policy guide effective August 10, 2009 Whether you’re a new consultant or you’ve been building your business for years, please take some time to carefully read these Pure Romance Policies. These guidelines, in conjunction with your Consultant Agreement, form the basis of your contractual relationship with Pure Romance. By entering into a contract with us, you have agreed to follow these guidelines. Likewise, you agree to any changes to these Policies, along with any changes to your Consultant Agreement. Please remember that we reserve the right to alter and amend these Policies from time to time to better serve the needs of our consultants and Pure Romance. Pure Romance Policy Guide INTRODUCTION Overview ............................................................................................................................................................... 3 Code of Conduct and Good Standing Requirements ................................................................................. 3 Rules of Selling Pure Romance .......................................................................................................................... 4 Party Policies ......................................................................................................................................................... 5 Confidential Information .................................................................................................................................... 5 Territories ................................................................................................................................................................ 7 One Business per Consultant ............................................................................................................................. 7 Sale, Assignment, or Transfer of a Pure Romance Business .......................................................................... 7 CONSULTANT ORDERS Ordering Guidelines ............................................................................................................................................ 7 Placing an Internet Order................................................................................................................................... 7 Placing a Telephone Order or Fax Order ........................................................................................................ 7 Placing Free Product Orders .............................................................................................................................. 8 Backorders ............................................................................................................................................................ 8 Buying Discounts .................................................................................................................................................. 8 Anniversary and Birthday Discounts ................................................................................................................. 9 Accepted Forms of Payment ............................................................................................................................ 9 Sales Tax ................................................................................................................................................................ 9 Personal Website Orders ................................................................................................................................... 10 SHIPPING POLICIES Domestic Shipments .......................................................................................................................................... 10 International & APO/FPO Shipments (Excluding Canada) ........................................................................ 11 Canadian Shipments ........................................................................................................................................ 11 Shipping Discrepancies .................................................................................................................................... 12 Warranty/Return Policy ..................................................................................................................................... 12 PARTY & RECRUIT LEADS Corporate Party Lead Requirements ............................................................................................................. 13 Corporate Recruit Lead Requirements .......................................................................................................... 14 MARKETING Use of the Pure Romance Name .................................................................................................................... 15 Use of Pure Romance Logos, Copyright, and Trademarks ........................................................................ 15 Corporate-Approved Business Supplies and Vendors ................................................................................ 15 Flyers and Print Ads ............................................................................................................................................ 16 Car Decals .......................................................................................................................................................... 16 Radio, Television, Interview and Publicity ...................................................................................................... 17 Press Releases ..................................................................................................................................................... 17 Participating in Corporate-Sponsored Promotional Events ....................................................................... 17 Participating in Non-Corporate-Sponsored Promotional Events ............................................................... 17 Displaying Product at Promotions ................................................................................................................... 17 Selling Product at Promotions .......................................................................................................................... 18 Open Houses ...................................................................................................................................................... 18 Solicitation ........................................................................................................................................................... 18 1 PERSONAL WEBSITE AND ONLINE POLICIES Selling Products Online...................................................................................................................................... 19 Search Engine and Meta Tags ........................................................................................................................ 19 General Internet Policies .................................................................................................................................. 19 Personal Website Policies ................................................................................................................................. 20 Personalizing Your Website ............................................................................................................................... 20 Online Networking Sites .................................................................................................................................... 21 Internet Advertising or Promotions .................................................................................................................. 21 Spam .................................................................................................................................................................... 21 Privacy Policy ...................................................................................................................................................... 21 INCENTIVES Programs.............................................................................................................................................................. 21 Monthly Bonuses ................................................................................................................................................ 22 Contests ............................................................................................................................................................... 23 Convention Credits ........................................................................................................................................... 23 Level Recognition .............................................................................................................................................. 23 Positions of Honor ............................................................................................................................................... 23 Buying Discounts ................................................................................................................................................ 24 Free Product ....................................................................................................................................................... 24 Incentive Trips ..................................................................................................................................................... 24 Car Lease Program............................................................................................................................................ 24 Eligibility................................................................................................................................................................ 25 ADP TOTAL PAY CARDS .................................................................................................................................................... 25 STATUS CHANGES Becoming an Active Consultant..................................................................................................................... 26 Maintaining Active Consultant Status ............................................................................................................ 26 Preferred Customer Status ............................................................................................................................... 26 Inactive Status .................................................................................................................................................... 26 Reactivation Process ......................................................................................................................................... 27 Leave of Absence ............................................................................................................................................. 27 Resignation ......................................................................................................................................................... 27 Disciplinary Sanctions and Termination ......................................................................................................... 27 Termination ......................................................................................................................................................... 28 REPORTING POLICY VIOLATIONS .................................................................................................................................... 28 GRIEVANCES AND COMPLAINTS .................................................................................................................................... 29 PERSONAL INCOME TAX REQUIREMENTS Social Security or Tax ID Number Required ................................................................................................... 29 1099 ...................................................................................................................................................................... 29 Federal Laws for 1099s ...................................................................................................................................... 29 CONSULTANT AGREEMENT .............................................................................................................................................. 30 GLOSSARY .......................................................................................................................................................................... 33 2 Overview The goal of the Pure Romance Policy Guide is to ensure each Consultant is treated fairly and is able to effectively operate a business. As an independent contractor representing Pure Romance, you have several obligations, responsibilities, and duties that are governed by the policies and procedures detailed in this book. This guide describes important information about Pure Romance, Inc. You, as an independent contractor, are responsible for reading the Policy Guide, familiarizing yourself with its contents, and adhering to all of the policies and procedures of Pure Romance, Inc., whether set forth in this guide or elsewhere. Since the information and policies described here are necessarily subject to change, revisions to the Guide may occur. All such changes will be communicated through official notices, and revised information may supersede, modify, or eliminate existing policies. Please refer the Pure Romance Consultant Website for changes. Of course, this book cannot cover every situation that may arise. If you have any questions about a policy or program, please call the Customer Service Department at 513-697-5970 or email us at customerservice@pureromance.com. Pure Romance reserves the right to make determinations on a case-by-case basis. Code of Conduct and Good Standing Requirements Pure Romance has grown into a leading force as a result of an unwavering commitment to building a respected image within the industry and among customers. This has been obtained through the actions of the Pure Romance Corporate Office as well as every Consultant representing the company. Each Pure Romance Consultant is expected to represent and sell Pure Romance products and present the Pure Romance business opportunity with the highest degree of professionalism, integrity, ethics, and accuracy. Consultants shall not participate in any activity that is illegal or that in any way may be deemed detrimental to the Pure Romance name, products, opportunity, business, corporate entity, or the organization of Pure Romance Consultants. All Pure Romance Consultants are expected to follow the Pure Romance Code of Conduct and Good Standing Requirements. Code of Conduct • Dress in professional business attire for all parties, Corporate-sponsored events, and in all situations while promoting Pure Romance unless casual attire is specified. If events are casual, dress should be tasteful and appropriate. • Use appropriate language at all times and avoid slang, derogatory, and/or profane terms. 3 • • • • • • • • • Display an upbeat, positive attitude toward Hostesses, customers, and peers. Respect others’ personal space and avoid inappropriate body contact. Accept that each person is entitled to his or her own opinions and views. Do not speak negatively about another Consultant or make that individual feel uncomfortable when their approach differs from your own. Consultants are not permitted to consume alcohol or smoke at any function or party where they are representing Pure Romance. At any Corporate-sponsored event, trip, or function where alcohol is permitted, Consultants are fully responsible for their own actions and must be aware of their limits. Treat other Pure Romance Consultants and members of the Pure Romance Corporate Office Staff with the utmost respect and professionalism. Concerns regarding policies or procedures shall not be addressed to members of the Pure Romance Corporate Office publicly during events, meetings, or other public forums. Never encourage a Hostess, customer, or Recruit to stop doing business with another Pure Romance Consultant. Good Standing Requirements To be eligible for many contests and incentives, a Consultant must not only follow the Code of Conduct, but should also be in Good Standing. A Consultant in Good Standing meets the following requirements: • Adheres to the Code of Conduct, Rules of Selling, Party Policies, and all other Pure Romance Policies outlined in this guide. • Is an Active Consultant who does not have outstanding balances with the Pure Romance Corporate Office or any of its affiliated vendors. • Demonstrates outstanding leadership characteristics and represents Pure Romance in a professional manner at all times. Rules of Selling Pure Romance There are a few rules to abide by when selling Pure Romance products: • Maintain an exclusive relationship with Pure Romance. Consultants cannot represent another company that offers a product line similar to Pure Romance. • You are not permitted to sell Pure Romance products at garage sales, flea markets, online auctions, sales websites (i.e., eBay®, Craig’s List, etc.), or retail stores. • If you are a representative for another Direct Sales Company, you cannot combine parties. • You cannot combine parties with other Direct Sales representatives. This means that you cannot have a candle party, cosmetics party, or any other themed party alongside your Pure Romance party with a representative from another Direct Sales Company. • You cannot sell products other than Pure Romance products at your parties or 4 • • while representing Pure Romance. This includes any and all adult novelties available through stores or outside vendors. All gifts and giveaways presented to Hostesses and/or customers must be purchased from Pure Romance. You are not permitted to purchase products from other Pure Romance Consultants; however, you may trade with a Pure Romance Consultant in order to fulfill customer backorders. Party Policies All Consultants must follow these basic policies when holding a party: • Do not charge individuals for booking or attending a party. Profit is based on the sales, bookings, and potential recruits at each party. • Always require valid I.D. to ensure guests attending a party are at least 18 years old. Pure Romance products may not be sold to individuals under the age of 18 (even if products are considered “mild” in nature). • Do not allow anyone under 18 years of age to be present during a party. Even if they are in a different room, section of the house, or party location. • Do not allow men at your parties. Even if they are in a different room, section of the house, or party location. • Use proper terminology during your demonstration. You can be fun and professional at the same time. Try to avoid using informal and unprofessional terms for products or body parts. • Do not tell overly personal stories during your party or while demonstrating a product. • Product sampling should only be conducted on a guest’s hand, arm, or neck. • Require a private Ordering Room for confidential ordering and don't divulge customer purchases. • Pure Romance strongly suggests carrying inventory so that guests can take their products home the night of the party. • All customer backorders should be delivered within 7 to 10 business days of the date of the party. Backorders must be delivered directly to the customer, not the Hostess. Confidential Information All Pure Romance Consultant genealogical Downline, group lists, or reports are confidential, proprietary information of Pure Romance and constitute a business trade secret belonging to Pure Romance. Downline information is provided to Consultants in the strictest confidence and is made available to Consultants for the sole purpose of supporting the customers and Consultants in their organization to further develop their Pure Romance business. Consultants should use their Downline information to manage, motivate, and train their Consultants. Every Pure Romance Consultant who is provided such information must treat it as confidential and take care to maintain its secrecy and to refrain from making any use thereof for any purpose other than the management of her Downline organization. As a result of your position as a Pure Romance Consultant, you will have access to 5 confidential information that you acknowledge to be proprietary, highly sensitive, and valuable to Pure Romance. This information is being made available to you solely and exclusively for purposes of furthering the sales of Pure Romance products and recruiting, training, and sponsorship of individuals who wish to become Pure Romance Consultants and to further build and promote your Pure Romance business. At Pure Romance's discretion, information contained in Downline information and reports may be forwarded to Consultants in strict and complete confidence only to help them manage their Pure Romance Downline and for no other purpose. The Consultant agrees that she shall not, on her own behalf, or on the behalf of any other person, partnership, association, corporation, or other entity: • Disclose any information contained in any Downline information or report to any third party directly or indirectly. • Directly or indirectly disclose the password or other access code to her Downline information or report. • Use the information to compete with Pure Romance or for any purpose other than to promote Pure Romance. • Solicit any Consultant or customer of Pure Romance or in any manner attempt to influence or induce any Consultant or customer of Pure Romance to alter their business relationship with Pure Romance. • Use or disclose to any person, partnership, association, corporation, or other entity any information contained in Downline information or report obtained while her Pure Romance agreement is in effect. Remedies for Disclosure of Confidential Information You acknowledge that Pure Romance would suffer irreparable harm as a result of any unauthorized disclosure or use of confidential information and that monetary damages are insufficient to compensate Pure Romance for such harm. Therefore, if you are in breach of the Pure Romance Corporate Policies and Procedures, Pure Romance is entitled to an injunction or temporary restraining order without notice to you, which will restrain any unauthorized disclosure or use of confidential information in addition to any other available remedy, including damages. In any such action, if Pure Romance prevails, you agree that you are to reimburse Pure Romance for its costs and reasonable attorneys' fees incurred in connection with taking the legal action. To Pure Romance, Consultants waive all bonding requirements otherwise applicable to a temporary restraining order and/or injunction. 6 Territories There are no restrictions on the location of a Pure Romance Consultant's territory. A Consultant may sell, sponsor, train, and build her business anywhere within the United States and its territories. One Business per Consultant You may only have ownership of one Pure Romance business. There may be two or more Pure Romance businesses per immediate household so long as the following criteria are satisfied: • No one under the age of 18 may be a Pure Romance Consultant. • The other Pure Romance business must be a bona fide independent business that is operated by the person listed on the Pure Romance Consultant Application and Agreement and not by the other Pure Romance Consultant in the household. Sale, Assignment, or Transfer of a Pure Romance Business Each Consultant's business relationship with Pure Romance is a personal relationship. Therefore, you may not sell, assign, or otherwise transfer a Pure Romance business to any third party. Consultant Orders Ordering Guidelines • All orders must be paid in full prior to submitting your order. • All deadlines and processing times are based on Eastern Standard Time. • If more than one order is placed on the same business day, each order will be processed individually and separate shipping charges will apply. • Once an order has been submitted, the Pure Romance Corporate Office cannot add or remove products from the order. Placing an Internet Order • All Internet orders placed before 11:59 p.m. EST are shipped within 48 hours of receipt at the Pure Romance Corporate Office, not including weekends or holidays. Placing a Telephone or Fax Order • Telephone and fax orders take up to 72 hours to be shipped from the time they are entered by the Pure Romance Corporate Office, not including holidays or weekends. • You will need to provide: o Your name and Consultant ID o How and where you want your order shipped 7 • • • o Product ID # o Product name o Flavor/scent/size (when applicable) o Quantity o Credit card number, the expiration date, and the 3-digit cvv-code Fax orders should be sent to 866-267-3003. For telephone and fax orders, daily sales or other discounts will be applied based on the day the order is entered into the Pure Romance Ordering System by the Pure Romance Corporate Office, not based on when the order was submitted. If your card is declined on a telephone or fax order, you will be contacted by the Customer Service Department or receive an email notification if the Customer Service Representative does not reach you via telephone. You must contact the Pure Romance Corporate Office within 48 hours of this notice to avoid having your order cancelled. Placing Free Product Orders • Orders must be placed after 12:01 a.m. EST on the first day of the month and before 11:59 p.m. EST on the 15th of the month. • The Pure Romance Corporate Office makes every attempt to include Free Product with the next order you place; however, we reserve the right to ship all Free Product with orders placed after the 15th of the month. • You must have at least one regular order processed within 30 days of placing your Free Product order or you will forfeit these items. • Free Product credit can be redeemed for Retail items only. • Free Product orders can only be placed online and cannot be placed via telephone or fax. Backorders • Once inventory becomes available, backordered items are shipped with your next order. If you need the backordered items sooner, you may expedite them for a $6.00 processing fee. • Backordered items may not be cancelled at any time. • Should a backordered item be discontinued, the Consultant will be issued a Credit on File. Buying Discounts • Your Buying Discount is automatically applied to your retail order. Buying Discounts do not apply to business supply items. 8 Anniversary and Birthday Discounts • During the month of your birthday or your Pure Romance anniversary month, you will receive an additional 5% off the already discounted Retail amount of any one order. • The anniversary month is the month that the Consultant joined Pure Romance (the Kit order date). If a Consultant becomes Inactive and reactivates with Pure Romance, her anniversary is the date of the most recent Kit purchased. • If a Consultant’s birthday and Pure Romance anniversary fall in the same month, the Consultant will be able to place two orders within that month to receive the 5% off both orders. Birthday and Anniversary discounts cannot be combined to total 10% on one order. • The Birthday or Anniversary Discount can be used in combination with a Daily Sale. If a Consultant’s birthday and Pure Romance Anniversary fall in the same month, only one can be used per order. Accepted Forms of Payment • MasterCard, Visa, American Express, and Discover • Credits on File • Commissions Sales Tax When an order is placed with the Pure Romance Corporate Office; you are required to pay Sales Tax according to the requirements of the state in which the product will be delivered (including Shipping and Handling where applicable). The amount of Sales Tax will be added to your order total. This link will take you to a listing of both State and Federal government sites related to taxation listed by state: http://www.irs.gov/taxpros/article/0,,id=100236,00.html Retail Purchases • Sales Tax is based on the Suggested Retail price of products (listed in the Pure Romance catalog and on the Pure Romance website). • States require Pure Romance to submit the amount of Sales Tax that will be collected from each customer. Business Supplies • Sales Tax for Business Supplies (which includes Catalogs, Order Forms, spatulas, boxes, Recruiting Packets, etc.) will be based on the purchase price of the items. Shipping and Handling • Depending on your local, county, and state tax code, a tax may be charged on the Shipping and Handling of your Consultant order. 9 • When a Kit is purchased from Pure Romance, you are required to pay Sales Tax according to the requirements of the state in which the product will be delivered (including Shipping and Handling where applicable). Free Product • Free Products are promotional items that are not intended for resale. • When you redeem Free Product that you have earned, you will not be required to pay Sales Tax if items are used as promotional items. • If you choose to use your Free Product for resale, you must pay Sales Tax on these items at the time you place your Free Product order. Personal Website Orders • Consultants will receive personal Retail Sales credit for orders placed on their Personal Website. • The Pure Romance Corporate Office will process the payment and ship the product directly to the customer automatically. • If a product is on backorder, the customer will be contacted by the Customer Service Department and will be given the option to cancel the backorder, to wait for the product to arrive, or to select an alternate item. When a customer cancels a backordered item, Pure Romance can take up to 72 business hours to process the credit to the customer’s account. • When a customer elects to wait for a backordered item, Pure Romance will automatically send the product directly to the customer when inventory of a product arrives at the Corporate Office. • If a product is delivered to the customer damaged or defective, the customer must contact the Customer Service Department to replace the item. Shipping Policies Domestic Shipments • Pure Romance will ship packages via United Parcel Service (UPS). See Consultant Website for current shipping methods and pricing. • Pure Romance does not guarantee the delivery date of any shipment. • Pure Romance ships only to physical addresses, including carrier hubs. We do not ship to P.O. boxes. • The address and/or delivery method cannot be modified when an order is in transit. • Pure Romance allows Consultants to pick up orders from the Corporate Office in Loveland, Ohio. o See the Ordering Page for current Corporate Office pickup charges. o Consultant orders may only be picked by the purchasing Consultant or a person authorized by the Consultant. The Consultant must send an email to localpickup@pureromance.com and state the name of the person she is 10 o o o authorizing to pick up her order. This email must be sent at least 24 hours before the order will be picked up at the Corporate Office. Orders must be picked up within two business days of order submission. Orders not retrieved within two business days will be restocked. A credit minus Shipping and Handling charges and a 20% restocking fee will be applied to the Consultant’s Credits on File account. Items contained in orders not retrieved must be re-ordered. Local pickup times are Tuesday – Friday, 1:00 p.m. – 4:30 p.m. (EST). Restricted Items • Federal regulations require aerosol items and certain liquids (i.e., alcohol) to be shipped via ground shipping service only. • The Ordering Page will restrict your shipping options when ordering items containing alcohol or aerosols. International & APO/FPO Shipments (Excluding Canada) • Pure Romance reserves the right to ship international packages via the United States Postal Service (USPS). See Consultant Website for current methods and pricing. • Pure Romance does not guarantee delivery dates. o APO/FPO – Once shipments are received by the US Military, they become the sole responsibility of the US Military Post Office. Pure Romance cannot control shipments once received by the US Military Post Office. • The address and/or delivery method cannot be modified when an order is in transit. • The Consultant is responsible for any brokerage, duties, and/or fees that may apply. Restricted Items • International regulations may restrict items available for shipping from Pure Romance. Canadian Shipments • Packages are shipped via UPS International Ground Service. o See Consultant Website for current shipping pricing information. • Pure Romance does not guarantee delivery dates. • The address and/or delivery method cannot be modified when an order is in transit. • Pure Romance will absorb any brokerage, duties, and/or fees that may apply. 11 Restricted Items • Canadian regulations may restrict items available for shipping from Pure Romance. Shipping Discrepancies Returned Shipments If a shipment is refused or you were not available to accept delivery and the shipment is returned to Pure Romance: • A refund minus Shipping and Handling charges and a 20% restocking feel will be applied to the Consultant’s Credits on File account. • Items contained in returned shipments must be re-ordered to be received. Damaged Packages Pure Romance makes every effort to pack orders in such a way to prevent product damage during shipping. • Shipments become the responsibility of the carrier upon pickup from the Pure Romance Corporate Office. • If a Consultant receives a damaged package, she must contact the Customer Service Department within one business day of receipt. • Pure Romance will file a claim with the carrier and work with the Consultant to arrive at a resolution. Stolen/Missing Packages • Shipments become the responsibility of the carrier upon pickup from the Pure Romance Corporate Office. • If a Consultant’s order is stolen or missing, she must contact the Customer Service Department to file a claim with the carrier. Missing Items • If a Consultant receives her order and an item is missing, she must contact the Customer Service Department within one business day of receipt. Warranty/Return Policy • • • 12 Pure Romance accepts merchandise returns for damaged or defective merchandise only. A Return Merchandise Authorization (RMA) number must be requested from the Customer Service Department. o If the Retail price is under $85, the request must be submitted within 30 days of the invoice date. o If the Retail price is over $85 and the item is a bedroom accessory, the request must be submitted within 60 days of the invoice date. Upon approval, an RMA number will be issued. • • • • • • • • • A Warranty Exchange form must be completed for each item being returned. The RMA number must be written on the outside of the package and on the Warranty Exchange form(s). Packages received without an RMA number will be returned to the sender. Consultants pay all shipping charges on return packages. Pure Romance reserves the right to approve or deny any returns submitted to the Corporate Office. Any item obviously misused, stretched, or used for demonstration purposes will not be accepted for return. All lingerie items must be returned in new condition: unworn, unwashed, and with all tags in original packaging. Lingerie items are subject to a restocking fee. Defective items approved for return will be exchanged for duplicate items only. Replacement items will be shipped with the Consultant’s next order. If a duplicate item is not available, Pure Romance will credit the Consultant for the purchase price of the item through Credits on File. Party and Recruit Leads Corporate Party Lead Requirements A Consultant can qualify to receive Party Leads from the Pure Romance Corporate Office by meeting the following requirements: • Reach a minimum of $5,000 in personal Retail Sales. • Consultant must be in Good Standing with the Pure Romance Corporate Office and adhere to the Code of Conduct. (See the Good Standing and Code of Conduct sections of this Guide for more information.) • Once these requirements have been met, the Consultant will become eligible to receive leads on the first of the following month. To Maintain Party Lead Eligibility: • Consultant must maintain a minimum of $1,200 in personal Retail Sales each month. o Should the Consultant’s monthly personal Retail Sales fall below this minimum, she will not be eligible to receive Party Leads the following month. Once she meets the $1,200 personal Retail Sales minimum again, her name will be added to the list the following month. • Consultant must attend the following Corporate Events: o One Empowerment Summit within 200 miles of her primary residence. o One National Training or National Convention each year. • Consultant must contact the lead by phone within 24 hours. o Failure to contact one Party Lead will result in a loss of Party Lead eligibility for the remainder of the month and the following month. • Consultant must update the Consultant Website lead status within 48 hours. 13 • Failure to update the website within 48 hours will result in the lead being reassigned to another Pure Romance Consultant. o Failure to provide the Pure Romance Corporate Office with status updates for 2 or more leads will result in a loss of Party Lead eligibility for the remainder of the month and the following month. Additional Party Lead Information • Should the Consultant happen to encounter an individual who is currently working with another active Pure Romance Consultant, she must notify the Customer Service Department immediately. Corporate Recruit Lead Requirements To become eligible for Recruit Leads from the Pure Romance Corporate Office, you must meet the following requirements: • Consultant must achieve Director Status (Director, Sr. Director, National Director, or Sr. National Director). • Consultant must have average personal Retail Sales of $3,000 per month and Group Sales of $6,000 per month. o Group Sales include personal Retail Sales and the Retail Sales of the Consultant’s 1st, 2nd, and 3rd Downline. • Consultant must be in Good Standing with the Pure Romance Corporate Office and adhere to the Code of Conduct. (See the Good Standing and Code of Conduct sections of this Guide for more information.) To Maintain Recruit Lead Eligibility: • Consultant must maintain Director Status (Director, Sr. Director, National Director, or Sr. National Director). • Consultant must maintain an average personal Retail Sales of $3,000 per month and Group Sales of $6,000 per month. o Consultant must be trending toward $36,000 in Personal Retail sales. o Group Sales must be trending toward $72,000 in annual sales. • Consultant must attend the following Corporate Events: o One Empowerment Summit within 200 miles of her primary residence. o One National Training or National Convention each year. • Consultant must hold team meetings on a bi-monthly basis and submit to the Pure Romance Corporate Office the date, time, and meeting content for each meeting. • Consultant must contact the lead by phone within 24 hours of receipt of the lead and send a Corporate Recruiting Packet. • Consultant must supply the Pure Romance Corporate Office with an update of the status of the lead via the Consultant Website within 48 hours. 14 o If Consultant does not supply an update within 48 hours, the contact information will be reassigned. Failure to provide the Pure Romance Corporate Office with status updates for two or more leads will result in a loss of Party Lead eligibility for the remainder of the month and the following month. Additional Recruit Lead Information • Should the Consultant happen to encounter a recruit currently working with another Active Pure Romance Consultant, she must notify the Customer Service Department immediately. • Recipients of Recruit Leads may not pass leads onto members of their Downline or other Consultants. • Should the Consultant not be able to service a lead within the required time frame, she must contact the Customer Service Department to have the lead reassigned or decline the lead on the Consultant Website. Marketing Use of the Pure Romance Name Consultants must state “Pure Romance by (insert name)” when advertising and promoting their business. When using Pure Romance’s name, you may also state your name followed by “Independent Consultant” (or appropriate level) for Pure Romance. You cannot represent yourself as an employee or agent of Pure Romance, Inc. Use of Pure Romance Logos, Copyright, and Trademarks • The Pure Romance name, various trademarks, and logos have been registered in the United States. The Catalog, invitations, newsletters, recruiting material, website material or anything developed by the company or bearing the copyright symbol ©, trademark symbol ™, or Pure Romance logo is not to be used in print, electronic media or any other media without prior written permission from the Pure Romance Corporate Office. • Consultants are prohibited from creating and selling products with a Pure Romance logo. This includes the repackaging and selling of original products, samples, etc. Corporate Approved Business Supplies and Vendors • Consultants are required to purchase Business Supplies including business cards, thank you cards, Order Forms, invitations, letterhead, etc., directly from Pure Romance or a Corporate-approved vendor. • Products or services using the Pure Romance logo are allowed on a by-permission basis. The developer of these products or services may be required to pay a 15 • • • • licensing fee, a percentage of profits, or some other remuneration for the benefit of using the Pure Romance name to promote a separate business. Consultants cannot make their own clothing or promotional items (i.e., buttons, pins, etc.) with a Pure Romance logo without Corporate approval. Promotional items with the Pure Romance logo are available through the Corporate Website at www.pureromance.com/gear and may not be purchased through any other vendor without prior approval from the Pure Romance Corporate Office. Pure Romance takes the position that sometimes Consultants find products or services Pure Romance is not currently pursuing or likely to pursue in the near future that would be beneficial to their business. Therefore, Pure Romance is open to others offering these services that might be beneficial to some Consultants. Pure Romance reserves the right to withdraw permission for use of its name and logo from these services or the marketing of these products at any time. Consultants are strongly encouraged to contact Pure Romance before they invest time and money in a product or service that Pure Romance may deem to be counter to its interests, its Consultants' interests as a whole, or damaging to its trademarks. For corporate approval or questions, please send all requests to marketing@pureromance.com. Flyers and Print Ads • • • • • Pre-approved marketing flyers are posted on the Consultant Website and include a customizable area for the Consultant’s contact information. If any creative information is added to the customizable area besides contact information, the copy must be approved by the Pure Romance Corporate Office. If a Consultant chooses to create her own print ads or flyers, she must contact the Pure Romance Corporate Office for prior approval and guidelines for creating the documents. All ads and flyers must have either the Corporate Website address (www.pureromance.com) or main Corporate Office telephone number (866ROMANCE) listed. For corporate approval, please send all requests to marketing@pureromance.com. Images from the Corporate Website cannot be used in any way, shape, or form. They are solely the property of Pure Romance, Inc. This does not include images that are used as a part of the pre-approved marketing flyers. Car Decals • Consultants wishing to have a car decal created to promote their business require approval from the Corporate Office. The design must include the Corporate Website address or telephone number on the decal unless the Consultants Personal Website address is listed. • For Corporate approval, please send all requests to marketing@pureromance.com. 16 Radio, Television, Interviews, or Publicity • Corporate approval must be obtained by the Public Relations Department before contributing to any media interviews, articles, or other publicity. • You may not broadcast, mention, or display the Pure Romance name, logo, trademarks, or product names in any way on the radio, local or national television networks, or cable television networks, no matter how limited the range. • It is not permissible to sell, advertise, or promote Pure Romance products on the radio or television. • For Corporate approval, please send all requests to publicrelations@pureromance.com. Press Releases If you would like to submit a press release to a local publication, you may only do so if you are attempting to publicize a recent promotion or achievement within the company (i.e., President’s Club, Board of Directors, Sr. Board of Directors, winning an incentive trip, etc.); other instances will be approved on a case-by-case basis. Before sending, you must first contact the Pure Romance Public Relations Department for approval of the release. Participating in Corporate-Sponsored Promotional Events • Consultants must be in Good Standing and will be selected by the Pure Romance Corporate Office. • Consultants who fail to attend a promotion they have previously committed to or who ignore company guidelines while at a promotional event will be taken off of the Corporate Party and/or Recruit Lead list and will also not be asked to participate in future promotions. • If a Consultant is unable to attend a scheduled event, it is her responsibility to notify the Marketing Department 48 hours prior to the event. • The Consultant is required to provide any giveaways for raffles. • The Consultant must provide ballots and ballot box for giveaways. Participating in Non-Corporate-Sponsored Promotional Events • Consultants must obtain approval from the Pure Romance Corporate Office before agreeing to participate in any promotional event, regardless of past participation. • Consultants must obtain approval at least seven business days prior to an event. • The Consultant will incur the entire cost of the event. • If two or more Consultants request to participate in the same event, it will be the Pure Romance Corporate Office’s discretion to determine the Consultant who will be authorized to participate. Displaying Product at Promotions • Only Foreplay Items, Massage and Bath Aids, Lubricants, Lingerie, and Mild Catalogs can be displayed when participating in trade shows, bridal shows, women’s expos, etc. Phallic-shaped items are prohibited from being displayed. 17 • • Silver Bullets and other non-phallic-shaped products are occasionally an exception at nightclub promotions, but only with management and Pure Romance Corporate Office approval. Materials given out at any promotion should be mild in nature. If the show director permits, the Consultant can supply a complete Catalog at a customer’s request (the customer must be over the age of 18). Selling Product at Promotions • Selling product is not permitted at promotions unless it is an Open House or if a Consultant is performing a live Pure Romance party for a Corporate-sponsored promotion. • Consultants are allowed to fill out Order Forms and ship the product to the customer after the event. Open Houses • Any guests over the age of 18 are permitted to attend a Pure Romance Open House. • Only Foreplay Items, Massage and Bath Aids, Lubricants, and Lingerie may be displayed on your table. Any phallic-shaped items must be kept out of sight. • If customers ask to see phallic-shaped products, you may allow them to look in your bin and handle the products; however, under no circumstance are you allowed to hold or demonstrate them. • Catalogs may be displayed as long as a visible sign mentions that the Catalog contains explicit material. Solicitation • Consultants must comply with the numerous Federal and State laws and regulations applicable to unsolicited telephone or fax solicitations. These include but are not limited to, compliance with Federal Communications Commission’s (FCC) and the Federal Trade Commission’s (FTC) “Do not call” rules. In many cases, State laws are more restrictive than Federal law. • Independent Consultants are not authorized to engage in telemarketing activities or partake in the use of automatic calling devices. • If a Consultant decides to engage in any type of telephone or fax solicitation, it is your responsibility to consult with an attorney who is knowledgeable about this area of law and familiarize yourself with applicable Federal law and the laws of any State in which you conduct business. Pure Romance cannot provide you legal advice. • When leaving your Pure Romance business cards at an establishment, you must get prior approval from management. Leaving business cards or other promotional materials in some areas is clearly inappropriate as there may be minors present. 18 Personal Website and Online Policies Selling Products Online • In order to maintain the integrity of Pure Romance’s brand name, product line and customer/Consultant relationship, Consultants may only sell Pure Romance products via their Pure Romance Personal Website, including current and past Pure Romance merchandise and any other promotional materials (collectively, “Products”). • Consultants are prohibited from selling products through online auction houses such as eBay®, Craig’s List, etc; and from supplying products to other individuals to sell online. Pure Romance strictly enforces this policy. Search Engines and Meta Tags • Pure Romance Consultants agree to cooperate fully with Pure Romance so that Internet search engines list Pure Romance’s Corporate Website, www.pureromance.com, as the first search result when an Internet browser makes a query containing the name “Pure Romance” or any one of Pure Romance’s product names or trademarks. • Pay for placement listings using the Pure Romance name, Pure Romance product names, or trademarks as the target keywords are strictly prohibited and in direct violation of Pure Romance’s policies. General Internet Policies • Consultants may not publish, post, or distribute any material on their Pure Romance Personal Website or in connection with Pure Romance that is defamatory, libelous, disparaging, threatening, offensive, harassing, abusive, obscene, pornographic, in violation of applicable law, or that inhibits others from enjoying the Pure Romance website or another Consultant’s Pure Romance Personal Website. • Pure Romance Personal Websites should not present false or misleading information about Pure Romance, the Pure Romance opportunity, or your relationship with Pure Romance. • Consultants may not violate or infringe on the rights of others, including privacy, publicity, and proprietary rights. • It is the sole responsibility of each Pure Romance Consultant to ensure that their Pure Romance Personal Website fully complies with Pure Romance’s Internet Guidelines as well as with all applicable Federal and State rules and regulations. Consultants are also responsible for ensuring their Downline Consultants comply with these policies. • Consultants agree not to interfere with or take action that results in interference with or disruption of the Pure Romance Corporate Website, other Consultant’s Personal Websites, or access to computer systems or networks connected to the foregoing. 19 • • Consultants will be held responsible for any statements or other content posted on their Pure Romance Personal Website or email, including liability or harm caused by such statements or material. When sharing documents or other materials specific to Pure Romance, Consultants must share within a password-protected environment. Website Domain Name and Email Addresses • The use of the Pure Romance name within a third-party URL address/domain name or email address is permitted (i.e., isellpureromance.com, pureromancegirl.com, or HYPERLINK "mailto:pureromancegirl@aol.com" pureromancegirl@aol.com). • The name must adhere to the rules set forth in the Pure Romance Code of Conduct. Redirecting URLs from Purchased Domain Names • Consultants can purchase a domain name from a third-party registrar that will act as a link, redirecting Customers to their official Pure Romance Personal Website. This may help in cases where an alternate name may be shorter and less difficult to remember. • You may not link to or from another business, hobby, or non-Pure Romance product or opportunity. Doing so is a conflict of interest as outlined in The Rules of Selling listed in this Consultant Policy Guide. Personal Website Policies • Pure Romance makes no guarantees or representations regarding the success or usefulness of having a Pure Romance Personal Website. • Internet services provided by Pure Romance are solely provided as-is. Pure Romance makes no representations or warranties, expressed or implied, including without limitation conditions of merchantability, title, or non-infringement. • Pure Romance may not be held liable for any downtime on your Personal Website due to server delays or problems, viruses, maintenance, or any other reason whatsoever. • When a customer places an order via your Personal Website, a notice will be sent to your Pure Romance email account. Personalizing Your Website You are allowed to personalize limited sections of your Pure Romance Personal Website. You can do so by logging into the Consultant Website under the MY PROFILE tab. These rules apply to managing your website: • Choose carefully the information you post on your Personal Website. • Do not include the following items: street addresses and any photographs containing nudity, or subject matter that is obscene, lewd, excessively violent, harassing, sexually explicit, or otherwise objectionable subject matter. • Your Personal Website is to be used to promote your Pure Romance business only. 20 • • You may not use your Personal Website to solicit others to buy or sell products or services other than Pure Romance. Pure Romance may, at its sole discretion, reject, refuse to post, or remove any personalized information (including private messages) by you, or to restrict, suspend, or terminate your access to all or any part of your Personal Website at any time, for any or no reason, with or without prior notice, and without liability. Note: If you become aware of misuse of a Personal Website by any Consultant, please contact the Customer Service Department to report the inappropriate content. Online Networking Sites • Pure Romance Consultants are permitted to have social networking accounts such as MySpace, BlackPlanet, or FaceBook. • Pure Romance requires that postings, photographs, messages, profiles, etc. posted on these sites with mention of Pure Romance be tasteful and not include street addresses or subject matter that contains nudity, obscene, lewd, excessively violent, harassing, sexually explicit, or otherwise objectionable subject matter. This is to protect the brand identity of Pure Romance and the success of all Pure Romance Consultants. Internet Advertising and Promotions To protect the Company’s logo, trademarks, brand names, and copyrighted material, Consultants must receive approval from the Pure Romance Corporate Office before advertising or promoting their business on any paid electronic network. Personal pages with indiscreet or racy images will not be permitted to be associated with Pure Romance advertising. Spam Pure Romance does not permit Consultants to send unsolicited commercial emails unless such emails strictly comply with applicable laws and regulations. Please refer to the Federal CAN SPAM Act for rules and regulations. Privacy Policy Consultants agree to abide by the Privacy Policy set forth on Pure Romance’s website and to honor and extend those same policies to people visiting Consultant’s Personal Websites. Incentives Programs Pure Romance offers a variety of incentives to recognize and reward Consultants for individual and team performance. Specific details on how to earn Incentives can be 21 found in the current Contest Book. Pure Romance may revise or discontinue individual incentives at the Company’s discretion. The following is a list of Incentives offered by the Pure Romance Corporate Office to Consultants: • Monthly Bonuses • Incentive Trips • Contests • Level Recognition • Positions of Honor (Executive Board of Directors, Board of Directors, etc.) • Car Lease Program • Buying Discounts • Free Product • Convention Credits Monthly Bonuses Monthly bonuses are paid to Consultants in the form of an automatic payment applied to the ADP card, check, or Credits on File. Specific rules apply to the payout and eligibility of bonus payments for each bonus type. Monthly bonuses consist of: • Override Bonus • Sponsor Bonus • Monthly Car Bonus • Commission from Personal Website sales* The monthly payments are issued on a predetermined payment schedule according to the following guidelines: • Bonuses are calculated on calendar month basis and paid on the 10th of the following month, unless it falls on a weekend or holiday. In which case, it would be paid on the next business day. • Bonuses for a given month totaling $49.99 or less will be placed on the Consultant’s account as Credits on File. • Bonuses of $50 or more are placed on a Consultant’s ADP card. If an ADP card has not been activated for the eligible Consultant, Pure Romance will mail a check to the Consultant’s current billing address. *Please see the current Contest Book for details on payment schedule for Commissions. To be eligible for monthly bonuses, the Consultant must: • Be Active. • Be In Good Standing and adhere to the Code of Conduct. • Achieve the required monthly Retail Sales minimum as outlined in the current Contest Book. 22 Contests Please follow the posted rules that apply to each individual contest. You can find the rules for contests on the Consultant Website or in the back of the Contest Book. Only Active Pure Romance Consultants are eligible to participate in the Pure Romance Contests and receive prizes, bonuses, and awards. Convention Credits • The current Contest Book and Pure Romance Consultant Website have complete details on how to earn and redeem Convention Credits. • Any exceptions to the policy must be approved in writing by the C.E.O. or President of Pure Romance. • If a Consultant becomes a Preferred Customer or Inactive at any time throughout the Contest period, she forfeits all Convention Credits she has earned up to that point. • Convention Credits cannot roll over to the following year and Convention Credits do not have a cash value. • Convention Credit prizes cannot be returned or exchanged. • To redeem Convention Credits, Consultants must register for and attend National Convention. Specific attendance requirements can be found on the Pure Romance Consultant Website. Level Recognition Pure Romance recognizes certain levels of performance in sales, recruiting, and team performance. The specific level recognitions are defined and governed as described in the Contest Book. Roll-up Consultants are not recognized as part of the qualifications in improving a Consultant’s Level. However, they will be considered in maintaining the Consultant’s current level. • Adjustments to move up Consultant Levels can be made throughout the month as Consultants meet the requirements for higher Consultant Levels. • Should a Consultant drop a Level, these changes are made once a month at 12:01 a.m. (EST) on the first day of each month. Positions of Honor (Board of Directors, President’s Club, etc.) Pure Romance recognizes a select group of Consultants who have consistently excelled in leadership abilities. Through their extraordinary efforts and professionalism, they have demonstrated their dedication to serving their team and the betterment of Pure Romance. • Positions of honor are awarded once a year based on specific requirements stated in the Contest Book. • The Consultant must officially accept or deny the position once offered. • At any time, Pure Romance could elect to disqualify a Consultant, should their 23 current performance be considered not conducive to fulfilling the responsibilities of their position. Buying Discounts • Buying Discounts are determined by the Consultant’s Level or account status at the time an order is submitted. • Pure Romance also offers various opportunities for Consultants to increase their Buying Discount through promotions, special orders, or Kit sales. Therefore, Buying Discounts may be increased independent of Consultant Level qualifications. • Pure Romance notifies Consultants of such promotions or special sales through emails and announcements made on the Consultant Website. Free Product • The total of your Free Product credit is subject to your monthly personal Retail Sales. • Free Product credit can be redeemed for Retail items only. • Free Product credit cannot be used toward regular Consultant orders. Incentive Trips • Trips are non-transferable. The original winner must be one of the travelers. • A Pure Romance Consultant may not take another Consultant as a traveling companion on Consultant Incentive Trips. When a trip allows a Consultant to bring a guest, her companion must be at least 21 years old. • Eligible Consultants must provide Pure Romance with the traveling companion information within 7 business days of confirmation that a trip has been won. • If a winner chooses not to take a portion of the planned trip itinerary, Pure Romance will not issue compensation for the unused portion. Pure Romance must authorize trip alterations. Pure Romance is not responsible for any costs associated with the changes. Balances due for approved trip alterations, additional costs, or buy-ins must be paid in full before arrangements can be confirmed and tickets released by Pure Romance. • Pure Romance will not reimburse trip winners or issue alternate prizes should the individual or guest become unable to attend the trip. Trip winners must travel with Pure Romance during the planned trip dates; winners are not allowed to travel at alternate times or request an alternate prize. Trip winners are responsible for obtaining a valid passport before trip departure. • The annual trips taken by the Executive, Sr., and Board of Directors and President’s Club are not considered an incentive trip. Car Lease Program • Car leases are issued in the winning Consultant’s name. The recipient of a car lease may not transfer the car to another individual. • Pure Romance reserves the right to select the year, make, model, and options of 24 • the cars awarded for the two-year Car Lease. Advertised cars are subject to change based on availability. Consultants must register for and attend National Convention. Specific attendance requirements can be found on the Pure Romance Consultant Website. Eligibility • Only Active Pure Romance Consultants in Good Standing and adhering to the Code of Conduct are eligible to qualify for Pure Romance incentives. • Sponsor Incentives will only be offered for new recruits that purchase a Kit and become Active. Kit purchases made for the purpose of reactivating will not count for Incentives offered for sponsoring new recruits. • Preferred Customers or Inactive Consultants are not eligible for any Incentives. Any Incentives earned prior to becoming Inactive or a Preferred Customer will be forfeited. Upon Reactivation, Consultants will once again become eligible for Incentives as of the Reactivation Date. • A Transfer Consultant is an individual transferring from another company within our industry. To be eligible to join Pure Romance as a transferring Consultant, the new recruit must submit a copy of the letter of resignation from her original company and proof of buying discount. o Transfer Consultants have the option to purchase a Kit or place a minimum order of $250 in Retail products of her choice. o Sponsor Bonuses and Convention Credits will be paid to the Sponsor only if the transferring Consultant purchases a Kit. • Certain Incentives require registration and attendance at the Pure Romance National Convention. ADP TotalPay Cards Your Monthly Override Bonuses and Sponsor Bonuses are issued to you though the ADP TotalPay Card. • • • • • Your Override Bonus is deposited on the 10th of every month, allowing you to access your funds immediately. If the 10th falls on a weekend or holiday, it will be issued the next business day. You will receive your ADP Card after the first time you reach an Override Bonus of $50 or more. Please allow up to 90 days from this achievement to receive your ADP card. Bonus payments $49.99 or less are always given in the form of Credits on File. If the ADP TotalPay Card is not activated before the first Bonus is issued, Pure Romance will send a check via mail. Questions regarding receipt of your TotalPay Card or Bonuses paid by Pure Romance should be directed to our Customer Service Department at 513-697-5970. 25 • Questions regarding deposits made to your ADP card should be directed to the ADP Customer Service Department. You can find their contact information on the back of your ADP Card. Status Changes Becoming an Active Consultant • Pure Romance Consultant Application (PRCA) Consultant Agreement must be submitted to the Pure Romance Corporate Office. o If a Kit is purchased through fax or phone, the original copies must be submitted within 60 days of Kit Purchase date. Failure to comply will result in the Consultant’s account being placed on hold. o If a Kit is purchased online, all paperwork is submitted automatically. • The Consultant must place order(s) with a Retail value totaling $250 before discount within 60 days of original Kit purchase date, unless otherwise dictated by promotion or contest rules. • If a Consultant fails to meet the requirements to become active within 60 days of her original Kit purchase date, she will need to purchase another Kit. Maintaining Active Consultant Status • Active Consultants must achieve Retail purchases of $50 or more every two calendar months. Please refer to Personal Website Orders under Consultant Orders. o If a return or adjustment results in a negative balance below $50 at Retail, the Consultant will lose her Active status and all corporate benefits. Preferred Customer Status • If a Consultant fails to achieve a minimum of $50 in Retail purchases every two calendar months, a Consultant’s status will change to Preferred Customer. • A Consultant can remain a Preferred Customer for up to one year, providing she makes a Retail purchase of any value every three calendar months. • Preferred Customers are not eligible for contests, prizes, other bonuses, or privileges offered to Active Consultants. • Preferred Customers do not count in your Downline for contests or for maintaining/advancing levels. • Downline Consultants will roll up to the Preferred Customer’s sponsor and will not revert back should the Consultant reactivate. Inactive Status • If a Preferred Customer fails to make a purchase of any Retail value within three calendar months, her Status will change to Inactive. • Inactive Consultants may not make any purchases as a Consultant with the Pure Romance Corporate Office until she completes the Reactivation Process. 26 Reactivation Process • Preferred Customer o A Preferred Customer can become an Active Consultant once again by paying a $39 reactivation fee. • Inactive (less than one year) o An Inactive Consultant who has been Inactive for less than one year can become an Active Consultant once again by paying a $99 reactivation fee or by purchasing a new Kit. • Inactive (more than one year) o An Inactive Consultant who has been Inactive for more than one year must purchase a new Kit • Reactivating Consultants will keep their original Consultant ID. Leave of Absence • The Pure Romance Corporate Office can approve a Leave of Absence of three months for those Consultant who have a medical condition, family issues, etc, that that will prevent them from maintaining their Active Status through traditional procedures. • A Consultant must fill out the Leave of Absence form, which can be found on the Consultant Website, and submit the form to the Pure Romance Corporate Office along with a doctor’s note or a legal document supporting their request. • If a Leave of Absence is needed for more than three months, then a written request for an extension should be submitted to the Pure Romance Corporate Office before the original three months has expired. • The Pure Romance Corporate Office reserves the right to refuse a Leave of Absence request at its discretion. Resignation • As an Independent Contractor, a Consultant has the right to resign her affiliation with Pure Romance. • In order to resign, a Consultant must submit a certified Letter of Resignation to the Pure Romance Corporate Office. After the letter has been received, the Consultant will receive written notification from the Pure Romance Corporate Office confirming that the resignation has been accepted. • All financial obligations to Pure Romance, Inc. must be resolved at the time of resignation, or Pure Romance, Inc. has the right to pursue any and all means to collect any outstanding debts owed. • A resigned Consultant has no right to claim or collect lost profits, lost opportunities, or other damages. • A resigned Consultant will lose all benefits as a Pure Romance Consultant. Disciplinary Sanctions and Termination • The Pure Romance Corporate Office can sanction a Consultant if she fails to make a commitment to uphold the name, reputation, and quality of our products. Such as: o A Consultant has violated any provisions of her Agreement including the provisions of the policies and procedures set forth in this Guide and the 27 • Consultant Agreement in its current form, which may be amended at Pure Romance’s sole discretion. o The Consultant has violated any laws, regulations, or standards of fair dealing. o The Consultant has conducted herself in a fashion that, in the Pure Romance Corporate Office’s sole discretion, damages or tarnishes the reputation or goodwill of Pure Romance. Disciplinary actions are based solely on the Pure Romance Corporate Office’s discretion. They may include: o Issuance of a written warning. o Requiring the Consultant to take immediate corrective measures. o Imposing a fine, which may be withheld from bonuses, Overrides, and/or commission checks. o Loss of rights to one or more bonuses, overrides, commission checks, or monies. This can be for the amount of time the Pure Romance Corporate Office is investigating any conduct allegedly violating the Consultant Agreement or a sanctioned amount of time as defined by the Pure Romance Corporate Office. o Loss of Party Leads or Recruit Leads. o Loss of Good Standing status. o Imposing a probationary period in which the Consultant will have a loss of benefits as outlined in this Guide. o Involuntary termination of the offending Consultant’s Agreement and Pure Romance business. o Any other measure expressly allowed within any provision of the Consultant Agreement or that which Pure Romance deems appropriate to equitably resolve injuries caused partially or exclusively by the Consultant’s policy violation or contractual breach. o In situations deemed appropriate the Pure Romance Corporate Office may institute legal proceeding for monetary and/or equitable relief. o All disciplinary sanctions are in addition to Pure Romance’s right to terminate or cancel with or without cause. Termination • The Pure Romance Corporate Office will notify the terminated Consultant by sending a Cease and Desist letter by certified mail. • Terminated Consultants may not reactivate as an Active Consultant at any time. Reporting Policy Violations If a Consultant observes a Policy violation by another Consultant, she should submit a written description of the violation directly to the Customer Service Department. • Details should include dates, number of occurrences, persons involved, and any supporting documentation. 28 Grievances and Complaints To report grievances and Complaints with another Consultant regarding any practice or conduct in relationship with their respective Pure Romance businesses, the Consultant should contact the offending Consultant’s Sponsor or Upline. • If the issue is not resolved, it must be reported in writing to the Customer Service Department. Personal Income Tax Requirements Social Security or Tax ID Number Required • In order for Pure Romance to comply with IRS regulations, we must have a Social Security number or Federal Tax ID number to provide the required 1099 reporting. This information is held in the strictest confidence and used only to comply with governing laws and for protection of your Pure Romance business. 1099 Because you are considered an independent contractor and not an employee, Pure Romance does not automatically send you a W-2 form. Pure Romance is required by Federal Law to report to the IRS and to send you a 1099 Form if you: • Purchase in excess of $5,000 at wholesale prices (which is defined as Retail minus your Buying Discount). • Received any trips, gifts, awards, or Override Bonuses with a value total in excess of $600 during the year. Federal Law for 1099s • 1099 Forms must be mailed to you no later than January 31st each year. • You must report your income or loss to the Federal Government whether or not you meet the above parameters. • Pure Romance cannot supply you with a breakdown of your profits for the year. 29 CONSULTANT AGREEMENT This Agreement (“Agreement”) is entered into between Pure Romance, Inc., an Ohio corporation, with a business office at 161 Commerce Boulevard, Loveland, Hamilton County, Ohio 45140 (“Company”) and________________________________________ [print name of Consultant/Contractor], whose address is _____________________________________________________________________________ (“Contractor”). Agreement Background 1. The Company has designed and developed a program (the “program”) for the sale of personal entertainment goods through home parties, which has become well known and established a reputation for quality. As a part of this program, the Company provides training, services, materials, and goods, including certain goods and materials bearing the Company’s PURE ROMANCE™ trademark or its PURE ROMANCE™ service mark and certain copyrighted materials for use in the businesses of individuals interested in owning a business that promotes and sells goods provided by the Company. 2. The Contractor desires to own and operate a business that will sell goods provided by the Company. Agreement Provisions In view of the foregoing background and of the following obligations, the Contractor and the Company agree: 1.Relationship. The Contractor is a self-employed individual and Independent Contractor, and not an employee of the Company, in the business of selling merchandise provided by the Company. The Contractor is not a Corporation, limited liability company, or other form of entity. The Contractor is the sole owner of her business. The Company is a supplier of training and a Consultant of merchandise for the Contractor’s retail sales business. There is no partnership, joint venture, or franchise business conducted by the Company and the Contractor, except as expressly and specifically provided by this Agreement. This Agreement is not intended to create and does not create any agency relationship. The Contractor and the Company do not have any authority to act for the other or to undertake, incur, and will not undertake or incur, any obligations or debts binding upon the other. The Contractor acknowledges that she has investigated, to her full satisfaction, all aspects of the program, the business and the merchandise to be sold and is not in any way relying on any representations or warranties of the Company in entering into this Agreement. Specifically, the Company has made no representations, directly or indirectly, about retail outlets, account locations, the ability to earn a gross or net profit in excess of any payments made for merchandise, the existence of any market for the goods, that the Company has knowledge about the Contractor’s relevant market, that the Company will supply to the Contractor names of locator companies or provide assistance with or supply names of or collect a fee on behalf of or for a locator company or that any buy-back arrangement exists. 2. Laws and Taxes. The Contractor will observe all laws and regulations and will meet all standards set by any federal, state, local, or other governmental authority or entity regulating or pertaining to the business of the Contractor. As an Independent Contractor, Contractor is liable for all Social Security, Medicare, and other self-employment taxes, all income taxes, and other returns required by any local, state, or federal tax authority for the Contractor’s business. When required or advisable due to override awards, sponsor awards, product awards, prizes or gifts, the Company may issue appropriate tax forms, including federal Form 1099 to the Contractor, reporting these to tax authorities as income to the Contractor. 3. Promotion and Sales. The Contractor will use her best efforts to learn the Company’s merchandise and to promote and sell the Company’s merchandise solely through home parties. The Contractor will display and promote the Company’s merchandise tastefully and honestly. The Contractor will maintain the highest standards of integrity, honesty, professionalism, and responsibility in promoting and selling the Company’s merchandise. The Company will make available to the Contractor training programs to educate the Contractor regarding the Company’s products and recommended sales techniques and will provide promotional materials, forms, and sales aids to the Contractor. The Company will provide to the Contractor all of its lines of merchandise, but the Company will not have any liability and the Contractor hereby waives any claim against the Company for lack of availability of any particular product due to uneven demand, inability to obtain a product from its manufacturer or Consultant, or any other condition beyond the control of the Company. The Contractor will only display, promote, and sell merchandise distributed by the Company at home parties at which PURE ROMANCE™ merchandise is displayed, promoted, or sold. The Contractor will not sell, market, promote or display the merchandise of any other companies through her PURE ROMANCE™ business. Contractor will not sell, market, or promote merchandise sold by the Company on any web site not specifically authorized by the Company, including without limitation, E-Bay or any similar site. Contractor agrees to the liquidated damages provision set forth in paragraph 13 if Contractor sells, markets, advertises for sale, or promotes the merchandise sold by the Company on any web site not approved by the Company, including but not limited to E-Bay or any similar site. The Contractor will display, promote, and sell the Company’s merchandise in accordance with all policies and procedures set forth in the Company’s products, on a nonexclusive basis throughout the United States. 4. Liability and Indemnification. The Contractor will defend, hold harmless, and indemnity the Company from any claim or liability for any misrepresentation, act or omission by the Contractor or any negligence, misconduct or intentional act of the Contractor in promoting or selling the Company’s goods. 30 5. Trademarks and Advertising. The Company owns certain trademark and trade name rights to its PURE ROMANCE™ trademarks and its PURE ROMANCE™ service marks (collectively the “Marks”) and to its PURE ROMANCE™ trade name. The Contractor will use the Marks, in connection with all home parties and sales of PURE ROMANCE™ merchandise, but only in accordance with the standards and procedures set forth in the Company’s Online Consultant Guide. The Contractor will not use any other trademarks or trade names in connection with the Contractor’s PURE ROMANCE business. The Contractor will not use Marks in connection with any other business of the Contractor. After one year from the date that the Company has signed this Agreement, provided the Contract has remained active according to the policies and procedures in the Online Consultant Guide, then the Contractor shall be given the limited and nonexclusive permission to use the format “PURE ROMANCE by ________________________________________________________[insert first, given, or nickname]” in local telephone directory and yellow page listings. Except for this limited permission for use in local telephone directories, the Contractor will use the Marks in advertising only after the Company has approved the advertising in writing. The Contractor will promptly notify the Company in writing of any third-party use of the Marks or trade name, of any equivalent or variation of them, or of any similar mark or name. The limited permissions granted in this 5 shall terminate immediately upon the termination of the Consultant-retail dealer relationship provided for by this Agreement. 6. Confidential Materials and Copyrights. The Online Consultant Guide is the property of the Company, contains some material that is trade secrets or confidential information of the Company, and is protected by copyright laws, trade secret laws, unfair trade practices law, and other laws. The Company may also publish other materials from time to time, including materials describing incentive programs and contests, that contain trade secrets or other confidential or proprietary information. The Company will provide access to the Online Consultant Guide and the Company’s other printed materials to the Contractor for the Contractor’s use only during the relationship governed by, and the permissions granted by, this Agreement. The Contractor will not disclose or reveal the contents of the Online Consultant Guide and other printed materials that are designated “Confidential” (the Online Consultant Guide and other designated materials being referred to collectively as “Confidential Information”) to anyone, will not discuss the contents of Confidential Information with anyone other than the Company, other Contractors, or the Contractor’s lawyer (and will only disclose and discuss Confidential Information with a lawyer engaged to provide legal advice with regard to her business or because of a conflict or disagreement with the Company). The Contractor will not copy any Confidential Information. The Contractor will return all of the Confidential Information to the Company promptly upon the termination, for any reason, of the relationship provided for by this Agreement. The Contractor will promptly notify the Company in writing of any third-party use of the Confidential Information, including making or using copies of any Confidential Information, using extracts from any Confidential Information, or otherwise infringing any of the Owner’s Copyrights. 7. Sales and Payment. The Contractor will conduct all sales to customers and payment to the Company in accordance with the policies and procedures in the Online Consultant Guide. 8. Incentives. The Company will provide certain sales and recruiting performance incentives to the Contractor in the form of programs and contest opportunities for discounts from the purchase price for the Company’s merchandise, override awards, sponsor awards, product awards, and prizes, all in accordance with the policies and procedures set forth in the Online Consultant Guide, newsletter, incentive program announcements, and contest announcements. The Contractor will not be entitled to payment for any discounts, override awards, sponsor awards, or prizes earned or accrued after the termination of the Consultant-retail dealer relationship provided for by this Agreement. 9. Privacy and Right of Publicity. The Contractor will not disclose the name or communications or contact information (including, but not limited to, addresses, telephone numbers, and e-mail addresses) of PURE ROMANCE™ customers to anyone except the Company. The Company may disclose the Contractor’s name and her PURE ROMANCE™ business telephone number to potential customers and potential new Contractors. The Company may use the Contractor’s name and photograph and quotes from the Contractor about PURE ROMANCE™ merchandise and the Company’s PURE ROMANCE™ business in the Company’s newsletter, in promotional materials, and in similar materials. 10. Policies and Procedures. The Contractor will act in accordance with all policies and procedures set forth in the Online Consultant Guide, whether or not they are referred to in this Agreement, as the Company may revise its Online Consultant Guide from time to time. The Company may make reasonable changes to its policies and procedures at the Company’s discretion. 11. Duration, Termination, and Surviving Provisions. This Agreement will be effective on the date signed by the Company below. Either party may terminate the relationship and the permissions granted in this Agreement upon fifteen days written notice, provided that paragraphs 2, 3, 5, 6, 9, 12, and 13 of this Agreement will survive the termination of the relationship and the permissions. Notwithstanding the foregoing, either party may terminate this Agreement immediately upon written notice for any material breach of the Agreement. This Agreement will be terminated, immediately and automatically, without 31 notice, if the Contractor fails to purchase the minimum amounts of merchandise set forth in the then current Online Consultant Guide. 12. Competition Restriction. The Contractor will not, during the relationship provided by this Agreement and for a period of one year from the termination of the relationship, within any County in which the Contractor has at any time displayed, promoted, or sold PURE ROMANCE™ merchandise (1) engage in a business similar to the Company’s business, including owning, operating, organizing, managing, directly, supervising, consulting with, or otherwise working for or being employed by such a business; (2) solicit any Contractor of the Company to become a sales representative, dealer, Consultant, or contractor for the Contractor for a business similar to the Company’s business; or (3) solicit any customers of the PURE ROMANCE™ network of contractors or any person who is or was a customer of the Contractor during the Contractor’s relationship with the Company to purchase merchandise similar to the Company’s merchandise from the Contractor. If the Contractor breaches this provision, then in addition to any legal or equitable actions available to the Company, the oneyear noncompetition period will be tolled for the duration of the breach so that the Company obtains the benefit of this provision for a noncompetition period of one year. After the termination of the relationship, the Company will attempt to service the PURE ROMANCE™ customers of the Contractor with another Contractor. 13. Legal Actions and Liquidated Damages. If the Company files a legal action to enforce any of the Contractor’s obligations or the Company’s rights set forth in this Agreement, then the Contractor will pay the Company’s reasonable attorneys’ fees, court costs, and legal expenses. Because monetary damages are difficult to determine for the breach of the obligations in paragraphs 3, 5, 6, 9, or 12, the Contractor consents to any preliminary and permanent injunctive relief, including temporary restraining orders, that may be necessary to enforce these obligations. Furthermore, Contractor agrees that if Contractor violates the provisions of paragraphs 3 relative to the sale, marketing, advertising for sale, or promoting of products on any website not authorized by the Company, including e-Bay®, then Contractor shall pay a liquidated amount of $5,000 per violation. Company shall continue to have all equitable rights and remedies that may be available to it for a violation of the foregoing prohibitions. 14. Assignment. This Agreement is personal to the Contractor and the Contractor may not assign or otherwise transfer any right, interest, or obligation of the Contractor under this Agreement, in whole or in part, in any manner. The Company will have the right to assign or transfer all rights in its PURE ROMANCE™ trademarks, service marks, and trade name and to assign or transfer any interest of the Company in the Copyrights and Confidential Materials. The Company will have the right to assign or transfer any or all rights, interests, and obligations of the Company arising from this Agreement. This Agreement is binding upon, and will inure to the benefit of, the Company and the Contractor, their legal representatives, and their successors in interest. 15. Amendment, Waiver, and Applicable Law. This Agreement constitutes the entire understanding of the Company and the Contractor concerning the subject matter of this Agreement and supersedes any prior oral or written and any contemporaneous oral agreements, understandings, promises, or representations. This Agreement may be amended only by an agreement in writing signed by the Company and the Contractor. No waiver of any obligation or provision in this Agreement will constitute a waiver of any other obligation or provision and no waiver of a breach of any obligation or provision will constitute a waiver of another breach of the same obligation or provision. This Agreement, including its interpretation and jurisdiction for enforcement, will be governed by the laws of the United States of America and the State of Ohio, and both Company and Contractor agree to jurisdiction and venue in Hamilton County, Ohio. If any provision or part of a provision of this Agreement is held unenforceable, the remaining provision will remain enforceable and any court of competent jurisdiction may reform this Agreement to accomplish the intent of the parties. 32 GLOSSARY ADP TotalPay Card: A personalized Visa card that has your monthly Override Bonus automatically deposited into the ADP account, making the funds immediately available by use of your ADP TotalPay Card. You can also deposit money on your ADP Card for payment of orders, etc. Automatic Roll-Up: If a Consultant fails to remain Active, she will fall into Preferred Customer status. All of the Consultants in the Preferred Customer Consultant’s Downline automatically roll-up into the Downline of the Inactive Consultant’s Sponsor. Backorder: Corporate Backorder: When a particular item is temporarily out of stock at the Corporate Office, it is placed on backorder until the Corporate Office receives it from the manufacturer. When the product is received, it will be shipped with your next order. Customer Backorder: If a customer orders a product that a Consultant does not have in stock, it should be placed in backorder status and ordered so it can be delivered to the customer within 7 to 10 days. Make sure to send out backorders in a timely fashion. Business Supply Items: Refers to supplies purchased from Pure Romance that you do not resell. Most of the business items you purchase may be a tax-deductible expense, as they are considered a cost of doing business. The price listed for each item is the actual price you will pay; your Buying Discount is not deducted from Business Supply items. Buying Discount: The percentage of discount applied to the price of Pure Romance Retail Purchases for the Pure Romance Consultant. The difference between the Retail Price and your cost after Buying Discount is the gross profit for each item you sell. Commission: The amount of profit paid to a Consultant when a customer places an order via her Personal Website. Consultant: An independent contractor representing Pure Romance who satisfies the minimum personal Retail Sales as set forth in the Pure Romance Policy Guide. Consultant Agreement: An Agreement that must be submitted online, via fax, or by mail before a new Consultant can become an Active Consultant. Signing this Agreement or accepting the online Agreement means you agree to the terms and conditions set forth by Pure Romance. Consultant Inventory Price List (CIPL): An itemized list of products and prices from which you can order. You can print this from the Consultant Website. It is also an Excel document that allows you to track inventory or organize information to place an order easily. Consultant Website: Once you have purchased a Kit, you will be able to visit a special section of our website dedicated to Pure Romance Consultants only. You will need to enter your Consultant ID and password (last four digits of your Social Security number) to activate your account. Convention Credits: Credits earned on a monthly basis through sales of Retail as well as recruiting. For more details, refer to the current Planner/Contest Book. Corporate Recruit Leads: An individual that contacts the Corporate Office for more information about becoming a Consultant. This information is assigned to eligible Pure Romance Consultants. 33 Credits on File: Small payments that are due to a Consultant are added to their Credits on File account (i.e., when an Override Bonus is $49.99 or less). Also, when a Consultant processes customer Credit Card payments through the Corporate Office, the amount due to the Consultant is added to her Credits on File account. A Consultant can use Credits on File to pay for future orders. Customer Service Department: Pure Romance has a Customer Service Department that is available to answer questions about your Pure Romance business. The Customer Service Department is available Monday – Friday from 9 a.m. to 5 p.m. EST. The Customer Service Department can be reached at 513-697-5970 or at customerservice@pureromance.com. Customer: An individual who purchases Pure Romance products directly from Pure Romance, Inc. or a Consultant but who is not a Consultant for Pure Romance. Downline: Anyone you personally sponsor who becomes an Active Consultant (combination of your 1st, 2nd and 3rd level Downline). 1st Level Downline: The Active Consultants you personally sponsor constitute your 1stLevel Downline. It is your responsibility to ensure that the new Consultants in your Downline are properly trained and well educated about Pure Romance policies and products. You will receive a one-time Sponsor Bonus when a new Consultant becomes an Active Consultant within the 60-day time limit. You also will receive monthly Override Bonuses based on the Retail Sales of your 1st Downline. (Your 1st Level Downline will sometimes be referred to as “daughters.”) 2nd Level Downline: The Active Consultants recruited by the Consultants in your 1st Level Downline constitute your 2nd Level Downline. Members of your 2nd Level Downline are sometimes referred to as “granddaughters.” You also will receive an Override Bonus on your 2nd level Downline in return for your efforts in assisting your team members in the training of their new Consultants. See the Planner/Contest Book for information about Override Bonuses and the benefits of building a Downline. 3rd Level Downline: The Active Consultants recruited by the Consultants in your 2nd Level Downline constitute your 3rd Level Downline. Members of your 3rd Level Downline are sometimes referred to as “great granddaughters”. You also will receive an Override Bonus on your 3rd level Downline in return for your efforts in assisting your team members in the training of their new Consultants. See the Planner/Contest Book for information about Override Bonuses and the benefits of building a Downline. Empowerment Summit: Pure Romance offers this training throughout the year; you will receive valuable information on running your business, demo ideas, and Corporate updates. Free Products: An incentive offered by Pure Romance to all Active Consultants who reach personal Retail Sales of a specific amount each calendar month. Free products refer to Retail only unless otherwise specified. Inactive Status: If a Preferred Consultant fails to place the necessary Retail order within two calendar months, she will fall into Inactive Status. Maintaining Active Status: Must make a Retail Purchase of $50 or more every two calendar months. 34 National Convention: An annual recognition and training event held once a year. All Active Consultants are invited to attend to redeem Convention Credits, receive recognition, and attend training workshops. National Training: All Active Consultants are invited to attend this training event to learn additional skills to help them grow a Pure Romance business through booking, selling, and recruiting. This is part of Pure Romance’s Continuing Education and Support Program. Override: An Override is a monthly bonus paid to a Sponsor based on the Retail Sales of the 1st, 2nd, 3rd, and/or 4th Level Downline. Personal Retail Sales: The amount a Retail products a Consultant purchases before Buying Discount. Positions of Honor: A Consultant who demonstrates outstanding sales and recruiting abilities earns a position on the Board of Directors or President’s Club. New members are awarded each year. Preferred Customer: A Consultant who has failed to meet the minimum monthly Retail requirements to maintain their Active Consultant status. Preferred Customers receive a discount of 15% off all orders. Profit: The amount earned by a Consultant for selling product directly to a customer. The difference between the selling price and the Consultant's cost of the product equals her profit. Pure Romance: Refers to Pure Romance, Inc., the Pure Romance Corporate Office, or Corporate Office, located at 161 Commerce Blvd., Loveland, OH 45140. Pure Romance Consultant Agreement (PRCA): Agreement between you and Pure Romance. When a Consultant joins online, she does not need to complete any additional paperwork. When a Consultant joins via fax or mail, she must submit a completed Consultant Application and PRCA. Reactivation: Preferred Customers and Inactive Consultants can reactivate their accounts to become Active Consultants. Recruit: An individual who has expressed interest in becoming a Pure Romance Consultant. Retail: The cost before the Buying Discount is applied. This is also the price the customer pays. Your normal Buying Discount is deducted from any Retail products you purchase. Roll-up: If a Consultant in your 1st, 2nd, or 3rd level Downline becomes a Preferred Customer, their immediate Consultants will roll-up to you. Sponsor: A Pure Romance Consultant who enrolls another Consultant into the Company and is listed as the Sponsor on the Consultant Application and Agreement. The act of enrolling others and training them to become Consultants is called “sponsoring” or recruiting. Suggested Retail Price: The suggested price at which a product is sold to the customer. Termination: When a Consultant is asked to no longer represent Pure Romance. Not abiding by Pure Romance policies, breaking the rules and policies agreed to, or not being in Good Standing are considered grounds for termination. 35 Up-line: Refers to the Pure Romance Consultant or Consultants above a particular Consultant in a sponsorship line up to the Company. The line of sponsors that link any particular Consultant to the Company. 36