POLICIES AND PROCEDURES v1.0

1.0 INTRODUCTION

1.1 Mutual Commitment Statement

CLAR8TY recognizes that in order to develop a long-term and mutually rewarding relationship with its Business Owners (“IBOs”) and Customers, CLAR8TY and the IBOs must acknowledge and respect the true nature of the relationship.

A. In the spirit of mutual respect and understanding, CLAR8TY is committed to:

I. Provide prompt, professional and courteous service and communications to all of its

IBOs and Customers;

II. Provide the highest quality products, at fair and reasonable prices;

III. Exchange or refund the purchase price of any product, service or membership as provided in our Return Policy;

IV. Deliver orders promptly and accurately;

V. Pay commissions accurately and on a timely basis;

VI. Expedite orders or checks if an error or unreasonable delay occurs;

VII. Roll out new products and programs with IBO input and planning;

VIII. Implement changes in the Compensation Plan or Policies and Procedures that affect the

IBO with input from the IBOs;

IX. Support, protect and defend the integrity of the CLAR8TY Business

Opportunity;

X. Offer IBOs an opportunity to grow with CLAR8TY with such growth guided by the principles of Servant Leadership.

B. In return, CLAR8TY expects that its IBOs will:

I. Conduct themselves in a professional, honest, and considerate manner;

II. Present CLAR8TY corporate and product information in an accurate and professional manner;

III. Present the Compensation Plan and Return Policy in a complete and accurate manner;

IV. Not make exaggerated income claims;

V. Make reasonable efforts to support and train IBOs and Customers in their downline;

VI. Not engage in cross-line recruiting, unhealthy competition or unethical business practices;

VII. Provide positive guidance and training to IBOs and Customers in their downline while exercising caution to avoid interference with other downlines. As such, an IBO is discouraged from providing cross-line training to an IBO or Customer in a different organization without first obtaining consent of the IBO’s or Customer’s upline leader;

VIII. Support, protect, and defend the integrity of the CLAR8TY Business

Opportunity;

IX. Accurately complete and submit the IBO agreement and any requested supporting documentation in a timely manner.

1.2 CLAR8TY Policies and Compensation Plan Incorporated into the

IBO agreement

A. Throughout these Policies, when the term “Agreement” is used, it collectively refers to the CLAR8TY agreement, these Policies and Procedures, and the CLAR8TY Compensation Plan.

B. It is the responsibility of the sponsoring IBO to provide the most current version of these Policies and Procedures (available on the CLAR8TY Web site) and the CLAR8TY Compensation Plan to each applicant prior to his or her execution of an IBO agreement.

1.3 Purpose of Policies

A. CLAR8TY is a direct sales company that markets products and services through Independent Business Owners, referred to as IBOs. To clearly define the relationship that exists between IBOs and CLAR8TY, and to explicitly set a standard for acceptable business conduct, CLAR8TY has established these Policies and Procedures.

B. CLAR8TY IBOs are required to comply with (i) all of the Terms and Conditions set forth in the IBO Agreement, which CLAR8TY may amend in its sole discretion; (ii) all Federal, state, provincial, territorial, and local laws governing his or her CLAR8TY business; and (iii) these Policies and Procedures.

C. CLAR8TY IBOs must review the information in these Policies and Procedures carefully. Should an IBO have any questions regarding a policy or rule, the IBO is encouraged to seek an answer from his or her sponsor, or any other upline IBO. If further clarification is needed, the IBO may contact CLAR8TY Customer Service.

1.4 Changes, Amendments, and Modifications

A. Because federal, state, and local laws, as well as the business environment, periodically change, CLAR8TY reserves the right to amend the Agreement and the prices in its CLAR8TY Product Price List in its sole and absolute discretion. Notification of amendments shall appear in Official CLAR8TY Materials.

B. Any such amendment, change, or modification shall be effective immediately upon notice by one of the following methods:

I. posting on the official CLAR8TY Web site;

II. electronic mail (e-mail); or

III. In writing through the CLAR8TY newsletters, or other CLAR8TY communication channels.

1.5 Delays

CLAR8TY shall not be responsible for delays or failures in performance of its obligations when such failure is due to circumstances beyond its reasonable control. This includes, without limitation, strikes, labor difficulties, transportation difficulties, riot, war, fire, and weather, curtailment of a source of supply, or government decrees or orders.

1.6 Effective Date

These Policies and Procedures shall become effective as of January 1st 2014 and, at such time, shall automatically supersede any prior Policies and Procedures (the “old Policies and Procedures”), and, on that date, the old Policies and Procedures shall cease to have any force or effect.

2.0 BASIC PRINCIPLES

2.1 Becoming A CLAR8TY IBO

A. To become an IBO, an applicant must comply with the following requirements:

I. Be of the age of majority (not a minor) in his or her state of residence;

II. Reside or have a valid address in the United States, or a U.S. territory;

III. Have a valid Social Security Number, Federal Tax ID Number, or Taxpayer Identification Number (TIN);

IV. Submit a properly completed and signed IBO Agreement to CLAR8TY;

V. Not be a CLAR8TY employee, the Spouse of a CLAR8TY employee or related to an employee of CLAR8TY or living in the same household as such CLAR8TY employee.

2.2 New IBO Registration

A. A potential new IBO may self-enroll on the sponsor’s replicated web site. In such event, instead of a physically signed IBO agreement, CLAR8TY will accept the web enrollment and IBO agreement by accepting the “electronic signature” stating the new IBO has accepted the terms and conditions of such IBO agreement. Please note that such electronic signature constitutes a legally binding agreement between the IBO and CLAR8TY.

B. CLAR8TY reserves the right to require signed paperwork for any account, regardless of origin.

C. If requested, the signed IBO Agreement must be received by CLAR8TY within14 days of enrollment.

D. Signed documents, including but not limited to IBO agreements, are legally binding contracts which must not be altered, tampered with or changed in any manner after they have been signed. False or misleading information, forged signatures or alterations to any document, including business registration forms, made after a document has been signed may lead to sanctions, up to and including involuntary termination of the IBO’s position.

2.3 Rights Granted

A. CLAR8TY hereby grants to the IBO a non-exclusive right, based upon the terms and conditions contained in the IBO agreement and these Policies and Procedures, to:

I. Purchase CLAR8TY products and services;

II. Promote and sell CLAR8TY products and services; and

III. Sponsor new IBOs and Customers in the United States and in countries where CLAR8TY may become established after the effective date of these Policies and Procedures.

2.4 Identification Numbers

A. Each IBO is required to provide his or her Social Security Number, or Federal Tax Identification Number, if located in the United States or any of its territories, to CLAR8TY on the IBO agreement. CLAR8TY reserves the right to withhold commission payments from any IBO who fails to provide such information or who provides false information.

B. Upon enrollment, CLAR8TY will provide a CLAR8TY Identification Number, and/or Username to the IBO. This number will be used to place orders, structure organizations, and track commissions and bonuses.

2.5 Renewals and Expiration of the IBO Agreement

A.  The annual IBO renewal fee is $45.00. The renewal date for his or her IBO agreement is 12-months from the date of enrollment.

B.  If the IBO allows his or her IBO agreement to expire due to nonpayment, the IBO will lose any and all rights to his or her downline organization unless the IBO re-activates within 60 days following the expiration of the agreement.

C. If the former IBO re-activates within the 60-day time limit, the IBO will resume the rank and position held immediately prior to the expiration of the IBO agreement. However, such IBO’s paid as level will not be restored unless he or she qualifies at that payout level in the new month. The IBO is not eligible to receive commissions for the time period that the IBO’s position was expired.

D. The IBO who was terminated or whose agreement has expired and lapsed the 60-day grace period is not eligible to re-apply for a CLAR8TY business for 12 months following the expiration of the IBO agreement.

E. The downline of the expired IBO will roll up to the immediate, ACTIVE upline sponsor.

2.6 Business Entities

A. A corporation, partnership, LLC, or trust (collectively referred to as a “Business Entity”) may apply to be a CLAR8TY IBO. This IBO’s business and position will remain temporary until the proper documents are submitted. The entity must submit one of the following documents: Certificate of Incorporation, Articles of Organization, Partnership Agreement or appropriate trust documents. CLAR8TY must receive these documents within 14 days from the date the IBO agreement was signed.

B. A CLAR8TY IBO may change its status under the same sponsor from an individual to a partnership, LLC, corporation, trust or from one type of business entity to another.

2.7 Independent Business Relationship; Indemnification for Actions

A. The CLAR8TY IBO is an independent contractor, and not a purchaser of a franchise or business opportunity. Therefore, each IBO’s success depends on his or her independent efforts.

B. The agreement between CLAR8TY and its IBOs does not create an employer/employee relationship, agency, partnership, or joint venture between CLAR8TY and the IBO.

C. A CLAR8TY IBO shall not be treated as an employee of CLAR8TY for any purposes, including, without limitation, for Federal, state, or provincial tax purposes. All IBOs are responsible for paying local, state, provincial, and Federal taxes due from all compensation earned as an IBO of CLAR8TY. Any other compensation received by IBOs from CLAR8TY will be governed by applicable U.S. tax laws (or the tax laws of any other applicable jurisdiction). The IBO has no express or implied authority to bind CLAR8TY to any obligation or to make any commitments by or on behalf of CLAR8TY. Each IBO shall establish his or her own goals, hours, and methods of operation and sale, so long as he or she complies with the terms of the IBO agreement, these Policies and Procedures and applicable State, Federal and Provincial laws.

D. The CLAR8TY IBO is fully responsible for all of his or her verbal and written communications made regarding CLAR8TY products, services, and the compensation plan that are not expressly contained within official CLAR8TY materials. IBOs shall indemnify and hold harmless CLAR8TY, its directors, officers, employees, and agents from any and against all liability including judgments, civil penalties, refunds, attorney fees and court costs incurred by CLAR8TY as a result of the IBO’s unauthorized representations or actions. This Provision shall survive the termination of the CLAR8TY IBO agreement.

2.8 Insurance

A. Business Pursuits Coverage. CLAR8TY encourages IBOs to arrange insurance coverage for their business. A homeowner’s insurance policy does not cover business related injuries, or the theft of, or damage to inventory or business equipment. CLAR8TY IBOs need to contact their insurance agent to make certain their business property is protected. In most instances, this may be accomplished with a “Business Pursuit” endorsement to an existing homeowner’s policy.

2.9 Errors or Questions

A. If an IBO has questions about, or believes any errors have been made regarding commissions, bonuses, business reports, orders, or charges, the IBO must notify CLAR8TY in writing within 30 days of the date of the error or incident in question. Any such errors, omissions or problems not reported within 30 days shall be deemed waived by the IBO.

3.0 CLAR8TY’s IBO Responsibilities

3.1 Correct Addresses

A. It is the responsibility of the IBO or Customer to make sure CLAR8TY has the correct shipping address before any orders are shipped.

B. An IBO or Customer will need to allow up to 30 days for processing after the notice of address change has been received by CLAR8TY.

C. An IBO or Customer may be assessed a $20 fee for returned shipments due to an incorrect shipping address.

3.2 Training and Leadership

A. Any CLAR8TY IBO who sponsors another IBO into CLAR8TY must perform an authentic assistance and training function to ensure his or her downline is properly operating his or her CLAR8TY business. Sponsoring IBOs should have ongoing contact and communication with the IBOs in their downline organizations. Examples of communication may include but are not limited to: newsletters, written correspondence, telephone, contact, team calls, voice-mail, e-mail, personal meetings, accompaniment of downline IBOs to CLAR8TY meetings and training sessions and any other related functions.

B. A Sponsoring CLAR8TY IBO should monitor the IBOs in his or her downline organizations to ensure that downline IBOs do not make improper product or business claims, or engage in any illegal or inappropriate conduct. Upon request, such IBO should be able to provide documented evidence to CLAR8TY of his or her ongoing fulfillment of the responsibilities of a sponsor.

C. Upline IBOs are encouraged to motivate and train new IBOs about CLAR8TY’s products and services, effective sales techniques, the CLAR8TY compensation plan and compliance with company policies and procedures.

D. Marketing product is a required activity in CLAR8TY and must be emphasized in all recruiting presentations.

F. We emphasize and encourage all IBOs to sell CLAR8TY’s products and services to Customers and VIP Customers.

G. Use of Sales Aids. To promote both the products and the opportunity CLAR8TY offers, IBOs must use the sales aids and support materials produced by CLAR8TY. If CLAR8TY IBOs develop their own sales aids and promotional materials, which may include, but is not limited to, Internet advertising, notwithstanding IBOs’ good intentions, they may unintentionally violate any number of statutes or regulations affecting a CLAR8TY business. These violations, although they may be relatively few in number, could jeopardize the CLAR8TY opportunity for all IBOs. Accordingly, IBOs must submit all written sales aids, promotional materials, advertisements, websites and other literature to the Company for Company’s approval prior to use. Unless the IBO receives specific written approval to use the material, the request shall be deemed denied. All IBOs shall safeguard and promote the good reputation of CLAR8TY and its products. The marketing and promotion of CLAR8TY, the CLAR8TY opportunity, the Compensation Plan, and CLAR8TY products and services shall be consistent with the public interest, and must avoid all discourteous, deceptive, misleading, unethical or immoral conduct or practices.

3.3 Constructive Criticism; Ethics

A. CLAR8TY desires to provide its independent IBOs with the best products and services and Compensation Plan in the industry. Accordingly, CLAR8TY values constructive criticism and encourages the submission of written comments addressed to the CLAR8TY compliance department.

B. Negative and disparaging comments about CLAR8TY, its products or Compensation Plan, by IBOs made to CLAR8TY, in the Field or at CLAR8TY meetings or events, or disruptive behavior at CLAR8TY meetings or events, serve no purpose other than to dampen the enthusiasm of other CLAR8TY IBOs. CLAR8TY IBOs must not belittle CLAR8TY, other CLAR8TY IBOs, CLAR8TY products or services, the Compensation Plan, or CLAR8TY directors, officers, or employees. Such conduct represents a material breach of these Policies and Procedures and may be subject to sanctions as deemed appropriate by CLAR8TY.

C. CLAR8TY endorses the following code of ethics:

I. A CLAR8TY IBO must show fairness, tolerance, and respect to all people associated with CLAR8TY, regardless of race, gender, social class or religion, thereby fostering a “positive atmosphere” of teamwork, good morale and community spirit.

II. An CLAR8TY IBO shall strive to resolve business issues, including situations with upline and downline IBOs, by emphasizing tact, sensitivity, good will and taking care not to create additional problems.

III. CLAR8TY IBOs must be honest, responsible, professional and conduct themselves with integrity.

IV. CLAR8TY IBOs shall not make disparaging statements about CLAR8TY, other IBOs, CLAR8TY employees, products, services, sales and marketing campaigns, or the Compensation Plan, or make statements that unreasonably offend, mislead or coerce others.

D. CLAR8TY may take appropriate action against an IBO if it determines, in its sole discretion, that an IBO’s conduct is detrimental, disruptive, or injurious to CLAR8TY or to other IBOs.

3.4 Reporting Policy Violation

A. An IBO who observes a policy violation by another IBO should submit a written and signed letter (e-mail or facsimile will not be accepted) of the violation directly to the CLAR8TY Corporate office. The letter shall set forth the details of the incident as follows:

I. The nature of the violation;

II. Specific facts and proof of facts to support the allegations;

III. Dates;

IV. Number of occurrences;

V. Persons involved; and

VI. Supporting documentation regarding the violation.

VII. Mail to:
CLAR8TY, INC

Attn: Compliance Department

25792 Obrero Drive

Mission Viejo, CA 92691

B. Once the matter has been presented to CLAR8TY, it will be researched thoroughly by the Compliance department and appropriate action will be taken, if required.

C. This section refers to the general reporting of policy violations as observed by other IBOs for the mutual effort to support, protect, and defend the integrity of the CLAR8TY business and opportunity. If a CLAR8TY IBO has a grievance or complaint against another IBO which directly relates to his or her CLAR8TY business, the procedures set forth in these policies must be followed.

3.5 Sponsorship

A. The sponsor is the person who introduces an IBO or Customer to CLAR8TY, helps them complete their enrollment, and supports and trains those in their downline.

B. CLAR8TY recognizes the sponsor as the name(s) shown on the first:

I. Physically signed CLAR8TY IBO agreement on file; or

II. Electronically signed IBO agreement from a web site, or a CLAR8TY IBOs web site.

C. An IBO agreement that contains notations such as “by phone,” or the signatures of other individuals (i.e. Sponsors, Spouses, relatives, or friends) is not valid and will not be accepted by CLAR8TY.

D. All ACTIVE IBOs in good standing have the right to Sponsor and enroll others into CLAR8TY. While engaged in sponsoring activities, it is not uncommon to encounter situations when more than one IBO will approach the same prospect. It is the accepted industry courtesy that the new prospect will be sponsored by the first IBO who presented a comprehensive introduction to CLAR8TY products or business opportunity, and followed up.

E. CLAR8TY recognizes that each new prospect has the right to ultimately choose his or her own sponsor, but CLAR8TY will not allow IBOs to engage in unethical sponsoring activities.

F. A Protected Prospect is a guest of any CLAR8TY IBO, or Customer who attended a CLAR8TY event or conference call. For 60 days following the event, a Protected Prospect cannot be solicited or sponsored by any other CLAR8TY IBO who attended the same event. A CLAR8TY event can be defined as the following:

I. Any CLAR8TY training session;

II. Conference call;

III. Fly-in meeting; or

IV. Presentation, including but not limited to a CLAR8TY at home presentation, whether sponsored by CLAR8TY, an IBO, a Customer, or an agent or agency designated by CLAR8TY.

3.6 Cross Sponsoring Prohibition

A. “Cross sponsoring” is defined as the enrollment into a different line of sponsorship of an individual, or business entity that already has a signed IBO Agreement. Actual or attempted cross sponsoring is not allowed. If cross sponsoring is verified by CLAR8TY, sanctions up to and including termination of an IBO’s position may be imposed.

B. The use of a spouse’s or relative’s name, trade names, assumed names, DBA names, corporation, partnership, trust, Federal ID numbers, or fictitious ID numbers to evade or circumvent this policy is not permitted.

C. This policy does not prohibit the transfer of a CLAR8TY business in accordance with CLAR8TY Sale or Transfer policy set forth in these Policies.

3.7 Adherence to the CLAR8TY Compensation Plan

A. An IBO must adhere to the terms of the CLAR8TY Compensation Plan as set forth in these Policies and Procedures as well as in official CLAR8TY literature. Deviation from the Compensation Plan is prohibited.

B. An IBO shall not offer the CLAR8TY opportunity through, or in combination with, any other system, program, or method of marketing other than that specifically set forth in official CLAR8TY literature.

C. An IBO shall not require or encourage a current or prospective Customer or IBO to participate in CLAR8TY in any manner that varies from the Compensation Plan as set forth in official CLAR8TY literature.

D. An IBO shall not require or encourage a current or prospective Customer or IBO to make a purchase from, or payment to any individual, or other entity, as a condition to participating in the CLAR8TY Compensation Plan, other than such purchases or payments required to naturally build their business.

3.8 Adherence to Laws and Ordinances

A. Many cities and counties have laws regulating certain home-based businesses. In most cases, these ordinances do not apply to IBOs because of the nature of the business.

However, IBOs must check their local laws and obey the laws that do apply to them.

B. A CLAR8TY IBO shall comply with all Federal, state, and local laws and regulations in them conduct of his or her CLAR8TY business.

3.9 Compliance with Applicable Income Tax Laws

A. CLAR8TY will automatically provide a complete 1099 Miscellaneous Income Tax form (nonemployee compensation) to each US IBO whose earnings for the year is at least $600, or who has purchased more than $5,000 of CLAR8TY products for resale or who received trips, prizes or awards valued at $600 or more. If earnings and purchases are less than stated above, IRS forms will be sent only at the request of the IBO, and a minimum charge of $20 may be assessed by CLAR8TY. Canadian T-4’s will be sent to IBOs who earn more than $500 or who received trips, prizes, or awards valued at $500 or more. CLAR8TY IBOs are responsible for the payment of taxes on these trips, prizes, or awards provided to them by CLAR8TY.

B. An IBO accepts sole responsibility for and agrees to pay all Federal, state, provincial and local taxes on any income generated as an independent IBO, and further agrees to indemnify CLAR8TY from any failure to pay such tax amounts when due.

C. If an IBO’s business is tax exempt, the Federal Tax Identification number must be provided to CLAR8TY in writing.

4. CLAR8TY encourages all IBOs to consult with a tax advisor for additional information for their business.

3.10 One CLAR8TY Business Per IBO

A. An IBO may operate or have an ownership interest, legal or equitable, as a sole proprietorship, partner, shareholder, trustee, or beneficiary, in only one CLAR8TY business. No individual may have, operate or receive compensation from more than one CLAR8TY business. Individuals of the same family unit may each enter into or have an interest in their own separate CLAR8TY businesses, only if each subsequent family position is placed frontline to the first family member enrolled. A “family unit” is defined as spouses and dependent children living at or doing business at the same address.

3.11 Actions of Household Members or Affiliated Parties

If any member of an IBO’s immediate household engages in any activity which, if performed by the IBO, would violate any provision of the Agreement, such activity will be deemed a violation by the IBO and CLAR8TY may take disciplinary action pursuant to these Policies and Procedures against the IBO. Similarly, if any individual associated in any way with a corporation, partnership, LLC, trust or other entity (collectively “Business Entity”) violates the Agreement, such action(s) will be deemed a violation by the Business Entity, and CLAR8TY may take disciplinary action against the Business Entity. Likewise, if an IBO enrolls in CLAR8TY as a Business Entity, each Affiliated Party of the Business Entity shall be personally and individually bound to, and must comply with, the terms and conditions of the Agreement.

3.12 Solicitation for Other Companies or Products

A. A CLAR8TY IBO may participate in other direct sales, multilevel, network marketing or relationship marketing business ventures or marketing opportunities. However, during the term of this Agreement and for one year thereafter, a CLAR8TY IBO may not recruit any CLAR8TY IBO, or Customer for any other direct sales or network marketing business, unless that IBO or Customer was personally sponsored by such IBO.

B. The term “recruit” means actual or attempted solicitation, enrollment, encouragement, or effort to influence in any other way (either directly or through a third party), another IBO or Customer to enroll or participate in any direct sales or network marketing opportunity. This conduct represents recruiting even if the IBO’s actions are in response to an inquiry made by another IBO or Customer.

C. During the term of this Agreement and for a period of six months thereafter, any CLAR8TY IBO must not sell, or entice others to sell, any competing products or services, including training materials, to CLAR8TY Customers or IBOs. Any product or service in the same category as a CLAR8TY product or service is deemed to be competing (i.e., any competing product or service regardless of differences in cost or quality. This provision does not apply where professional services are the primary source of revenue and the product sales are secondary (e.g., doctor’s offices, clinics, health clubs, spas and beauty salons).

D. However, an IBO may sell non-competing products or services to CLAR8TY Customers and IBOs that they personally sponsored.

E. An IBO may not display or bundle CLAR8TY products or services, in sales literature, on a web site or in sales meetings, with any other products or services to avoid confusing or misleading a prospective Customer or IBO into believing there is a relationship between the CLAR8TY and non-CLAR8TY products and services.

F. A CLAR8TY IBO may not offer any non-CLAR8TY opportunity, products or services at any CLAR8TY related meeting, seminar or convention, or immediately following a CLAR8TY event.

G. A violation of any of the provisions in this section shall constitute unreasonable and unwarranted contractual interference between CLAR8TY and its IBOs and would inflict irreparable harm on CLAR8TY. In such event, CLAR8TY may, at its sole discretion, impose any sanction it deems necessary and appropriate against such IBO or such IBO’s positions including termination, or seek immediate injunctive relief without the necessity of posting a bond.

3.13 Presentation of the CLAR8TY Opportunity

A. In presenting the CLAR8TY opportunity to potential Customers and IBOs, an IBO is required to comply with the following provisions:

I. An IBO shall not misquote or omit any significant material fact about the Compensation Plan.

II. An IBO shall make it clear that the Compensation Plan is based upon sales of CLAR8TY products and services and upon the sponsoring of other IBOs.

III. An IBO shall make it clear that success can be achieved only through substantial independent efforts.

IV. A CLAR8TY IBO shall not make unauthorized income projections, claims, or guarantees while presenting or discussing the CLAR8TY opportunity or Compensation Plan to prospective IBOs or Customers.

V. An IBO may not make any claims regarding products or services of any products offered by CLAR8TY, except those contained in official CLAR8TY literature.

VI. An IBO may not use official CLAR8TY material to promote the CLAR8TY business opportunity in any country where CLAR8TY has not established a “presence.”

VII. In an effort to conduct best business practices, CLAR8TY has developed the Income Disclosure Statement (“IDS”). The CLAR8TY IDS is designed to convey truthful, timely, and comprehensive information regarding the income that CLAR8TY IBOs earn. In order to accomplish this objective, a copy of the IDS must be presented to all prospective IBOs.

A copy of the IDS must be presented to a prospective IBO anytime the Compensation Plan is presented or discussed, or any type of income claim or earnings representation is made.

The terms “income claim” and/or “earnings representation” (collectively “income claim”) include: (1) statements of average earnings, (2) statements of non-average earnings, (3) statements of earnings ranges, (4) income testimonials, (5) lifestyle claims, and (6) hypothetical claims. Examples of “statements of non-average earnings” include, “Our number one IBO earned over a million dollars last year” or “Our average ranking IBO makes five thousand per month.” An example of a “statement of earnings ranges” is “The monthly income for our higher ranking IBOs is ten thousand dollars on the low end to thirty thousand dollars a month on the high end.”

3.14 Sales Requirements are governed by the Compensation Plan

A. CLAR8TY IBOs may purchase CLAR8TY products and then re-sell them at any price they choose. CLAR8TY will provide suggested selling prices. There are no exclusive territories granted to anyone. No franchise fees are applicable to a CLAR8TY business.

B. The CLAR8TY program is built on sales to the ultimate consumer. CLAR8TY encourages its IBOs to only purchase inventory that they and their family will personally consume, will be used as a sales tool, or will be resold to others for their ultimate consumption. IBOs must never attempt to influence any other IBO to buy more products than they can reasonably use or sell to retail Customers in a month.

C. Each CLAR8TY IBO commits to personally use, sell, or use in business building at least 70% of every order placed with the Company prior to placing another order, and must be able to certify to such if demanded by the Company or by any regulatory agency. Purchasing product solely for the purpose of collecting bonuses or achieving rank is prohibited. CLAR8TY retains the right to limit the amount of purchases you may make if, in our sole judgment, we believe those purchases are being made solely for qualification purposes instead of for consumption or resale.

4.0 ORDERING

4.1 General Order Policies

A. Bonus buying is strictly and absolutely prohibited. Bonus buying includes: (a) the enrollment of individuals or entities without the knowledge of and/or execution of an Agreement by such individuals or entities; (b) the fraudulent enrollment of an individual or entity as an IBO or Customer; (c) the enrollment or attempted enrollment of non-existent individuals or entities as IBO or Customers (“phantoms”); (d) purchasing CLAR8TY products or services on behalf of another IBO or Customer, or under another IBO’s or Customer’s ID number, to qualify for commissions or bonuses; (e) purchasing excessive amounts of goods or services that cannot reasonably be used or resold in a month; and/or (f) any other mechanism or artifice to qualify for rank advancement, incentives, prizes, commissions, or bonuses that is not driven by bona fide product or service purchases by end user consumers.

An IBO shall not use another IBO’s or Customer’s credit card or debit checking account to enroll in CLAR8TY or purchase products or services without the account holder’s written permission. Such documentation must be kept by the IBO indefinitely as it may be required by CLAR8TY at a later date.

B. Regarding an order with an invalid or incorrect payment, CLAR8TY will attempt to contact the IBO by phone, mail or email in order to obtain another form of payment. If these attempts are unsuccessful after 10 business days, the order will be canceled.

C. If an IBO wants to move an order to another IBO’s position, he or she must have prior authorization, of all parties involved. CLAR8TY will charge the IBO a $20 fee for processing.

D. Prices are subject to change without notice.

E. An IBO or Customer who is a recipient of a damaged or incorrect order must notify CLAR8TY within 10 calendar days from receipt of the order and follow the procedures as set forth in these Policies.

4.2 Insufficient Funds

A. All checks returned for insufficient funds will be re-submitted for payment. A $35 fee will be charged to the account of the IBO or Customer for all returned checks and insufficient funds.

B. Any outstanding balance owed to CLAR8TY by an IBO or Customer of the IBO from NSF (non-sufficient funds) checks, returned check fees or insufficient fund fees (ACH) will be withheld by CLAR8TY from an IBO’s future bonus and commission checks.

3. All transactions involving returned checks or insufficient funds through ACH or credit card, which are not resolved in a timely manner by the IBO, constitute grounds for disciplinary sanctions.

D. If a credit card order or automatic debit is declined the first time, the Customer or IBO will be contacted for an alternate form of payment. If payment is declined a second time, the Customer or IBO may be deemed ineligible to purchase CLAR8TY products or services or participate in the monthly Auto-Ship.

4.3 Sales Tax Obligation

A. The IBO shall comply with all state and local taxes and regulations governing the sale of CLAR8TY products and services.

B. CLAR8TY will collect and remit sales tax on IBO orders unless an IBO furnishes CLAR8TY with the appropriate Resale Tax Certificate form. When orders are placed with CLAR8TY, sales tax is prepaid based upon the suggested retail price. CLAR8TY will remit the sales tax to the appropriate state and local jurisdictions. The IBO may recover the sales tax when he or she makes a sale. CLAR8TY IBOs are responsible for any additional sales taxes due on products marked up and sold at a higher price.

C. CLAR8TY encourages each IBO to consult with a tax advisor for additional information for his or her business.

5.0 PAYMENT OF COMMISSIONS & BONUSES

5.1 Bonus and Commission Qualifications

A. An IBO must be ACTIVE and in compliance with CLAR8TY Policies and Procedures to qualify for bonuses and commissions. So long as an IBO complies with the terms of the agreement, CLAR8TY shall pay commissions to such IBO in accordance with the Compensation Plan.

B. CLAR8TY will not issue a check to an IBO without the receipt of a completed and signed CLAR8TY IBO Agreement or electronic authorization.

C. CLAR8TY reserves the right to postpone commission payments until such time the cumulative amount exceeds $25.

5.2 Computation of Commissions and Discrepancies

A. In order to qualify to receive commissions and bonuses, an IBO must be in good standing and comply with the terms of the Agreement and these Policies and Procedures. Commissions, overrides, and achievement levels are calculated weekly and monthly, depending on the Compensation Plan.

B. A CLAR8TY IBO must review his or her monthly statement and bonus reports promptly and report any discrepancies within 30 days of receipt. After the 30-day “grace period” no additional requests will be considered for commission recalculations.

C. For additional information on payment of commissions, please review the Compensation Plan.

5.3 Adjustments to Bonuses and Commissions for Returned Products or IBO Memberships.

A. An IBO receives bonuses and commissions based on the actual sales of products and services to end consumers and to IBOs through product purchases. When a product or service is returned to CLAR8TY for a refund from the end consumer, or by an IBO, the bonuses and commissions attributable to the returned product or service will be deducted from the IBO who received bonuses or commissions on such sales. Deductions will occur in the month in which the refund is given and continue every pay period thereafter until the commission is recovered.

B. In the event that an IBO terminates his or her position, and the amounts of the bonuses or commissions attributable to the returned products have not yet been fully recovered by CLAR8TY, the remainder of the outstanding balance may be offset against any other amounts that may be owed by CLAR8TY to the terminated IBO.

6.0 SATISFACTION GUARANTEED AND RETURNS

CLAR8TY offers a one hundred percent (100%) thirty-day money back guarantee for all Customers. If a Customer purchased a product directly from the IBO, and is not satisfied with the item, the Customer may return the unopened items and request a refund from their IBO, less a 5% restocking fee. Shipping and handling charges incurred will not be refunded. If a Customer purchased a product directly from the IBO’s replicating website and the product was fulfilled directly by CLAR8TY, and the Customer is not satisfied with the item, the Customer may return the unopened items to CLAR8TY and request a refund, less a 5% restocking fee. Shipping and handling charges incurred will not be refunded.

If you, the IBO, are not 100% satisfied with our products or are unable to sell them, you may return the unopened items for a refund, less a 5% restocking fee, if neither you nor CLAR8TY have terminated the Agreement and the unopened products were purchased within twelve months and remain in resalable condition. The refund shall be 90% of the purchase price. Shipping and handling charges incurred will not be refunded.

Upon cancellation of the Agreement, the IBO may return all sales aids purchased within one (1) year from the date of cancellation for a refund if he or she is unable to sell or use the merchandise. An IBO may only return sales aids he or she personally purchased from the Company under his or her IBO Identification Number, and which are in Resalable condition. Upon receipt of the products and sales aids, the IBO will be reimbursed ninety percent (90%) of the net cost of the original purchase price(s), less shipping charges. If the purchases were made through a credit card, the refund will be credited back to the same account. The Company shall deduct from the reimbursement paid to the IBO any commissions, bonuses, rebates or other incentives received by the IBO which were associated with the merchandise that is returned.

6.1 Return Process

A. All returns, whether by a Customer, or IBO, must be made as follows:

I. Obtain RMA (Return Merchandise Authorization) from CLAR8TY;

II. Ship items to the address provided by CLAR8TY Customer Service when you are given your RMA;

III. Provide a copy of the invoice with the returned unopened products. Such invoice must reference the RMA and include the reason for the return.

IV. Ship back unopened product in manufacturer’s box exactly as it was delivered.

B. All returns must be shipped to CLAR8TY pre-paid, as CLAR8TY does not accept shipping collect packages. CLAR8TY recommends shipping returned product by UPS or FedEx with tracking, as risk of loss in shipping the returned product shall be borne solely by the Customer, or IBO. If returned product is not received at CLAR8TY Distribution Center, it is the responsibility of the Customer, or IBO to trace the shipment and no credit will be applied.

C. The return of $500 or more of products accompanied by a request for a refund within a calendar year, by an IBO, may constitute grounds for involuntary termination.

7.0 PRIVACY POLICY

7.1 Introduction

This Privacy Policy is to ensure that all Customers and IBOs understand and adhere to the basic principles of confidentiality.

7.2 Expectation of Privacy

A. CLAR8TY recognizes and respects the importance its Customers and IBOs place on the privacy of their financial and personal information. CLAR8TY will make reasonable efforts to safeguard the privacy of, and maintain the confidentiality of its Customers’ and IBOs’ financial and account information and nonpublic personal information.

B. By entering into the IBO agreement, an IBO authorizes CLAR8TY to disclose his or her name and contact information to uplines IBOs solely for activities related to the furtherance of the CLAR8TY business. An IBO hereby agrees to maintain the confidentiality and security of such information and to use it solely for the purpose of supporting and servicing his or her downline organization and conducting the CLAR8TY business.

7.3 Employee Access to Information

CLAR8TY limits the number of employees who have access to Customer’s and IBOs’ nonpublic personal information.

7.4 Restrictions on the Disclosure of Account Information

A. CLAR8TY will not share non-public personal information or financial information about current or former Customers or IBOs with third parties, except as permitted or required by laws and regulations, court orders, or to serve the Customers’, or IBOs’ interests or to enforce its rights or obligations under these Policies and Procedures, or IBO’s Agreement or with written permission from the account holder on file.

8.0 PROPRIETARY INFORMATION AND TRADE SECRETS

8.1 Business Reports, Lists, and Proprietary Information

A. By completing and signing the CLAR8TY IBO Agreement, the IBO acknowledges that Business Reports, lists of Customer and IBO names and contact information and any other information, which contain financial, scientific or other information both written or otherwise circulated by CLAR8TY pertaining to the business of CLAR8TY (collectively, “Reports”), are confidential and proprietary information and trade secrets belonging to CLAR8TY.

8.2 Obligation of Confidentiality

A. During the term of the CLAR8TY IBO Agreement and for a period of 5 years after the termination or expiration of the IBO Agreement between the IBO and CLAR8TY, the IBO shall not:

I. Use the information in the Reports to compete with CLAR8TY or for any purpose other than promoting his or her CLAR8TY business;

II. Use or disclose to any person or entity any confidential information contained in the Reports, including the replication of the genealogy in another network marketing company.

8.3 Breach and Remedies

A. The IBO acknowledges that such proprietary information is of such character as to render it unique and that disclosure or use thereof in violation of this provision will result in irreparable damage to CLAR8TY and to independent CLAR8TY businesses. CLAR8TY and its IBOs will be entitled to injunctive relief or to recover damages against any IBO who violates this provision in any action to enforce its rights under this section. The prevailing party shall be entitled to an award of attorney’s fees and expenses.

8.4 Return of Materials

A. Upon demand by CLAR8TY, any current or former IBO will return the original and all copies of all “Reports” to CLAR8TY together with any CLAR8TY confidential information in such person’s possession.

9.0 ADVERTISING, PROMOTIONAL MATERIAL, USE OF COMPANY NAMES

AND TRADEMARKS

9.1 Labeling, Packaging, and Displaying Products

A. A CLAR8TY IBO may not re-label, re-package, refill, or alter labels of any CLAR8TY product, or service, information, materials or programs in any way. CLAR8TY products and services must only be sold in their original containers from CLAR8TY. Such re-labeling or re-packaging violates Federal and state laws, which may result in criminal or civil penalties or liability.

B. A CLAR8TY IBO shall not cause any CLAR8TY product or service or any CLAR8TY trade name to be sold or displayed in retail establishments except the following:

I. Where professional services are the primary source of revenue and the product sales are secondary (e.g., doctor’s offices, clinics, health clubs, spas and beauty salons).

II. Where the retail establishment is owned or managed by the IBO and the store does not exceed $1 million in annual gross revenue, and there are 5 or fewer stores under common ownership of management.

C. CLAR8TY will permit IBOs to solicit and make Commercial Sales upon prior written approval from CLAR8TY. For the purpose of these Policies and Procedures, the term “Commercial Sale” means the sale of:

I. CLAR8TY products that equal or exceed $5,000 in a single order.

II. Products sold to a third party who intends to re-sell the products to an end consumer.

D. An IBO may sell CLAR8TY products and services and display the CLAR8TY trade name at any appropriate display booth (such as trade shows) upon prior written approval from CLAR8TY.

1. CLAR8TY reserves the right to refuse authorization to participate at any function that it does not deem a suitable forum for the promotion of its products and services, or the CLAR8TY opportunity.

9.2 Use of Company Names and Protected Materials

A. A CLAR8TY IBO must safeguard and promote the good reputation of CLAR8TY and the products and services it markets. The marketing and promotion of CLAR8TY, the CLAR8TY opportunity, the Compensation Plan, and CLAR8TY products and services will be consistent with the public interest, and must avoid all discourteous, deceptive, misleading, unethical or immoral conduct and practices.

B. All promotional materials supplied or created by CLAR8TY must be used in their original form and cannot be changed, amended or altered except with prior written approval from the CLAR8TY Compliance Department.

C. The name of CLAR8TY, each of its product names and other names that have been adopted by CLAR8TY in connection with its business are proprietary trade names, trademarks and service marks of CLAR8TY. As such, these marks are of great value to CLAR8TY and are supplied to IBOs for their use only in an expressly authorized manner.

D. A CLAR8TY IBO’s use of the name “CLAR8TY” is restricted to protect CLAR8TY proprietary rights, ensuring that the CLAR8TY protected names will not be lost or compromised by unauthorized use. Use of the CLAR8TY name on any item not produced by CLAR8TY is prohibited except as follows:

I. [IBO’s name] Independent CLAR8TY IBO

II. [IBO’s name] Independent IBO of CLAR8TY products and services.

E. Further procedures relating to the use of the CLAR8TY name are as follows:

I. All stationery (i.e. letterhead, envelopes, and business cards) bearing the CLAR8TY name or logo intended for use by the IBO must be approved in writing by the CLAR8TY Compliance Department.

II. CLAR8TY IBOs may list “Independent CLAR8TY IBO or IBO” in the white pages of the telephone directory under his or her own name.

III. CLAR8TY IBOs may not use the name CLAR8TY or CLAR8TY in answering his or her telephone, creating a voice message or using an answering service, such as to give the impression to the caller that they have reached the corporate office. They may state, “Independent CLAR8TY IBO,”

F. Certain photos and graphic images used by CLAR8TY in its advertising, packaging, and Web sites are the result of paid contracts with outside vendors that do not extend to IBOs. If an IBO wants to use these photos or graphic images, they must negotiate individual contracts with the vendors for a fee.

G. A CLAR8TY IBO shall not appear on, or make use of television or radio, or make use of any other media to promote or discuss CLAR8TY or its programs, products or services without prior written permission from the CLAR8TY Compliance Department.

H. An IBO may not produce for sale or distribution any Company event or speech, nor may an IBO reproduce CLAR8TY audio or video clips for sale or for personal use without prior written permission from the CLAR8TY Compliance Department.

I. CLAR8TY reserves the right to rescind its prior approval of any sales aid or promotional material to comply with changing laws and regulations and may request the removal from the marketplace of such materials without financial obligation to the affected IBO.

J. An IBO shall not promote non-CLAR8TY products or services in conjunction with CLAR8TY products or services on the same Web sites or same advertisement without prior approval from CLAR8TY Compliance.

K. An IBO shall never imply that any of the CLAR8TY products are designed to prevent, treat, cure or mitigate any diseases. Health claims related to various diseases will not be tolerated.

9.3 Faxes and E-mail – Limitations

A. Except as provided in this section, an IBO may not use or transmit unsolicited faxes, e-mail, mass e-mail distribution, or “spamming” that advertises or promotes the operation of his or her CLAR8TY business. The exceptions are:

I. Faxes or e-mailing any person who has given prior permission or invitation.

II. Faxing or e-mailing any person with whom the IBO has established a prior business or personal relationship.

B. In all states where prohibited by law, an IBO may not transmit, or cause to be transmitted through a third party, (by telephone, facsimile, computer or other device), an unsolicited advertisement to any equipment, which has the capacity to transcribe text or images from an electronic signal received over a regular telephone line, cable line, ISDN, T1 or any other signal carrying device, except as set forth in this section.

C. All faxes, e-mail or computer broadcasted documents subject to this provision shall include each of the following:

I. A clear and obvious identification that the fax or e-mail message is an advertisement or solicitation. The words “advertisement” or “solicitation” should appear in the subject line of the message.

II. A clear return path or routing information.

III. The use of legal and proper domain name.

IV. A clear and obvious notice of the opportunity to decline to receive further commercial facsimile or e-mail messages from the sender.

V. Unsubscribe or opt-out instructions should be the very first text in the body of the message box in the same size text as the majority of the message.

VI. The true and correct name of the sender, valid senders fax or e-mail address, and a valid sender physical address.

VII. The date and time of the transmission.

VIII. Upon notification by recipient of his or her request not to receive further faxed or e-mailed documents, a CLAR8TY IBO shall not transmit any further documents to that recipient.

D. All e-mail or computer broadcasted documents subject to this provision shall not include any of the following:

I. Use of any third party domain name without permission.

II. Sexually explicit materials.

9.4 Internet and Third-Party Web site Restrictions

1. An IBO may not use or attempt to register any of CLAR8TY’s trade names, trademarks, service names, service marks, product names, URLs, advertising phrases, the Company’s name or any derivative thereof, for any purpose including, but not limited to, Internet domain names (URL), third party Web sites, email addresses, Web pages, or blogs.
2. A CLAR8TY IBO may not sell CLAR8TY products or offer the Business opportunity using “on-line auctions,” such as eBay®, or websites such as Craigslist.org.

3. All IBOs may have one (1) Approved third-party Web site. A third-party Web site is a CLAR8TY-approved personal website that is hosted on non-CLAR8TY servers and has no affiliation with CLAR8TY. Any IBO who wishes to develop their own third-party Web site must submit a properly completed third-party Web site Application and Agreement along with the proper web site registration fee and receive CLAR8TY’s prior written approval beofre going live with their third-party Web site. Third-party Web sites may be used to promote your business and CLAR8TY’s products so long as the third-party Web site adheres to CLAR8TY’s advertising policies. Moreover, no orders may be placed through third-party Websites, and no enrollments may occur through a third-party Website. If you wish to use anythird-party Website, you must do the following:
   1. Identify yourself as an IBO for CLAR8TY.
   2. Use only the approved images and wording authorized by CLAR8TY.
   3. Adhere to the branding, trademark, and image usage policies described in this document.
   4. Adhere to any other provision regarding the use of a third-party Web site described in this document.
   5. Agree to give the Compliance Department at CLAR8TY access to the third-party Web site and, if the website is password protected, the Compliance Department must receive passwords or credentials allowing unlimited access.
   6. Agree to modify your web site to comply with current or future CLAR8TY policies.

4. All marketing materials used on an IBO’s third-party Web site must be provided by CLAR8TY or approved in writing by CLAR8TY.

5. To avoid confusion, the following three elements must also be prominently displayed at the top of every page of your third-party Web site:

1. 1. 1. 1. The CLAR8TY IBO Logo
         2. Your Name and Title
         3. CLAR8TY Corporate Web site Redirect Button

6. An IBO may not use third-party sites that contain materials copied from corporate sources (such as CLAR8TY brochures, CDs, videos, tapes, events, presentations, and corporate Web sites). This policy ensures brand consistency, allows Customers and IBOs to stay up-to-date with changing products and information, facilitates enrollment under the correct Sponsor, and assists in compliance with government regulations.

7. A CLAR8TY IBO who currently qualifies at the rank of Diamond may apply to the Compliance Department for an exception to the third-party Web site policy in 9.4(D). To qualify for an exception, the Web site must serve a unique market that the CLAR8TY corporate site does not currently serve or intend to serve.

8. CLAR8TY products may be displayed with other products or services on an IBO’s third-party Web site so long as the other products and services are consistent with CLAR8TY values and are not marketed or sold by a competing network-marketing company.

9. If the independent CLAR8TY business of an IBO who has received authorization to create and post an third-party Website is voluntarily or involuntarily canceled for any reason, or if CLAR8TY revokes its authorization allowing the IBO to maintain a third-party Website, the IBO shall assign the URL to his/her third-party Website to the CLAR8TY within three days from the date of the cancellation and/or re-direct all traffic to the site as directed by the CLAR8TY. CLAR8TY reserves the right to revoke any IBO’s right to use a third-party Website at any time if CLAR8TY believes that such revocation is in the best interest of CLAR8TY, its IBOs, and Customers. Decisions and corrective actions in this area are at CLAR8TY’s sole discretion.

10. Social Media sites may not be used to sell or offer to sell CLAR8TY products. PROFILES An IBO GENERATES IN ANY SOCIAL COMMUNITY WHERE CLAR8TY IS DISCUSSED OR MENTIONED MUST CLEARLY IDENTIFY THE IBO AS A CLAR8TY IBO, and when an IBO participates in those communities, IBOs must avoid inappropriate conversations, comments, images, video, audio, applications or any other adult, profane, discriminatory or vulgar content. The determination of what is inappropriate is at CLAR8TY’s sole discretion, and offending IBOs will be subject to disciplinary action. Banner ads and images used on these sites must be current and must come from the CLAR8TY approved library. If a link is provided, it must link to the posting IBO’s Replicated Website or an approved third-party Website.

11. Anonymous postings or use of an alias on any Social Media site is prohibited, and offending IBOs will be subject to disciplinary action.

12. IBOs may not use blog spam, spam dexing or any other mass-replicated methods to leave blog comments. Comments IBOs create or leave must be useful, unique, relevant and specific to the blog’s article.

13. IBOs must disclose their full name on all Social Media postings, and conspicuously identify themselves as an independent IBO for CLAR8TY. Anonymous postings or use of an alias is prohibited.

14. Postings that are false, misleading, or deceptive are prohibited. This includes, but is not limited to, false or deceptive postings relating to the CLAR8TY income opportunity, CLAR8TY’s products and services, and/or your biographical information and credentials.

15. IBOs are personally responsible for their postings and all other online activity that relates to CLAR8TY. Therefore, even if an IBO does not own or operate a blog or Social Media site, if an IBO posts to any such site that relates to CLAR8TY or which can be traced to CLAR8TY, the IBO is responsible for the posting. IBOs are also responsible for postings which occur on any blog, or Social Media site that the IBO owns, operates, or controls.

16. As a CLAR8TY distibutor, it is important not converse with any person who places a negative post against you, other IBOs, or CLAR8TY. Report negative posts to CLAR8TY at cs@clar8ty.com. Responding to such negative posts often simply fuels a discussion with someone carrying a grudge that does not hold themselves to the same high standards as CLAR8TY, and therefore damages the reputation and goodwill of CLAR8TY.

17. The distinction between a Social Media site and a Website may not be clear-cut, because some Social Media sites are particularly robust, CLAR8TY therefore reserves the sole and exclusive right to classify certain Social Media sites as third-party Websites and require that IBOs using, or who wish to use, such sites adhere to the CLAR8TY’s policies relating to third-party Websites.

18. If your CLAR8TY business is cancelled for any reason, you must discontinue using the CLAR8TY name, and all of CLAR8TY’s trademarks, trade names, service marks, and other intellectual property, and all derivatives of such marks and intellectual property, in any postings and all Social Media sites that you utilize. If you post on any Social Media site on which you have previously identified yourself as an independent CLAR8TY IBO, you must conspicuously disclose that you are no longer an independent CLAR8TY IBO.

19. Failure to comply with these policies for conducting business online may result in the IBO losing their right to advertise and market CLAR8TY products and CLAR8TY business opportunity online in addition to any other disciplinary action available under the Policies and Procedures.

9.5 Advertising and Promotional Materials

A. You may not advertise any CLAR8TY products at a price LESS than the highest company published, established retail price of ONE offering of the CLAR8TY product plus shipping and applicable taxes. No special enticement advertising is allowed. This includes but is not limited to offers of free membership, free shipping, or other such offers that grant advantages beyond those available through the Company.

B. Advertising and all forms of communications must adhere to principles of honesty and propriety.

C. All advertising, including but not limited to print, Internet, computer bulletin boards, television, radio, etc., are subject to prior written approval by the CLAR8TY Compliance Department.

D. All requests for approvals with respect to advertising must be directed in writing to the CLAR8TY Compliance Department.

E. CLAR8TY approval is not required to place blind ads that do not mention CLAR8TY, its employees, any of its products, services designs, symbols, programs, and trademarked, copyrighted, or otherwise protected materials.

F. An IBO who is currently paid at the Diamond rank may create his or her own ads or promotional materials including the development of commercials, infomercials and additional third-party Web sites. However, all such materials, and any subsequent changes thereto shall be submitted to the CLAR8TY Compliance Department for approval.

I. Diamonds are encouraged to work with the Compliance Department prior to the production of commercials, infomercials, or Web sites.

G. CLAR8TY reserves the right to rescind its prior approval of submitted advertising or promotional materials in order to comply with changing laws and regulations, and may require the removal of such advertisements from the market place without obligation to the affected IBO.

9.6 Testimonial Permission

A. By signing the CLAR8TY IBO Agreement, an IBO gives CLAR8TY permission to use his or her testimonial or image and likeness in corporate sales materials, including but not limited to print media, electronic media, audio and video. In consideration of being allowed to participate in the CLAR8TY Business Opportunity, an IBO waives any right to be compensated for the use of his or her testimonial or image and likeness even though CLAR8TY may be paid for items or sales materials containing such image and likeness. In some cases, an IBO’s testimonial may appear in another IBO’s advertising materials. If an IBO does not wish to participate in CLAR8TY sales and marketing materials, he or she should provide a written notice to the CLAR8TY Compliance Department to ensure that his or her testimonial or image and likeness will not be used in any corporate materials, corporate recognition pieces, advertising or recordings of annual events.

9.7 Telemarketing – Limitations

A. A CLAR8TY IBO must not engage in telemarketing in relation to the operation of the IBO’s CLAR8TY business. The term “telemarketing” means the placing of one or more telephone calls to an individual or entity to induce the purchase of CLAR8TY products or services, or to recruit them for the CLAR8TY opportunity.

B. The Federal Trade Commission (“FTC”) and the Federal Communications Commission (“FCC”) each have laws that restrict telemarketing practices. Both Federal agencies, as well as a number of states, have “do not call” regulations as part of their telemarketing laws.

C. While an IBO may not consider himself or herself a “telemarketer” in the traditional sense, these regulations broadly define the term “telemarketer” and “telemarketing” so that the unintentional action of calling someone whose telephone number is listed on the Federal “Do Not Call” registry could cause the IBO to violate the law. These regulations must not be taken lightly, as they carry significant penalties (up to $11,000 per violation).

D. “Cold calls” or “state-to-state calls” made to prospective Customers, or IBOs that promote either CLAR8TY products, services or the CLAR8TY opportunity is considered telemarketing and is prohibited.

E. Exceptions to Telemarketing Regulations

A CLAR8TY IBO may place telephone calls to prospective Customers, or IBOs under the following limited situations:

I. If the IBO has an established business relationship with the prospect.

II. In response to the prospect’s personal inquiry or application regarding a product or service offered by the CLAR8TY IBO, within 3 months immediately before the date of such a call.

III. If the IBO receives written and signed permission from the prospect authorizing the IBO to call. The authorization must specify the telephone number(s) that the IBO is authorized to call.

IV. If the call is to family members, personal friends, and acquaintances. However, if an IBO makes a habit of collecting business cards from everyone he/she meets and subsequently calls them, the FTC may consider this a form of telemarketing that is not subject to this exemption.

V. CLAR8TY IBOs engaged in calling “acquaintances,” must make such calls on an occasional basis only and not as a routine practice.

F. An IBO shall not use automatic telephone dialing systems in the operation of his or her CLAR8TY businesses.

G. Failure to abide by CLAR8TY policies or regulations as set forth by the FTC and FCC regarding telemarketing may lead to sanctions against the IBO’s position, up to and including termination of the position.

H. By signing the IBO agreement or by accepting commission checks, other payments or awards from CLAR8TY, an IBO gives permission to CLAR8TY and other IBOs to contact them as permitted under the Federal Do Not Call regulations.

I. In the event an IBO violates this section, CLAR8TY reserves the right to institute legal proceedings to obtain monetary or equitable relief.

10.0 INTERNATIONAL MARKETING

10.1 International Marketing Policy

A. A CLAR8TY IBO is authorized to sell CLAR8TY products, to Customers, IBOs only in the countries in which CLAR8TY is authorized to conduct business, according to the Policies and Procedures of each country. CLAR8TY IBOs may not sell products or services in any country where CLAR8TY products and services have not received applicable government authorization or approval.

B. An IBO may not, in any unauthorized country, conduct sales, enrollment or training meetings, enroll or attempt to enroll potential Customers, or IBOs, nor conduct any other activity for the purpose of selling CLAR8TY products and services, establishing a sales organization, or promoting the CLAR8TY business opportunity.

11.0 CHANGES TO AN IBO BUSINESS

11.1 Modification of the IBO agreement

A. A CLAR8TY IBO may modify his or her existing IBO agreement (i.e., change a social security number to a Federal ID number, add a Spouse or partner to the account, or change the form of ownership from an individual to a business owned by the IBO) by submitting a written request, accompanied by a new IBO agreement and the Business Registration Form, if applicable, completed with fresh signatures (not a “crossed out” or “white-out” version of the first agreement), and any appropriate supporting documentation.

11.2 Change Sponsor or Placement for ACTIVE IBOs

A. Maintaining the integrity of the organizational structure is mandatory for the success of CLAR8TY and our independent IBOs. As such, under exceptional circumstances at the discretion of the company, a request to change placement may only be made within the first 30 days of initial enrollment as an IBO. Furthermore, such changes may only occur within the same organization.

B. Sponsors may make “Placement changes” from one IBO to another for personally sponsored (frontline) IBOs during the first 30 days of enrollment.

C. New IBOs or their original Sponsor may request a change of Sponsor or Placement within the first 30 days of enrollment for the purpose of structuring an organization. The new IBO agreement must be received within the calendar month for commission calculations to be effective with the requested change.

D. To change or correct the Sponsor, an IBO must comply with following procedures:

I. Submit a Sponsor Placement Transfer Form;

II. Submit a CLAR8TY IBO agreement showing the correct Sponsor and Placement, and any appropriate supporting documentation;

III. The IBO agreement must be a new, completed document bearing “fresh” signatures, not a “crossed-out” or “white-out” version of the first agreement.

E. Upon approval, the IBO’s downline, if any, will transfer with the IBO.

F. If one transfer has already been made a $20 fee will be assessed for the second and for each transfer thereafter.

G. After the first 30 days from initial enrollment, CLAR8TY will honor the Sponsor/Placement as shown:

I. On the most recently signed IBO agreement on file or

II. Self-enrolled on the Web site (i.e., electronically signed Web agreement).

H. CLAR8TY retains the right to approve or deny any requests to change Sponsor or Placement, and to correct any errors related thereto at any time and in whatever manner it deems necessary.

11.3 Change Sponsor or Placement for Inactive IBOs

A. At the discretion of CLAR8TY, IBOs who did not participate in an Auto-Ship or have not ordered products or services for at least 12 months, and who have not tendered a letter of resignation, are eligible to re-enroll in CLAR8TY under the Sponsor/Placement of their choice.

B. Upon written notice to CLAR8TY that a former IBO wishes to re-enroll, CLAR8TY will “compress” (close) the original account. A new CLAR8TY ID number will then be issued to the former IBO.

C. Such IBO does not retain former rank, downline, or rights to commission checks from his or her former organizations.

D. CLAR8TY reserves the right to correct Sponsor or Placement errors at any time and in whatever manner it deems necessary.

11.4 Change Organizations

A. If a CLAR8TY IBO wishes to transfer organizations, he or she must submit a letter of resignation to the CLAR8TY Customer Service Department and remain inactive (place no orders, or be on an Auto-Ship) from CLAR8TY for 6 months from the receipt of the letter before being eligible to re-enroll under a different Sponsor/Placement.

B. CLAR8TY retains the right to approve or deny any request to re-enroll after an IBO’s resignation.

C. If re-enrollment is approved, the former IBO will be issued a new CLAR8TY ID number and will be required to submit a new IBO agreement. The IBO will not be entitled to keep any former rank, downline, or rights to commission checks from any prior organization.

D. Transfers may not be done outside of the original organization.

11.5 Unethical Sponsoring

A. Unethical sponsoring activities include, but are not limited to, enticing, bidding or engaging in unhealthy competition in trying to acquire a prospect or new IBO from another IBO or influencing another IBO to transfer to a different sponsor.

3. Allegations of unethical sponsoring must be reported in writing to the CLAR8TY Compliance Department within the first 90 days of enrollment. If the reports are substantiated, CLAR8TY may transfer the IBO or the IBO’s downline to another sponsor, Placement or organization without approval from the current Upline Sponsor or Placement IBOs. CLAR8TY remains the final authority in such cases.

3. CLAR8TY prohibits the act of “Stacking.” Stacking is the unauthorized manipulation of the CLAR8TY compensation system and/or the marketing plan in order to trigger commissions or cause a promotion off a downline IBO in an unearned manner. One example of stacking occurs when a sponsor places participants under an inactive downline without his or her knowledge in order to trigger unearned qualification for commissioning. Stacking is unethical and unacceptable behavior, and as such, it is a punishable offense with measures up to and including the termination of the independent consultant positions of all individuals found to be directly involved.

3. Should IBOs engage in solicitation and/or enticement of members of another direct sales company to sell or distribute CLAR8TY products, they bear the risk of being sued by the other direct sales company. If any lawsuit, arbitration, or mediation is brought against an IBO alleging that they engaged in inappropriate recruiting activity of its sales force or Customers, CLAR8TY will not pay any of IBO’s defense costs or legal fees, nor will CLAR8TY indemnify the IBO for any judgment, award, or settlement.

11.6 Sell, Assign or Delegate Ownership

A. In order to preserve the integrity of the hierarchical structure, it is necessary for CLAR8TY to place restrictions on the transfer, assignment, or sale of an position.

B. A CLAR8TY IBO may not sell or assign his or her rights or delegate his or her position as an IBO without prior written approval by CLAR8TY, which approval will not be unreasonably withheld. Any attempted sale, assignment, or delegation without such approval may be voided at the discretion of CLAR8TY.

C. Should the sale be approved by CLAR8TY, the Buyer assumes the position of the Seller at the current qualified title, but at the current “paid as” rank, at the time of the sale and acquires the Seller’s Downline.

D. To request corporate authorization for a sale or transfer of a CLAR8TY position, the following items must be submitted to the CLAR8TY Compliance Department:

I. A Sale/Transfer of position form properly completed, with the requisite signatures.

II. A copy of the Sales Agreement signed and dated by both Buyer and Seller.

III. A CLAR8TY IBO Agreement completed and signed by the Buyer.

IV. Payment of the $100 administration fee.

V. Any additional supporting documentation requested by CLAR8TY.

E. Any debt obligations that either Seller or Buyer may have with CLAR8TY must be satisfied prior to the approval of the sale or transfer by CLAR8TY.

F. A CLAR8TY IBO who sells his or her position is not eligible to re-enroll as a CLAR8TY IBO in any organization for 6 full calendar months following the date of the sale except as otherwise expressly set forth in these Policies and Procedures.

11.7 Separating a CLAR8TY Business

A. Pending a divorce or dissolution of a partnership or other business entity, the parties must adopt one of the following methods of operation:

I. One of the parties may, with the written consent of the other(s), operate the CLAR8TY business whereby the relinquishing Spouse, shareholders, partners, members or trustees authorize CLAR8TY to deal directly and solely with the other Spouse, non-relinquishing shareholder, partner, member or trustee.

II. The parties may continue to operate the CLAR8TY business jointly on a “business as usual” basis, whereupon all compensation paid by CLAR8TY will be paid in the name designated by the IBOs or in the name of the entity to be divided, as the parties may independently agree between them. If no name is stipulated, CLAR8TY will pay compensation to the name on record and in such event, the IBO named on the account shall indemnify CLAR8TY from any claims from the other business owner or the other Spouse with respect to such payment.

B. CLAR8TY recognizes only one Downline organization and will issue only one commission check per CLAR8TY business per commission cycle. Under no circumstances will the Downline of an organization be divided, nor will CLAR8TY split commission and bonus checks.

C. If a relinquishing Spouse, partner or owner of the business has completely relinquished (“Relinquishing Party”), in writing, all rights to the original CLAR8TY business, he or she may immediately thereafter re-enroll under the Sponsor and Placement of his or her choice. In such cases, however, the Relinquishing Party shall have no rights to, and shall not solicit, any IBO or active Customer in the former organization, and must develop a new business in the same manner as any other new CLAR8TY IBO. An IBO in the Relinquishing Party’s former Downline who wishes to transfer to the Relinquishing Party’s new organization or to any other organization, must comply with the requirements in Section 13.5.

11.8 Succession

A. Upon the death or incapacity of an IBO, the IBO’s business may be passed on to his or her legal successors in interest (successor). Whenever a CLAR8TY business is transferred by will or other testamentary process, the successor acquires the right to collect all bonuses and commissions of the deceased IBO’s sales organization. The successor must:

I. Complete and sign a new CLAR8TY IBO agreement;

II. Comply with the terms and provisions of the IBO agreement; and

III. Meet all of the qualifications for the last rank achieved by the former IBO.

B. Bonus and commission checks of a CLAR8TY business transferred based on this section will be paid in a single check to the successor. The successor must provide CLAR8TY with an “address of record” to which all bonus and commission checks will be sent. Checks will be based on the current performance of the position, not the highest rank or volume achieved.

C. If the business is bequeathed to joint devisees (successor), they must form a business entity and acquire a Federal taxpayer identification number. CLAR8TY will issue all bonus and commission checks and one 1099 Miscellaneous Income Tax form to the business entity only.

D. Appropriate legal documentation must be submitted to CLAR8TY Compliance Department to ensure the transfer is done properly. To affect a testamentary transfer of a CLAR8TY business, the successor must provide the following to CLAR8TY Compliance department:

I. A certified copy of the death certificate; and

II. A notarized copy of the will or other appropriate legal documentation establishing the successor’s right to the CLAR8TY business.

E. To complete a transfer of the CLAR8TY business because of incapacity, the successor must provide the following to the CLAR8TY Compliance department:

I. A notarized copy of an appointment as trustee;

II. A notarized copy of the trust document or other appropriate legal documentation establishing the trustee’s right to administer the CLAR8TY business; and

III. A completed IBO agreement executed by the trustee.

F. If the successor is already an existing IBO, CLAR8TY will allow such IBO to keep his or her own position plus the inherited position ACTIVE for up to 6 months. By the end of the 6 month period, the IBO must have compressed (if appropriate), sold or otherwise transferred either the existing position or the inherited position.

G. If the successor wishes to terminate the CLAR8TY position, he or she must submit a notarized statement stating the desire to terminate the position, along with a certified copy of the death certificate, appointment as trustee, or other appropriate legal documentation.

H. Upon written request, CLAR8TY may grant a 1 month bereavement waiver and pay out at the last “paid as” rank.

11.9 Resignation/Voluntary Termination

A. An IBO may immediately terminate his or her position by submitting a written notice or email to the CLAR8TY Compliance Department compliance [at]clar8ty.com. The written notice must include the following:

I. The IBO’s intent to resign;

II. Date of resignation;

III. CLAR8TY Identification Number;

IV. Reason for resigning; and

V. Signature.

VI. Mail to:

CLAR8TY, INC

Attn: Compliance Department

25792 Obrero Drive

Mission Viejo, CA 92691

B. A CLAR8TYIBO may not use resignation as a way to immediately change Sponsor and Placement. Instead, the IBO who has voluntarily resigned is not eligible to reapply for an position or have any financial interest in a CLAR8TY business for 6 months from the receipt of the written notice of resignation.

11.10 Involuntary Termination

A. CLAR8TY reserves the right to terminate an IBO’s position for, but not limited to, the following reasons;

I. Violation of any terms or conditions of the IBO agreement;

II. Violation of any provision in these Policies and Procedures;

III. Violation of any provision in the Compensation Plan;

IV. Violation of any applicable law, ordinance, or regulation regarding the CLAR8TY business;

V. Engaging in unethical business practices or violating standards of fair dealing; or

VI. Returning over $500 worth of products and sales tools for a refund within a 12 month period.

B. CLAR8TY will notify the IBO in writing by certified mail, return receipt requested or overnight documented mail, at his or her last known address of its intent to terminate the IBO’s position and the reasons for termination. The IBO will have 15 calendar days from the date of mailing of such notice to respond in writing to the allegations or claims constituting cause for termination as stated in the notice. CLAR8TY will then have 30 calendar days from the date of receipt of the IBO’s response to render a final decision as to termination.

C. If a decision is made by CLAR8TY to terminate the IBO’s position, CLAR8TY will inform the IBO in writing that the position is terminated effective as of the date of the written notification. The IBO will then have 15 calendar days from the date of mailing of such notice to appeal the termination in writing. CLAR8TY must receive the IBO’s written appeal within 20 calendar days of the date of the CLAR8TY termination letter. If the written appeal is not received within this time period, the termination will be considered final.

D. If the IBO does file a timely appeal of termination, CLAR8TY will review its decision, along with any other information it may deem relevant, reconsider any other appropriate action, and notify the IBO of its decision. The decision of CLAR8TY is then considered final and not subject to further review.

E. If the termination is not rescinded, the termination will be effective as of the date of the original termination notice by CLAR8TY. The former IBO shall thereafter be prohibited from using the names, marks or signs, labels, stationery, advertising, or business material referring to or relating to any CLAR8TY products or services. CLAR8TY will notify the ACTIVE Upline Sponsor within 10 days after termination. The organization of the terminated IBO will “roll up” to the ACTIVE Upline Sponsor on record.

F. The CLAR8TY IBO who is involuntarily terminated by CLAR8TY may not re-apply for an position, either under his or her present name or any other name or entity, without the express written consent of an officer of CLAR8TY, following a review by the CLAR8TY Compliance Committee. In any event, such IBO may not re-apply for a position for 12 months from the date of termination.

11.11 Effect of Cancellation

A. Following an IBO’s cancellation for inactivity or voluntary or involuntary termination (collectively, a “cancellation”) such IBO:

I. Shall have no right, title, claim or interest to any commission or bonus from the sales generated by the IBO’s former organization or any other payments in association with the IBO’s former independent position.

II. Effectively waives any and all claims to property rights or any interest in or to the IBO’s former Downline organization.

III. Shall receive commissions and bonuses only for the last full pay period in which he or she was ACTIVE prior to cancellation, less any amounts withheld during an investigation preceding an involuntary cancellation, and less any other amounts owed to CLAR8TY.

12.0 DISCIPLINARY SANCTIONS

12.1 Imposition of Disciplinary Action – Purpose

A. It is the spirit of CLAR8TY that integrity and fairness should pervade among its IBOs, thereby providing everyone with an equal opportunity to build a successful business. Therefore, CLAR8TY reserves the right to impose disciplinary sanctions at any time, when it has determined that an IBO has violated the agreement or any of these Policies and Procedures or the Compensation Plan as they may be amended from time to time by CLAR8TY.

12.2 Consequences and Remedies of Breach

A. Disciplinary actions may include one or more of the following:

I. Monitoring an IBO’s conduct over a specified period of time to assure compliance;

II. Issuance of a written warning or requiring the IBO to take immediate corrective action;

III. Imposition of a fine (which may be imposed immediately or withheld from future commission checks) or the withholding of commission checks (a Commission Hold) until the matter causing the Commission Hold is resolved or until CLAR8TY receives adequate additional assurances from the IBO to ensure future compliance;

IV. Suspension from participation in Company or IBO events, rewards, or recognition;

V. Suspension of the CLAR8TY IBO agreement and position for one or more pay periods;

VI. Involuntary termination of the IBO’s agreement and position;

VII. Any other measure which CLAR8TY deems feasible and appropriate to justly resolve injuries caused by the IBO’s policy violation or contractual breach; OR

VIII. Legal proceedings for monetary or equitable relief.

13.0 DISPUTE RESOLUTION

13.1 Grievances

A. If a CLAR8TY IBO has a grievance or complaint against another IBO regarding any practice or conduct relating to their respective CLAR8TY businesses, he or she is encouraged to resolve the issue directly with the other party. If an agreement cannot be reached, it must be reported directly to the CLAR8TY Compliance Department as outlined below in this Section.

B. The CLAR8TY Compliance Department will be the final authority on settling such grievance or complaint and its written decision shall be final and binding on the IBOs involved.

C. CLAR8TY will confine its involvement to disputes regarding CLAR8TY business matters only. CLAR8TY will not decide issues that involve personality conflicts or unprofessional conduct by or between IBOs outside the context of a CLAR8TY business. These issues go beyond the scope of CLAR8TY and may not be used to justify a Sponsor or Placement change or a transfer to another CLAR8TY organization.

D. CLAR8TY does not consider, enforce, or mediate third party agreements between IBOs, nor does it provide names, funding, or advice for obtaining outside legal counsel.

E. Process for Grievances:

I. The CLAR8TY IBO should submit a written letter of complaint (e-mail or facsimile will not be accepted) directly to the CLAR8TY Compliance Department. The letter shall set forth the details of the incident as follows:

a. The nature of the violation;

b. Specific facts to support the allegations;

c. Dates;

d. Number of occurrences;

e. Persons involved; and

f. Supporting documentation.

g. Mail to:

CLAR8TY, INC

Attn: Compliance Department

25792 Obrero Drive

Mission Viejo, CA 92691

II. Upon receipt of the written complaint, CLAR8TY will conduct an investigation according to the following procedures:

a. The Compliance Department will send an acknowledgment of receipt to the complaining IBO;

b. The Compliance Department will provide a verbal or written notice of the allegation to the IBO under investigation. If a written notice is sent to the IBO, he or she will have 10 business days from the date of the notification letter to present all information relating to the incident for review by CLAR8TY

c. The Compliance Department will thoroughly investigate the complaint, consider all the submitted information it deems relevant, including information from collateral sources. Due to the unique nature of each situation, determinations of the appropriate remedy will be on a case by case basis, and the length of time to reach a resolution will vary.

d. During the course of the investigation, the Compliance Department will only provide periodic updates simply stating that the investigation is ongoing. No other information will be released during this time. IBO calls, letters, and requests for “progress reports” during the course of the investigation will not be answered or returned.

E. CLAR8TY will make a final decision and timely notify the CLAR8TY IBOs involved.

13.2 Arbitration

A. Any controversy or claim arising out of or relating to the CLAR8TY IBO agreement, these Policies and Procedures, or the breach thereof, the IBO’s business or any dispute between CLAR8TY and the IBO, shall be settled by binding and confidential arbitration administered by the American Arbitration Association under its commercial arbitration rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. Any such arbitration shall be held in Mission Viejo, California. There shall be one arbitrator, who shall have expertise in business law transactions and who shall be knowledgeable in the direct selling industry, selected from a panel provided by the American Arbitration Association.

B. The prevailing party in any such arbitration shall be entitled to receive from the losing party, all costs and expenses of arbitration, including reasonable attorney’s fees and filing fees. The decision of the arbitrator shall be final and binding on the parties and may, if necessary, be reduced to judgment in any court of competent jurisdiction.

C. This agreement to arbitration shall survive any termination or expiration of the IBO agreement.

D. Nothing in these Policies and Procedures shall prevent CLAR8TY from applying for or obtaining from any court having jurisdiction a writ of attachment, a temporary injunction, preliminary injunction, permanent injunction, or other relief available to safeguard and protect CLAR8TY interests or its Confidential Information prior to, during or following the filing of an arbitration or other proceeding, or pending the rendition of a decision or award in connection with any arbitration or other proceeding.

E. NO CLASS ACTION, OR OTHER REPRESENTATIVE ACTION OR PRIVATE ATTORNEY GENERAL ACTION OR JOINDER OR CONSOLIDATION OF ANY CLAIM WITH A CLAIM OF ANOTHER PERSON OR CLASS OF CLAIMANTS SHALL BE ALLOWABLE. 

F. These Policies and Procedures and any arbitration involving an IBO and CLAR8TY shall be governed by and construed in accordance with the laws of the state of California, without reference to its principles of conflict of laws.

13.3 Severability

A. If any provision of these Policies and Procedures is found to be invalid, or unenforceable for any reason, only the invalid provision shall be severed. The remaining terms and provisions hereof shall remain in full force and shall be construed as if such invalid or unenforceable provision never had comprised a part of these Policies and Procedures.

13.4 Waiver

A. Only an officer of CLAR8TY can, in writing, affect a waiver of the CLAR8TY Policies and Procedures. CLAR8TY’s waiver of any particular breach by an IBO shall not affect CLAR8TY’s rights with respect to any subsequent breach, nor shall it affect the rights or obligations of any other IBO.

B. The existence of any claim or cause of action of an IBO against CLAR8TY shall not constitute a defense to CLAR8TY’s enforcement of any term or provision of these Policies and Procedures.

13.5 Successors and Claims

The agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

14.0 GOVERNING LAW

These Policies and Procedures shall be governed by and construed in accordance with the Laws of the State of California and the exclusive jurisdiction of the United States courts, and is subject to change without notice.

15.0 CLAR8TY GLOSSARY OF TERMS

ACTIVE IBO: An IBO who satisfies the minimum volume requirements, as set forth in the Compensation Plan Document, to ensure that they are eligible to receive bonuses and commissions..

AGREEMENT: The contract between the Company and each IBO; includes the IBO Agreement, the CLAR8TY Policies and Procedures, and the CLAR8TY Compensation Plan, all in their current form and as amended by CLAR8TY in its sole discretion. These documents are collectively referred to as the “Agreement.”

CANCEL: The termination of an IBO’s business. Cancellation may be either voluntary, involuntary, or through non-renewal.

COMPENSATION PLAN: The guidelines and referenced literature for describing how IBOs can generate commissions and bonuses.

CUSTOMER: A Customer who purchases CLAR8TY products and does not engage in building a business or retailing product.

IBO: An individual who purchases product, generates retail sales and business building commissions.

LINE OF SPONSORSHIP (LOS): A report generated by CLAR8TY that provides critical data relating to the identities of IBOs, sales information, and enrollment activity of each IBO’s organization. This report contains confidential and trade secret information which is proprietary to CLAR8TY.

ORGANIZATION: The Customers and IBOs placed below a particular IBO.

OFFICIAL CLAR8TY MATERIAL: Literature, audio or video tapes, and other materials developed, printed, published, and distributed by CLAR8TY to IBOs.

PLACEMENT: Your position inside your Sponsor’s organization.

RECRUIT: For purposes of CLAR8TY’s Conflict of Interest Policy, the term “Recruit” means the actual or attempted solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another CLAR8TY IBO or Customer to enroll or participate in another multilevel marketing, network marketing, or direct sales opportunity.

RESALABLE: Products shall be deemed “resalable” if each of the following elements is satisfied: 1) they are unopened and unused, 2) original packaging and labelling has not been altered or damaged, 3) they are in a condition such that it is a commercially reasonable practice within the trade to sell the merchandise at full price, and 4) the product contains current CLAR8TY labeling. Any merchandise that is clearly identified at the time of sale as nonreturnable, discontinued, or as a seasonal item, shall not be resalable.

SPONSOR: An IBO who enrols a Customer, Retailer, or another IBO into the Company, and is listed as the Sponsor on the IBO Agreement. The act of enrolling others and training them to become IBOs is called “sponsoring.”

UPLINE: This term refers to the IBO or IBOs above a particular IBO in a sponsorship line up to the Company. It is the line of sponsors that links any particular IBO to the Company.