source of supply, or government decrees or orders.
2.4 - Policies and Provisions Severable
If any provision of the Agreement, in its current form or as may be amended, is found to be invalid or unenforceable for any reason, only the invalid portion(s) of the provision shall be severed and the remaining terms and provisions shall remain in full force and effect. The severed provision, or portion thereof, shall be reformed to reflect the purpose of the provision as closely as possible.
2.5 - Waiver
The Company never gives up its right to insist on compliance with the Agreement and with the applicable laws governing the conduct of a business. No failure of AAESD to exercise any right or power under the Agreement or to insist upon strict compliance by a Consultant with any obligation or provision of the Agreement, and no custom or practice of the parties at variance with the terms of the Agreement, shall constitute a waiver of AAESD's right to demand exact compliance with the Agreement. Waiver by AAESD can be effectuated only in writing by an authorized officer of the Company. AAESD's waiver of any particular breach by a Consultant shall not affect or impair AAESD's rights with respect to any subsequent breach, nor shall it affect in any way the rights or obligations of any other Consultant. Nor shall any delay or omission by AAESD to exercise any right arising from a breach affect or impair AAESD's rights as to that or any subsequent breach.
The existence of any claim or cause of action of a Consultant against AAESD shall not constitute a defense to AAESD's enforcement of any term or provision of the Agreement.
SECTION 3 - BECOMING A CONSULTANT
3.1 - Requirements to Become a Consultant
To become an AAESD Consultant, each applicant must:
a) Be of the age of majority in his or her state of residence;
b) Reside in the United States, a U.S. Territory, or any country that AAESD has officially announced is open for business;
c) Have a valid Social Security or Federal Tax ID number;
d) Purchase an AAESD Starter Kit (optional in North Dakota);
e) Submit a properly completed Consultant Application and Agreement to AAESD either in hard copy or online format; and
f) Submit an IRS Form W-9. If a valid Form W-9 is not received by the Company within 60 days from the date of the Applicant's enrollment, the enrollment process will not be finalized
and the Applicant shall not be permitted to become a Consultant, sell AAESD products or services, or participate in the AAESD Compensation Plan.
3.2 - No Product Purchases Required
No person is required to purchase AAESD products, services or sales aids, or to pay any charge or fee to become a Consultant. In order to familiarize new Consultants with AAESD products, services, sales techniques, sales aids, and other matters, the Company requires that they purchase a Starter Kit. AAESD will repurchase Resalable kits from any Consultant who terminates his or her Consultant Agreement pursuant to the terms of Section 8.1.
3.3 - Consultant Benefits
Once a Consultant Application and Agreement has been accepted by AAESD, the benefits of the Marketing and Compensation Plan and the Consultant Agreement are available to the new Consultant. These benefits include the right to:
a) Sell AAESD products and services;
b) Participate in the AAESD Marketing and Compensation Plan (receive bonuses and commissions, if eligible);
c) Sponsor other individuals as Customers or Consultants into the AAESD business and thereby, build a Marketing Organization and progress through the AAESD Marketing and Compensation Plan;
d) Receive periodic AAESD literature and other AAESD communications;
e) Participate in AAESD-sponsored support, service, training, motivational and recognition functions, upon payment of appropriate charges, if applicable; and
f) Participate in promotional and incentive contests and programs sponsored by AAESD for its Consultants.
SECTION 4 - OPERATING AN AAESD BUSINESS
4.1 - Adherence to the AAESD Marketing and Compensation Plan
Consultants must adhere to the terms of the AAESD Marketing and Compensation Plan as set forth in official AAESD literature. Consultants shall not offer the AAESD opportunity through, or in combination with, any other system, program, or method of marketing other than that specifically set forth in official AAESD literature. Consultants shall not require or encourage other current or prospective Customers or Consultants to execute any agreement or contract other than official AAESD agreements and contracts in order to become an AAESD Consultant. Similarly, Consultants shall not require or encourage other current or prospective Customers or Consultants to make any purchase from, or payment to, any individual or other entity to participate in the AAESD Marketing and Compensation Plan other than those purchases or payments identified as recommended or required in official AAESD literature.
4.2 - Advertising
4.2.1 - General
All Consultants shall safeguard and promote the good reputation of AAESD and its products. The marketing and promotion of AAESD, the AAESD opportunity, the Marketing and Compensation Plan, AAESD products and services must avoid all discourteous, deceptive, misleading, unethical or immoral conduct or practices.
To promote both the products and services, and the income opportunity AAESD offers, Consultants must use the sales aids and support materials produced by AAESD. The Company has carefully designed its products, product labels, Marketing and Compensation Plan, and promotional materials to ensure that they are promoted in a fair and truthful manner, that they are substantiated, and that the materials comply with the requirements of federal and state laws.
ACCORDINGLY, CONSULTANTS MUST SUBMIT ALL WRITTEN SALES AIDS, PROMOTIONAL MATERIALS, ADVERTISEMENTS, AND OTHER LITERATURE TO THE COMPANY FOR APPROVAL. UNLESS THE CONSULTANT RECEIVES SPECIFIC WRITTEN APPROVAL TO USE SUCH TOOLS, THE REQUEST SHALL BE DEEMED DENIED.
AAESD will not permit Consultants to sell sales aids to other AAESD Consultants. Therefore, Consultants who receive authorization from AAESD to produce their own sales aids may not sell such material to any other AAESD Consultant. Consultants may make approved material available to other Consultants free of charge if they wish, but may not charge other AAESD Consultants for the material.
AAESD further reserves the right to rescind approval for any sales tools, promotional materials, advertisements, or other literature, and Consultants waive all claims for damages or remuneration arising from or relating to such rescission.
4.2.2 - Consultant Web Sites -
If a Consultant desires to utilize an Internet web page to promote his or her business, he or she may do so through the Company's replicated website program. This program permits Consultants to advertise on the Internet and to personalize the website with the Consultant's message and the Consultant's contact information. These websites seamlessly link directly to the official AAESD website giving the Consultant a professional and Company-approved presence on the Internet. A Consultant may independently design a website with prior written approval of AAESD, but any such website may not use the names, logos, or product descriptions of AAESD. A Consultant may not use "blind" ads on the Internet without prior written approval of AAESD. The use of any other Internet website or web page without prior written approval of AAESD to in any way promote the sale of AAESD products, the AAESD opportunity, or the Marketing and Compensation Plan is a breach of the Agreement and may result in any of the disciplinary sanctions set forth in Section 9.1.
4.2.3 - Blogs, Chat Rooms, Social Networks, Online Auctions, and other Online Forums Consultants may use online blogs, chat rooms and social networks sites to promote the opportunity and products of AAESD as long as the Consultant safeguards the good reputation of AAESD and its products. The marketing and promotion of AAESD, the AAESD opportunity, the Marketing and Compensation Plan, AAESD products and services must avoid all discourteous, deceptive, misleading, unethical or immoral conduct or practices.
4.2.4 - Domain Names and Email Addresses
Consultants may not use or attempt to register any of AAESD's trade names, trademarks, service names, service marks, product names, the Company's name, or any derivative thereof, for any Internet domain name. Nor may Consultants incorporate or attempt to incorporate any of the Company's trade names, trademarks, service names, service marks, product names, the Company's name, or any derivative thereof, into any electronic mail address.
4.2.5 - Trademarks and Copyrights
AAESD will not allow the use of its trade names, trademarks, designs, or symbols by any person, including AAESD Consultants, without its prior, written permission. Consultants may not produce for sale or distribution any recorded Company events and speeches without written permission from AAESD nor may Consultants reproduce for sale or for personal use any recording of Company-produced audio or video tape presentations.
4.2.6 - Media and Media Inquiries
Consultants must not attempt to respond to media inquiries regarding AAESD, its products or services, or their independent AAESD business. All inquiries by any type of media must be immediately referred to AAESD's Office of the President. This policy is designed to assure that accurate and consistent information is provided to the public as well as a proper public image.
4.2.7 - Unsolicited Email
AAESD does not permit Consultants to send unsolicited commercial emails unless such emails strictly comply with applicable laws and regulations including, without limitation, the federal CAN SPAM Act. Any email sent by a Consultant that promotes AAESD, the AAESD opportunity, or AAESD products and services must comply with the following:
a) There must be a functioning return email address to the sender.
b) There must be a notice in the email that advises the recipient that he or she may reply to the email, via the functioning return email address, to request that future email
solicitations or correspondence not be sent to him or her (a functioning "opt-out" notice).
c) The email must include the Consultant's physical mailing address.
d) The email must clearly and conspicuously disclose that the message is an advertisement or solicitation.
e) The use of deceptive subject lines and/or false header information is prohibited.
f) All opt-out requests, whether received by email or regular mail, must be honored. If a Consultant receives an opt-out request from a recipient of an email, the Consultant must forward the opt-out request to the Company.
AAESD may periodically send commercial emails on behalf of Consultants. By entering into the Consultant Agreement, Consultant agrees that the Company may send such emails and that the Consultant's physical and email addresses will be included in such emails as outlined above. Consultants shall honor opt-out requests generated as a result of such emails sent by the Company.
4.2.8 - Unsolicited Faxes
Except as provided in this section, Consultants may not use or transmit unsolicited faxes or use an automatic telephone dialing system relative to the operation of their AAESD businesses. The term "automatic telephone dialing system" means equipment which has the capacity to: (a) store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers. The term "unsolicited faxes" means the transmission via telephone facsimile of any material or information advertising or promoting AAESD, its products, the Marketing and Compensation Plan or any other aspect of the company which is transmitted to any person, except that these terms do not include a fax: (a) to any person with that person's prior express invitation or permission; or (b) to any person with whom the Consultant has an established business or personal relationship. The term "established business or personal relationship" means a prior or existing relationship formed by a voluntary two way communication between a Consultant and a person, on the basis of: (a) an inquiry, application, purchase or transaction by the person regarding products offered by such Consultant; or (b) a personal or familial relationship, which relationship has not been previously terminated by either party.
4.2.9 - Use of AAESD Trademarks and Trade Names
The name of AAESD and other names as may be adopted by AAESD are proprietary trade names, trademarks and service marks of AAESD. As such, these marks are of great value to AAESD and are supplied to Consultants for their use only in an expressly authorized manner. Use of AAESD name on any item not produced by the Company is prohibited except as follows:
Consultant's Name
Independent AAESD Consultant
Consultants may list themselves as an "Independent AAESD Consultant" in the white or yellow pages of the telephone directory under their own name. No Consultant may place telephone directory display ads using AAESD's name or logo. Consultants may not answer the telephone by saying "AAESD", "AAESD LLC", or in any other manner that would lead the caller to believe that he or she has reached corporate offices of AAESD.
4.3 - Bonus Buying Prohibited
Bonus buying is strictly and absolutely prohibited. "Bonus buying" includes any mechanism or artifice to qualify for rank advancement, incentives, prizes, commissions or bonuses that is not driven by bona fide product or service purchases by end user consumers. This includes the submission of an unauthorized request for service of an individual's or entity's electric service provider ("slamming").
4.4 - Business Entities
A corporation, limited liability company (LLC), partnership or trust (collectively referred to in this section as a "Business Entity") may apply to be an AAESD Consultant by submitting a Consultant Application and Agreement, a properly completed Business Entity Registration Form, and a properly completed IRS Form W-9 to AAESD. If a Consultant enrolls online, the Business Entity Registration Form and the IRS Form W-9 must be submitted to AAESD within 30 days of the online enrollment. The IRS Form W-9 can be submitted electronically or via hard copy. (If the Form W-9 is not received within the 30-day period, the Consultant Agreement shall automatically terminate.) The Business Entity Registration Form must be signed by all of the shareholders, members, partners, trustees, or other parties with any ownership interest in, or management responsibilities for, the Business Entity (collectively "Affiliated Parties"). The Business Entity, as well as all Affiliated Parties, is individually, jointly and severally liable for any indebtedness to AAESD, compliance with the AAESD Policies and Procedures, the AAESD Consultant Agreement, and all other obligations to AAESD.
To prevent the circumvention of Sections 4.26 (regarding transfers and assignments of AAESD business) and 4.5 (regarding Sponsorship Changes), if any Affiliated Party wants to terminate his or her relationship with the Business Entity or AAESD, the Affiliated Party must terminate his or her affiliation with the Business Entity, notify AAESD in writing that he or she has terminated his/her affiliation with the Business Entity, and must comply with the provisions of Section 4.25. In addition, the party foregoing their interest in the Business Entity may not participate in any other AAESD business for six consecutive calendar months in accordance with Section 4.5.3. If the Business Entity wishes to bring on any new Affiliated Party, it must adhere to the requirements of Section 4.25.
The modifications permitted within the scope of this Section 4.4 do not include a change of sponsorship. Changes of sponsorship are addressed in Section 4.5, below.
4.4.1 - Changes to a Business Entity
An AAESD business may change its status under the same sponsor from an individual to a partnership, LLC, corporation or trust, or from one type of entity to another. There is a $25.00 fee for each change requested, which must be included with the written request and the completed Consultant Application and Agreement. Such changes shall be processed only once per year and must be submitted by November 30 to become effective on January 1 of the following year. In addition, Consultants operating their AAESD businesses utilizing a business entity must notify AAESD of the addition or removal of any officers, directors, shareholders, managers, members or business associates of the business entity. AAESD may, at its discretion, require notarized documents before implementing any changes to an independent AAESD business. Please allow 30 days after the receipt of the request by AAESD for processing.
4.5 - Change of Sponsor
To protect the integrity of all Marketing Organizations and safeguard the hard work of all Consultants, AAESD strongly discourages changes in sponsorship. Maintaining the integrity of sponsorship is critical for the success of every Consultant and Marketing Organization. Accordingly, the transfer of an AAESD business from one sponsor to another is rarely permitted.
Requests for change of sponsorship must be submitted in writing to the Consultant Services Department, and must include the reason for the transfer. Transfers will only be considered in the following three circumstances:
4.5.1 - Misplacement
In cases in which the new Consultant is sponsored by someone other than the individual he or she was led to believe would be his or her Sponsor, a Consultant may request that he or she be transferred to another organization with his or her entire Marketing Organization intact. Requests for transfer under this policy will be evaluated on a case-by-case basis and must be made within 60 days from the date of enrollment. The Consultant requesting the change has the burden of proving that he or she was placed beneath the wrong sponsor. It is up to AAESD's discretion whether the requested change will be implemented.
4.5.2 - Upline Approval
The Consultant seeking to transfer submits a properly completed and fully executed Sponsorship Transfer Form which includes the written approval of his or her immediate Five (5) upline Consultants. Photocopied or facsimile signatures are not acceptable. All Consultant signatures must be notarized. The Consultant who requests the transfer must submit a fee of $50.00 for administrative charges and data processing. If the transferring Consultant also wants to move any of the Consultants in his or her Marketing Organization, each downline Consultant must also obtain a properly completed Sponsorship Transfer Form and return it to AAESD with the $50.00 change fee (i.e., the transferring Consultant and each Consultant in his or her Marketing Organization multiplied by $50.00 is the cost to move an AAESD business.) Downline Consultants will not be moved with the transferring Consultant unless all of the requirements of this paragraph are met. Transferring Consultants must allow thirty (30) days after the receipt of the Sponsorship Transfer Forms by AAESD for processing and verifying change requests.
In cases wherein the appropriate sponsorship change procedures have not been followed, and a Marketing Organization has been developed in the second business developed by a Consultant, AAESD reserves the sole and exclusive right to determine the final disposition of the Marketing Organization. Resolving conflicts over the proper placement of a downline that has developed under an organization that has improperly switched sponsors is often extremely difficult. Therefore, CONSULTANTS WAIVE ANY AND ALL CLAIMS AGAINST AAESD THAT RELATE TO OR ARISE FROM AAESD'S DECISION REGARDING THE DISPOSITION OF ANY MARKETING ORGANIZATION THAT DEVELOPS BELOW AN ORGANIZATION THAT HAS IMPROPERLY CHANGED LINES OF SPONSORSHIP.
4.5.3 - Cancellation and Re-application
A Consultant may legitimately change organizations by voluntarily cancelling his or her AAESD business and remaining inactive (i.e., no purchases of AAESD products for resale, no sales of AAESD products, no sponsoring, no attendance at any AAESD functions, and no participation in any other form of Consultant activity or operation of any other AAESD business) for six (6) full calendar months. Following the six month period of inactivity, the former Consultant may reapply under a new Sponsor, however, the former Consultant's Marketing Organization will remain in the original line of sponsorship. AAESD will consider waiving the six month waiting period under exceptional circumstances. Such requests for waiver must be submitted to AAESD in writing.
4.6 - Unauthorized Claims and Actions
4.6.1 - Indemnification
A Consultant is fully responsible for all of his or her verbal and written statements made regarding AAESD products, services, and the Marketing and Compensation Plan which are not expressly contained in official AAESD materials. Consultants agree to indemnify AAESD and AAESD'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 AAESD as a result of the Consultant's unauthorized representations or actions. This provision shall survive the termination of the Consultant Agreement.
4.6.2 - Product/Service Claims
No claims (which include personal testimonials) as to benefits or properties of any products or services offered by AAESD may be made except those contained in official AAESD literature.
4.6.3 - Claiming to be a Customer
Consultants are strictly prohibited from holding themselves out as a Customer. Consultants shall neither perform third-party verification ("TPV") for the real Customer nor interfere with TPV by guiding a Customer's answers or remaining on the line during the recorded TPV call. Consultants shall not complete or fill-in any enrollment documents for a Customer, sign any enrollment documents for a Customer, or act on behalf of the Customer.
4.6.4 - Income Claims
Because AAESD Consultants do not have the data necessary to comply with the legal requirements for making income claims, a Consultant, when presenting or discussing the AAESD opportunity or Marketing and Compensation Plan to a prospective Consultant, may not make income projections, income claims, or disclose his or her AAESD income (including the showing of checks, copies of checks, bank statements, or tax records).
4.6.5 - Income Disclosure Statement
AAESD's corporate ethics compel us to do not merely what is legally required, but rather, to conduct the absolute best business practices. To this end, we will develop the AAESD Income Disclosure Statement ("IDS") as soon as we have sufficient date with which to prepare it. (NOTE -- The AAESD IDS will be available shortly after the six month anniversary of AAESD's official launch. The requirements of this section need not be met until after the AAESD IDS is available.) The AAESD IDS will convey truthful, timely, and comprehensive information regarding the income that AAESD Consultants earn. In order to accomplish this objective, a copy of the IDS must be presented to all prospective Consultants (when it becomes available).
A copy of the IDS must be presented to a prospective Consultant (someone who is not a party to a current AAESD Consultant Agreement) anytime the Compensation Plan is presented or discussed, or any type of income claim or earnings representation is made.
The terms "income claim" and/or "earnings representation" (collectively "income claim") include: (1) statements of average earnings, (2) statements of actual earnings, (3) statements of non-average or non-actual earnings (projected earnings), (4) statements of earnings ranges, (5) income testimonials, (6) lifestyle claims, and (7) hypothetical claims.
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 AAESD income exceeded my salary after six months in the business," or "Our AAESD business has allowed my wife to come home and be a full-time mom" also fall within the purview of "lifestyle" claims.
In any non-public meeting (e.g., a home meeting, one-on-one, regardless of venue) with a prospective Consultant or Consultants in which the Compensation Plan 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 Compensation Plan is discussed or any type of income claims is made, you must provide every prospective Consultant 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 Compensation Plan or the making of an income claim.
When it becomes available, copies of the IDS may be printed or downloaded without charge from the corporate website at http://AMANation.com.
Consultants who develop sales aids and tools in which the Compensation Plan or income claims are present must incorporate the IDS into each such sales aid or tool prior to submission to the Company for review.
Consultants may display and/or sell AAESD products at trade shows and professional expositions. Before submitting a deposit to the event promoter, Consultants must contact the Consultant Services Department in writing for conditional approval, as AAESD's policy is to authorize only one AAESD business per event. Final approval will be granted to the first Consultant who submits an official advertisement of the event, a copy of the contract signed by both the Consultant and the event official, and a receipt indicating that a deposit for the booth has been paid. Approval is given only for the event specified. Any requests to participate in future events must again be submitted to the Consultant Services Department. AAESD further reserves the right to refuse authorization to participate at any function which it does not deem a suitable forum for the promotion of its products, services, or the AAESD opportunity. Approval will not be given for swap meets, garage sales, flea markets or farmer's markets as these events are not conducive to the professional image AAESD wishes to portray.
4.8 - Conflicts of Interest
AAESD Consultants are free to participate in other multilevel or network marketing business ventures or marketing opportunities (collectively "network marketing"). However, during the term of this Agreement, Consultants may not directly or indirectly Recruit other AAESD Consultants or Customers for any other network marketing business.
Following the cancellation of a Consultant's Independent Consultant Agreement, and for a period of six calendar months thereafter, with the exception of a Consultant who was personally sponsored by the former Consultant, a former Consultant may not Recruit any AAESD Consultant or Customer for another network marketing business. Consultants and the Company recognize that because network marketing is conducted through networks of independent contractors dispersed across the entire United States and internationally, and business is commonly conducted via the internet and telephone, an effort to narrowly limit the geographic scope of this non-solicitation provision would render it wholly ineffective. Therefore, Consultants and AAESD agree that this non-solicitation provision shall apply to all markets in which AAESD conducts business.
The term "Recruit" means the actual or attempted sponsorship, solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another AAESD Consultant or Customer to enroll or participate in another multilevel marketing, network marketing or direct sales opportunity. The conduct described in the preceding sentence constitutes recruiting even if the Consultant's actions are in response to an inquiry made by another Consultant or Customer.
4.8.2 - Consultant Participation in Other Direct Selling Programs If a Consultant is engaged in other non-AAESD direct selling programs, it is the responsibility of the Consultant to ensure that his or her AAESD business is operated entirely separate and apart from any other program in which the Consultant participates. To this end, the following must be adhered to:
a) Consultants shall not display AAESD promotional materials, sales aids, products or services with or in the same location as any non-AAESD promotional materials, sales aids, products or services. b) Consultants shall not offer the AAESD opportunity, products or services to prospective or existing Customers or Consultants in conjunction with any non-AAESD program, opportunity, product or service. c) Consultants may not offer any non-AAESD opportunity, products, services, or opportunity at any AAESD-related meeting, seminar or convention, or within two hours and a five mile radius of the AAESD event. If the AAESD meeting is held telephonically or on the internet, any non-AAESD meeting must be at least two hours before or after the AAESD meeting, and on a different conference telephone number or internet web address from the AAESD meeting.
Downline Activity Reports are available for Consultant access and viewing at the Back Office of each Consultant's replicated AAESD website. Consultant 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 AAESD. Downline Activity Reports are provided to Consultants in strictest confidence and are made available to Consultants for the sole purpose of assisting Consultants in working with their respective Marketing Organizations in the development of their AAESD business. Consultants should use their Downline Activity Reports to assist, motivate, and train their downline Consultants. The Consultant and AAESD agree that, but for this agreement of confidentiality and nondisclosure, AAESD would not provide Downline Activity Reports to the Consultant. A Consultant 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 contained in any Downline Activity Report to compete with AAESD or for any purpose other than promoting or supporting his or her AAESD business; or
d) Recruit or solicit any Consultant or Customer listed on any Downline Activity Report, or in any manner attempt to influence or induce any Consultant or Customer to alter their
business relationship with AAESD.
4.8.4 Buying Customers and Side Deals – Buying customers or paying others not contracted with AAESD to solicit customers on your behalf is strictly forbidden. Side deals include any attempt to circumvent the compensation plan by paying a person or entity to enroll customers on your behalf.
Upon demand by the Company, any current or former Consultant will return the original and all copies of Downline Activity Reports to the Company.
4.9 - Targeting Other Direct Sellers
AAESD does not condone Consultants specifically or consciously targeting the sales force of another direct sales company to sell AAESD products or to become Consultants for AAESD, nor does AAESD condone Consultants 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 Consultants engage in such activity, they bear the risk of being sued by the other direct sales company. If any lawsuit, arbitration or mediation is brought against a Consultant alleging that he or she engaged in inappropriate recruiting activity of its sales force or customers, AAESD will not pay any of Consultant's defense costs or legal fees, nor will AAESD indemnify the Consultant for any judgment, award, or settlement.
4.10 - Cross-Sponsoring
Actual or attempted cross sponsoring is strictly prohibited. "Cross sponsoring" is defined as the enrollment or attempted enrollment of an individual who or entity that already has a current Customer or Consultant Agreement on file with AAESD, or who has had such an agreement within the preceding six calendar months, within a different line of sponsorship. The use of a spouse's or relative's name, trade names, DBAs, assumed names, corporations, partnerships, trusts, federal ID numbers, fictitious ID numbers or any straw-man or other artifice to circumvent this policy is prohibited. Consultants shall not demean, discredit or defame other AAESD Consultants in an attempt to entice another Consultant to become part of the first Consultant's Marketing Organization. This policy shall not prohibit a sponsorship change in accordance with Section 4.5.
If Cross Sponsoring is discovered, it must be brought to the Company's attention immediately. AAESD may take disciplinary action against the Consultant that changed organizations and/or those Consultants who encouraged or participated in the Cross Sponsoring. AAESD may also move all or part of the offending Consultant's Marketing Organization to his or her original Marketing Organization if the Company deems it equitable and feasible to do so. However, AAESD is under no obligation to move the Cross Sponsored Consultant's Marketing Organization, and the ultimate disposition of the organization remains within the sole discretion of AAESD. Consultants waive all claims and causes of action against AAESD arising from or relating to the disposition of the Cross Sponsored Consultant's Marketing Organization.
4.11 - Errors or Questions
If a Consultant has questions about or believes any errors have been made regarding commissions, bonuses, Downline Activity Reports, or charges, the Consultant must notify AAESD in writing within 60 days of the date of the purported error or incident in question. AAESD will not be responsible for any errors, omissions or problems not reported to the Company within 60 days.
Neither federal nor state regulatory agencies or officials "approve" or endorse any utility, direct selling, network marketing companies or programs. Therefore, Consultants shall not represent or imply that AAESD, its products or services, or its Marketing and Compensation Plan have been "approved," "endorsed" or otherwise sanctioned by any government agency.
4.13 - Holding Applications or Orders
Consultants must not manipulate enrollments of new applicants and purchases of products. All Consultant Applications and Agreements, and product orders must be sent to AAESD within 72 hours from the time they are signed by a Consultant or placed by a customer, respectively.
4.14 - Identification
All Consultants are required to provide their Social Security Number, or a Federal Employer Identification Number to AAESD on the Consultant Application and Agreement. Upon enrollment, the Company will provide a unique Consultant Identification Number to the Consultant by which he or she will be identified. This number will be used to place orders, and track commissions and bonuses.
4.15 - Income Taxes
Each Consultant is responsible for paying local, state and federal taxes on any income generated as an Independent Consultant. If an AAESD business is tax exempt, the Federal tax identification number must be provided to AAESD. Every year, AAESD will provide an IRS Form 1099 MISC (Non-employee Compensation) earnings statement to each U.S. resident who: 1) Had earnings of over $600 in the previous calendar year; or 2) Made purchases during the previous calendar year in excess of $5,000.
4.16 - Independent Contractor Status
Consultants are independent contractors, and are not purchasers of a franchise or a business opportunity. The agreement between AAESD and its Consultants does not create an employer/employee relationship, agency, partnership, or joint venture between the Company and the Consultant. Consultants shall not be treated as an employee for his or her services or for Federal or State tax purposes. All Consultants are responsible for paying local, state, and federal taxes due from all compensation earned as a Consultant of the Company. The Consultant has no authority (expressed or implied), to bind the Company to any obligation. Each Consultant shall establish his or her own goals, hours, and methods of sale, so long as he or she complies with the terms of the Consultant Agreement, these Policies and Procedures, and applicable laws.
You may wish to arrange insurance coverage for your business. Your homeowner's insurance policy does not cover business-related injuries, or the theft of or damage to inventory or business equipment. Contact your insurance agent to make certain that your business property is protected. This can often be accomplished with a simple "Business Pursuit" endorsement attached to your present home owner's policy.
4.18 - International Marketing
Because of critical legal, regulatory, and tax considerations, AAESD must limit the sale of AAESD products and services, and the presentation of the AAESD business to prospective customers and Consultants 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 Consultants to conduct business in markets not yet opened by AAESD would violate the concept of affording every Consultant the equal opportunity to expand internationally.
Accordingly, Consultants are authorized to offer AAESD products and services and to enroll Customers, only in the U.S. States in which AAESD is authorized to conduct business, as announced in official Company literature. Consultants are authorized to enroll Consultants only in the countries in which AAESD is authorized to conduct business. AAESD sales aids cannot be shipped into or sold in any foreign country. Consultants may sell, give, transfer, or distribute AAESD products or sales aids only in their home country. In addition, no Consultant may, in any unauthorized country: (a) conduct sales, enrollment or training meetings; (b) enroll or attempt to enroll potential Customers or Consultants; or (c) conduct any other activity for the purpose of selling AAESD products or services, establishing a Marketing Organization, or promoting the AAESD opportunity.
4.19 - Adherence to Laws and Ordinances
Consultants 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 Consultants because of the nature of their business. However, Consultants must obey those laws that do apply to them. If a city or county official tells a Consultant that an ordinance applies to him or her, the Consultant shall be polite and cooperative, and immediately send a copy of the ordinance to the Compliance Department of AAESD. In many cases there are exceptions to the ordinance that may apply to AAESD Consultants.
4.20 - Minors
A person who is recognized as a minor in his/her state of residence may not be an AAESD Consultant. Consultants shall not enroll or recruit minors into the AAESD program.
A Consultant may operate or have an ownership interest, legal or equitable, as a sole proprietorship, partner, shareholder, trustee, or beneficiary, in only one AAESD business. No individual may have, operate or receive compensation from more than one AAESD business. Individuals of the same family unit may not enter into or have an interest in more than one AAESD Business. A "family unit" is defined as spouses and dependent children living at or doing business at the same address.
In order to maintain the integrity of the AAESD Marketing and Compensation Plan, husbands and wives or common-law couples (collectively "spouses") who wish to become AAESD Consultants must be jointly sponsored as one AAESD business. Spouses, regardless of whether one or both are signatories to the Consultant Application and Agreement, may not own or operate any other AAESD business, either individually or jointly, nor may they participate directly or indirectly (as a shareholder, partner, trustee, trust beneficiary, or any other legal or equitable ownership) in the ownership or management of another AAESD business in any form.
An exception to the one business per Consultant/household rule will be considered on a case by case basis if two Consultants marry or in cases of a Consultant receiving an interest in another business through inheritance. Requests for exceptions to policy must be submitted in writing to the Office of the President.
If any member of a Consultant's immediate household engages in any activity which, if performed by the Consultant, would violate any provision of the Agreement, such activity will be deemed a violation by the Consultant and AAESD may take disciplinary action pursuant to these Policies and Procedures against the Consultant. Similarly, if any individual associated in any way with a Business Entity Consultant violates the Agreement, such action(s) will be deemed a violation by the Business Entity Consultant, and AAESD may take disciplinary action against the Business Entity. Likewise, if a Consultant enrolls in AAESD as a Business Entity, each shareholder, officer, member, partner, or other individual or entity with an ownership interest or management responsibility in the Business Entity shall be personally and individually bound to, and must comply with, the terms and conditions of the Agreement.
4.23 - Requests for Records
Any request from a Consultant 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.
4.24 - Roll-up of Marketing Organization
When a vacancy occurs in a Marketing Organization due to the termination of an AAESD business, each Consultant in the first level immediately below the terminated Consultant on the date of the cancellation will be moved to the first level ("front line") of the terminated Consultant's sponsor. For example, if A sponsors B, and B sponsors C1, C2, and C3, if B terminates her business, C1, C2, and C3 will "roll-up" to A and become part of A's first level.
4.25 - Sale, Transfer or Assignment of AAESD Business
Although an AAESD business is a privately owned, independently operated business, the sale, transfer or assignment of an AAESD business, and the sale, transfer, or assignment of an interest in a Business Entity that owns or operates an AAESD business, is subject to certain limitations. If a Consultant wishes to sell his or her AAESD business, or an individual or entity wishes to sell his or her interest in a Business Entity that owns or operates an AAESD business, the following criteria must be met:
a) The Company must be offered the right of first refusal to purchase the business under the same terms pursuant to which the Consultant receives a bona fide offer from a third-party purchaser.
b) The buyer or transferee must become a qualified AAESD Consultant. If the buyer is an active AAESD Consultant, he or she must first terminate his or her AAESD business and wait six calendar months before acquiring any interest in a different AAESD business.
c) Before the sale, transfer or assignment can be finalized and approved by AAESD, any debt obligations the selling party has with AAESD must be satisfied.
d) The selling party 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 AAESD business.
Prior to selling an AAESD business or a Business Entity interest, the selling party must notify AAESD's Compliance Department in writing and advise of his or her intent to sell the AAESD business or the Business Entity interest. The selling party must receive written approval from the Compliance Department before proceeding with the sale. AAESD reserves the right to request additional documentation that may be necessary to analyze the transaction between the buyer and seller. No changes in line of sponsorship can result from the sale or transfer of an AAESD business.
4.26 - Separation of an AAESD Business
AAESD Consultants sometimes operate their AAESD businesses as husband-wife partnerships, regular partnerships, corporations, LLCs, trusts, or other Business Entities. At such time as a marriage may end in divorce or a corporation, LLC, partnership, trust, or other Business Entity 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 sponsorship.
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 AAESD business pursuant to an assignment in writing whereby the relinquishing spouse, shareholders, partners or trustees authorize AAESD to deal directly and solely with the other spouse or non-relinquishing shareholder, partner or trustee.
b) The parties may continue to operate the AAESD business jointly on a "business-as-usual" basis, whereupon all compensation paid by AAESD 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 Marketing Organization of divorcing spouses or a dissolving business entity be divided. Similarly, under no circumstances will AAESD split commission and bonus checks between divorcing spouses or members of dissolving entities. AAESD will recognize only one Marketing Organization and will issue only one commission check per AAESD 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 commissions and ownership of the business in a timely fashion as determined by the Company, the Consultant Agreement shall be involuntarily canceled.
If a former spouse has completely relinquished all rights in the original AAESD business pursuant to a divorce, he or she is thereafter free to enroll under any sponsor 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 affiliate who retains no interest in the business must wait six calendar months from the date of the final dissolution before re-enrolling as a Consultant. In either case, the former spouse or business affiliate shall have no rights to any Consultants 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 Consultant.
CONSULTANTS MUST NEVER CHANGE, ALTER, OR SWITCH, OR ATTEMPT TO CHANGE, ALTER, OR SWITCH, THE SERVICE PROVIDER OF ANY INDIVIDUAL OR ENTITY TO AAESD OR ITS PROVIDER UNLESS SUCH INDIVIDUAL OR ENTITY HAS AUTHORIZED THE TRANSFER TO ANOTHER PROVIDER REPRESENTED BY AAESD BY SIGNING A LETTER OF AUTHORIZATION ("LOA") OR OTHER FORMS THAT MAY BE REQUIRED CONSENTING TO CHANGE TO AAESD'S SERVICE PROVIDER.
4.28 - Sponsoring
All active Consultants in good standing have the right to sponsor and enroll others into AAESD. Each prospective Customer or Consultant has the ultimate right to choose his or her own Sponsor. If two Consultants claim to be the Sponsor of the same new Consultant or Customer, the Company shall regard the first application received by the Company as controlling.
When sponsoring a new Consultant through the online enrollment process, the Sponsor may assist the applicant in filling-out the online application materials. However, the applicant must personally review and agree to the online application and agreement terms and conditions, AAESD's Policies and Procedures, and the AAESD Compensation Plan. The Sponsor may not fill-out the online application and agreement on behalf of the applicant or agree to these materials on behalf of the applicant.
4.30 - Succession
Upon the death or incapacitation of a Consultant, his or her business may be passed to his or her heirs. Appropriate legal documentation must be submitted to the Company to ensure the transfer is proper. Accordingly, a Consultant should consult an attorney to assist him or her in the preparation of a will or other testamentary instrument. Whenever an AAESD business is transferred by a will or other testamentary process, the beneficiary acquires the right to collect all bonuses and commissions of the deceased Consultant's Marketing Organization provided the following qualifications are met. The successor(s) must:
a) Execute a Consultant Agreement;
b) Comply with terms and provisions of the Agreement; and
c) Meet all of the qualifications for the deceased Consultant's status.
The devisee(s) must provide AAESD 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. AAESD will issue all bonus and commission checks and one 1099 to the business entity.
4.30.1 - Transfer Upon Death of a Consultant
To effectuate a testamentary transfer of an AAESD business, the executor of the estate of the deceased Consultant must provide the following to AAESD: (1) an original death certificate; (2) a notarized copy of the will or other instrument establishing the successor's (or successors') right to the AAESD business; (3) certified letters testamentary or a letter of administration appointing the executor; and (4) written instructions from the authorized executor to AAESD specifying to whom the business and income should be transferred.
4.30.2 - Transfer Upon Incapacitation of a Consultant
To effectuate a transfer of an AAESD business because of incapacity, the successor must provide the following to AAESD: (1) a notarized copy of an appointment as trustee; (2) a notarized copy of the trust document or other documentation establishing the trustee's right to administer the subject AAESD business; and (3) a completed Consultant Agreement executed by the trustee.
4.31 - Telemarketing Techniques
The Federal Trade Commission and the Federal Communications Commission each have laws that restrict telemarketing practices. Both federal agencies (as well as a number of states) have "do not call" regulations as part of their telemarketing laws. Although AAESD does not consider Consultants 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, Consultants must not engage in telemarketing in the operation of their AAESD businesses. The term "telemarketing" means the placing of one or more telephone calls to an individual or entity to induce the purchase of an AAESD product or service, or to recruit them for the AAESD opportunity. "Cold calls" made to prospective customers or Consultants that promote either AAESD's products or services or the AAESD opportunity constitute telemarketing and are prohibited. However, a telephone call(s) placed to a prospective customer or Consultant (a "prospect") is permissible under the following situations:
a) If the Consultant has an established business relationship with the prospect. An "established business relationship" is a relationship between a Consultant and a prospect based on the prospect's purchase, rental, or lease of goods or services from the Consultant, or a financial transaction between the prospect and the Consultant, 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 Consultant, within the three (3) months immediately preceding the date of such a call.
c) If the Consultant receives written and signed permission from the prospect authorizing the Consultant to call. The authorization must specify the telephone number(s) which the Consultant 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.
e) In addition, Consultants shall not use automatic telephone dialing systems relative to the operation of their AAESD businesses. The term "automatic telephone dialing system" means equipment which has the capacity to: (a) store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers.
4.32 - Back Office Access
AAESD makes online back offices available to its Consultants. Back offices provide Consultants access to confidential and proprietary information that may be used solely and exclusively to promote the development of a Consultant's AAESD business and to increase sales of AAESD products. However, access to a back office is a privilege, and not a right. AAESD reserves the right to deny Consultants' access to the back office at its sole discretion.
SECTION 5 - RESPONSIBILITIES OF CONSULTANTS
5.1 - Change of Contact Information
To ensure timely delivery of products, support materials, and commission checks, it is critically important that the AAESD's files are current. Street addresses are required for shipping. Consultants planning to change their contact information or move must update their contact information via the Back Office function of the Consultant's replicated AAESD website ~or~ send their new contact information to AAESD's Corporate Offices to the attention of the Consultant Services Department. To guarantee proper delivery, two weeks advance notice must be provided to AAESD on all changes.
5.2 - Continuing Development Obligations
5.2.1 - Ongoing Training
Any Consultant who sponsors another Consultant into AAESD must perform a bona fide assistance and training function to ensure that his or her Marketing Organization is properly operating his or her AAESD business. Consultants must have ongoing contact and communication with the Consultants in their Marketing Organizations. Examples of such contact and communication may include, but are not limited to: newsletters, written correspondence, personal meetings, telephone contact, voice mail, electronic mail, and the accompaniment of downline Consultants to AAESD meetings, training sessions, and other functions. Upline Consultants are also responsible to motivate and train new Consultants in AAESD product knowledge, effective sales techniques, the AAESD Marketing and Compensation Plan, and compliance with Company Policies and Procedures. Communication with and the training of downline Consultants must not, however, violate Section 4.2 (regarding the development of Consultant-produced sales aids and promotional materials).
Consultants should monitor the Consultants in their Marketing Organizations to guard against downline Consultants making improper product or business claims, or engaging in any illegal or inappropriate conduct.
5.2.2 - Increased Training Responsibilities
As Consultants progress through the various levels of leadership, they will become more experienced in sales techniques, product knowledge, and understanding of the AAESD program. They will be called upon to share this knowledge with lesser experienced Consultants within their organization.
5.2.3 - Ongoing Sales Responsibilities
Regardless of their level of achievement, Consultants have an ongoing obligation to continue to personally promote sales through the generation of new customers and through servicing their existing customers.
5.3 - Nondisparagement
AAESD wants to provide its Independent Consultants with the best products, compensation plan, and service in the industry. Accordingly, we value your constructive criticisms and comments. All such comments should be submitted in writing to the Office of the President. Remember, to best serve you, we must hear from you! While AAESD welcomes constructive input, negative comments and remarks made in the field by Consultants about the Company, its products, or Compensation Plan serve no purpose other than to sour the enthusiasm of other AAESD Consultants. For this reason, and to set the proper example for their Marketing Organization, Consultants must not disparage, demean, or make negative remarks about AAESD, other AAESD Consultants, AAESD's products, the Compensation Plan, or AAESD's directors, officers, or employees.
5.4 - Providing Documentation to Applicants
Consultants must provide the most current version of the Policies and Procedures and the Compensation Plan to individuals whom they are sponsoring to become Consultants before the applicant signs a Consultant Agreement. Additional copies of Policies and Procedures and Compensation Plan can be downloaded from AAESD's website.
5.5 - Reporting Policy Violations
Consultants observing a Policy violation by another Consultant should submit a written report of the violation directly to the attention of the AAESD Compliance Department. Details of the incidents such as dates, number of occurrences, persons involved, and any supporting documentation should be included in the report.
5.6 - Vendor Confidentiality/Communications
AAESD's business relationships with its marketing alliances, vendors, suppliers, Company associates or former employees within or outside the corporate workplace are confidential, proprietary, and not to be circumvented by either the Consultant or the vendor. A Consultant shall not contact, directly or indirectly, or speak to or communicate with any representative, agent, or employee of any supplier, vendor, agent, or former employee of AAESD except at an AAESD-sponsored event at which the representative is present at the request of AAESD or as otherwise expressly permitted in writing by AAESD. Violation of this provision may result in termination of the Consultant and possible claims of damages against the Consultant and/or the vendor. Questions regarding any of these businesses should be directed to the Compliance Department.
SECTION 6 - SALES REQUIREMENTS
6.1 - Product Sales
The AAESD Marketing and Compensation Plan is based on the sale of AAESD products and services to end consumers. Consultants must fulfill personal and Marketing Organization retail sales requirements (as well as meet other responsibilities set forth in the Agreement) to be eligible for bonuses, commissions and advancement to higher levels of achievement. The following sales requirements must be satisfied for Consultants to be eligible for commissions:
a) Consultants must satisfy the volume requirements to fulfill the requirements associated with their rank as specified in the AAESD Marketing and Compensation Plan. For the purposes of determining eligibility in the AAESD Marketing and Compensation Plan, only volume generated by AAESD Customers will count toward eligibility.
b) At least 70% of a Consultant's total monthly compensation must be derived from sales to retail Customers.
c) Consultants must develop or maintain at least five customers every month.
d) When enrolling customers, you must provide to them all of the costs involved with the service. This includes all of the following (if applicable):
i. Cost per kilowatt-hour or therm;
ii. Monthly service fees;
iii. One-time service fees;
iv. Taxes and surcharges;
v. Time-of-day or other usage limitations; and
vi. Other costs.
All of this information is available for download at the company website.
6.2 - No Territory Restrictions
There are no exclusive territories granted to anyone. No franchise fees are required.
6.3 - Sales Receipts
All Consultants must provide their retail customers with two copies of an official AAESD sales receipt at the time of the sale. These receipts set forth the Customer Satisfaction Guarantee as well as any consumer protection rights afforded by federal or state law. Records documenting the purchases of Consultants' Customers will be maintained by AAESD.
Remember that retail customers must receive two copies of the sales receipt. In addition, Consultants must orally inform the buyer of his or her cancellation rights.
SECTION 7 - BONUSES AND COMMISSIONS
A Consultant must be active and in compliance with the Agreement to qualify for bonuses and commissions. So long as a Consultant complies with the terms of the Agreement, AAESD shall pay commissions to such Consultant in accordance with the Marketing and Compensation Plan. AAESD uses pay cards to provide earned compensation to Consultants. At a Consultant's option, he or she may notify AAESD that he or she would prefer to be paid via a check. The minimum amount for which AAESD will issue a check is $50.00. If a Consultant's bonuses and commissions do not equal or exceed $50.00, the Company will accrue the commissions and bonuses until they total $50.00. A check will be issued once $50.00 has been accrued. AAESD may charge a $5.00 per check charge for Consultants that elect to be paid by check.
Notwithstanding the foregoing, all commissions and bonuses accrued on behalf of a Consultant, regardless of the amount, will be paid to the Consultant at the end of each fiscal year.
7.2 - Adjustment to Bonuses and Commissions
Consultants receive bonuses and commissions based on the actual sales of products and services to end consumers. When a product is returned to AAESD for a refund or repurchase, or a service is cancelled and the customer is entitled to a refund, either of the following may occur at the Company's discretion: (1) the bonuses and commissions attributable to the returned or repurchased product or the refunded service will be deducted, in the month in which the refund is given and continuing every pay period thereafter until the bonuses and commissions are recovered, from the Consultants who received bonuses and commissions on the sales of the refunded product or cancelled service; or (2) the Consultants who earned commissions or bonuses based on the sale of the returned product or cancelled service will have the corresponding points deducted from their Group Volume in the next month and all subsequent months until such points are completely recovered.
7.2.2 - Hard Copy Bonus and Commission Checks
The Company pays commissions and bonuses via direct deposit via direct payment onto a Company-provided debit card. There is no charge for such direct deposits. A Consultant may, however, request payment by hard-copy check. In that event, the Company will deduct a $5.00 processing fee from each hard-copy check issued to the Consultant.
7.2.3 - Tax Withholdings
If a Consultant fails to submit an IRS Form W-9, AAESD will deduct the necessary back-up withholdings from the Consultant's bonus and commission checks as required by law.
7.3 - Reports
All information provided by AAESD in online or telephonic Downline Activity Reports, including but not limited to personal and group sales volume (or any part thereof), and downline sponsoring activity is believed to be accurate and reliable. Nevertheless, due to various factors including, but not limited to, the inherent possibility of human, digital, 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 AAESD or any persons creating or transmitting the information.
ALL PERSONAL AND GROUP SALES VOLUME INFORMATION IS PROVIDED "AS IS" WITHOUT WARRANTIES, EXPRESS OR IMPLIED, OR REPRESENTATIONS OF ANY KIND WHATSOEVER. IN PARTICULAR BUT WITHOUT LIMITATION THERE SHALL BE NO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR USE, OR NON INFRINGEMENT.
TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, AAESD AND/OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION WILL IN NO EVENT BE LIABLE TO ANY CONSULTANT OR ANYONE ELSE FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT ARISE OUT OF THE USE OF OR ACCESS TO PERSONAL AND/OR GROUP SALES VOLUME INFORMATION (INCLUDING BUT NOT LIMITED TO LOST PROFITS, BONUSES, OR COMMISSIONS, LOSS OF OPPORTUNITY, AND DAMAGES THAT MAY RESULT FROM INACCURACY, INCOMPLETENESS, INCONVENIENCE, DELAY, OR LOSS OF THE USE OF THE INFORMATION), EVEN IF AAESD 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, AAESD 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 AAESD'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 AAESD's online and telephone reporting services and your reliance upon the information.
SECTION 8 - RETURNS AND REPURCHASES
8.1 - Return of Starter Kit and Sales Aids by Consultants Upon Cancellation Upon cancellation of a Consultant's Agreement, the Consultant may return his or her Starter Kit and sales aids for a refund. In order to receive a refund from AAESD pursuant to this policy, the following requirements must be met:
a) The items being returned must have been personally purchased by the Consultant from AAESD (purchases from other Consultants or third parties are not subject to refund); b) The items must be in Resalable condition (see Definition of "Resalable" below); and c) The items must have been purchased from AAESD within one year prior to the date of cancellation.
Upon receipt of a Resalable Starter Kit and/or Resalable sales aids, the Consultant will be reimbursed 90% of the net cost of the original purchase price(s). Shipping charges incurred by a Consultant when the items 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 a Consultant was paid a bonus or commission based on a product that he or she purchased, and such product is subsequently returned for a refund, the bonus and/or commission that was paid to the Consultant based on that product purchase will be deducted from the amount of the refund.
Starter Kits 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) they are returned to AAESD within one year from the date of purchase; and 5) the product contains current AAESD labeling. Any merchandise that is clearly identified at the time of sale as nonreturnable, discontinued, or as a seasonal item, shall not be Resalable.
8.1.1 - Montana Residents
A Montana resident may cancel his or her Consultant Agreement within 15 days from the date of enrollment, and may return his or her Starter Kit for a full refund within such time period.
8.2 - Procedures for All Returns
The following procedures apply to all returns for refund, repurchase, or exchange:
a) All merchandise must be returned by the Consultant who purchased it directly from AAESD.
b) All products to be returned must have a Return Authorization Number which is obtained by calling the Consultant Services Department. This Return Authorization Number must be written on each carton returned.
c) The return is accompanied by:
i. a completed and signed Return Form;
ii. a copy of the original dated retail sales receipt; and
iii. the item in its original container.
d) Proper shipping carton(s) and packing materials are to be used in packaging the items (s) being returned, and the best and most economical means of shipping is suggested. All returns must be shipped to AAESD shipping pre-paid. AAESD does not accept shipping-collect packages. The risk of loss in shipping for returned product shall be on the Consultant. If returned product is not received by the Company's Distribution Center, it is the responsibility of the Consultant to trace the shipment.
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, these Policies and Procedures, violation of any common law duty, including but not limited to any applicable duty of loyalty, any illegal, fraudulent, deceptive or unethical business conduct, or any act or omission by a Consultant that, in the sole discretion of the Company may damage its reputation or goodwill (such act or omission need not be related to the Consultant's AAESD business), may result, at AAESD's discretion, in one or more of the following corrective measures:
a) Issuance of a written warning or admonition;
b) Requiring the Consultant to take immediate corrective measures;
c) Imposition of a fine, which may be withheld from bonus and commission checks;
d) Loss of rights to one or more bonus and commission checks;
e) AAESD may withhold from a Consultant all or part of the Consultant's bonuses and commissions during the period that AAESD is investigating any conduct allegedly violative of the Agreement. If a Consultant's business is canceled for disciplinary reasons, the Consultant will not be entitled to recover any commissions withheld during the investigation period;
f) Suspension of the individual's Consultant Agreement for one or more pay periods;
g) Suspension and/or termination of the offending Consultant's AAESD website or website access;
h) Involuntary termination of the offender's Consultant Agreement; or
i) Any other measure expressly allowed within any provision of the Agreement or which AAESD deems practicable to implement and appropriate to equitably resolve injuries caused partially or exclusively by the Consultant's policy violation or contractual breach.
In situations deemed appropriate by AAESD, the Company may institute legal proceedings for monetary and/or equitable relief.
9.2 - Grievances and Complaints
When a Consultant has a grievance or complaint with another Consultant regarding any practice or conduct in relationship to their respective AAESD businesses, the complaining Consultant should first report the problem to his or her Sponsor who should review the matter and try to resolve it with the other party's upline sponsor. If the matter involves interpretation or violation of Company policy, it must be reported in writing to the Consultant Services Department at the Company. The Consultant Services Department will review the facts and attempt to resolve it.
9.3 - Mediation
Prior to instituting an arbitration as provided in Section 9.4 below, 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 attorneys fees, costs, and individual expenses associated with conducting and attending the mediation. Mediation shall be held in the City of Ft Myers, Florida 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. Consultants waive all rights to trial by jury or to any court. All arbitration proceedings shall be held in the City of Ft Myers, Florida, unless the laws of the state in which a Consultant resides expressly require the application of its laws, in which case the arbitration shall be held in the capital of that state. All parties shall be entitled to all discovery rights pursuant to the Federal Rules of Civil Procedure, and the Federal Rules of Evidence shall apply. 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 Association 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.
The parties and the arbitrator shall maintain the confidentiality of the entire arbitration process and shall not disclose to any person not directly involved in the arbitration process:
a) The substance of, or basis for, the controversy, dispute or claim;
b) The content of any testimony or other evidence presented at an arbitration hearing or obtained through discovery in arbitration;
c) The terms or amount of any arbitration award; or
d) The rulings of the arbitrator on the procedural and substantive issues involved in the case.
Notwithstanding the foregoing, nothing in these Policies and Procedures shall prevent AAESD 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 AAESD'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 Lee County, State of Florida. The Federal Arbitration Act shall govern all matters relating to arbitration. The law of the State of Florida shall govern all other matters relating to or arising from the Agreement.
9.5.1 - Louisiana Residents
Notwithstanding the foregoing and the mediation and arbitration provisions in Sections 9.3 and 9.4, residents of the State of Louisiana shall be entitled to bring an action against AAESD in their home forum and pursuant to Louisiana law.
SECTION 10 - PAYMENT AND SHIPPING
All checks returned by a Consultant's bank for insufficient funds will be re-submitted for payment. A $25.00 returned check fee will be charged to the account of the Consultant. After receiving a returned check from a customer or a Consultant, all future orders must be paid by Credit Card, money order or cashier's check. Any outstanding balance owed to AAESD by a Consultant for NSF checks and returned check fees will be withheld from subsequent bonus and commission checks.
10.2 - Restrictions on Third Party Use of Credit Cards and Checking Account Access
A Consultant shall not permit other Consultants or Customers to use his or her credit card, or permit debits to his or her checking accounts, to enroll or to make purchases from the Company.
10.3 - Sales Taxes
In designing the AAESD opportunity, one of our guiding philosophies has been to free Consultants from as many administrative, operational, and logistical tasks as possible. In doing so, Consultants are free to concentrate on those activities that directly affect their incomes, namely product sales and enrollment activities. To these ends, AAESD relieves Consultants 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, AAESD is required to charge sales taxes on all purchases made by Consultants and Customers, and remit the taxes charged to the respective states. Accordingly, AAESD will collect and remit sales taxes on behalf of Consultants, 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. If a Consultant has submitted, and AAESD has accepted, a current Sales Tax Exemption Certificate and Sales Tax Registration License, sales taxes will not be added to the invoice and the responsibility of collecting and remitting sales taxes to the appropriate authorities shall be on the Consultant. Exemption from the payment of sales tax is applicable only to orders which are shipped to a state for which the proper tax exemption papers have been filed and accepted. Applicable sales taxes will be charged on orders that are drop-shipped to another state. Any sales tax exemption accepted by AAESD is not retroactive.
SECTION 11 - INACTIVITY AND CANCELLATION
So long as a Consultant remains active and complies with the terms of the Consultant Agreement and these Policies and Procedures, AAESD shall pay commissions to such Consultant in accordance with the Marketing and Compensation Plan. A Consultant's bonuses and commissions constitute the entire consideration for the Consultant's efforts in generating sales and all activities related to generating sales (including building a Marketing Organization). Following a Consultant's non-renewal of his or her Consultant Agreement, cancellation for inactivity, or voluntary or involuntary cancellation of his or her Consultant Agreement (all of these methods are collectively referred to as "cancellation"), the former Consultant shall have no right, title, claim or interest to the Marketing Organization which he or she operated, or any commission or bonus from the sales generated by the organization. A Consultant whose business is cancelled will lose all rights as a Consultant. This includes the right to sell AAESD products and services and the right to receive future commissions, bonuses, or other income resulting from the sales and other activities of the Consultant's former Marketing Organization. In the event of cancellation, Consultants agree to waive all rights they may have, including but not limited to property rights, to their former Marketing Organization and to any bonuses, commissions or other remuneration derived from the sales and other activities of his or her former Marketing Organization.
Following a Consultant's cancellation of his or her Consultant Agreement, the former Consultant shall not hold himself or herself out as an AAESD Consultant and shall not have the right to sell AAESD products or services. A Consultant whose Consultant Agreement is canceled shall receive commissions 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).
If a Consultant has not earned a bonus or commission for six consecutive months (and thus become "inactive"), his or her Consultant Agreement shall be canceled for inactivity.
A Consultant's violation of any of the terms of the Agreement, including any amendments that may be made by AAESD in its sole discretion, may result in any of the sanctions listed in Section 9.1, including the involuntary cancellation of his or her Consultant Agreement. Cancellation shall be effective on the date on which written notice is mailed, emailed, faxed, or delivered to an express courier for delivery, to the Consultant's last known address, email address, or fax number, or to his or her attorney, or when the Consultant receives actual notice of cancellation, whichever occurs first.
AAESD reserves the right to terminate all Consultant 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.
A participant in this network 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 Consultant's signature, printed name, address, and Consultant I.D. Number.
11.5 - Exceptions to Activity Requirements
11.5.1 - Maternity
A Consultant shall be exempt from meeting her or his Personal Volume and Group Volume requirements for a period of four (4) months following the birth or adoption of a child.
11.5.2 - Military Deployment
Military personnel shall be exempt from meeting their Personal Volume and Group Volume requirements during the term of active duty deployment into a foreign country.
SECTION 12 - DEFINITIONS
Active Customer - A Customer who purchases AAESD products or energy through an AAESD Provider.
Active Consultant - A Consultant who satisfies the minimum group volume requirements, as set forth in the AAESD Marketing and Compensation Plan, to ensure that he or she is eligible to receive bonuses and commissions for a particular month.
Active Rank - The term "active rank" refers to the current rank of a Consultant, as determined by the AAESD Marketing and Compensation Plan, for any month. To be considered "active" relative to a particular rank, a Consultant must meet the criteria set forth in the AAESD Marketing and Compensation Plan for his or her respective rank. (See the definition of "Rank" below.)
Agreement - The contract between the Company and each Consultant includes the Consultant Application and Agreement, the AAESD Policies and Procedures, the AAESD Marketing and Compensation Plan, and the Business Entity Registration Form (where appropriate), all in their current form and as amended by AAESD in its sole discretion. These documents are collectively referred to as the "Agreement."
Cancel - The termination of a Consultant's business. Cancellation may be either voluntary, involuntary, through non-renewal or inactivity.
Customer - An individual who registers with AAESD as a Customer pursuant to AAESD's Customer Program.
Downline Activity Report - An online report generated by AAESD that provides critical data relating to the identities of Consultants, sales information, and enrollment activity of each Consultant's Marketing Organization. This report contains confidential and trade secret information which is proprietary to AAESD.
Downline Leg - Each one of the individuals enrolled immediately underneath you and their respective Marketing Organizations represents one "leg" in your Marketing Organization.
Group Volume (GV) - The commissionable value of AAESD products or services sold by a Consultant's Marketing Organization. Group Volume does not include the Personal Volume of the subject Consultant. (Starter Kits and sales aids have no Sales Volume.)
Immediate Household - Heads of household and dependent family members residing in the same house.
Level - The layers of downline Customers and Consultants in a particular Consultant's Marketing Organization. This term refers to the relationship of a Consultant relative to a particular upline Consultant, determined by the number of Consultants between them who are related by sponsorship. For example, if A sponsors B, who sponsors C, who sponsors D, who sponsors E, then E is on A's fourth level.
Marketing Organization - The Customers and Consultants sponsored below a particular Consultant.
Official AAESD Material - Literature, audio or video tapes, and other materials developed, printed, published and distributed by AAESD to Consultants.
Personal Production - Moving AAESD products or services to an end consumer for personal use.
Personal Volume (PV) - A Consultant's Personal Volume includes the commissionable value of services and products purchased in a month: (1) by the Consultant; and (2) by the Consultant's personally enrolled Customers or website customers.
Provider - A Provider is the supplier of energy or products to AAESD
Rank - The "title" that a Consultant has achieved pursuant to the AAESD Marketing and Compensation Plan.
Recruit - For purposes of AAESD's Conflict of Interest Policy (Section 4.9), the term "recruit" means the actual or attempted sponsorship, solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another AAESD Consultant or Customer to enroll or participate in another multilevel marketing, network marketing or direct sales opportunity. Except in California, the foregoing conduct constitutes recruiting even if the Consultant's actions are in response to an inquiry by another Consultant or Customer.
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) they are returned to AAESD within one year from the date of purchase; and 5) the product contains current AAESD labeling. Any merchandise that is clearly identified at the time of sale as nonreturnable, discontinued, or as a seasonal item, shall not be Resalable.
Retail Customer - An individual who purchases AAESD products from a Consultant or energy from one of our energy providers but who is not a participant in the AAESD compensation plan.
Retail Sales - Sales to a Retail Customer. If a sale is made to a customer who subsequently submits an AAESD Consultant Agreement within 30 days from the date of the sale, or if an immediate household family member of the Customer submits an AAESD Consultant Agreement within 30 days of the sale, such sale shall not constitute a Retail Sale. A Consultant's personal purchases from AAESD do not constitute Retail Sales.
Roll-Up - The method by which a vacancy in a Marketing Organization left by a Consultant whose Consultant Agreement has been canceled is filled.
Sponsor - A Consultant who enrolls a Customer or another Consultant into the Company, and is listed as the Sponsor on the Consultant Application and Agreement. The act of enrolling others and training them to become Consultants is called "sponsoring."
Starter Kit - A selection of AAESD training materials and business support literature that each new Consultant is required to purchase. The Starter Kit is sold to Consultants at the Company's cost.
Upline - This term refers to the Consultant or Consultants above a particular Consultant in a sponsorship line up to the Company. Conversely stated, it is the line of sponsors that links any particular Consultant to the Company.
