Policies and Procedures

VITAMIST, LTD.

STATEMENT OF POLICIES and PROCEDURES

United States Effective July 3, 2008

TABLE OF CONTENTS

SECTION 1 – CORPORATE MISSION STATEMENT.
1.1 – CODE OF ETHICS.

SECTION 2 – INTRODUCTION.
2.1 – POLICIES AND COMPENSATION PLAN INCORPORATED INTO Team Member AGREEMENT.
2.2 – ADHERENCE TO THE VITAMIST REWARDS PROGRAM.
2.3 – PURPOSE OF POLICIES.
2.4 – CHANGES TO THE AGREEMENT.
2.5 – DELAYS.
2.6 – POLICIES AND PROVISIONS SEVERABLE.
2.7 – WAIVER.
2.8 – CORPORATE TOURS.

SECTION 3 – BECOMING A TEAM MEMBER.
3.1 – REQUIREMENTS TO BECOME A TEAM MEMBER.
3.2 – NO PRODUCT PURCHASE REQUIRED.
3.3 – TEAM MEMBER BENEFITS.
3.4 – TERM AND RENEWAL OF AN VITAMIST INDEPENDENT BUSINESS.

SECTION 4 – ADVERTISING.
4.1 – INTELECTUAL PROPERTY.
4.2 – INDEPENDENT TEAM MEMBER-PRODUCED MARKETING MATERIALS.
4.3 – TEAM MEMBER WEBSITES.
4.4 – BLOGS, CHAT ROOMS, SOCIAL NETWORKS, ONLINE AUCTIONS, AND OTHER ONLINE FORUMS.
4.5 – DOMAIN NAMES AND EMAIL ADDRESSES.
4.6 – SALES MEDIUMS.
4.7 – ADVERTISED PRICE.
4.8 – GENERIC BUSINESS ADVERTISEMENTS.
4.9 – MEDIA AND MEDIA INQUIRIES.
4.10 – UNSOLICITED EMAIL AND FAX COMMUNICATION.
4.11 – TELEMARKETING RESTRICTIONS.
4.12 – UNAUTHORIZED CLAIMS AND ACTIONS.
4.12.1 – Indemnification.
4.12.2 – Product Claims.
4.13 – TRADE SHOWS, EXPOSITIONS, AND OTHER SALES FORUMS.
4.14 - SOLE ADVERTISING

SECTION 5 – A TEAM MEMBER’S RELATIONSHIP WITH THE COMPANY.
5.1 – CHANGES TO AN VITAMIST INDEPENDENT MEMBERSHIP.
5.1.1 – Changes Involving a Spouse and/or Closely Held Company.
5.1.2 – Change in Form of Legal Entity.
5.1.3 – Change in Existing Beneficial Interest Holders of a Legal Entity.
5.1.4 – Limitations.
5.2 – OTHER CHANGES.
5.2.1 – Change of Sponsor.
5.2.2 – Change of Placement.
5.2.3 – Cancellation and Re-application.
5.3 – CONFLICTS OF INTEREST.
5.3.1 – Non-solicitation.
5.3.2 – Sale of Competing Goods or Services.
5.3.3 – Team Member Participation in Other Direct Selling Programs.
5.4 – TARGETING OTHER DIRECT SELERS.
5.5 – DOWNLINE (GENEALOGY) REPORTS.
5.6 – DISPARAGEMENT & NON-ENTICEMENT.
5.7 – CROSS SPONSORING.
5.8 – GOVERNMENTAL APPROVAL OR ENDORSEMENT.
5.9 – HOLDING APPLICATIONS OR ORDERS.
5.10 – IDENTIFICATION.
5.11 – INCOME TAXES.
5.12 – INDEPENDENT CONTRACTOR STATUS.
5.13 – INSURANCE.
5.14 – INTERNATIONAL MARKETING.
5.15 – NOT FOR RESALE.
5.16 – INVENTORY LOADING.
5.16.1 – The 70% Rule.
5.17 -- SPONSORSHIP RIGHTS.
5.18 – BENEFICIAL INTEREST.
5.19 – SUCCESSION.
5.19.1 – Transfer Upon Death of a Team Member.
5.19.2 –Transfer Upon Incapacitation of a Team Member.
5.20 – SALE, TRANSFER, OR ASSIGNMENT OF AN VITAMIST INDEPENDENT BUSINESS.
5.20.1 – Requirements of Sale.
5.20.2 – Right of First Refusal.
5.20.3 – Line of Sponsorship.
5.20.4 – Compliance Department Approval.
5.20.5 – Voidable Sales; Assumption of Obligations; Waiting Period.
5.21 – ACTIONS OF HOUSEHOLD MEMBERS OR AFFILIATED INDIVIDUALS.
5.22 – SEPARATION OF AN VITAMIST INDEPENDENT BUSINESS.

SECTION 6 – RESPONSIBILITIES OF TEAM MEMBERS.
6.1 – CHANGE OF ADDRESS, TELEPHONE, AND EMAIL ADDRESSES.
6.2 – SPONSORING TEAM MEMBER RESPONSIBILITIES.
6.2.1 – Initial Training.
6.2.2 – Ongoing Training Responsibilities.
6.3 – REPORTING POLICY VIOLATIONS.

SECTION 7 – SALES REQUIREMENTS.
7.1 – PRODUCT SALES.
7.2 – NO TERRITORY RESTRICTIONS.
7.3 – SALES RECEIPTS.
7.4 – PRODUCT PACKAGING AND LIABILITY.
7.5 – PICKUP CENTER ORDERS.

SECTION 8 – AUTOSHIP PROGRAM.
8.1 – AUTOSHIP CYCLE.
8.2 – AUTOSHIP STATUS.
8.3 – AUTOSHIP ENROLMENT.

SECTION 9 – BONUSES AND COMMISSIONS.
9.1 – BONUS AND COMMISSION QUALIFICATIONS.
9.2 – ERRORS OR QUESTIONS.
9.3 – BONUS BUYING PROHIBITED.
9.4 – ADJUSTMENTS TO BONUSES AND COMMISSIONS.
9.4.1 – Returned Products.
9.5 – REPORTS.
9.6 - COMMISSION PAYOUT PERIOD

SECTION 10 – PRODUCT GUARANTEES, RETURNS, AND INVENTORY REPURCHASE.
10.1 – CUSTOMER SATISFAC TION GUARANTEE.
10.2 – RETURN OF INVENTORY AND SALES AIDS BY TEAM MEMBERS UPON CANCELATION.
10.2.1 – Local and State Laws.
10.3 – PROCEDURES FOR ALL RETURNS.
10.4 – PRODUCT ABANDONMENT.

SECTION 11 – DISPUTE RESOLUTION AND DISCIPLINARY PROCEDINGS.
11.1 – DISCIPLINARY SANCTIONS.
11.2 – GRIEVANCES AND COMPLAINTS.
11.3 – TEAM MEMBER CONDUCT REVIEW COMMITTEE.
11.4 – TEAM MEMBER CONDUCT APPEALS COMMITTEE.
11.5 – MEDIATION.
11.6 – ARBITRATION.
11.7 – GOVERNING LAW, JURISDICTION, AND VENUE.

SECTION 12 – PAYMENT AND SHIPPING.
12.1 – RETURNED CHECKS OR CHARGEBACKS.
12.1.1 - RETURNED CHECKS
12.1.2 - CHARGEBACKS
12.2 – RESTRICTIONS ON THIRD PARTY USE OF CREDIT CARDS AND CHECKING ACCOUNT ACE SS.
12.3 – SALES TAXES.

SECTION 13 – RECLASSIFICATION AND CANCELATION.
13.1 – RECLASSIFICATION.
13.2 – CANCELATION & NON-COMPETE.
13.3 – NON-RENEWAL.

SECTION 14 – DEFINITIONS.

VITAMIST, LTD. TEAM MEMBER POLICIES & PROCEDURES

SECTION 1 – CORPORATE MISSION STATEMENT

At VitaMist, Ltd. our mission is to improve the lives of our Team Members by providing whole food derived nutritional product s, a life changing business opportunity and by giving back to the world through charity.

1.1 – Code of Ethics

VitaMist, Ltd. (hereafter "VitaMist" or "the Company") is a values-based company that prides itself on the quality and character of its Team Members. The following guidelines help ensure a uniform standard of excellence throughout the entire organization. Every VitaMist Team Member is expected to practice the following ethical behavior when acting in the name of the company:

I will be respectful of every person I meet while doing VitaMist related business.
At all times I will conduct myself and my business in an ethical, moral, legal, and financially sound manner.
I will be truthful in my representation of VitaMist products by making no diagnostic, therapeutic, curative, or exaggerated claims and by clearly stating all terms of sale. I understand any claim of cure, prevention, mitigation, or treatment or any prescription is strictly forbidden.
I will not engage in activities that would bring disrepute to VitaMist, any VitaMist corporate officer or employee, myself, or other Team Members.
I will not make discouraging or disparaging claims toward other VitaMist Team Members. I will ensure that in all VitaMist business dealings I will refrain from engaging in negative or derogatory language. I will refrain from making any type of slanderous statements.
I will correctly represent all the bonus/compensation plans available through VitaMist and the income potential represented therein. I understand I may not use my own income as an indication of others’ potential success, or use compensation checks as marketing materials. I further understand that I may only disclose my VitaMist personal income to recruit a potential Team Member(s).
I will provide encouragement and support to all of my customers to ensure that their experience with VitaMist is a successful and happy one. I understand that it is important to provide follow-up service and support to my downline.
I will abide by all of VitaMist’s Policies & Procedures now and as they may be amended in the future.

SECTION 2 – INTRODUCTION

2.1 – Policies and Rewards Program Incorporated into Team Member Agreement. These Policies and Procedures, in its present form and as amended at the sole discretion of VitaMist, are incorporated into and form an integral part of the VitaMist Team Member Agreement. Throughout these Policies, when the term "Agreement" is used, it collectively refers to the VitaMist Team Member Application and Agreement, these Policies and Procedures, and the VitaMist Rewards Program. These documents are incorporated by reference into the VitaMist Team Member Agreement (all in their current form and as amended by VitaMist). It is the responsibility of each Independent Team Member (hereafter "ITM") to read, understand, adhere to, and ensure that they are aware of and operating under the most current version of these Policies and Procedures. When sponsoring or enrolling a new Team Member(s), it is the responsibility of the sponsoring Team Member to ensure that the applicant is provided with, or has online access to the most current version of these Policies and Procedures and the VitaMist Rewards Program prior to their execution of the ITM Agreement.

2.2 – Adherence to the VitaMist Rewards Program: ITMs must adhere to the terms of the VitaMist Rewards Program as set forth in Official VitaMist Literature. ITMs shall not offer the VitaMist opportunity through, or in combination with any other system, program, or method of marketing other than that specifically set forth in official VitaMist literature. ITMs shall not require or encourage other current or prospective Customers or ITMs to participate in VitaMist in any manner that varies from the program as set forth in official VitaMist literature. ITMs shall not require or encourage other current or prospective customers or Team Members to execute any agreement, contract, or membership, other than those offered by the company, in order to become an VitaMist ITM. Similarly, ITMs shall not require or encourage other current or prospective Customers or Team Members to make any purchase from, or payment to, any individual or other entity to participate in the VitaMist Rewards Program other than those purchases or payments identified as recommended or required in Official VitaMist Literature.

2.3 – Purpose of Policies: VitaMist is a direct sales company that markets its products through ITMs. It is important to understand that your success and the success of your fellow ITMs depends on the integrity of the men and women who market our products and services. To clearly define the relationship that exists between ITMs and VitaMist, and to explicitly set a standard for acceptable business conduct, VitaMist has established the Agreement. VitaMist ITMs are required to comply with (1) all of the Terms and Conditions set forth in the Agreement which VitaMist may amend at its sole discretion from time to time and (2) all federal, state, and local laws governing their VitaMist Independent business and their conduct. Because you may be unfamiliar with many of these standards of practice, it is very important that you read and abide by the Agreement. Please review the information in this manual carefully. It explains and governs the relationship between you, as an independent contractor, and the Company. If you have any questions regarding any policy or rule, do not hesitate to contact cs@vitamist.com or seek an answer from your upline.

2.4 – Changes to the Agreement: Because federal, state, and local laws, as well as the business environment, periodically change, VitaMist reserves the right to amend the Agreement and its prices in its sole and absolute discretion. By signing the ITM Agreement, a Team Member agrees to abide by all amendments or modifications that VitaMist elects to make. Amendments shall be effective upon notice to all Team Members that the Agreement has been modified. Notification of amendments shall be published in official VitaMist materials. The Company shall provide or make available to all Team Members a complete copy of the amended provisions by one or more of the following methods: (1) posting on the Company’s official website, (2) electronic mail (email), (3) fax-on-demand, (4) voice mail system broadcast, (5) inclusion in Company periodicals, (6) inclusion in product orders, or (7) special mailings. The continuation of an VitaMist Independent Business or a Team Members acceptance of bonuses or commissions constitutes acceptance of any and all amendments.

2.5 – Delays: VitaMist 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.

2.6 – 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.

2.7 – 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 VitaMist to exercise any right or power under the Agreement or to insist upon strict compliance by a Team Member with any obligation or provision of the Agreement, and no custom or practice of the parties at variance with the terms of the Agreement, shall constitute a waiver of VitaMist’s right to demand exact compliance with the Agreement. Waiver by VitaMist can be effectuated only in writing by an authorized officer of the Company. VitaMist’s waiver of any particular breach by a Team Member shall not affect or impair VitaMist’s rights with respect to any subsequent breach, nor shall it affect in any way the rights or obligations of any other Team Member. Nor shall any delay or omission by VitaMist to exercise any right arising from a breach affect or impair VitaMist’s rights as to that or any subsequent breach. The existence of any claim or cause of action of a Team Member against VitaMist shall not constitute a defense to VitaMist’s enforcement of any term or provision of the Agreement.

2.8 – Corporate Tours: You may visit VitaMist’s corporate owned facilities only at designated times. You must make an appointment in advance to arrange any such visit. At the time of the visit, you are immediately required to sign in at the front desk, and must be accompanied at all times by a VitaMist employee.

SECTION 3 – BECOMING A TEAM MEMBER

3.1 – Requirements to become a Team Member: To become a VitaMist Team Member, each applicant must:

Be of the age of legal majority in his or her state of residence;
Reside in the United States, U.S. Territories, or a country that VitaMist has officially opened for business;
Have a valid Social Security or Federal Tax ID number on file with the Company (if in the U.S.);
Submit a properly completed, VitaMist-authorized Team Member Agreement to the Company.
Husbands, wives, and dependent children desiring a team membership must be in the same team membership entity, unless two previously existing team members marry and each continues to maintain their own membership.

3.2 – No Starter Kit: no person is required to purchase VitaMist starter Kit, services or sales aids, to become a Team Member. However, each applicant must purchase a 3 tubes of product 47.88. This will include various marketing materials, and includes the $40.00 annual membership fee.

3.3 – Team Member Benefits: Once a Team Member Agreement has been accepted by VitaMist, the benefits of the Rewards Program and the Team Member Agreement are available to Team Members in good standing. These benefits include the right to:

Sell VitaMist products in accordance with the Policies & Procedures;
Participate in the VitaMist Rewards Program (receive bonuses and commissions, if eligible);
Receive periodic VitaMist literature and other VitaMist communications;
Sponsor other individuals as Customers or Team Members into the VitaMist business and thereby, build an organization and progress through the VitaMist Rewards Program;
Participate in promotional and incentive contests and promotional programs sponsored by VitaMist.
Participate in VitaMist-sponsored support, service, training, motivational and recognition functions (upon payment of appropriate charges, if applicable).

3.4 – Term and Renewal of an VitaMist Business: The term of the Team Member Agreement is one year from the date of its acceptance by VitaMist (subject to reclassification for inactivity after five months). Every Team Member Agreement must be renewed each year with an annual renewal fee of $40, which must be paid on or before the anniversary date of the Team Member Agreement. If the renewal fee is not paid within 30 days after the expiration of the current term of the Team Member Agreement, the Agreement will be canceled and the Team Member will be purged from the system. VitaMist provides an Automatic Renewal Program ("ARP") for qualifying Team Members who will be enrolled automatically. To qualify for the ARP, a Team Member must have in excess of $40 in commissions owed at the time of renewal. If a qualifying Team Member does not wish to auto-renew their Team Membership, they must employ the available Opt-Out feature. The ARP fee ($40) will be deducted from the Team Member’s closest commission check coinciding with their renewal date. Team Members who are not automatically enrolled in ARP may become re-enrolled via the manual re-enrollment process available through the Virtual Back-Office. The renewal fee will be waived if the team member has been on a monthly autoship of at least 3 tubes for a minimum of 10 months out of the calendar year.

SECTION 4 – ADVERTISING

4.1 – Intellectual Property: VitaMist will not allow the use of its trade names, trade marks, designs, or symbols outside of the corporate produced and approved sales aids by any person, including VitaMist Team Members, without prior written authorization from VitaMist. Furthermore, no Team Member may use, publish, reproduce, advertise, sell, or display in any manner the name, picture or likeness, or voice of another Team Member without prior written consent from the named Team Member. This consent must be on file with VitaMist’s Compliance department prior to any use.

4.2 – Independent Team Member-Produced Marketing Materials: Only Team Members who have achieved the rank of Ruby Mentor or higher may create and publish their own marketing materials, advertising materials, and/or other sales aids. All items must be submitted and reviewed by VitaMist and must bear the appropriate review seal before being displayed or publically circulated. Any modification subsequent to initial approval must also be reviewed by VitaMist and must also bear the appropriate review seal before being displayed or publically circulated. Team Members may not sell independently produced items in any type of package that also contains corporate produced literature with out prior written concent from VitaMist’s Corporate office. Team Members may not produce for sale or distribution any recorded Company events and speeches without written permission from VitaMist. Team Members may also not reproduce for sale or for personal use any recording of Company-produced audio or video tape presentations. VitaMist further reserves the right to rescind approval for any sales tools, promotional materials, advertisements, or other literature, and Team Members waive all claims for damages or remuneration arising from or relating to such rescission.

4.3 – Team Member Websites: If a Team Member desires to utilize an Internet web page to promote their business, they may do so through VitaMist’s official website or through VitaMist approved replicating websites after entering into the Website License Agreement. A copy of the Agreement can be obtained upon written request to cs@vitamist.com. Alternatively, Team Members may develop their own web pages. However, any who does so must license their site(s) with the Compliance department and receive written permission from Compliance prior to the site’s public availability. Ruby Mentor and higher may offer their web pages to there own organization only. The Ruby Mentor must do so with prior approval from the Compliance department. After initial approval of the website is obtained, the Team Member may not change or modify its website without the express written consent of Compliance. Websites that are owned, operated, or managed by a Team Member may not redirect a viewer to any other website, regardless of to- or from-page content. Failure to comply may result in disciplinary action up to and including termination of a Team Membership.

4.4 – Blogs, Chat Rooms, Social Networks, Online Auctions, and other Online Forums: Team Members may use any approved website, including but not limited to, online blogs, chat rooms, social networks, online auction sites, video websites, or any other online forum to market, sell, advertise, promote, or discuss VitaMist’s products or services, or the VitaMist business opportunity.

4.5 – Domain Names and Email Addresses: Team Members may not use or attempt to register or sell any of VitaMist’s trade names, trademarks, service names, service marks, product names, or any derivative thereof, for any internet domain name or email address. Without prier consent of VitaMist spray vitamins.

4.6 – Sales Mediums: VitaMist products may not be sold or promoted through catalogues or other mass sales mediums, such as infomercials, television, radio, or other related sales mediums. VitaMist products may not be sold or promoted through retail establishments. You may, however, sell VitaMist sales aids and products through service establishments. These service establishments must require a membership and/or appointment, and the services performed must be health and wellness related. Only VitaMist-produced or approved literature, banners, or signage may be displayed on a shelf, counter, or wall.

4.7 – Advertised Price: You may not advertise any VitaMist products at a price LESS than the highest company published, established retail price of any of the products in the VitaMist product line plus shipping and applicable taxes. No special enticement advertising is allowed. This includes but is not limited to offers of free membership, free shipping, or other such offers that grant advantages beyond those available through the Company.

4.8 – Generic Business Advertisements: If you advertise via newspaper or other advertising venues, the following rules apply:

No advertisement may promote, represent, or imply salaried positions, management positions, hourly wages, full or part-time employment, or guaranteed incomes. The VitaMist opportunity is not a job, and may not be presented as such. Terms such as "manager trainee," "management positions available," "travel provided," "call for interview," "positions available," "now hiring," and other misleading statements are not allowed.
No advertisement may imply that a job, position, salary, or any type of employment is allowed.
No specific income can be promised or implied, and any references to compensation must use the word "commissions" to indicate the independent contractor status of Team Members.
Advertisements may not contain references to VitaMist or its products (i.e., no product, no use of VitaMist logo or product design, no health claims).
You may not use any of VitaMist’s trademarks or trade-names. Any requests for variances from the above rules must be submitted to VitaMist and approved in writing prior to publication. Please direct any inquiries to cs@VitaMist.com, or by fax to the attention of the Compliance department at (602) 244-8977.

4.9 – Media and Media Inquiries: Team Members must not initiate any interaction with the media or attempt to respond to media inquiries regarding VitaMist, its products or services, or their independent VitaMist business. All inquiries by any type of media must be immediately referred to VitaMist’s communications department at cs@vitamist.com, or by calling 1-800-582-5273. Additionally, Team Members may not draft, publish, post on the internet, or otherwise dispense verbal or written VitaMist-related press releases or statements to the media. This policy is designed to ensure that accurate and consistent information is provided to the public, as well as a proper public image.

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

The email must include the Team Member’s physical mailing address.
There must be a functioning return email address to the sender.
There must be a notice in the email that advises the recipient that they 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).
The email must clearly and conspicuously disclose that the message is an advertisement or solicitation.
The use of deceptive subject lines and/or false header information is prohibited.
All opt-out requests, whether received by email or regular mail, must be honored. If a Team Member receives an opt-out request from a recipient of an email, the Team Member must forward the opt-out request to the Company. VitaMist may periodically send commercial emails on behalf of Team Members. By entering into the Team Member Agreement, Team Member agrees that the Company may send such emails and that the Team Member’s physical and email addresses will be included in such emails as outlined above. Team Members shall honor opt-out requests generated as a result of such emails sent by the Company. Except as provided in this section, Team Members may not use or transmit unsolicited faxes or use an automatic telephone dialing system relative to the operation of their VitaMist businesses.

4.11 – Telemarketing Restrictions: 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. While you may not consider yourself a "telemarketer" in the traditional sense of the word, these regulations broadly define "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, Team Members must not engage in telemarketing relative to the operation of their VitaMist businesses. The term "telemarketing" means the placing of one or more telephone calls to an individual or entity to induce the purchase of a VitaMist products or service, or to recruit them for the VitaMist opportunity. "Cold calls" made to prospective customers or Team Members that promote either VitaMist’s products or services of the VitaMist opportunity constitute telemarketing and are prohibited. Notwithstanding the foregoing, a Team Member may place telephone call(s) to a prospective Customer or Team Member (a "prospect") under the following limited situations:

(a) If the Team Member has an established business relationship with the prospect. An "established business relationship" is a relationship between a Team Member and a prospect based on:
- A financial transaction between the prospect and the Team Member within the eighteen (18) months immediately preceding the date of such a call.
- The prospect’s purchase, rental, or lease of goods or services from the Team Member within the eighteen (18) months immediately preceding the date of a telephone call to induce the prospect’s purchase of a product or services; or
The prospect’s personal inquiry or application regarding a product or service offered by the Team Member within the three (3) months immediately preceding the date of such a call.
I f the Team Member receives written and signed permission from the prospect authorizing the Team Member to call. The authorization must specify the telephone number(s) which the Team Member is authorized to call.
Team Members may call family members, personal friends, and acquaintances. An "acquaintance" is someone with whom a Team Member has at least a recent first-hand relationship (i.e., the Team Member recently personally met him or her). Bear in mind, however, that if a Team Member makes a habit of "card collecting" from everyone he or she meets and subsequently calling them, the FTC may consider this a form of telemarketing that is not subject to this exemption. Thus, if Team Members engage in calling "acquaintances," the Team Member must make such calls on an occasional basis only and not as a routine practice. In addition, Team Members shall not use automatic telephone dialing systems relative to the operation of their VitaMist businesses. The term "automatic telephone dialing system" means equipment that has the capacity to:
1. (a) store or produce telephone numbers to be called, using a random or sequential number generator, and
2. (b) to dial such numbers.

4.12 – Unauthorized Claims and Actions

4.12.1 Indemnification: A Team Member is fully responsible for all of their verbal and written statements made regarding VitaMist products, services, and the Marketing and Rewards Program which are not expressly contained in official VitaMist materials. Team Members agree to indemnify VitaMist and VitaMist’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 VitaMist as a result of the Team Member’s unauthorized representations or actions. This provision shall survive the termination of the Team Member Agreement.

4.12.2 Product Claims: No claims (which include personal testimonials) as to therapeutic, curative, or beneficial properties of any products offered by VitaMist may be made except those contained in Official VitaMist Literature. In particular, no Team Member may make any claim that VitaMist products are useful in the cure, treatment, diagnosis, mitigation, or prevention of any diseases. Such statements can be perceived as medical or drug claims. Not only do such claims violate VitaMist policies, but they potentially violate federal and state laws and regulations, including the federal Food, Drug, and Cosmetic Act and Federal Trade Commission Act.

4.13 – Trade Shows, Expositions, and Other Sales Forums: VitaMist provides a Trade Show Request Form in the Team Member’s Back Office, or upon request through Team Member Support. Team Members may display and/or sell ONLY VitaMist products at trade shows and professional expositions, with prior written approval from Compliance. Requests are approved on a first-submitted, first-served basis, and a maximum of one representation per event is allowed. Only one event per Team Member at a time is permitted. At the completion of each event, an additional request may be made. VitaMist further reserves the right to refuse authorization to participate at any function which it does not deem a suitable forum for the promotion of its products or the VitaMist 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 VitaMist wishes to portray.

4.14 - Sole advertising: VitaMist products may not be sold or promoted in any medium, print, digital or otherwise in conjunction with advertising or mention of any other product or service without prior written approval of from the VitaMist Compliance department.

SECTION 5 – A TEAM MEMBER’S RELATIONSHIP WITH THE COMPANY:

5.1 – Changes to a VitaMist Team Membership: Changes to the ownership of rights in a Team Membership are subject to the following rules.

5.1.1 Changes Involving a Spouse and/or a Closely Held Company.

5.1.1: The First Right of Refusal rules in this section 6 shall not apply if

5.1.1.1: A Team Member desires to add or remove a spouse from the Team Membership (Examples: Mrs. X is a Team Member. She may add her husband, Mr. X, to the Team Membership. She may not add an adult child, parent, or other relative. She may not add any business partner; or Mrs. Y and Mr. Y are joint applicants on a Team Membership. They divorce and by agreement (or court order) Mrs. Y retains all the rights to the Team Membership and Mr. Y releases or is ordered to release all such rights)

5.1.1.1.2 A Team Member who is an individual desires to transfer his or her interest (and the spouse’s interest, if applicable) to a legal entity that is 100% held by one or both spouses. (Example: XYZ, Inc. is 100% owned by Mr. A. The Team Membership is in the name of XYZ, Inc. XYZ, Inc. may transfer its interest to Mr. A (and to Mrs. A if Mr. A agrees)

5.1.1.1.3 A Team Member that is a legal entity and 100% owned by an individual and/or his spouse desires to transfer its interest to the individual and/or the spouse. (Example: Mr. A is the sole name on a Team Membership. He may transfer his rights to XYZ, Inc. if he is the sole shareholder (or he and his wife Mrs. A are the sole shareholders) of XYZ, Inc.)

5.1.1.2 To accomplish a transfer, the Team Member must submit an amended Team Member application and,

5.1.1.2.1 If adding a spouse, a copy of their marriage certificate;

5.1.1.2.2 If removing a spouse, a notarized copy of the signatures of both spouses authorizing the removal;

5.1.1.2.3 if transferring to a legal entity, a certificate of good standing from the state of organization and a copy of the company’s charter documents showing all the interest holders and management; and

5.1.1.2.4 if transferring from a legal entity to the individual and/or individual and spouse, an authorizing statement signed by an officer or director of the legal entity and signed by the individual (and spouse, if applicable).

5.1.2 Change in Form of Legal Entity. A Team Member that is a legal entity and desires to change to another type of legal entity may do so as long as the beneficial interests in the legal entity do not change. All beneficial interest holders of the former legal entity must confirm with a notarized signature that they agree to the change. Also, a new Team Member Agreement must be signed by all of the beneficial interest holders of the new legal entity.Members of the former entity are jointly and severally liable for any indebtedness or other obligation to VitaMist.

5.1.3 Change in Existing Beneficial Interest Holders of a Legal Entity. If a shareholder, director, officer, partner, member, or trustee is removed from a legal entity and no new individual is added, the entity holding an interest in a Team Membership must provide such forms and evidence of the change as may be required by the Compliance department.

5.1.4 Limitations. Changes within the scope of this section 5.1 do not include a change of sponsorship, which is addressed in section 5.2.2 below

5.2 - Other Changes Any change not described in subsections 5.1 and 5.2 that involve a change in the beneficial interest of a Team Member is subject to the Right of First Refusal rules in subsection 5.20.

5.2.1 Change of Sponsor To protect the integrity of all marketing organizations and safeguard the hard work of all Team Members, VitaMist rarely allows changes in sponsorship, with the rare exception of direct line changes (meaning placement is not affected). A direct change request must be made by submitting a completed Sponsor Change Request Form within a seven (7) calendar day period from the date of enrollment, and must come from the current listed sponsor. If after seven days a fee of $75.00 will be charged to the Team Member making the Sponsor change request.

5.2.2 Change of Placement A request for change of placement must be: submitted within seven (7) calendar days of the date of enrollment, requested by the current listed sponsor through Team Member Services, and approved by Compliance. A Team Member can only be moved inside of the same sponsor’s organization. If approved, a Team Member is placed in the first available open bottom position on the date that the change is made. Team Members who have earned commissions or achieved rank are not eligible for placement changes. Please note that decisions made for any change request (sponsor or placement) are at the sole discretion of VitaMist.

5.2.3 Cancellation and Re-application A Team Member may legitimately change organizations by voluntarily cancelling their VitaMist business and remaining inactive (i.e., no purchases of VitaMist products, no sales of VitaMist products, no sponsoring, no attendance at any VitaMist functions, no participation in any other form of Team Member activity, nor operation of any other VitaMist business) for five (5) full consecutive calendar months. Following the five (5) month period of inactivity, the former Team Member may reapply under a new sponsor, but relinquishes all rights held by the original Team Membership (i.e., downline, commissions, previous orders, Starter Kit fee).

5.3 – Conflicts of Interest

5.3.1 Non-solicitation VitaMist Team Members 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, Team Members may not directly or indirectly recruit other VitaMist Team Members or Customers other than those they have personally sponsored for any other Network Marketing business. Following the cancellation of a Team Member Agreement, and for a period of six (6) calendar months thereafter, with the exception of a Team Member who is personally sponsored by the former Team Member, a former Team Member may not recruit any VitaMist Team Member or Customer for another Network Marketing business. Team Members 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, Team Members and VitaMist agree that this non-solicitation provision shall apply to all markets in which VitaMist conducts business.

5.3.2 Sale of Competing Goods or Services Team Members must not sell, or attempt to sell, any competing non-VitaMist programs, products, or services to VitaMist Customers or Team Members. Any program, product, service, or direct selling opportunity in the same generic categories as VitaMist products is deemed to be competing, regardless of differences in cost, quality or other distinguishing factors.

5.3.3 Team Member Participation in Other Direct Selling Programs If a Team Member is engaged in other non-VitaMist direct selling programs, it is the responsibility of the Team Member to ensure that their VitaMist business is operated entirely separate and apart from any other program. To this end, the following must be adhered to:

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

5.4 – Targeting Other Direct Sellers Should Team Members engage in solicitation and/or enticement of members of another direct sales company to sell or distribute VitaMist products, they bear the risk of being sued by the other direct sales company. If any lawsuit, arbitration, or mediation is brought against a Team Member alleging that they engaged in inappropriate recruiting activity of its sales force or Customers, VitaMist will not pay any of Team Member’s defense costs or legal fees, nor will VitaMist indemnify the Team Member for any judgment, award, or settlement.

5.5 – DOWNLINE (GENEALOGY) REPORTS Downline Activity Reports are available for Team Member access and viewing through the Team Member’s Back Office. Team Member access to their Downline Reports is password protected. All Downline Reports and the information contained therein are confidential and constitute proprietary information and business trade secrets belonging to VitaMist. Downline Reports are provided to Team Members in strictest confidence and are made available to Team Members for the sole purpose of assisting Team Members in working with their respective Downline Organizations in the development of their VitaMist business. Team Members should use their Downline Reports to assist, motivate, and train their downline Team Members. The Team Member and VitaMist agree that, but for this agreement of confidentiality and nondisclosure, VitaMist would not provide Downline Reports to the Team Member. A Team Member shall not, on their own behalf, or on behalf of any other person, partnership, association, corporation or other entity:

Directly or indirectly disclose the password or other access code to their Downline Activity Report;
Use the information to compete with VitaMist or for any purpose other than promoting their VitaMist business;
Directly or indirectly disclose any information contained in any Downline Activity Report to any third party;
Recruit or solicit any Team Member or Customer of VitaMist listed on any report, or in any manner attempt to influence or induce any Team Member or Preferred Customer of VitaMist to alter their business relationship with VitaMist. Upon demand by the Company, any current or former Team Member will return the original, and all copies of, Downline Activity Reports to the Company.

5.6 – Disparagement & Non-Enticement Team Members shall not demean, discredit, or defame other companies, competitors of VitaMist, Team Member marketing organizations or systems, or VitaMist Team Members in an attempt to promote any VitaMist product, or to entice another Team Member to become part of the first Team Member’s marketing organization or enroll in VitaMist. VitaMist specifically prohibits the disparagement of any approved Regional Director sales tools and/or business building systems. Additionally, if any Regional Director Team Member is found to be disparaging another Regional Director Team Member by name or by approved business building system, an automatic $10,000 fine will be imposed, per instance. Team Members are prohibited from using financial enticements or other incentives for the purpose of persuading a Team Member to change their line of sponsorship or business building system.

5.7 – Cross Sponsoring Actual or attempted cross sponsoring is strictly prohibited. "Cross sponsoring" is defined as the enrollment of an individual who or entity that already has a current Customer or Team Member Agreement on file with VitaMist, or who has had such an agreement within the preceding six calendar months, within a different line of sponsorship. The use of a spouse or relative’s name, trade names, DBAs, assumed names, corporations, partnerships, trusts, federal ID numbers, or fictitious ID numbers to circumvent this policy is prohibited. Team Members shall not demean, discredit or defame other VitaMist Team Members in an attempt to entice another Team Member to become part of the first Team Member’s marketing organization. This policy shall not prohibit the transfer of an VitaMist business in accordance with this Section.

5.7.1 If Cross Sponsoring is discovered, it must be brought to the Company’s attention immediately. VitaMist may take disciplinary action against the Team Member that changed organizations and/or those Team Members who encouraged or participated in the Cross Sponsoring. VitaMist may also move all or part of the offending Team Member’s downline to their original downline organization if the Company deems it equitable and feasible to do so. However, VitaMist is under no obligation to move the Cross Sponsored Team Member’s downline organization, and the ultimate disposition of the organization remains within the sole discretion of VitaMist. Team Members waive all claims and causes of action against VitaMist arising from or relating to the disposition of the Cross Sponsored Team Member’s downline organization.

5.8 – Governmental Approval or Endorsement Neither federal nor state regulatory agencies or officials approve or endorse any direct selling or network marketing companies or programs. Therefore, Team Members shall not represent or imply that VitaMist or its Marketing and Rewards Program have been "approved," "endorsed," or otherwise sanctioned by any government agency.

5.9 – Holding Applications or Orders All Team Member Agreements and product orders must be sent to VitaMist within 72 hours from the time they are signed by a Team Member or placed by a Customer, respectively.

5.10 – Identification All Team Members are required to provide their Social Security Number, Federal Employer Identification Number, or their Government Issued ID Number to VitaMist either on the Team Member Agreement or at the company’s request. Upon enrollment, the Company will provide a unique Team Member Identification Number to the Team Member by which they will be identified. This number will be used to place orders and track commissions and bonuses.

5.11 – Income Taxes Each Team Member is responsible for paying local, state/provincial, and federal taxes on any income generated as an Independent Team Member. If an VitaMist business is tax exempt, the Federal tax identification number must be provided to VitaMist. Every year, VitaMist 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.

5.12 – Independent Contractor Status You are an independent contractor. You are not an agent, employee, partner, or joint venture with the Company. You may not represent yourself as anything other than an Independent Team Member. You have no authority to bind VitaMist to any obligation. You are responsible for paying your own self-employment taxes, federal income taxes and other taxes required by law. You must obey any federal, state, and local laws, as well as Company rules and regulations pertaining to your independent VitaMist Team Membership or the acquisition, receipt, holding, selling, distributing or advertising of VitaMist’s products or opportunity.

Team Members may not answer the telephone by saying "VitaMist," "VitaMist, Ltd. Incorporated," or by any other manner that would lead the caller to believe that they have reached VitaMist’s corporate offices.
A Team Member may only represent that he/she is an VitaMist Independent Team Member. Therefore, all correspondence, business cards, sales materials or any other medium, digital and otherwise relating to or in connection with a Team Member’s VitaMist business shall contain the Team Member’s name followed by the term "Independent Team Member."
You agree to indemnify and hold VitaMist, its officers, agents, directors, and employees harmless from any claim, damage, liability, or loss arising out of your activities.

5.13 – Insurance VitaMist does not extend coverage under any of its policies to Team Members. If Team Members use their personal property (e.g., car or computer) or their home for business use, it may not be covered for loss or damage under typical automobile, property, or homeowner’s/renter’s insurance policies. All Team Members should contact their independent insurance agent to determine whether their business and associated property are suitably protected.

5.14 – International Marketing Because of critical legal and tax considerations, VitaMist must limit the resale of VitaMist products and the presentation of the VitaMist business to prospective Customers and Team Members located within the United States and U.S. Territories and those other countries that the Company has officially opened for business. Conducting meetings, promoting the VitaMist financial opportunity, or gifting/distributing product in an unopened country or market is strictly prohibited.

5.15 – Not for Resale In markets where the company is operating a Not for Resale ("NFR") program, the following parameters apply:

U.S. Customer Service Representatives located in Phoenix, Arizona, support Customers and Team Members in NFR markets. Hours of operation are Monday through Friday from 8:00 p.m. to 5:00 p.m, Mountain Standard Time.
Most products available in the United States are also available in NFR markets. Any product not available in NFR markets is due to NFR restrictions. Prices in NFR markets may seem higher than those in other countries where VitaMist operates. This difference is due to the addition of VAT, Duty, and shipping costs, which are included in the pricing of products sold in NFR markets.
Customers in NFR markets must purchase VitaMist products directly from the corporate offices and not through an Independent Team Member.
Customers and Team Members receive product on an NFR basis—for personal consumption only. Therefore, Customers and Team Members may not resell products to other Team Members or Customers.
No Open Sales Meetings may be conducted.
Customers and Team Members in NFR markets are prohibited from distributing and/or using sales tools promoting the VitaMist Rewards Program. Team Members may not advertise products in an NFR market.
Bulk order buying is prohibited.
Commissions paid under the U.S. Rewards Program may vary in NFR markets.

VitaMist encourages Team Members in NFR markets to expand their businesses. However, Team Members are subject to disciplinary action, including termination and/or legal action, if they attempt to sell VitaMist products or promote the VitaMist Rewards Program in countries where VitaMist is not officially open for business.

5.16 – Inventory Loading: The VitaMist program is built on retail sales to the ultimate consumer. VitaMist encourages its Team Members to only purchase inventory that they and their family will personally consume, will be used as a sales tool, or will be resold to others for their ultimate consumption.

VitaMist strictly prohibits the purchase of products in unreasonable amonts solely for the purpose of qualification or advancement in the compensation Plan.
A team member initial order cannot exceed $600 without prior approval by VitaMist.

5.16.1 The 70% Rule Each VitaMist Team Member commits to personally use, sell, or use in business building at least 70% of every order placed with the Company prior to placing another order, and must be able to certify to such if demanded by the Company or by any regulatory agency. No bonuses, commissions, or other compensation may be paid to any Team Member unless it is based on the sale of VitaMist products to end-users. Purchasing product solely for the purpose of collecting bonuses or achieving rank is prohibited. VitaMist retains the right to limit the amount of purchases you may make if, in our sole judgment, we believe those purchases are being made solely for qualification purposes instead of for consumption or resale. In addition, no person is permitted to make a personal order in another Team Member’s business center without prior written permission from the Team Member; this written permission must be on file with VitaMist. The Company reserves the right to restrict or deduct the points and commissions paid, based on sales, in violation of this section from all Team Members who earned such commissions. The deduction of points and commissions will occur in the month in which the sales in question occur, and continue every pay period thereafter until all points and commissions are recovered from the Team Members who received compensation from such sales.

5.17 – Sponsorship Rights No Team Member may sell, assign or otherwise transfer their sponsorship rights to another Team Member. After a period of seven (7) days following the acceptance of a Team Member Agreement by the Company, sponsorship and placement are irrevocable and permanent.

5.18 – Beneficial Interest A Team Member may operate or have an ownership interest, legal or equitable, as a sole proprietorship, partner, shareholder, trustee, or beneficiary, in only one VitaMist business. No individual may have, operate, or receive compensation from more than one VitaMist business. Individuals of the same family unit may not enter into or have an interest in more than one VitaMist business. A "family unit" is defined as spouses and dependent children (regardless of age) living or doing business at the same address. In order to maintain the integrity of the VitaMist Rewards Program, husbands and wives or common-law couples (collectively "spouses") who wish to become VitaMist Team Members must be jointly sponsored as one VitaMist business. Spouses, regardless of whether one or both are signatories to the Team Member Agreement, may not own or operate any other VitaMist 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 VitaMist business in any form. An exception to the one business per Team Member rule will be considered on a case-by-case basis if two Team Members marry or in cases of a Team Member receiving an interest in another business through inheritance. Requests for exceptions to policy must be submitted in writing to the Compliance department by email at cs@vitamist.com or by fax at (602)-244-8977.

5.19 – Succession Upon the death or incapacitation of a Team Member, their business may be passed to a designated heir(s). Appropriate legal documentation must be submitted to the Company to ensure the transfer is proper. Whenever an VitaMist business is transferred by a will or other testamentary process, the beneficiary acquires the right to collect all bonuses and commissions of the deceased Team Member’s marketing organization provided the following qualifications are met. The successor(s) must:

Execute a Team Member Agreement;
Comply with terms and provisions of the Agreement;
Meet all of the qualifications for the deceased Team Member’s rank/status;
Provide VitaMist with an "address of record" to which all bonus and commission checks will be sent. Bonus and commission checks of an VitaMist business transferred pursuant to this section will be paid in a single check jointly to the successor(s).
Form a business entity and acquire a federal Taxpayer Identification Number, if the business is bequeathed to joint successors. VitaMist will issue all bonus and commission checks and one 1099 to the business entity.

5.19.1 Transfer Upon Death of a Team Member To affect a testamentary transfer of an VitaMist business, the successor must provide the following to VitaMist: (1) a certified copy of the death certificate, (2) A notarized copy of the will or other instrument establishing the successor’s right to the VitaMist business, and (3) A new, completed and executed Team Member Agreement. If the Successor is already a VitaMist Team Member, the Company may grant exception to the One Team Member per Household rule upon written request from the Successor.

5.19.2 Transfer Upon Incapacitation of a Team Member To effectuate a transfer of a VitaMist business because of incapacity, the successor must provide the following to VitaMist: (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 VitaMist business, and (3) A new, completed Team Member Agreement executed by the trustee.

5.20 – Sale, Transfer, or Assignment of a VitaMist Business The Company discourages the sale of Team Memberships, the transfer of partial interests in Team Memberships, and the practice of partnering as a subterfuge for transferring interest.

5.20.1 Requirements of Sale If a Team Member wishes to sell, transfer, or assign (hereinafter in this section "sell" if used as a verb and "sale" if used as a noun) his or her whole or partial interest in an VitaMist Team Membership, the following criteria must be met:

5.20.1.1 The Team Membership being sold must be paid at the rank of Director at the time the request for sale is made;

5.20.1.2 Except as allowed for Sponsors in section 5.20.2 below, the buying Team Member may not currently have a beneficial interest in a Team Membership or have had a beneficial interest in a Team Membership within the preceding six (6) months;

5.20.1.3 The selling Team Member may not reapply to become a Team Member under another Sponsor for a period of not less than six (6) months after the sale occurs.

5.20.1.4 The sale is subject to the Right of First Refusal rules in this section.

5.20.1.5 The Company must first give express written approval of the sale, which the Company may grant or withhold in its sole discretion.

5.20.2 Right of First Refusal All offers for the sale of a Team Membership are subject to a right of first refusal.

5.20.2.1 If a Team Member receives a Good Faith Offer (as hereinafter defined) to purchase his or her interest in a Team Membership, the Team Member shall first offer to sell such interest to the Company on the same terms and conditions contained in the Good Faith Offer. The Team Member shall deliver the Good Faith Offer in writing to the Company, and the Company shall have fifteen (15) business days in which to accept the offer. A "Good Faith Offer" is an arm’s length written offer to purchase the Team Membership Rights by a Person that is not a Team Member, which the Company, in its sole discretion, determines to be a legitimate offer. Evidence of a legitimate offer may include, but is not limited to, cash or securities deposited into an escrow account, evidence of a loan commitment, and other substantial steps taken for the sole purpose of purchasing such Team Membership Rights.

5.20.2.1.1 If the Company fails to exercise its RFR within the fifteen (15) day time period, the Team Member shall extend the same offer to his or her Sponsor who is not in violation of the Contract and who within the previous month qualified for earnings under the Rewards Program. The offer shall be on the same terms and conditions as those contained in the Good Faith Offer. The Company shall convey the Good Faith Offer by providing written notice of the same to the Sponsor. The Sponsor shall have ten (10) business days in which to accept or reject such offer. If the Sponsor qualifies and accepts the offer, he or she must provide written notice to the Company upon acceptance, resign his or her existing Team Membership (contingent on completing the sale); and submit an amended application for the Team Membership

5.20.2.1.2 If the Sponsor rejects or fails to accept the offer, the same procedures and requirements shall be applied to the next upline Sponsor.

5.20.2.1.3 If that Sponsor rejects or fails to accept the offer, the same procedures and requirements shall be applied to the next upline Sponsor.

5.20.2.1.4 If that Sponsor rejects or fails to exercise his or her right within the time allotted, the Team Member may complete the sale of his or her rights in the Team Membership to the third party according to the same terms and conditions contained in the Good Faith Offer, provided, however, that the Team Member complies with all other transferring procedures contained in this section and as may be established from time to time by the Company.

5.20.2.2 This section shall apply to each new Good Faith Offer received by the Team Member.

5.20.2.3 This section shall not apply to changes as described in subsections 5.1 and 5.2.

5.20.3 Line of Sponsorship No changes in line of sponsorship can result from the sale or transfer of an VitaMist business.

5.20.4 Compliance Department Approval Upon complete execution of the purchase and sale agreement and the new Team Member Agreement, the parties must submit copies of the same to VitaMist’s Compliance department for review and approval. VitaMist may request additional documentation that may be necessary to analyze the transaction between the buyer and seller. VitaMist’s Compliance department will, in its sole and absolute discretion, approve or deny the sale, transfer or assignment within three (3) days after its receipt of all necessary documents from the parties.

5.20.5 Voidable Sales; Assumption of Obligations; Waiting Period If the seller sells, transfers, or assigns, or attempts to sell, transfer, or assign his or her Team Membership upon terms different than those set forth in the offer to the Company, such transfer shall be voidable at VitaMist’s option. Further, if the parties fail to obtain VitaMist’s approval for the transaction, the transfer shall be voidable at VitaMist’s option. The purchaser of the existing Team Membership will assume the obligations and position of the selling Team Member. A Team Member who sells his or her Team Membership shall not be eligible to re-apply as a VitaMist Team Member for a period of at least six (6) full calendar months after the sale.

5.21 – Actions of Household Members or Afiliated Individuals If any member of a Team Member’s immediate household engages in any activity which, if performed by the Team Member, would violate any provision of the Agreement, such activity will be deemed a violation by the Team Member and VitaMist may take disciplinary action pursuant to these policies and procedures against the Team Member. Similarly, if any individual associated in any way with a corporation, partnership, trust, or other entity (collectively "affiliated individual") violates the Agreement, such action(s) will be deemed a violation by the entity and VitaMist may take disciplinary action against the entity. All applicants listed on a Team Member Agreement are responsible for the activities associated with the Team Membership.

5.22 – Separation of an VitaMist Business VitaMist Team Members sometimes operate their VitaMist businesses as husband-wife partnerships, regular partnerships, corporations, or trusts. At such time as a marriage may end in divorce or a corporation, partnership, or trust (the latter three entities are collectively referred to herein as "entities") may dissolve, arrangements must be made to assure that any separation or division of the business is accomplished so as not to adversely affect the interests and income of other businesses up or down the line of sponsorship. If the separating parties fail to provide for the best interests of other Team Members and the Company in a timely fashion, VitaMist will involuntarily terminate the Team Member Agreement. During the divorce or entity dissolution process, the parties must adopt one of the following methods of operation:

One of the parties may, with consent of the other(s), operate the VitaMist business pursuant to an assignment in writing whereby the relinquishing spouse, shareholders, partners, or trustees authorize VitaMist to deal directly and solely with the other spouse or non-relinquishing shareholder, partner, or trustee.
The parties may continue to operate the VitaMist business jointly on a "business-as-usual" basis, where upon all compensation paid by VitaMist 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. The Company will never remove a party to a Team Membership from a Team Member account without that party’s written permission and signature. Under no circumstances will the downline organization of divorcing spouses or a dissolving business entity be divided. Under no circumstances will VitaMist split commission and bonus checks between divorcing spouses or members of dissolving entities. VitaMist will recognize only one downline organization and will issue only one commission check per VitaMist 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 Team Member Agreement shall be involuntarily canceled. If a former spouse has completely relinquished all rights in the original VitaMist business pursuant to a divorce, they are thereafter free to enroll under any sponsor of their choosing without waiting six (6) 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 Team Member. In either case, however, the former spouse or business affiliate shall have no rights to any Team Members 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 Team Member.

SECTION 6 – RESPONSIBILITIES OF TEAM MEMBERS

6.1 – Change of Address, Telephone, and Email Addresses To ensure timely delivery of products, support materials, and commission checks, it is critically important that VitaMist’s files are current. Street addresses are required for shipping since UPS cannot deliver to a post office box. Team Members planning to move or change their email address must submit an amended Team Member Agreement complete with the new information.

6.2 – Sponsoring Team Member Responsibilities

6.2.1 Initial Training Any Team Member who sponsors another Team Member into VitaMist must perform a bona fide assistance and training function to ensure that their downline is properly operating their VitaMist business. Team Members must provide the most current version of the Policies and Procedures and Rewards Program to individuals whom they are sponsoring to become Team Members before the applicant signs a Team Member Agreement. Additional copies of the Policies and Procedures can be downloaded from VitaMist’s website or your personal Back Office. A sponsoring Team Member must require each prospective Team Member to personally complete the enrollment forms whether electronically or on paper. A sponsoring Team Member may not purchase the Starter Kit or pay renewal fees for an enrolling Team Member. Use of a sponsoring Team Member’s credit card for this purpose is prohibited. Upline Team Members are also responsible to motivate and train new Team Members in VitaMist product knowledge, effective sales techniques, the VitaMist Marketing and Rewards Program, and compliance with Company Policies and Procedures.

6.2.2 Ongoing Training Responsibilities Team Members must monitor the Team Members in their Downline Organizations to ensure that downline Team Members do not make improper product or business claims, or engage in any illegal or inappropriate conduct. Upon request, every Team Member should be able to provide documented evidence to VitaMist of their ongoing fulfillment of the responsibilities of a Sponsor. Regardless of their level of achievement, Team Members have an ongoing obligation to continue to personally promote sales through the generation of new Customers and through servicing their existing Customers.

6.3 – Reporting Policy Violations Team Members observing a Policy violation by another Team Member should submit a written report of the violation directly to the attention of the VitaMist Compliance department, complete with all supporting evidence and pertinent information. It is important to understand that information that is submitted will be kept confidential.

SECTION 7 – SALES REQUIREMENTS

7.1 – Product Sales The VitaMist Marketing and Rewards Program is based on the sale of VitaMist products and services to end consumers. Team Members must fulfill personal and Downline 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 Team Members to be eligible for commissions:

Team Members must satisfy the Personal Sales Volume and Group Sales Volume requirements to fulfill the requirements associated with their rank as specified in the VitaMist Marketing and Rewards Program.
At least 70% of a Team Member’s total personal sales volume must be sold to retail customers or personally consumed before any new orders may be placed with the Company.
Team Members must develop or service at least five Customers each month.

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

7.3 – Sales Receipts All Team Members must provide their retail customers with copies of an official VitaMist 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. Team Members must verbally inform the buyer of their cancellation rights. Team Members must maintain all retail sales receipts for a period of two years and furnish them to VitaMist at the Company’s request. VitaMist will maintain documentation for purchases made directly from the Company.

7.4 – Product Packaging and Liability Under no circumstances may you print your own labels or repackage VitaMist’s products. Products are to be sold in their original packaging only. Subject to the limitations set forth in this provision, the Company shall defend Team Members from claims made by third-party customers alleging injury from use of a product or injury due to a defective product. The Team Member must promptly notify the Company in writing of any such claim, no later than ten (10) days from the date of the third-party claimant’s letter alleging injury; failure to so notify the Company shall alleviate any obligation of the Company respecting such claim. The Team Member must allow the Company to assume the sole and absolute discretion respecting the defense of the claim, and use and choice of counsel as a condition to the Company’s obligation to defend Team Member.

7.5 – Pickup Center Orders VitaMist does not permit any individual/Team Member to pick up another Team Member’s will-call order without properly substantiated written permission and picture ID. This written permission must be relinquished to the pickup center upon pickup, and must contain the following components:

Original signature of Team Member who placed the order
Statement of permission releasing the order to the specifically designated individual (must provide picture ID for verification)
ID number of Team Member who placed order
Date order was placed
Order number
Exact content of order

VitaMist’s pickup centers are currently located at the Phoenix corporate office only. A fee is assessed for pickup orders. To take advantage of this option, simply select the pickup center of your choice at checkout, when ordering from your Back Office.

SECTION 8 – AUTOSHIP PROGRAM

8.1 – AutoShip Cycle By enrolling in AutoShip, you can ensure that you have 1) an adequate inventory with which you can service retail customers, 2) adequate product for demonstrations and sampling purposes, and 3) adequate inventory for personal use. The AutoShip program eliminates the inconvenience of placing monthly orders manually. AutoShip orders run on a monthly cycle. Your order will not be processed on the same day every month, but rather on a sliding calendar. A calendar is provided in every Team Member’s Back Office so you can track when your next AutoShip is scheduled to run. The date of your AutoShip can be changed in the Back Office or by calling VitaMist Team Member Support. Changing your monthly order to another date is always allowed. There will be a $2.50 charge for such a change.

8.2 – AutoShip Status You may deactivate or reactivate your AutoShip profile at any time.

8.3 – AutoShip Enrollment VitaMist recommends that each applicant personally enroll in the AutoShip Program. Sponsors may not set up an AutoShip order on behalf of their new personally sponsored Team Members without written permission from the enrolling Team Member. Permission must be on file with the Compliance department prior to enrollment.

SECTION 9 – BONUSES AND COMMISSIONS

9.1 – Bonus and Commission Qualifications In order to qualify to receive commissions and bonuses, a Team Member must be in good standing and comply with the terms of the Agreement and these Policies and Procedures.

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

9.3 – Bonus Buying Prohibited Bonus buying is strictly and absolutely prohibited. Bonus buying includes: (a) the enrollment of individuals or entities without the knowledge of and or execution of an Independent Team Member Agreement by such individuals or entities; (b) the fraudulent enrollment of an individual or entity as a Team Member or Customer; (c) the enrollment or attempted enrollment of non-existent individuals or entities as Team Members or Customers ("phantoms"); (d) Purchasing VitaMist products or services on behalf of another Team Member or Customer, or under another Team Member’s or Customer’s I.D. number, to qualify for commissions or bonuses; (e) purchasing excessive amounts of goods or services that cannot reasonably be used or resold in a month; and or (f) any other mechanism or artifice to qualify for rank advancement, incentives, prizes, commissions, or bonuses that is not driven by bona fide product or service purchases by end user consumers.

9.4 – Adjustments to Bonuses and Commissions

9.4.1 Returned Products Team Members receive bonuses and commissions based on the actual sales of products and services to end consumers. When a product is returned to VitaMist for a refund or is repurchased by the Company, either of the following may occur at the Company’s discretion: (1) The bonuses and commissions attributable to the returned or repurchased product(s) will be deducted from the pay period in which the refund is given, and continuing every pay period thereafter until the commission is recovered, from the Team Members who received bonuses and commissions on the sales of the refunded products or (2) The Team Members who earned commissions based on the sale of the returned products will have the corresponding points deducted from their Group Volume in the next pay period and all subsequent pay periods until it is completely recovered.

9.5 – Reports All information provided by VitaMist, 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 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 VitaMist 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, VitaMist and/or other persons creating or transmitting the information will in no event be liable to any Team Member or anyone else for any direct, indirect, consequential, incidental, special, or punitive damages that arise out of the use of or access to personal and group sales volume information (including but not limited to lost profits, bonuses, or commissions, loss of opportunity, and damages that may result from inaccuracy, incompleteness, inconvenience, delay, or loss of the use of the information), even if VitaMist 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, VitaMist 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.

9.6 - Commission payout period Since commissions are based on actual sales, commissions are delayed to allow for clearing of checks, charges, etc. The normal lead time from qualification of commissions to commission payout is to the next accounting period. An accounting period is typically 30 days, but this lead time may be adjusted as needed to accomodate delays in clearing of purchases.

SECTION 10 – PRODUCT GUARANTEES, RETURNS, AND INVENTORY REPURCHASE

10.1 – Customer Satisfaction Guarantee VitaMist offers, through its Team Members, a 100% 30-day money-back guarantee to all retail customers. Every Team Member is bound to honor the retail customer guarantee. If, for any reason, a retail customer is dissatisfied with any VitaMist product, the retail customer may return the unused portion of the product to the Team Member from whom it was purchased, within thirty (30) days, for a replacement, exchange or a full refund of the purchase price (including shipping costs, if applicable). A Customer who makes a purchase of $25.00 or more has three (3) business days (72 hours) after the sale or execution of a contract to cancel the order and receive a full refund consistent with the cancellation notice on the retail receipt. When a Team Member makes a sale or takes an order from a retail customer who cancels or requests a refund within the 72-hour period, the Team Member must promptly refund the Customer’s money as long as the products are returned to the Team Member in substantially as good condition as when received. Additionally, Team Members must verbally inform Customers of their right to rescind a purchase or an order within 72 hours, and ensure that the date of the order or purchase is entered on the retail receipt. All retail customers must be provided with a copy of an official VitaMist sales receipt at the time of the sale. The back of the receipt provides the Customer with written notice of their rights to cancel the sales agreement.

10.2 – Return of Inventory and Sales Aids by Team Members Upon Cancellation Within thirty (30) days, and upon cancellation of a Team Member’s Agreement, the Team Member may return their Starter Kit and any products and sales aids held in their inventory for a refund. Team Members may only return Starter Kits, products, and sales aids that they personally purchased from VitaMist (purchases from other Team Members or third parties are not subject to refund) and which are in Resalable condition. Upon receipt of a Resalable Starter Kit and/or Resalable products and sales aids, the Team Member will be reimbursed 90% of the net cost of the original purchase price(s). Shipping charges incurred by a Team Member when the Starter Kit, products, or sales aids were purchased will not be refunded. If the purchases were made through a credit card, the refund will be credited back to the same account. If a Team Member was paid a commission based on a product(s) purchased, and such product(s) is subsequently returned for a refund, the commission that was paid based on that product purchase will be deducted from the amount of the refund.

10.2.1 Local and State Laws Local and state laws with specific consumer return policies supersede those contained in this agreement.

10.3 – Procedures for All Returns All products deemed Resalable may be returned for a 90% refund. Sales aids and shipping fees are nonrefundable. The following procedures apply to all product returns for refund, repurchase, or exchange:

All merchandise must be returned by the Team Member or Customer who purchased it directly from VitaMist.
All products to be returned must have a Return Merchandise Authorization number which is obtained by calling the Team Member Support department. This Return Merchandise Authorization number must be written on each carton returned. Return Merchandise Authorizations are valid for 30 days from the date of issue.
Proper shipping carton(s) and packing materials are to be used in packaging the product(s) being returned for replacement. All returns must be shipped to VitaMist pre-paid. VitaMist does not accept shipping-collect packages. The risk of loss in shipping for returned product shall be borne by the Team Member. If returned product is not received by the Company’s Distribution Center, it is the responsibility of the Team Member to trace the shipment.
If a Team Member is returning merchandise to VitaMist that was returned to them by a personal retail customer, the product must be received by VitaMist within ten (10) days from the date on which the retail customer returned the merchandise to the Team Member, and must be accompanied by the sales receipt the Team Member gave to the Customer at the time of the sale.

10.4 – Product Abandonment An order transaction is considered complete only when the order has been paid for and the shipping or delivery method has been satisfied. If these conditions are not met within 90 days from the date of order, the Company reserves the right to determine the final outcome of the order at its sole discretion, and the ordering Team Member releases VitaMist from any further obligation or liability.

SECTION 11 – DISPUTE RESOLUTION AND DISCIPLINARY PROCEDINGS

11.1 – 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 Team Member that, in the sole discretion of the Company, may damage its reputation or goodwill (such damaging act or omission need not be related to the Team Member’s VitaMist business), may result, at VitaMist’s discretion, in one or more of the following corrective measures:

Issuance of a written warning or admonition;
Requiring the Team Member to take immediate corrective measures;
Withholding from a Team Member all or part of the Team Member’s bonuses and commissions during the period that VitaMist is investigating any conduct allegedly contrary to the Agreement. If a Team Member’s business is canceled for disciplinary reasons, the Team Member will not be entitled to recover any commissions withheld during the investigation period;
Imposition of a fine, which may be withheld from bonus and commission checks;
Loss of rights to one or more bonus and commission checks;
Suspension of the individual’s Team Member Agreement for one or more pay periods;
Involuntary termination of the offender’s Team Member Agreement;
Instituting legal proceedings for monetary and/or equitable relief;
The transfer or reassignment of some or all of a Team Member’s downline organization to another Team Member’s downline organization;
Any other measure expressly allowed within any provision of the Agreement or which VitaMist deems practicable to implement and appropriate to equitably resolve injuries caused partially or exclusively by the Team Member’s policy violation or contractual breach. Each violation is reviewed on a case-by-case basis, and all disciplinary actions are at the sole discretion of VitaMist.

11.2 – Grievances and Complaints When a Team Member has a grievance or complaint with another Team Member regarding any practice or conduct in relationship to their respective VitaMist businesses, the complaining Team Member should first report the problem to their 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 VitaMist’s Compliance department, via email or regular mail. Compliance will review the facts and attempt to resolve the matter. If it is not resolved, it will be referred to the Team Member Conduct Review Committee for final review and possible disciplinary action.

11.3 – Team Member Conduct Review Committee The purpose of the Team Member Conduct Review Committee ("TMCRC") is to review policy violations and determine disciplinary actions. The Compliance department solicits information from all involved parties and presents the same to the TMCRC for final resolution and disciplinary action, up to and including termination of a Team Member Agreement. Once the TMCRC has made a decision, the decision will be communicated to the Team Member in writing.

11.4 – Team Member Conduct Appeals Committee If a Team Member wishes to appeal a decision made by the TMCRC, they must do so in writing within ten (10) business days of the date of notification of decision. A decision will only be reviewed by the Appeals Committee if new information or further supporting evidence has been provided. All cases will be reviewed on a monthly basis and notification will be provided accordingly. Please note that during the appeals process, all involved Team Member accounts will be placed on a complete business hold, and all commissions generated will be placed in an Escrow account until the matter is resolved. Decisions mandated by the Team Member Conduct Appeals Committee are final and binding, and will not be further reviewed by the Company.

11.5 – Mediation Prior to instituting arbitration, the parties shall meet in good faith and attempt to resolve any dispute arising from or relating to the Agreement through non-binding mediation. One individual who is mutually acceptable to the parties shall be appointed as mediator. The mediator’s fees and costs, as well as the costs of holding and conducting the mediation, shall be divided equally between the parties. Each party shall pay its portion of the anticipated shared fees and costs at least ten (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 Phoenix, Arizona, and shall last no more than two (2) business days.

11.6 – 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. Team Members waive all rights to trial by jury or to any court. All arbitration proceedings shall be held in Phoenix, Arizona. All parties shall be entitled to all discovery rights pursuant to the Federal Rules of Civil Procedure. There shall be one arbitrator, an attorney at law, who shall have expertise in business law transactions with a strong preference being an attorney knowledgeable in the direct selling industry, selected from the panel, which the American Arbitration Panel provides. Each party to the arbitration shall be responsible for its own costs and expenses of arbitration, including legal and filing fees. The decision of the arbitrator shall be final and binding on the parties and may, if necessary, be reduced to a judgment in any court of competent jurisdiction. This agreement to arbitration shall survive any termination or expiration of the Agreement. Nothing in these Policies and Procedures shall prevent VitaMist 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 VitaMist’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.

11.7 – Governing Law, Jurisdiction, and Venue Jurisdiction and venue of any matter not subject to arbitration shall reside exclusively in Maricopa County, State of Phoenix. The Federal Arbitration Act shall govern all matters relating to arbitration. The law of the State of Arizona shall govern all other matters relating to or arising from the Agreement. Notwithstanding the foregoing, and the arbitration provision in paragraph 11.6, residents of the State of Louisiana shall be entitled to bring an action against VitaMist in their home forum and pursuant to Louisiana law.

SECTION 12 – PAYMENT AND SHIPPING

12.1 - Returned Checks or chargebacks

12.1.1 - All checks returned by a Team Member’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 Team Member. After receiving a returned check from a Customer or a Team Member, all future orders must be paid by Credit Card, money order, or cashier’s check. Any outstanding balance owed to VitaMist by a Team Member for NSF checks and returned check fees will be withheld from subsequent bonus and commission checks.

12.1.2 - After receiving a chargeback for any purchase from the company, a $35.00 chargeback fee will be charged to the account of the Team Member and all commissions and purchases will be placed on hold pending payment of balance due to the company. All future orders must be paid by money order or cashier's check or a different credit card.

12.2 - Restrictions on Third Party Use of Credit Cards and Checking Account Access Team Members shall not permit other Team Members or Customers to use their credit card, or permit debits to their checking accounts, to enroll or to make purchases from the Company, unless an official VitaMist Authorization Letter is on file with the Company prior to the transaction. This Authorization Letter is found in a Team Member’s Back Office. Team members wishing to use third party credit cards (i.e. credit cards in which they are not signors on the account, and liable for the debt) or checking accounts to pay for purchases from the company must have an official VitaMist Authorization letter on file with the company from the holder of the credit card or checking account.

12.3 – Sales Taxes The Company will collect and remit sales tax based on the wholesale price of products purchased by you unless otherwise required by law. The sales tax is based upon the tax rate in the jurisdiction to which the product is shipped. For your retail sales, if you submit to us a current Sales Tax Exemption Certificate (STEC) from your resident state, we will not charge or collect sales tax on your orders shipped to that state unless prohibited by law. You will be responsible for tracking and reporting all sales and sales taxes due for retail sales. Sales tax on orders placed before we receive a STEC will not be reimbursed. If you provide us an STEC, you agree to indemnify and hold VitaMist harmless from any liability that VitaMist incurs as a result of your failure to collect or remit sales taxes.

SECTION 13 – RECLASSIFICATION AND CANCELATION

13.1 – Reclassification From inception, each new applicant is classified as a Customer. If a Customer begins retailing VitaMist products and receives commissions on retail sales they will be reclassified as a Wholesale Customer. A Wholesale Customer may then choose to qualify as a Team Member and build a VitaMist business by remaining active for eight consecutive weeks, receiving a commission check for both Retail and Business Building Bonuses, and sponsoring one or more individuals into the business. A Team Member’s rank/classification is contingent upon meeting all qualifications for that pay period, and may change accordingly.

13.2 – Cancellation & NON-COMPETE A Team Member whose account is canceled will lose all rights as a Team Member. This includes the right to sell VitaMist products and services, and the right to receive future commissions, bonuses, or other income resulting from the sales and other activities of the Team Member’s former downline sales organization. In the event of cancellation, Team Members agree to waive all rights they may have, including but not limited to property rights, to their former downline organization and to any bonuses, commissions, or other remuneration derived from the sales and other activities of their former downline organization. An VitaMist participant maintains the right to cancel their account at any time, regardless of reason. Cancellation must be submitted in writing to the Company at its principal business address, or via email to cs@vitamist.com. The written notice must include the Team Member’s signature, printed name, address, and Team Member I.D. Number. Furthermore, VitaMist does not employ a non-compete agreement. Team Members who wish to participate in a competing network marketing business are free to do so at will. However, VitaMist Team Members should be mindful of the non-solicitation prohibitions specified in Section

13.3 – Non-Renewal A Team Member may voluntarily cancel their Team Member Agreement by failing to renew the Agreement on its anniversary date. The Company may also elect not to renew a Team Member’s Agreement upon its anniversary date.

SECTION 14 – DEFINITIONS

ACTIVE TEAM MEMBER: A Team Member who satisfies the minimum Personal Volume requirements, as set forth in the VitaMist Rewards Program, to ensure that they are eligible to receive bonuses and commissions. AGREEMENT: The contract between the Company and each Team Member; includes the Team Member Agreement, the VitaMist Policies and Procedures, and the VitaMist Rewards Program, all in their current form and as amended by VitaMist in its sole discretion. These documents are collectively referred to as the "Agreement." AUTOMATIC TELEPHONE DIALING SYSTEM: Any equipment which has the capacity to: (a) store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers.
CANCEL: The termination of a Team Member’s business. Cancellation may be either voluntary, involuntary, or through non-renewal.
REWARDS PROGRAM: The guidelines and referenced literature for describing how Team Members can generate commissions and bonuses.
CUSTOMER: A Customer who purchases VitaMist products and does not engage in building a business or retailing product.
TEAM MEMBER: An individual who purchases product, generates retail sales and business building commissions, is active for eight consecutive weeks, and has personally sponsored one or more individuals.
DOWNLINE (GENEALOGY) REPORT: A report generated by VitaMist that provides critical data relating to the identities of Team Members, sales information, and enrollment activity of each Team Member’s Organization. This report contains confidential and trade secret information which is proprietary to VitaMist.
GROUP VOLUME (GV): The commissionable value of VitaMist products purchased directly from VitaMist through a Team Member’s binary organization.
IMMEDIATE HOUSEHOLD: Heads of household and dependent family members residing in the same house.
LEVEL: The layers of downline Customers and Team Members in a particular Team Member’s Organization. This term refers to the relationship of a Team Member relative to a particular upline Team Member, determined by the number of Team Members 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.
NETWORK MARKETING: Any multilevel or network marketing business venture or marketing opportunities.
ORGANIZATION: The Customers and Team Members placed below a particular Team Member.
OFFICIAL VITAMIST MATERIAL: Literature, audio or videotapes, and other materials developed, printed, published, and distributed by VitaMist to Team Members.
OPEN SALES MEETING: Any VitaMist-related gathering of five (5) or more individuals.
PERSONAL VOLUME (PV): The value of products sold by the Company to a Team Member in a rolling calendar month.
PLACEMENT: Your position inside your Sponsor’s organization.
RECRUIT: For purposes of VitaMist’s Conflict of Interest Policy (Section 4.2), the term "Recruit" means the actual or attempted solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another VitaMist Team Member or Customer to enroll or participate in another multilevel marketing, network marketing, or direct sales opportunity.
RESALABLE: Products shall be deemed "resalable" if each of the following elements is satisfied: 1) they are unopened and unused, 2) original 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, and 4) the product contains current VitaMist labeling. Any merchandise that is clearly identified at the time of sale as nonreturnable, discontinued, or as a seasonal item, shall not be resalable.
SPONSOR: A Team Member who enrolls a Customer, Retailer, or another Team Member into the Company, and is listed as the Sponsor on the Team Member Agreement. The act of enrolling others and training them to become Team Members is called "sponsoring."
STARTER KIT: A selection of VitaMist training materials and business support literature that each new Independent Team Member may purchase. The Starter Kit is sold to Team Members at the Company’s cost.
UPLINE: This term refers to the Team Member or Team Members above a particular Team Member in a sponsorship line up to the Company. Conversely stated, it is the line of sponsors that links any particular Team Member to the Company.
WHOLESALE CUSTOMER: An individual who purchases VitaMist products at wholesale, but who is not a participant in the VitaMist Rewards Program.

revised 08-13-2010

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Policies and Procedures

VITAMIST, LTD.

STATEMENT OF POLICIES and PROCEDURES

United States Effective July 3, 2008

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