The Rules of Conduct (“Rules”) form an important part of the contract between Profit Connect and the Affiliate (the “Affiliate Contract”). The Rules have been carefully developed in consultation with an Affiliate representative, and have been implemented following notice to Affiliates and review of their comments.
Affiliates own and operate their own Independent Businesses (“IBs”). Profit Connect recognizes the value of the contributions that Affiliates who have achieved business goals can make to the development of other Affiliates whom they sponsor and support under the Rules. As Affiliates develop into established leaders, they play an increasingly important role in mentoring, teaching, and training other Affiliates about the Profit Connect business. Among other things, the Rules are designed to ensure that all Affiliates have the support that they need to continue to develop their IBs with Profit Connect.
Under the Affiliate Agreement Contract, Affiliates receive substantial benefits, including: the right to purchase products through Profit Connect and refer Customers to Profit Connect; the right to sponsor others to become Affiliates and sell products offered at ProfitConnect.me; the right to qualify for bonuses under the Profit Connect Affiliate Compensation Plan (“Plan”); use of Profit Connect’s intellectual property in accordance with the Rules; and a variety of support for Affiliates and their Customers. As part of its commitment to support the opportunity made available to Affiliates, Profit Connect invests substantial resources in goodwill, in the Line of Sponsorship (“LOS”) and in LOS Information to provide Profit Connect and Affiliates with a competitive advantage. All Affiliates and Profit Connect share a competitive business interest in maintaining and protecting these assets and interests. The Rules provide important safeguards for Affiliates and Profit Connect in this regard, as well as contractual rights and obligations.
1.1. Contractual Relationship:
Profit Connect Corp. (“Profit Connect”) has a contract with each Affiliate that includes all of the terms in the Affiliate Registration Agreement form executed by the Affiliate, the renewal form(s) executed or authorized by the Affiliate, the Plan and the Rules in effect at the time the Affiliate executed the Affiliate Registration Agreement, and any Entity Agreement for Independent Business Owners (Affiliates) (“Entity Agreement”) or modifications to the Plan or Rules that become effective during the term of the contract (the “Affiliate Contract”). The current version of the Plan and Rules can be found at ProfitConnect.me.
As part of the Affiliate Contract, Affiliates have an obligation to comply with the Rules.
1.2. Choice of Law:
Except to the extent that the Federal Arbitration Act applies to Rule 11, the formation, construction, interpretation, and enforceability of the Affiliate Contract, and all claims arising from or relating to the Affiliate Contract, shall be governed by Nevada law, without giving effect to any choice of law or conflicts of law rules or provisions (whether of the State of Nevada or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Nevada. The place where the Affiliate Contract is made is Nevada.
If an arbitrator or court of competent jurisdiction determines any portion of the Rules of Conduct is unenforceable in any respect, then it shall enforce the rest of the Rules of Conduct to the fullest extent permitted by law without affecting the enforceability of all remaining Rules of Conduct.
2.1. Profit Connect Affiliate Compensation Plan (or Plan):
The business arrangement through which Affiliates receive certain income or other compensation as described in Section A of the Business Reference Guide.
2.2. Copyrighted Works:
Works protected by copyrights that are owned by, created by, or licensed to Profit Connect.
A non-Affiliate who is an end user of products and services offered through or by Profit Connect.
2.4. Independent Business (IB):
A Profit Connect independent business operated by an Affiliate(s) pursuant to the Affiliate Contract.
2.5. Independent Business Owner (Affiliate):
An individual(s) or entity operating an IB pursuant to the Affiliate Contract.
2.6. Affiliate Genius:
Refer to the Affiliate (“Affiliate Genius”).
2.7. Line of Sponsorship (LOS):
The structural arrangement of Affiliates established by the contractual relationship that each Affiliate has with Profit Connect.
2.8. LOS Information:
Includes all information that discloses or relates to all or part of the Line of Sponsorship, including but not limited to Affiliate numbers and other Affiliate business identification data, Affiliate personal contact information, Affiliate business performance information, and all information generated or derived therefrom, in its past, present, or future forms.
The trademarks, service marks, trade dress, and trade names adopted or used by Profit Connect and/or otherwise the subject of pending or existing trademark rights owned by or licensed to Profit Connect, regardless of whether the trademarks, service marks, trade dress, or trade names are the subject of trademark applications or registrations.
A prospective Affiliate.
The United States, Canada, Dominican Republic, Puerto Rico, U.S. Virgin Islands, Guam, Jamaica, the Pacific Islands of American Samoa, Federated States of Micronesia, Marshall Islands, Northern Mariana Islands, Palau, Wake Island, and all authorized Atlantic and Caribbean islands operating under the Plan.
(a) with reference to Marks, directly or indirectly placing, affixing, or displaying one or more Marks on or in connection with goods or services, in a manner that tends to create the impression of an affiliation, connection, or association between Profit Connect and the Affiliate or Approved Provider; and (b) with reference to Copyrighted Works, to reproduce, distribute, and/or display copies of the Copyrighted Works, in whole or in part, including by means of
digital audio transmissions, and to create any derivative works.
3. Becoming an Affiliate
3.1. Registration Agreement:
To become an authorized Affiliate capable of merchandising products and services offered through or by Profit Connect and registering other Affiliates, an applicant must be 18 years of age, complete and sign the Affiliate Registration Agreement, and pay the Business Services and Support fee specified in the Affiliate Registration Agreement. An Affiliate Registration Agreement may be completed and signed in one of the following ways: (a) the applicant may complete, sign and submit an electronic version of the Affiliate Registration Agreement in accordance with the procedures on the Profit Connect website; or (b) the applicant may complete, sign and return a paper version of the Affiliate Registration Agreement.
3.2. Acceptance or Rejection of Affiliate Registration Agreement:
Profit Connect reserves the right to accept or reject any Affiliate Registration Agreement. A registration shall be considered accepted by Profit Connect when it receives a completed and signed Affiliate Registration Agreement in accordance with Rule 3.1, its contents are verified with Profit Connect’s Affiliate records database, and the registration does not violate any Rule of Conduct. Pending receipt of a completed, signed Affiliate Registration Agreement, Profit Connect may temporarily authorize an Affiliate to conduct business subject to the Rules of Conduct for up to 90 days.
3.3. Legal Entities as Affiliates:
IBs shall be formed initially by and in the name(s) of the individual applicant(s). After receiving an Affiliate number, an Affiliate who wishes to operate his/her IB as a corporation, limited liability company (LLC), formal partnership, limited partnership, limited liability partnership (LLP) or trust must complete the appropriate Entity Agreement for Independent Business Owners (Affiliates) and submit it to Profit Connect, which may accept or reject it. Existing Affiliates as of September 2012 that are operating through a legal entity under an existing Entity Agreement approved by Profit Connect may continue to operate under that agreement, but the Affiliate and entity must sign the currently applicable Entity Agreement upon request or in the event of a change in ownership or control in the entity.
3.4. Husband and Wife Affiliates:
If both husband and wife wish to become Affiliates, they must register together as a single IB. Husbands and wives may not sponsor each other. If one spouse is already an Affiliate, the other spouse, upon electing to become an Affiliate, must join his or her spouse’s IB. An Affiliate will be held accountable for the actions of a spouse, whether or not the spouse is an Affiliate, so far as the Rules of Conduct are concerned.
3.5. Minors as Independent Business Owners:
Minors who are at least 16 years of age may become Affiliates only for the single purpose of merchandising products and services offered through or by Profit Connect. A minor who desires to become an Affiliate must: (a) obtain a parent’s or guardian’s signature on the Affiliate Registration Agreement; (b) be sponsored by or added to his or her parent’s or guardian’s IB if the parent or guardian of the minor is an Affiliate; and (c) must not be a signatory in any IB other than a parent’s or guardian’s IB.
The term of the Affiliate Contract shall expire at the end of each calendar year, with the exception of initial registrations accepted by Profit Connect between September 1 and December 31, in which case such initial term shall expire at the end of the subsequent calendar year.*-
3.7. Annual Renewal:
In order to renew the Affiliate Contract, an Affiliate must annually file a request to renew the Affiliate Contract, along with the required annual business renewal fee, by December 31 of the year preceding the year for which the Affiliate is renewing. Profit Connect reserves the right to reject any renewal request, or revoke any Affiliate’s Renewal Agreement, if the Affiliate is not in compliance with all provisions of the Affiliate Contract. An annual Renewal Agreement may be completed and signed in one of the following ways: (a) an Affiliate may complete, sign and submit an electronic version of the Renewal Agreement and pay the required annual business fee in accordance with the procedures on the Profit Connect website; (b) an Affiliate may renew and pay the required annual business fee by telephone at 800-674-6392; (c) an Affiliate may sign an automatic Renewal Agreement with Profit Connect; unless they instruct Profit Connect otherwise, Affiliates who have reached the level of Silver Producer or above will be automatically renewed in order to avoid an inadvertent interruption of their business.
3.8. Late Renewal:
In the event that Profit Connect accepts an Affiliate’s Renewal Agreement that was not filed in compliance with Rule 3.7, Profit Connect is not required to restore that Affiliate’s sponsoring relationship(s) with downline Affiliates.
3.9. Affiliate Contract Termination:
An Affiliate may terminate his or her Affiliate Contract at any time prior to expiration by written communication to the Profit Connect Business Conduct and Rules Department. A person who terminates his or her Affiliate Contract may immediately become a Customer.
3.10. Death and Inheritance:
An IB can be passed on to a deceased Affiliate’s spouse, heirs, or other beneficiary.
In cases where the IB is owned jointly, such as a husband and wife or partnership, and one spouse or partner dies, unless they have previously arranged otherwise, Profit Connect will recognize the surviving spouse or partner(s) as the owner(s) of the IB. The survivor(s) must forward a certified copy of the death certificate in order for Profit Connect to change its records.
In cases where the IB is operated as an entity under Rule 3.3, and one of the owners of the entity dies, the entity will continue to operate the IB, provided the entity remains in compliance with Rule 3.3 and the successor of the deceased owner is an Affiliate in full compliance with the Rules. The entity shall notify Profit Connect of the change in ownership or control of the entity by submitting the currently applicable Entity Agreement reflecting the proposed changes, and any proposed changes in the ownership or control of the entity require the express approval of Profit Connect in writing.
In cases where an Affiliate disposes of an IB in a will, Profit Connect will recognize the terms of the transfer, provided the beneficiary is an Affiliate who is in compliance with the Rules.
If there is no qualified Affiliate in a position to operate an IB due to probate or other court procedures, Profit Connect will have the option of entering into a servicing agreement with another Affiliate, preferably upline in the LOS, to manage the IB until the proceedings are complete.
4. Responsibilities and Obligations
4.1. Duty of Good Faith:
Under the terms of the Affiliate Contract, Profit Connect and all Affiliates agree to perform their obligations in accordance with the duty of good faith and fair dealing. An Affiliate will be held accountable for the actions of a partner, family member or third party acting or purporting to act on behalf of the Affiliate or IB, so far as the Rules of Conduct are concerned. An Affiliate shall not aid and abet another Affiliate to violate the Rules of Conduct. Affiliates shall not conduct any activity that could jeopardize the reputation of Profit Connect or Affiliates.
4.1.1. Double Dipping / Setting-up Multiple Agent Accounts:
The practice of receiving two incomes from the same source is prohibited.
- Placing clients into your downline instead of directly to you, to deceive the company into paying a greater commission.
- This can happen when an unethical Agent runs clients through family members, children, friends or an LLC controlled by the Up-Line Agent. When a procedure is put in place to deceive the company for more commission it financially hurts everyone in the Up-Line by cutting commissions in half or more.
Profit Connect Agents are expected to be Aware of the “Rules of Conduct”, and to be Knowledgeable, Patient, Honest and Ethical. Profit Connect pays the highest referral commission in the industry and thus many Agents make a significant income from Profit Connect. Double Dipping is stealing from you, the up-line agent, and the company, as a result your commissions are cut in half or more because of the unethical Agent in your Down-Line. If you suspect an Agent is Double Dipping it is in your best financial interest to report to Customer Service (800) 674-6392.
To avoid Double Dipping investigation, it is recommended to NOT place family, children or an Agent controlled LLC into your Down-Line. But to instead place them with your sponsor (Agent above you).
- Penalties for Double Dipping
- Double dipping, although rare, is strongly discouraged by Profit Connect and the financial industry at large, which considers the practice to be highly unethical.
- Agents who get caught doing this can be heavily fined. The Compliance Department has full discretion to Bar, Terminate or Prosecute the Agent to the full extent of the law. Double Dipping will not be tolerated by Profit Connect.
The Bottom Line – Double Dipping usually occurs in secret. It is either hidden by the Agent or Agent’s family, friends or with some unscrupulous arrangements. Yes, Accounting and your Up-Line is watching for this type of scam and eventually it will be found and reported to the Compliance Department. For example, when one of your Agents decides to create a Down-Line, it includes the responsibility to be careful and not unknowingly or deliberately create a Double Dipping situation. Double Dipping is stealing from you. As a result, your commissions are cut in half or more because of the unethical Agent in your Down-Line. If you suspect an Agent is Double Dipping, it is in your best financial interest, to report to Customer Service (800) 674-6392.
4.2. Cross-Group Buying or Selling:
No Affiliate shall engage in cross-group buying or selling. Cross-group buying and selling occurs when an Affiliate sells products and services offered through or by Profit Connect to another Affiliate he or she did not personally sponsor, except (a) as may be permitted under a servicing agreement pursuant to Rule 5.5.4 or (b) when an Affiliate purchases from or through his or her upline Platinum products and services offered through or by Profit Connect.
4.3. Unsolicited Electronic Messages:
No Affiliate shall send, transmit, or otherwise communicate any unsolicited electronic messages relating to Profit Connect, its business opportunity, products or services to persons with whom the Affiliate does not have a pre-existing personal or business relationship. (This includes, but is not limited to, sending messages through newsgroups, purchased mailing lists, “safe lists,” or other lists of individuals or entities with whom or which the Affiliate does not have a pre-existing relationship.)
Affiliates may advertise only with the express approval of Profit Connect in writing.
4.5. Retail Establishments:
An Affiliate who works in or owns a retail establishment must operate his or her IB separate and apart from the retail establishment. No Affiliate shall permit products, services or literature offered through or by Profit Connect to be sold or displayed in retail establishments, including, but not limited to, places like schools, fairs, kiosks, vending machines, unauthorized internet websites, military stores, salons or professional offices.
4.5.1. Event Sales:
The sale of authorized product categories by Affiliates are permitted only at temporary (no more than 10 days) events whose themes are consistent with the products being sold, and only with the express approval of Profit Connect in writing. To allow Profit Connect sufficient time to grant approval, the Affiliate must submit a completed Event Sales Application Form to Profit Connect 30 days prior to the event. A copy of the Event Sales Application form may be obtained at ProfitConnect.me.
4.5.2. Display Booths:
The display only (no sales) of products and approved literature by Affiliates is permitted only at temporary (no more than 10 days) events, and only with the express approval of Profit Connect in writing. To allow Profit Connect sufficient time to grant approval, the Affiliate must submit a completed Display Booth Application Form to Profit Connect 30 days prior to the event. A copy of the Display Booth Application form may be obtained at ProfitConnect.me.
4.6. Statements About Products, Services, and the Opportunity:
An Affiliate shall make only truthful and accurate statements about the business opportunity, products and services offered through or by Profit Connect. Affiliates shall not make any claims about products or services offered through or by Profit Connect other than those claims found in Profit Connect authorized literature and at ProfitConnect.me.
Products offered through or by Profit Connect are to be sold only in their original packages and in their original formulations. Affiliates may not repackage products or otherwise change or alter any of the packaging, labels or materials of products offered through or by Profit Connect.
4.8. Written Sales Receipt:
An Affiliate who takes and/or delivers an order in person for over $25 shall deliver to the Customer at the time of sale a written and dated order or receipt which shall: (a) describe the product(s) sold; (b) state the price charged; (c) give the name, address, and telephone number of the selling Affiliate; and (d) include Profit Connect’s Satisfaction Guarantee.
4.9. Satisfaction Guarantee:
When a Customer requests Satisfaction Guarantee service within the stated guarantee period for a product purchased directly from an Affiliate, the Affiliate shall immediately offer the individual his or her choice of: (a) a full refund; (b) an exchange for a like product; or (c) full credit toward the purchase of another product. If a product is shipped directly to the Customer by Profit Connect, the Customer should follow the return instructions on the packing slip. In the case of Affiliate purchases, only those that the Affiliate makes for personal, family, or household use may be returned under the Satisfaction Guarantee. Whenever an Affiliate requests Satisfaction Guarantee service within the stated guarantee period, an Affiliate has the choice of a: (a) full refund; (b) exchange for the same or like product; or (c) full credit toward the purchase of another product. The current Satisfaction Guarantee can be found at ProfitConnect.me.
4.10. Buy-Back Rule:
Affiliates leaving the Profit Connect business have a right to return Profit Connect™ products. A departing Affiliate may choose to sell inventory of currently marketable Profit Connect™ products to an upline Affiliate at a mutually agreeable price. If a departing Affiliate is unable to secure the buy-back of inventory through an upline Affiliate, Profit Connect shall repurchase the departing Affiliate’s unused, currently marketable Profit Connect products subject to the following: (a) Profit Connect will make all appropriate Performance Bonus differential and Leadership Bonus charge backs to those IBs who originally received them; and (b) Profit Connect will charge freight costs incurred by the Affiliate leaving the Profit Connect business if the net reimbursement includes same, and a service charge equal to 10% of the Affiliate cost of the products being returned to cover handling and processing charges.
4.11. Other Returns:
An Affiliate who is not leaving the Profit Connect business may ask Profit Connect to buy back Profit Connect™ products where he or she may be experiencing financial hardship or other exceptional circumstances as explained by the Affiliate. Return requests are reviewed on a case-by-case basis. Profit Connect reserves the right to repurchase only unused, currently marketable Profit Connect™ products subject to Rule 4.9.
4.12. Seventy Percent Rule:
In order for an Affiliate to receive a Performance Bonus or recognition due on all the products purchased, an average of seventy percent of the Affiliate’s personal Business Volume (BV) per month must come from products sold at a commercially reasonable price; if the Affiliate fails to meet this requirement, then such Affiliate may be paid that percentage of Performance Bonus measured by the amount of products that can be shown to have been actually sold, rather than the amount of products purchased, and recognized accordingly. For purposes of this Rule, a reasonable amount of products used for personal or family consumption or given out as samples can contribute to the 70% average.
4.13. Customer Volume:
In order to obtain the right to earn a Performance Bonus on downline volume during a given month, an Affiliate must: (a) make not less than one sale to each of 10 different Customers; or (b) have at least 50 PV of sales to any number of Customers. For purposes of obtaining the rights referred to in this Rule, sales must be to Customers who either: (a) place an order directly with Profit Connect; or (b) place an order with the Affiliate that the Affiliate reports to Profit Connect through a system established by Profit Connect for tracking such sales.
In producing proof of such sales, the Affiliate is required to disclose the prices at which he or she made the Customer sales.
If such an Affiliate fails in any month to make said Customer sales and/or to produce proof of making such sales, then he or she will be denied his or her Performance Bonus that month on downline volume. It is the obligation of the Affiliate to ensure compliance by the official deadlines published by Profit Connect, in order to qualify for his or her Performance Bonus. This Rule shall apply unless the Affiliate is currently a qualified Platinum or above.
4.14. Compliance with Applicable Laws, Regulations, and Codes:
Affiliates shall comply with all laws, regulations, and codes that apply to the operation of their IB wherever said business may be conducted. Affiliates shall not directly or indirectly encourage, or aid and abet any person to violate any laws, regulations, codes, or term of the Affiliate Contract. No Affiliate may operate any illegal or unlawful business enterprise, or engage or participate in any deceptive, illegal, or unlawful trade practices.
4.15. Affiliate Relationship:
Affiliates are independent contractors. Affiliates shall not state or imply that they are employees, agents or legal representatives of Profit Connect, its affiliates, and/or other Affiliates. Affiliates shall not represent or imply, either directly or indirectly, that registration creates an employment relationship between themselves and the Affiliates whom they have sponsored or who have sponsored them.
4.16. Franchises and Territories:
Affiliates shall not represent to anyone that there are franchises or exclusive territories available under the Plan.
4.17. Enticement to Change Position in the Line of Sponsorship:
Under no circumstances shall an Affiliate, directly or indirectly, solicit, assist, attempt to induce, or encourage another Affiliate to request a change in position in the Line of Sponsorship.
4.18. Exporting and Importing:
Affiliates shall not export or import products or services offered through or by Profit Connect, or sell to others they have reason to believe will import or export such products or services, to or from the United States or its possessions or territories or any other country, regardless of whether or not Profit Connect or its affiliates have established operations or are doing business in that country. Nothing in this Rule prohibits Affiliates from personal use or resale within the Region in accordance with the Affiliate Contract.
4.19. Activity Outside the Region or Activity Outside the Market Where the Affiliate Is Registered:
Affiliates who engage, directly or indirectly, in any activity related to the Profit Connect business in a jurisdiction outside of the Region must do so in a manner that complies with the letter and spirit of the applicable laws, regulations, rules, policies, and procedures of the Profit Connect affiliate in that jurisdiction, regardless of whether they are registered Affiliates in that jurisdiction. Failure to do so shall be a breach of the Affiliate Contract.
4.20. Sound Business Practices:
Affiliates shall operate their IB in a financially responsible and solvent manner. Profit Connect reserves the right to offset bonus payments for amounts an Affiliate owes to Profit Connect. If an Affiliate or any member partner in his or her IB files a petition for bankruptcy or has bankruptcy proceedings commenced against him or her, or has any assets seized by court order or taken in execution of an unsatisfied judgment debt, the Affiliate must immediately inform Profit Connect.
No Affiliate shall use Profit Connect™ products or services in conjunction with any type of fund-raising activity. Fund-raising includes the solicitation for the donation of funds or for the purchase of Profit Connect™ products or services based on the representation that all, or some, of the gains, proceeds, donations, bonuses, or profits generated by such sale will benefit a particular group, organization, or cause.
4.22. Affiliate Plan Manipulation:
Affiliates shall not manipulate the Plan, point value (PV), or business volume (BV) in any way that results in the payment of bonuses or other awards and recognition that have not been earned in accordance with the terms of the Affiliate Contract.
4.23. Personal/Business Information Update:
All Affiliates are responsible for communicating any updates or changes to their personal information (e.g., name, address, email address, and telephone numbers, etc.) or business information (e.g., business name, address, email address, telephone numbers, addition/deletion of partner, change of business status, etc.) to Profit Connect.
4.24. Profit Connect Contact:
When the Rules require an Affiliate to contact Profit Connect for notice, permission, or approval, the Affiliate shall contact the Profit Connect Business Conduct and Rules Department by mail at 4262 Blue Diamond Rd Ste 102-37, Las Vegas, NV 89139, by fax at 800-674-6392 or by email at bcr@ProfitConnect.me. For questions or concerns, please call 800-674-6392.
5. Presentation of the Plan, Sponsoring, and Support
When inviting a Prospect to hear a presentation of the Plan, an Affiliate must make it clear that what is being described or offered is the Plan.
5.2. Describing the Plan:
When describing the Plan: (a) an Affiliate’s statements must be truthful, accurate, and not misleading; (b) the roles of a balanced business (retail sales, personal use, and sponsoring) must be accurately described; and (c) all income representations must be limited to income from the Plan, based on actual experience or from Profit Connect-authorized materials, and provide realistic income potential.
5.3. Required Disclosures:
In seeking participation of a Prospect in the Plan, an Affiliate:
Must give each Prospect a copy of a brochure authorized by Profit Connect for use with Prospects that contains the average profits, earnings, and sales figures and percentages as published by Profit Connect, and orally inform the Prospect that the brochure contains the average profits, earnings, and sales figures and percentages as published by Profit Connect.
Must use only Profit Connect-authorized materials or Business Support Materials authorized for use with Prospects under Rule 7 (Business Support Materials).
5.4. Prohibited Sponsoring Practices:
In seeking participation of a Prospect in the Plan, an Affiliate:
Must not cite lifestyle examples, e.g., travel, automobile, homes of successful Affiliates, and contributions to charitable causes, unless such benefits were actually accrued as the result of building a successful IB.
Must not say or imply that a successful IB can be built in the form of a wholesale buying club.
Must not say or imply that there is no requirement for the retail sale or marketing of products by Affiliates.
Must not promote potential tax benefits of the Plan.
Must not encourage or require a Prospect to purchase anything not included with the Business Services and Support fee specified in the Affiliate Registration Agreement and must not encourage the purchase of a product or service not identified on the Affiliate Registration Agreement. The only requirements that an Affiliate can impose upon a Prospect whom he or she is willing to register is that the Prospect shall pay the Business Services and Support fee, and sign a completed Affiliate Registration Agreement and submit it to Profit Connect.
Must not register or sponsor new Affiliates in a way that manipulates the new Affiliate’s position in the LOS.
5.5. Sponsor’s Responsibilities:
A sponsor must comply with the following obligations:
Rules Compliance: The sponsor must be an Affiliate in full compliance with the Rules of Conduct.
Access to the Affiliate Contract: The sponsor must ensure that all Affiliates whom he or she sponsors have access to and the opportunity to read the Affiliate Contract.
Training and Motivation: The sponsor must be able to train and motivate the Affiliates whom he or she has sponsored with a minimum of assistance from his or her first upline Platinum or above. Affiliates may fulfill this obligation by use of Business Support Materials approved under Rule 7.
Servicing Arrangements: If an Affiliate is unable or unwilling to service Affiliates whom he or she has sponsored with the proper training or motivation, he or she must make arrangements, in writing, with his or her first upline qualified Platinum to provide this service. Platinum level or above Affiliates who wish to make arrangements with another Platinum level or above Affiliate to provide product fulfillment services to Affiliates downline to the next qualified Platinum, must do so in writing. In either case, he or she must be willing to compensate for these services, and full PV/BV for products purchased must always be transferred to the serviced Affiliate so that bonuses are paid correctly.
Distribution of Performance Bonuses: Some Affiliates receive a Performance Bonus from Profit Connect, a part of which may be payable to downline Affiliates. The Affiliate cannot retain any portion which may be payable to a downline Affiliate, even where the downline Affiliate owes a private debt to the upline Affiliate, unless there is a written agreement between the parties permitting such retention. Even with such a written agreement, the upline Affiliate may retain only the net portion of the Performance Bonus due that Affiliate, and not any portion that may be payable to other downline Affiliates.
5.6. Platinum Responsibilities:
Affiliates who qualify as a Platinum or above have the following additional responsibilities:
Conduct or provide access to periodic sales meetings for the purpose of training and inspiring Affiliates downline to the next qualified Platinum and maintain frequent contact with all of them.
Assure compliance with the Rules of Conduct by Affiliates downline to the next qualified Platinum.
5.7. Prohibited Support Practices:
Sponsors and upline Affiliates shall not encourage or require downline Affiliates, as a condition of receiving assistance in building their IB after registration, to (a) purchase any specified amount of Profit Connect or non-Profit Connect products or services, or (b) maintain a specified inventory of Profit Connect or non-Profit Connect products or services.
6. Preservation of the Line of Sponsorship
6.1. Confidentiality of the LOS:
Profit Connect protects the LOS and LOS Information for the benefit of Profit Connect and of all Affiliates. Profit Connect keeps LOS Information proprietary and confidential, and treats it as a trade secret. Profit Connect is the exclusive owner of all LOS Information, which is derived, compiled, configured, and maintained through the expenditure of considerable time, effort, and
resources by Profit Connect and its Affiliates. Affiliates can use Profit Connect’s goodwill and LOS Information only for the purposes permitted under the Affiliate Contract.
Affiliates acknowledge, and agree not to challenge, that: (i) LOS Information is confidential and a valuable trade secret owned by Profit Connect; (ii) LOS Information is owned exclusively by Profit Connect; and (iii) Affiliates do not own any rights in LOS Information. Affiliates agree not to challenge or interfere with Profit Connect’s authority to license or sublicense LOS Information. Affiliates shall not assert or seek any rights or protection of any kind in LOS Information other than those limited rights or protections that may be specifically granted by this Rule.
An Affiliate may use LOS Information only with Profit Connect’s prior written permission, which may be expressed through general publication (to all Affiliates) or through a specific writing to one or more Affiliates. Any permission granted by Profit Connect shall constitute a limited non-exclusive, non-transferable, and revocable license by Profit Connect for an Affiliate to use LOS Information only as necessary to facilitate his or her IB as permitted under these Rules of Conduct. Profit Connect reserves the right to deny or revoke any such license, upon reasonable notice to the Affiliate stating the reason(s) for such denial or revocation, whenever, in the reasonable opinion of Profit Connect, such is necessary to protect the confidentiality or value of LOS Information.
All Affiliates shall maintain LOS Information in strictest confidence, and shall take all reasonable steps and appropriate measures to safeguard LOS Information and maintain the confidentiality thereof. An Affiliate shall not compile, organize, access, create lists of, or otherwise use or disclose LOS Information except as authorized by Profit Connect. An Affiliate also shall not disclose LOS Information to any third party, or use LOS Information in connection with any other businesses or to compete, directly or indirectly, with the Profit Connect business.
An Affiliate shall promptly return any and all LOS Information to Profit Connect upon resignation, non renewal, or termination of his or her IB and shall immediately discontinue any further use thereof.
Every Affiliate acknowledges that use or disclosure of LOS Information, other than as authorized by Profit Connect, will cause significant and irreparable harm to Profit Connect, warranting an award of injunctive relief, including a temporary restraining order and/or a preliminary injunction, specific performance, and damages, including costs, attorneys’ fees, and disgorgement of all profits made as a result of such unauthorized use or disclosure.
An Affiliate’s obligations under this Rule 6.1 shall survive and remain enforceable following the voluntary or involuntary resignation, non-renewal, or termination of that Affiliate’s IB.
6.2. Non-Competition and Non-Solicitation:
Non-Competition (current Affiliates): Every Affiliate agrees not to own, manage, operate, consult for, serve in a Key Position in, or participate as an independent distributor in (a) any other direct sales program using a multilevel or network marketing structure, or (b) any other enterprise that markets, through independent distributors, products or services functionally interchangeable with those offered through or by Profit Connect.
Non-Solicitation (current Affiliates): Every Affiliate agrees that he or she will not, on his or her own behalf or on behalf of any person or entity, directly or indirectly, encourage, solicit, or otherwise attempt to recruit or persuade (i) any Affiliate or (ii) any person who has been an Affiliate within the past two calendar years, to own, manage, operate, consult for, serve in a Key Position in, or participate as an independent distributor in (a) any other direct sales program using a multilevel or network marketing structure, or (b) any other enterprise that markets, through independent distributors, products or services functionally interchangeable with those offered through or by Profit Connect.
Non-Competition (former Affiliates): Every Affiliate agrees that, during the six-month period following the resignation, non-renewal, or termination of that Affiliate’s IB, he or she shall not own, manage, operate, consult for, serve in a Key Position in, or participate as an independent distributor in (a) any other direct sales program using a multilevel or network marketing structure, or (b) any other enterprise that markets, through independent distributors, products or services functionally interchangeable with those offered through or by Profit Connect.
Non-Solicitation (former Affiliates): Every Affiliate agrees that, during the twenty-four-month period following the resignation, non-renewal, or termination of that Affiliate’s IB, he or she shall not, on his or her own behalf or on behalf of any person or entity, directly or indirectly, encourage, solicit, or otherwise attempt to recruit or persuade (i) any Affiliate or (ii) any person who has been an Affiliate within the past two calendar years, to own, manage, operate, consult for, serve in a Key Position in, or participate as an independent distributor in (a) any other direct sales program using a multilevel or network marketing structure, or (b) any other enterprise that markets, through independent distributors, products or services functionally interchangeable with those offered through or by Profit Connect.
The time periods in Rules 6.2.3 and 6.2.4 above shall be extended by any period of time during which the former Affiliate is in violation of the applicable Rule.
The geographic scope of Rules 6.2.1, 6.2.2, 6.2.3, and 6.2.4 is the Region.
All Affiliates agree that these Rules are reasonable in both time and geographic scope.
For purposes of this Rule 6.2, “Key Position” means an owner, employee, agent, or independent contractor who contributes to the profitability of his or her new business or who is in a position to receive benefit or competitive advantage from his or her new business by virtue of his or her access to LOS Information.
Nothing in this Rule 6.2 restricts the sale or distribution of privately developed Business Support Materials in accordance with Rule 7 and Rule 6.3.
Nothing in this Rule 6.2 restricts competition between Affiliates (a) in the sale of products or services offered through or by Profit Connect to Customers or (b) in the registration of new Affiliates or Customers.
Every Affiliate acknowledges that this Rule 6.2 protects the reasonable competitive business interests of Profit Connect and Affiliates, and that a violation of any subsection of this Rule 6.2 will cause significant and irreparable harm to Affiliates and Profit Connect, warranting an award of injunctive relief, including a temporary restraining order and/or a preliminary injunction, specific performance, and damages, including costs, attorneys’ fees, and disgorgement of all profits made as a result of such violation.
Except for obligations under Rule 6.2.1 and Rule 6.2.2, an Affiliate’s obligations under this Rule 6.2 shall survive and remain enforceable following the voluntary or involuntary resignation, non-renewal, or termination of that Affiliate’s IB.
6.3. Other Business Activities:
Except as provided in Rule 6.2, Affiliates may engage in other business ventures, including other selling activities, involving products, services, or business opportunities. However, Affiliates may not take advantage of their knowledge of or association with other Affiliates whom they did not personally register, including their knowledge resulting from or relating to Line of Sponsorship Information, in order to promote and expand such other business ventures.
Every Affiliate agrees not to solicit, directly or indirectly, other Affiliates whom he or she did not personally sponsor in order to sell, offer to sell, or promote other products, services, business opportunities, investments, securities, or loans not offered through or by Profit Connect. Every Affiliate agrees not to sell, offer to sell, or promote any other business opportunities, products, or services in connection with the Plan. Nothing in this Rule 6.3 restricts the sale or distribution of Business Support Materials in accordance with Rule 7.
Nothing in this Rule 6.3 restricts, for example, an Affiliate regularly engaged in the operation of a service station, auto dealership, retail establishment, salon, or a professional service (e.g., law, medicine, dentistry, or accounting) from serving customers who are Affiliates and who have sought them out. But an Affiliate shall not actively solicit the patronage of other Affiliates based on knowledge or information gained as a result of being an Affiliate.
6.4. Approval of Certain Affiliate Contract Changes:
The sale of an ownership interest in an IB, transferring an IB, merging IBs, separating or dividing an IB, or assignment of any rights or obligations under an Affiliate Contract require express approval of Profit Connect in writing. None of the foregoing may be used to manipulate the Line of Sponsorship.
6.5. Individual Transfers:
An individual transfer involves the transfer of an Affiliate without any downline Affiliates. Any Affiliate who wants to change his or her sponsor must submit a written request to Profit Connect accompanied by (1) a written release signed by all the Affiliates upline in the Line of Sponsorship up to and including the first qualified Platinum, (2) a written acceptance from the new Affiliate sponsor and new upline Platinum, and (3) a statement indicating the business reason for the transfer request. Upon Profit Connect’s express approval in writing of the request, the written acceptance from the new sponsor and upline Platinum confirms that they will incur all responsibilities of the transferring Affiliate.
6.6. Group Transfers:
A group transfer involves the transfer of an Affiliate with one or more downline Affiliates.
An Affiliate who wishes to transfer to a different sponsor with one or more downline Affiliates may do so only with the express approval of Profit Connect in writing. In addition, an Affiliate must submit a written request to Profit Connect accompanied by (a) written consent from all Affiliates upline in the Line of Sponsorship up to and including the first qualified Platinum, and also the first qualified Emerald, (b) written consent of all Affiliates whom the transferring Affiliate wishes to transfer with him or her, (c) written consent by the new sponsor and his or her upline qualified Platinum to which the requesting Affiliate wants to be transferred, and (d) a statement indicating the business reason for the transfer request.
No Affiliate currently qualified as a Silver Producer or above can be transferred with downline Affiliates under this Rule.
An Affiliate formerly qualified as a Silver Producer or above may be transferred with downline Affiliates if more than twelve months have elapsed since the Affiliate was so qualified.
6.7. Six-Month Inactivity:
An Affiliate who wishes to transfer to a different sponsor but is unable to obtain the necessary consents may not register under a new sponsor until the Affiliate has terminated his or her Affiliate Contract or failed to renew and has been inactive for a period of six months or longer. Following the lapse of the inactive period, the former Affiliate may register as a
new Affiliate under a new sponsor.
During the period of inactivity, a person shall not conduct any of the activities of an Affiliate under his or her name, or in the name of another person or IB.
The following shall not interrupt the running of the six-month inactivity period: (a) procuring and/or submitting a written request for transfer; (b) filing an application for an informal or formal conciliation; (c) operating an Profit Connect-affiliated business in any other country in which an Profit Connect affiliate conducts business; (d) directing an inquiry to Profit Connect as to the status of his or her IB; or (e) purchasing Profit Connect™ products or services as a Customer.
Two-Year Inactivity: An Affiliate who transfers to a new sponsor, or who registers under a different sponsor after 6 months of inactivity, may not sponsor any Affiliate who was previously upline or downline to him or her, up to and down to the first qualified Platinum unless at least two years have elapsed since the expiration of the sponsored Affiliate’s contract.
Two-Year Inactivity (Joining an Existing IB): Former Affiliates may not be added to an existing IB for a period of 24 months following the expiration of their Affiliate Contract.
6.8. Sale of an IB:
An Affiliate who owns and operates an IB may sell his or her ownership interest in such IB only to another Affiliate who is in compliance with the Rules of Conduct, and who has the sufficient skills, experience, judgment, and resources to operate the IB, as reasonably determined by Profit Connect. Profit Connect requires that specific terms of sale be included in any sales agreement. Such terms and a sample sales agreement may be obtained from Profit Connect. An IB may be sold only with the express approval of Profit Connect in writing.
In order to preserve the Line of Sponsorship, the selling Affiliate must offer his or her IB in the order of priority stated below, and the Affiliate(s) interested in purchasing the IB must meet all of the terms and conditions set forth in these Rules:
The first option to purchase belongs to the selling Affiliate’s International Sponsor, who retains the right to acquire the IB throughout the negotiations to sell the IB by meeting the price and conditions of any bona fide offer received by and deemed acceptable to the selling Affiliate;
The second option to purchase belongs to the selling Affiliate’s local Foster Sponsor so long as the first option has not been exercised. In the event the selling Affiliate has no International Sponsor, the local Sponsor retains the right to acquire the IB throughout the negotiations to sell the IB by meeting the price and conditions of any bona fide offer received by and deemed acceptable by the selling Affiliate;
The third option, exercisable so long as the first or second options above have not been exercised, belongs to any one of the selling Affiliate’s personally registered Affiliates;
The fourth option, exercisable so long as the first, second, or third options above have not been exercised, belongs to any qualified Platinum Affiliate or above, either up or down the Line of Sponsorship from the selling Affiliate to the next qualified Diamond;
The final option, exercisable so long as the first, second, third, or fourth options above have not been exercised, belongs to any Affiliate in good standing.
If Profit Connect operates an IB, and has entered into a servicing agreement with an Affiliate to manage the IB, Profit Connect shall have the option of selling the IB to the servicing Affiliate.
When an IB is sold, it will remain in its same position in the Line of Sponsorship.
6.9. Mergers and Combinations of IBs:
Mergers of IBs resulting from failure to file a Renewal Agreement, termination, resignation, death (with no designation of succession by heirs), or some involuntary event or cause beyond the control of any of the owners, are permitted, only with the express approval of Profit Connect in writing.
6.10. Two IBs Rule:
An Affiliate may own or have an ownership interest in only one IB except: (a) where two Affiliates marry; (b) where an existing IB purchases another IB pursuant to Rule 6.8; or (c) where the IB is, or will be, passed on to a deceased person’s spouse, heirs, or other beneficiary in accordance with Rule 3.10.
6.11. Parent-Child Integration:
As part of a plan to ensure the continuity of IBs owned by parents and children (“Succession Plan”), parent and children Affiliates may integrate their respective IBs, provided that they submit a written request to Profit Connect and meet the following:
- the child(ren) must be personally registered by the parents; or the parents must be personally registered by the child(ren);
- the parent’s IB and the child’s (children’s) IB must have operated as a separate IB for not less than two years by date of implementation;
- the parent and the child(ren) shall be qualified at the level of Platinum or above as of the implementation date;
- in the event that the parent(s) or the child(ren) is deceased or is not mentally or physically capable of running the IB before conditions b and c above have occurred, the child(ren) or parent(s) inheriting the IB shall have the right to integrate the separate IBs in accordance with this Rule.
Once the above conditions have been met, the Legal & Ethics Committee of the Affiliate Board shall review such request and provide Profit Connect with a recommendation. Profit Connect may or may not approve the request in light of such recommendation, the Succession Plan, and the goals, objectives, and benefits of the Plan. The implementation of the integration or de-integration shall be on September 1 after at least one full fiscal year has passed since
Profit Connect expressly approved the request in writing.
6.12. Divorce, Separation, or Other Dissolution of a Non-Spousal Partnership or Legal Entity:
Affiliates who become involved in an action for divorce, separation of marital property, or the dissolution of a non-spousal partnership or legal entity formed under Rule 3.3 must continue to conduct themselves in compliance with the Rules of Conduct.
During the pendency of a divorce, separation of marital property, or dissolution of
a legal entity, the Affiliates must adopt one of the following methods of operation: (a) the Affiliates continue to operate the IB jointly on a “business-as-usual” basis; (b) one or more Affiliates relinquishes his or her right and interest in the IB; (c) the Affiliates may agree on a third party to operate the IB, subject to express approval of Profit Connect in writing; or (d) if the Affiliates cannot agree on a third party, Profit Connect shall appoint a third party to act as a receiver during the pendency of the divorce or dissolution if Profit Connect determines that such an appointment is necessary to prevent a negative impact on the business.
After a Final Decree or Judgment of Divorce, a Final Separation Agreement or other domestic contract that contains a legally enforceable Property Settlement or Division of Assets that addresses their IB, or after a final dissolution of a legal entity, Affiliates may: (a) agree to continue to operate their IB in the form of a partnership or other legal entity permitted under Rule 3.3; or (b) agree that one Affiliate may relinquish all rights in the original IB to the other Affiliate(s), at which time the withdrawing Affiliate is free to immediately register under any sponsor.
Affiliates below the level of qualified Platinum level may not divide their IB in the case of a divorce, separation of marital property or other dissolution.
Upon approval by Profit Connect following submission of a signed written request, Affiliates who are qualified at the Platinum level may divide their IB so that one of the Affiliates is the sponsor of the other Affiliate. In such a case, all legs recognized by Profit Connect as 25% Sponsor or above within the past one year (“qualified legs”) will remain registered under the downline Affiliate. Affiliate(s) in the remaining legs (“non-qualified legs”) who wish to change their positions in the Line of Sponsorship must follow the requirements of the Individual or Group Transfer Rules at Rules 6.5 and 6.6, respectively.
Qualified Emeralds or above at the time of divorce, separation of marital property, or dissolution may divide their IB, thereby creating two separate IBs, one of which is sponsored by the other, in which case a “phantom IB” will be imposed over their separate IBs. Under the “phantom IB” arrangement, regardless of how the parties may split their IB, their separate IBs will be considered a single IB for purposes of determining bonuses to be paid to upline Affiliates. The parties will function as two separate Affiliates so far as themselves, their respective IBs, and their respective sponsored Affiliates are concerned. The IB of one Affiliate is not permitted to earn a Leadership Bonus or a Depth Bonus on the volume of the IB of the other Affiliate. Even though the original IB is divided into two separate IBs, Profit Connect may, if the Affiliates request, recognize both newly created IBs as a single entity for purposes of determining annual bonuses. Thus, the “phantom IB” arrangement continues the previously existing IB for purposes of calculating and paying higher award level bonuses to the Affiliates of the original IB. If one Affiliate registers another Affiliate of the original IB, the downline sponsored Affiliate at maximum Performance Bonus level may count as a qualifying “leg” for recognition purposes only. Profit Connect will issue all annual bonus checks in the joint names of the Affiliates of the original IB, leaving it to them to determine how the funds are to be divided. Whenever an Emerald or above IB is divided, the Affiliates of the original IB may rely on their former pin level to meet the requisite pin-level qualification for an invitation to Profit Connect-sponsored events for one fiscal year following the fiscal year in which the divorce, separation, or marital property or other dissolution occurred. Once an IB has been divided into two IBs, the new IBs will no longer be considered as a single combined IB for purposes of future higher pin/award recognition, but each separate IB must thereafter qualify on its own. To effect a division of the IB and to permit the Affiliates to operate separate IBs, the Affiliates must file a certified copy of the Final Decree or Judgment of Divorce, a Final Separation Agreement or other domestic contract that contains a legally enforceable Property Settlement or Division of Assets that addresses their IB, or a final Dissolution Agreement, and any additional documents requested by Profit Connect.
6.13. Disposition of an IB:
If an Affiliate resigns, fails to renew, terminates his or her IB, dies without transferring the IB, or is terminated by Profit Connect, Profit Connect shall decide the future of the IB in accordance with these Rules.
7. Business Support Materials
Business Support Materials (or “BSM”) as used in these Rules means all products and services (including but not limited to business aids, books, magazines, flip charts, and other printed material, online literature, internet websites, advertising, audio, video or digital media, rallies, meetings, and educational seminars, and other types of materials and services) that are (i) designed to solicit and/or educate Prospects, Customers, or prospective Customers of Profit Connect products or services, or to support, train, motivate, and/or educate Affiliates, or (ii) incorporate or use one or more of the Marks or Copyrighted Works of Profit Connect, or (iii) are otherwise offered with an explicit or implied sense of affiliation, connection, or association with Profit Connect. Unless otherwise specified in writing, Affiliates acknowledge that nothing in this Rule, or in any other Rule, shall be construed or interpreted as a license or other permission to incorporate any LOS Information into any BSM.
7.1. General Rules on BSM
Affiliates may sell BSM only in accordance with Rules 7.1 and 7.2. BSM created, used, promoted, distributed, or offered for sale by or to Affiliates must: (a) comply with all Quality Assurance Standards and any applicable Rules of Conduct relating to their use, promotion, and sale; (b) be submitted to Profit Connect for review prior to use, promotion, distribution, or sale; (c) be authorized by Profit Connect; and (d) if required for the category of BSM, bear the authorization number provided by Profit Connect. Except as explicitly provided in the Quality Assurance Standards, BSM may not be offered for sale to Prospects. A copy of the currently applicable Quality Assurance Standards is available from Profit Connect upon request by Affiliates eligible to sell or promote BSM.
Profit Connect’s Satisfaction Guarantee and Buy- Back Rules do not apply to materials not sold by Profit Connect. BSM may only be sold subject to the right of the purchaser to return such BSM for a refund in accordance with the following:
The terms of the refund policy, including terms regarding procedures for the resolution of disputes and the responsible person for returns, must be clearly communicated to the purchaser prior to any sale. In addition to any other person designated to handle returns, the selling Affiliate and the Approved Provider shall be responsible for handling returns if the sale occurred under Rule 7.2, and the selling Affiliate together with the selling Affiliate’s upline Platinum Affiliate or above shall be responsible for handling returns of all other sales.
During the first 90 days following an Affiliate’s registration with Profit Connect, the Affiliate may return all BSM of any form purchased, including meeting tickets, together with proof of purchase, for a 100% refund of the price paid for such BSM.
Except as provided in Rule 188.8.131.52, an Affiliate end user of BSM may return BSM purchased, together with proof of purchase, within 180 days following purchase, for a refund on commercially reasonable terms.
Except as provided in Rule 184.108.40.206, each Affiliate who chooses to sell tickets to seminars, events, and other business meetings is obligated to buy back tickets purchased for the purchaser’s personal use for a period of 30 days after the event, provided the dissatisfied purchaser personally attended the event. Such refund shall be for that portion of the cost of the event related to admission to the event, exclusive of the cost of travel, meals, or hotel accommodations.
BSM offered in the form of website subscriptions and downloadable media are subject to the following requirements, in addition to Rule 7.1.2: (a) Purchasers cancelling website subscriptions are entitled to a refund for unused, whole months of any prepaid subscription(s); and (b) Purchasers of downloadable media are entitled, if dissatisfied, to obtain a replacement download of equal value within 30 days of the purchase of the subject downloadable media.
Affiliates promoting, selling, distributing, or offering BSM for sale must: (a) ensure that such BSM are not sold or offered for sale in conjunction with the Affiliate’s registration with Profit Connect; (b) provide purchasers of such BSM with any disclosures or other information that may be required by Profit Connect from time to time; (c) clearly inform every Affiliate purchasing BSM that purchasing BSM is optional, is strictly voluntary, and may be helpful but is not necessary to build a successful independent business; and (d) advise the purchaser about refund policies that apply to such BSM in accordance with Rule 7.1.2.
No Affiliate may record a Profit Connect presentation without the prior specific written consent of Profit Connect. An Affiliate may make a single recording of the talks or presentations made by non-Profit Connect employees at any Profit Connect-sponsored meeting, provided the recording is for their personal use and is not reproduced for any purpose.
Although the specific content of live seminars, events, business meetings, or other similar BSM must comply with the Quality Assurance Standards, such BSM do not require prior authorization from Profit Connect unless or until the content is reduced to a fixed media (such as in print, audio, or video) for use with Affiliates or Prospects.
An Affiliate who purchases, promotes, distributes, or offers BSM for sale shall use reasonable efforts to determine that the quantity and cost of BSM are reasonably related to sales volume and profits of the purchaser’s IB.
Affiliates who create, promote, distribute, or sell BSM to other Affiliates may not compensate or remunerate other Affiliates in connection with such distribution, except in accordance with Rule 7.2.
Affiliates may organize seminars, events, or business meetings for Affiliates consistent with their training obligations as sponsors or Platinums.
Affiliates creating, using, selling, promoting, or distributing BSM apart from Rule 7.2 must obtain appropriate written authorization from Profit Connect in accordance with Rule 8 in order to use any Marks or otherwise use any copyrighted material or other intellectual property of Profit Connect in connection with such BSM.
Affiliates creating, using, selling, promoting, or distributing BSM must not infringe the copyrights or intellectual property rights of Approved Providers, other Affiliates, or third parties.
Affiliates qualified at the Platinum level or above who are not affiliated with an Approved Provider and who wish to sell, promote, or distribute BSM must register with Profit Connect by completing the “Platinum BSM Registration Form” available from the Business Support Materials Administration Department.
Sale, Promotion, and Distribution of BSM with Authorization from an Approved Provider (a
supplier authorized by Profit Connect to provide BSM to Affiliates or use BSM with Prospects, pursuant to the ACCREDITATION PLUS Program)
Affiliates who wish to sell, promote, or earn income from the sale of BSM from an Approved Provider must have a written contract or other binding authorization from that Approved Provider in accordance with the Program, obligating the Affiliate to adhere to applicable Quality Assurance Standards in connection with such activities.
Affiliates who are authorized by an Approved Provider to sell, promote, or distribute an Approved Provider’s BSM in accordance with Rule 7.2 require no further written authorization from Profit Connect to conduct such activity.
8. Marks and Copyrighted Works
Profit Connect’s Marks and Copyrighted Works are important and valuable business assets of Profit Connect. The Marks help identify the source and reputation of Profit Connect’s products and services worldwide and distinguish them from those of competitors. Profit Connect makes commercially reasonable efforts to protect the Marks from improper use, including through the Rules of Conduct, accreditation of Approved Providers, and a corporate identity program that requires the correct and consistent use of the Marks, both in appearance and substance.
8.1. Use of Marks and Copyrighted Works:
An Affiliate may use Profit Connect’s Marks and Copyrighted Works only with Profit Connect’s prior written permission, which may be expressed through general publication (to all Affiliates) or through a specific writing to one or more Affiliates. Without limitation, Profit Connect may require conformity with specifications, may require that materials that use Profit Connect’s Marks and/or Copyrighted Works be sourced from Profit Connect or an Profit Connect-approved supplier, and may otherwise condition use of its Marks and Copyrighted Works. Any permission granted by Profit Connect shall constitute a limited, non-exclusive, nontransferable, and revocable license to use such Marks and Copyrighted Works solely in connection with the Profit Connect business in the Region. Subject to conditions and specifications published or specifically provided in writing from time to time, the Marks and Copyrighted Works may be used only on: (a) exterior and interior office signs; (b) all forms of vehicle signs; (c) telephone listings; (d) promotional literature; (e) stationery; (f) premiums; and (g) business cards. Other proposed uses will be considered upon request. Without limitation, Profit Connect will not authorize an Affiliate to use
the Marks on imprinted checks.
9. Complying With the Affiliate Contract (Remedies for Breach)
Complying with the Affiliate Contract is essential for preserving a strong and viable business for Affiliates and Profit Connect. Affiliates and Profit Connect each have rights and responsibilities in case of a breach of the Affiliate Contract.
9.1. Profit Connect’s Rights and Responsibilities: When Profit Connect detects a potential breach of the Affiliate Contract, it will first investigate as appropriate. Before taking enforcement action, Profit Connect shall attempt to contact the Affiliate in an effort to resolve the issue. If the communication does not resolve the issue, Profit Connect may take any enforcement action authorized by the Affiliate Contract including, but not limited to, one or any combination of the following:
A written warning to an Affiliate and/or upline or downline Affiliates in the Line of Sponsorship.
Retraining an Affiliate and/or upline or downline Affiliates in the Line of Sponsorship.
Suspending some or all of the rights of an Affiliate for a specified period of time, or until certain conditions have been satisfied.
Withdrawing or denying an award, trip, pin recognition, or other incentive.
Withholding any monthly or annual bonus or incentive payments.
Compensatory remedies, as applicable.
Transferring an Affiliate or a group of Affiliates.
Terminating an Affiliate Contract.
If an Affiliate elects to challenge any action taken by Profit Connect under this Rule, the Affiliate shall submit the issue to the Dispute Resolution Procedures described in Rule 11.
9.2. Affiliate Rights and Responsibilities:
If an Affiliate believes that another Affiliate has breached the Affiliate Contract, the Affiliate first should contact the Affiliate in question in an effort to resolve the issue. If an Affiliate believes that Profit Connect has breached the Affiliate Contract, the Affiliate first shall contact Profit Connect in an effort to resolve the issue. If discussion with either an Affiliate or Profit Connect does not resolve the issue, the Affiliate may file a written complaint with Profit Connect. The complaint should explain the issue in as much detail as possible, and include all supporting documents. Profit Connect will investigate as appropriate, and take enforcement or corrective action under the Affiliate Contract, if necessary. If any issue remains unresolved, it shall be submitted to the Dispute Resolution Procedures described in Rule 11.
An Affiliate who elects to challenge the validity of a Rule or other term of the Affiliate Contract shall first contact Profit Connect in an effort to resolve the issue. If the Affiliate is not satisfied with Profit Connect’s response, the dispute shall be resolved in Arbitration under Rule 11.5.
9.3. Duty to Cooperate:
All Affiliates are required to respond to inquiries and otherwise cooperate in a timely fashion with any investigation conducted by Profit Connect. Failure to respond to inquiries or to otherwise cooperate in a timely fashion is a breach of the Affiliate Contract and may result in Profit Connect taking action against the IB.
The failure of Profit Connect or any Affiliate to enforce any breach of any provision of the Affiliate Contract shall not constitute a waiver of any prior, concurrent, or subsequent breach of the same or any other provision of the Affiliate Contract.
10. Modification of the Affiliate Contract
Profit Connect may modify the Affiliate Contract in accordance with the following procedures:
Any changes to Rule 11 require mutual agreement of the Affiliate Board and Profit Connect. For all other Rules, final decision making authority on amendments to the Affiliate Contract rests with Profit Connect. Profit Connect will, prior to final action, submit to the Affiliate Board for discussion, evaluation, and recommendation all changes in the Affiliate Contract that materially affect Affiliates.
Profit Connect will notify Affiliates of the proposed changes subject to Rule 10.1 by making them available to review by logging on to ProfitConnect.me and solicit comments from Affiliates concerning the proposed changes. Profit Connect and the Affiliate Board will consider any comments submitted during the 30 days following such notice. The proposed changes shall become effective 15 days after the end of the comment period, unless Profit Connect makes further modifications, after consultation with the Affiliate Board (and agreement in the case of Rule 11). Profit Connect shall provide notice of any such further modifications on ProfitConnect.me 15 days prior to the effective date of such further modifications. These time periods may be shortened when it is necessary for a particular change to comply with a new law or other government mandate, to protect Affiliates from serious financial harm, or to protect the integrity of the Plan. Rule changes have prospective effect only.
Prior to the effective date of any proposed Rule change, any Affiliate who is unwilling to accept a Rule change can, if he or she wishes, provide notice of his/ her intent to resign from the Profit Connect business on the effective date of the Rule change. Unless the proposed Rule change is withdrawn, the Affiliate’s resignation will become effective, and Profit Connect will refund a pro rata share of the Affiliate’s registration or renewal fee for that year. The resigning Affiliate may sell his or her IB in accordance with Rule 6.8. In addition, the resigning Affiliate can return any unused, marketable products pursuant to Rule 4.10.
11. Dispute Resolution Procedures
Disputes arising out of or relating to an IB, the Plan, or the Affiliate Contract, as well as disputes involving Business Support Materials (“Disputes”) shall be resolved in accordance with this Rule. The dispute resolution procedures in this Rule apply to Disputes involving the following parties: (1) an Affiliate, a former Affiliate, or any such Affiliate’s officers, directors, agents, or employees; (2) Profit Connect and any parent, subsidiary, affiliate, predecessor, or successor thereof, or any of their officers, directors, agents, or employees; and (3) an Approved Provider or its officers, directors, agents, or employees (the “Party” or “Parties”). Rule 11 is reciprocal and applies to all of the Parties.
The only exception is when the claim made by an Affiliate or Profit Connect is for a debt on account for product or services offered through or by Profit Connect to or on behalf of the Affiliate, and the only Parties to that claim are Profit Connect and the Affiliate, and the total value of the claim is less than $10,000.00. In such cases, the Affiliate or Profit Connect may elect to pursue the claim in any court of competent jurisdiction, including small claims court. In all other cases the Parties will resolve the dispute as provided for under these Rules, up to and including binding arbitration if necessary.
11.1. Amendment Only With Affiliate Board Consent:
This Rule 11 and its subparts shall be amended only by mutual agreement between Profit Connect and the Affiliate Board, and such amendments shall not be retroactively applied to any dispute known to Profit Connect or the Affiliate Board at the time of amendment.
11.2. Temporary or Preliminary Injunctive Relief:
Nothing in these Rules prevents Profit Connect, an Affiliate, Approved Provider, or any other one of the Parties from seeking temporary or preliminary injunctive or other relief from a court of competent jurisdiction, notwithstanding the Parties’ obligation to participate in conciliation or arbitration under Rule 11.
The Parties, when involved in the dispute resolution process in any manner, will not disclose to any other person not directly involved in the dispute resolution process: (a) the substance of, or basis for, the Dispute; (b) the content of any testimony
or other information obtained through the dispute resolution process; or (c) the resolution (whether voluntary or not) of any matter that is subject to the dispute resolution process. However, nothing in these Rules shall preclude any one of the Parties from, in good faith, investigating a claim or defense, including interviewing witnesses and otherwise engaging in discovery.
The conciliation procedures are designed to resolve disputes efficiently in a non confrontational setting, through education, mediation, and conciliation. The conciliation requirement is reciprocal and applies to all Parties. The Party first seeking resolution shall commence conciliation by providing a Request for Conciliation form to the other affected Parties and, in any Dispute, the Profit Connect Business Conduct and Rules Department. In cases where the Affiliate Board will be involved in the conciliation, a copy of the Request for Conciliation form will also be given to the Affiliate Board and the Affiliate Board Hearing Panel Chairperson.
The first step in conciliation is non-binding mediation. The Affiliate Board provides experienced Affiliates who are available to serve as mediators (“Affiliate Mediator”).
In cases where an Approved Provider is not a Party, an Affiliate Board Mediator will serve and conduct an informal conciliation with the Parties, unless one or more Affiliates involved in the dispute objects to an Affiliate Board Mediator. In that case, the mediation will take place with an independent neutral mediator acceptable to all Parties. Profit Connect can provide a list of possible mediators, but the Parties are not obligated to agree to any mediator on that list.
In cases where an Approved Provider is a Party, the dispute will be mediated by an independent neutral mediator acceptable to all Parties, unless all of the Parties involved in the dispute stipulate to informal conciliation with an Affiliate Board Mediator. Profit Connect can provide a list of possible mediators, but the Parties are not obligated to agree to any mediator on that list.
In all instances where the Parties cannot agree on a mediator within 10 business days of receiving the Request for Conciliation form, they authorize Profit Connect to request the American Arbitration Association (AAA) to select a mediator.
Profit Connect will pay the reasonable fees of the mediator for up to one full day, except that if an Approved Provider is a Party, the Approved Provider is responsible for its pro rata share of the mediator’s fee.
The mediation shall take place within 30 days of selection of a mediator. The Parties may agree to extend this date by 30 days. In addition, on a request of a Party, the mediator may extend the deadline for not more than an additional 30 days. All Parties must appear in person or, if authorized by the mediator, by telephone.
The mediation proceeding is confidential and not open to the public; but any participant may, if he or she chooses, be accompanied by an attorney or another personal representative, such as an upline Affiliate or a friend or family member, as long as the representative agrees to respect the confidentiality of the process.
All Parties who receive notice of the mediation are required to participate. The
Parties are strongly encouraged to attend the mediation in person, but are not required to do so. Should the Parties choose to attend in person, they are responsible for their own expenses. Failure by Profit Connect or any disputing Affiliate to participate in good faith is a breach of the Affiliate Contract, and the breaching Party shall reimburse the other Parties for any expense directly caused by the breach, as determined by the mediator.
The mediator shall within two weeks following the mediation provide the Parties with a written statement summarizing any agreement between the Parties resolving their disputes and, for any dispute not settled, declaring that the Parties are at impasse. The mediator may, at his/her discretion, recommend a resolution for any dispute not settled in the mediation. Within two weeks of receiving this summary, each Party shall state in writing whether or not it agrees with any recommendation by the mediator, in whole or in part.
11.4.2. Hearing Panel Procedures:
If any part of the dispute is not resolved by mediation under Rule 11.4.1, any Affiliate who is a Party to the remaining dispute may request a Hearing Panel; except that any dispute involving an Approved Provider, or any challenge to the impartiality of the Hearing Panel itself, shall go directly to arbitration without a Hearing Panel.
A Request for Hearing Panel Form must be filed with the Business Conduct and Rules Department or the Hearing Panel Chairperson within four weeks after the mediator’s written statement pursuant to Rule 220.127.116.11. Upon receipt of a request, the matter is scheduled for the next Hearing Panel session, which shall be not more than 60 days following the request. All Parties who receive notice of the hearing are required to participate, unless excused by the Hearing Panel Chairperson or his/her designee. The Parties are strongly encouraged to attend the hearing in person, but are not required to do so. Should the Parties choose to attend in person, they are responsible for their own expenses.
The Affiliate Board Executive Committee selects the Hearing Panel Chairperson, three additional Panel members, and alternates who may serve on the Hearing Panel. The Hearing Panel Chairperson will confirm that no Panel member presents a conflict of interest with respect to the matters over which the Panel presides. Once selected, the Panel members are barred from discussing the dispute with anyone before the date of the hearing. Each Panel member and the Parties involved receive a copy of the conciliation file.
The Parties shall exchange all documents on which they intend to rely during
the hearing at least 10 days in advance of the hearing. In addition, Parties must submit to the Panel all documents on which they intend to rely in proving or defending their claim at least 10 days in advance of the hearing. If a Party does not submit such documents in a timely fashion, the Hearing Panel Chairperson may refuse to allow their introduction.
The Chairperson of the Panel is empowered to control the conduct of the hearing, and to have authorized persons administer an oath to any witness. The rules of evidence do not apply.
When a voluntary resolution does not occur, the Hearing Panel, within 30 days
following completion of the hearing, will issue to the Parties and Profit Connect a written statement of facts and a non-binding recommendation for resolution, including, if appropriate, the imposition of certain sanctions. Within two weeks of receiving that recommendation, each Party shall inform the Panel and the other Parties in writing whether that Party: (a) accepts the recommended resolution in its entirety; (b) accepts some specific portions of the recommended resolution and rejects the others; or (c) rejects the recommended resolution in its entirety. Any Party may demand arbitration of any unresolved Dispute under Rule 11.5.
The Parties shall submit any Disputes that were not resolved through the process described in Rule 11.4, through binding arbitration in accordance with this Rule 11.5.
The arbitration award shall be final and binding and judgment thereon may be entered by any court of competent jurisdiction. The Parties acknowledge that the Affiliate Contract and each of its parts evidence a transaction involving interstate commerce, and the Federal Arbitration Act shall apply in all cases and govern the interpretation and enforcement of the arbitration rules and arbitration proceedings.
Class Action Waiver: The Parties mutually waive any right to assert any Dispute as a class, collective, or representative action, or to participate in any Dispute asserted as such.
No Class Arbitration: The Parties agree that, if the Class Action Waiver at Rule 11.5.2 is found to be void or unenforceable for any reason, any motion to have the Dispute certified as a class action, and any ensuing class action should it be certified, must be heard and disposed of only by a court, and not by an arbitrator; class action claims cannot be submitted to arbitration under these Rules under any circumstances.
Commencement of Arbitration: The complaining Party may file a demand for arbitration with either the American Arbitration Association (AAA) or JAMS. The arbitration will be commenced and conducted in accordance with the AAA or JAMS (whichever is chosen) fee schedules, and commercial arbitration rules and this Rule 11.5. If there is any conflict between the JAMS or AAA arbitration rules and this Rule 11.5, Rule 11.5 shall apply.
If an Affiliate demands arbitration against Profit Connect or an Approved Provider and the Affiliate’s claim is less than $10,000, Profit Connect or the Approved Provider, whichever is the applicable respondent, shall pay for all applicable fees of AAA or JAMS for initiating and administering the arbitration and the reasonable fees for the arbitrator for up to two days.
Demand for arbitration shall be made within two years after the claim arose, but in no event after the date when the initiation of legal proceedings would have been barred by the applicable statute of limitations. The two-year period or any shorter statutory limitations period shall be tolled during the conciliation process described in Rule 11.4, provided that conciliation shall not revive any limitations period that has expired before the time a Party invokes Rule 11.4.
11.5.6. Single Arbitrator:
Unless all Parties to the arbitration agree otherwise, a single arbitrator shall be chosen, and arbitrator candidates must have at least five years’ experience as a state or federal judge or as a full-time ADR professional, including substantial experience in commercial arbitration.
11.5.7. Arbitrability Issues to Be Decided by Arbitrator:
The arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability or formation of this Agreement including, but not limited to, any claim that all or any part of this Agreement is void or voidable.
The arbitrator’s award shall be limited to deciding the rights and responsibilities of the Parties in the specific dispute being arbitrated. The arbitrator’s award shall have no collateral estoppel effect in any other proceeding. The arbitrator shall not provide a statement of reasons for his or her award unless requested to do so by all Parties.
Similar claims involving multiple Parties may be consolidated before a single arbitrator if all Parties agree. The arbitrator will decide any disputed consolidation issues.
Notwithstanding any discovery provisions in the JAMS or AAA commercial arbitration rules incorporated in paragraph 11.5.4 above, no discovery shall occur in an arbitration under these Rules unless and until specifically authorized by the arbitrator. The arbitrator shall decide the amount, scope, and timing of discovery as appropriate in each case. In addition, before requiring any discovery, the Parties involved in the arbitration shall agree on an appropriate confidentiality order consistent with the Affiliate Contract. If they fail to agree, the arbitrator shall impose appropriate confidentiality requirements on the Parties and witnesses.