SECTION 1 - INTRODUCTION

1.1 - Policies and Compensation Plan Incorporated into Associate Agreement

These Policies and Procedures, in their present form and as amended at the sole discretion of Talk Fusion, Inc. (hereafter “Talk Fusion” or the “Company”), are incorporated into, and form an integral part of, the Talk Fusion Associate Agreement.  Throughout these Policies, when the term “Agreement” is used, it collectively refers to the Talk Fusion Associate Application and Agreement, these Policies and Procedures, the Talk Fusion Marketing and Compensation Plan and Talk Fusion Terms and Conditions.  These documents are incorporated by reference into the Talk Fusion Associate Agreement (all in their current form and as amended by Talk Fusion).  It is the responsibility of each Associate to read, understand, adhere to, and ensure that he or she is aware of and operating under the most current version of these Policies and Procedures.  When sponsoring or enrolling a new Associate, it is the responsibility of the sponsoring Associate to ensure that the applicant is provided with, or has online access to, the most current version of these Policies and Procedures and the Talk Fusion Marketing, Compensation Plan, Talk Fusion Income Disclaimer and Talk Fusion Terms and Conditions prior to his or her execution of the Associate Agreement.

1.2 - Purpose of Policies

Talk Fusion is a direct sales company that markets its products through Independent Associates.  It is important to understand that your success and the success of your fellow Associates depends on the integrity of the men and women who market our products and services.  To clearly define the relationship that exists between Associates and Talk Fusion, and to explicitly set a standard for acceptable business conduct, Talk Fusion has established the Agreement.

Talk Fusion Associates are required to comply with all of the Terms and Conditions set forth in the Agreement which Talk Fusion may amend at its sole discretion from time to time, as well as all international, federal, state, and local laws governing their Talk Fusion business and their conduct.  Because you may be unfamiliar with many of these standards of practice, it is very important that you read and abide by the Agreement.  Please review the information in this manual carefully.  It explains and governs the relationship between you, as an independent contractor and the Company.  If you have any questions regarding any policy or rule, do not hesitate to seek an answer from anyone in your upline or Talk Fusion.

Because international, federal, state, and local laws, as well as the business environment, periodically change, Talk Fusion reserves the right to amend the Agreement and its prices in its sole and absolute discretion.  By accepting the terms of the Associate Agreement, an Associate agrees to abide by all amendments or modifications that Talk Fusion elects to make.  Amendments shall be effective upon notice to all Associates that the Agreement has been modified.  Notification of amendments shall be published in official Talk Fusion materials.  The Company shall provide or make available to all Associates a complete copy of the amended provisions by one or more of the following methods: (1) posting on the Company’s official web site; (2) electronic mail (e-mail) (3) inclusion in Company periodicals; (4) inclusion in product orders or bonus checks; or (5) special mailings.  The continuation of an Associate’s Talk Fusion business or an Associate’s acceptance of bonuses or commissions constitutes acceptance of any and all amendments.

Talk Fusion shall not be responsible for delays or failures in performance of its obligations when performance is made commercially impracticable due to circumstances beyond its reasonable control.  This includes, without limitation, strikes, labor difficulties, riot, war, fire, death, curtailment of a party’s source of supply, or government decrees or orders.

If any provision of the Agreement, in its current form or as may be amended, is found to be invalid, or unenforceable for any reason, only the invalid portion(s) of the provision shall be severed and the remaining terms and provisions shall remain in full force and effect and shall be construed as if such invalid, or unenforceable provision never comprised a part of the Agreement.

 The Company never gives up its right to insist on compliance with the Agreement and with the applicable laws governing the conduct of a business.  No failure of Talk Fusion to exercise any right or power under the Agreement or to insist upon strict compliance by an Associate with any obligation or provision of the Agreement, and no custom or practice of the parties at variance with the terms of the Agreement, shall constitute a waiver of Talk Fusion’s right to demand exact compliance with the Agreement.  Waiver by Talk Fusion can be effectuated only in writing by an authorized officer of the Company.  Talk Fusion’s waiver of any particular breach by an Associate shall not affect or impair Talk Fusion’s rights with respect to any subsequent breach, nor shall it affect in any way the rights or obligations of any other Associate.  Nor shall any delay or omission by Talk Fusion to exercise any right arising from a breach affect or impair Talk Fusion’s rights as to that or any subsequent breach.

The existence of any claim or cause of action of an Associate against Talk Fusion shall not constitute a defense to Talk Fusion’s enforcement of any term or provision of the Agreement.

2.1 - Requirements to Become An Associate

To become a Talk Fusion Associate, each applicant must:

• Be of the age of majority in his or her state of residence;
• Have a valid Social Security or Federal Tax ID number (US residents);
• Purchase a Talk Fusion Welcome Kit (optional in North Dakota);
• Submit a properly completed Associate Application and Agreement to Talk Fusion.

In order to familiarize new Associates with Talk Fusion products, services, sales techniques, sales aids, and other matters, the Company requires that they purchase a Welcome Kit. Talk Fusion will repurchase Resalable kits from any Associate who terminates his or her Associate Agreement pursuant to the terms of Section 7.2. Associates are not required to purchase Talk Fusion products or services to participate in the compensation plan.

Once an Associate Application and Agreement has been accepted by Talk Fusion, the benefits of the Marketing and Compensation Plan and the Associate Agreement are available to the new Associate. These benefits include the right to:

• Sell Talk Fusion products and services;
• Participate in the Talk Fusion Marketing and Compensation Plan (receive bonuses and commissions, if eligible);
• Sponsor other individuals as Customers or Associates into the Talk Fusion business and thereby, build a marketing organization and progress through the Talk Fusion Marketing and Compensation Plan;
• Receive periodic Talk Fusion literature and other Talk Fusion communications;
• Participate in Talk Fusion-sponsored support, service, training, motivational and recognition functions, upon payment of appropriate charges, if applicable; and
• Participate in promotional and incentive contests and programs sponsored by Talk Fusion for its Associates.

The term of the Associate Agreement is one year from the date of its acceptance by Talk Fusion. Renewal fees are waived as long as the associate is active with their monthly subscription.

3.1 - Adherence to the Talk Fusion Marketing and Compensation Plan

Associates must adhere to the terms of the Talk Fusion Marketing and Compensation Plan as set forth in official Talk Fusion literature.  Associates shall not offer the Talk Fusion opportunity through, or in combination with, any other system, program, or method of marketing other than that specifically set forth in official Talk Fusion literature.  Associates shall not require or encourage other current or prospective Customers or Associates to participate in Talk Fusion in any manner that varies from the program as set forth in official Talk Fusion literature.  Associates shall not require or encourage other current or prospective Customers or Associates to execute any agreement or contract other than official Talk Fusion agreements and contracts in order to become a Talk Fusion Associate.  Similarly, Associates shall not require or encourage other current or prospective Customers or Associates to make any purchase from, or payment to, any individual or other entity to participate in the Talk Fusion Marketing and Compensation Plan other than those purchases or payments identified as recommended or required in official Talk Fusion literature.

3.2.1 - General

All Associates shall safeguard and promote the good reputation of Talk Fusion and its products.  The marketing and promotion of Talk Fusion, the Talk Fusion opportunity, the Marketing and Compensation Plan, and Talk Fusion products shall be consistent with the public interest, and must avoid all discourteous, deceptive, misleading, unethical or immoral conduct or practices.

To promote both the products and services, and the tremendous opportunity Talk Fusion offers, Associates may only use the sales aids and support materials produced by Talk Fusion or materials that have received prior written approval from Talk Fusion’s compliance department.

Talk Fusion Associates may not sell sales aids to other Talk Fusion Associates.  Therefore, Associates who receive authorization from Talk Fusion to produce their own sales aids may make the sales aids available to other Associates free of charge, but may not sell such sales aids to any other Talk Fusion Associate. 

3.2.2 - Associate Web Sites

 If an Associate desires to utilize an Internet web page to promote his or her business, he or she may do so only through an official Talk Fusion replicated website. 

3.2.3 - Domain Names

Associates may not use or attempt to register any of Talk Fusion’s trade names, trademarks, service names, service marks, product names, the Company’s name, or any derivative thereof, for any Internet domain name.

3.2.4 - Trademarks and Copyrights

Talk Fusion will not allow the use of its trade names, trademarks, designs, or symbols by any person, including Talk Fusion Associates, without its prior, written permission.  Associates may not produce for sale or distribution any recorded Company events and speeches without written permission from Talk Fusion nor may Associates reproduce for sale or for personal use any recording of Company-produced audio or video tape presentations.

3.2.5 - Media and Media Inquiries

Associates must not attempt to respond to media inquiries regarding Talk Fusion, its products or services, or their independent Talk Fusion business.  All inquiries by any type of media must be immediately referred to Talk Fusion’s Marketing Department.  This policy is designed to assure that accurate and consistent information is provided to the public as well as a proper public image.

3.2.6 - Unsolicited Email

Talk Fusion does not permit Associates to send unsolicited commercial emails unless such emails strictly comply with applicable laws and regulations including, without limitation, the federal CAN SPAM Act. Any email sent by an Associate that promotes Talk Fusion, the Talk Fusion opportunity, or Talk Fusion products and services must comply with the following:

• There must be a functioning return email address to the sender.
• There must be a notice in the email that advises the recipient that he or she may reply to the email, via the functioning return email address, to request that future email solicitations or correspondence not be sent to him or her (a functioning “opt-out” notice).
• The email must clearly and conspicuously disclose that the message is an advertisement or solicitation.
• The use of deceptive subject lines and/or false header information is prohibited.
• All opt-out requests, whether received by email or regular mail, must be honored. If an Associate receives an opt-out request from a recipient of an email, the Associate must forward the opt-out request to the Company.

3.2.7 - Unsolicited Faxes

Except as provided in this section, Associates may not use or transmit unsolicited faxes or use an automatic telephone dialing system relative to the operation of their Talk Fusion businesses.  The term “automatic telephone dialing system” means equipment which has the capacity to: (a) store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers.  The terms "unsolicited faxes" means the transmission via telephone facsimile or electronic mail, respectively, of any material or information advertising or promoting Talk Fusion, its products, its compensation plan or any other aspect of the company which is transmitted to any person, except that these terms do not include a fax or e-mail: (a) to any person with that person's prior express invitation or permission; or (b) to any person with whom the Associate has an established business or personal relationship.  The term "established business or personal relationship" means a prior or existing relationship formed by a voluntary two way communication between an Associate and a person, on the basis of: (a) an inquiry, application, purchase or transaction by the person regarding products offered by such Associate; or (b) a personal or familial relationship, which relationship has not been previously terminated by either party. 

Bonus buying is strictly and absolutely prohibited. “Bonus buying” includes: (a) the enrollment of individuals or entities without the knowledge of and/or execution of an Independent Associate Application and Agreement by such individuals or entities; (b) the fraudulent enrollment of an individual or entity as an Associate or Customer; (c) the enrollment or attempted enrollment of non-existent individuals or entities as Associates or Customers (“phantoms”); (d) Purchasing Talk Fusion services on behalf of another Associate or Customer, or under another Associate’s or Customer’s I.D. number, to qualify for commissions or bonuses; (e) purchasing excessive amounts of services that cannot reasonably be used (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 Associate may legitimately change organizations only by voluntarily canceling his or her Talk Fusion business and remaining inactive (i.e., no purchases of Talk Fusion products for resale, no sales of Talk Fusion products, no sponsoring, no attendance at any Talk Fusion functions, participation in any other form of Associate activity, or operation of any other Talk Fusion business) for six (6) full calendar months.  Following the six month period of inactivity, the former Associate may reapply under a new sponsor.

3.5.1 - Indemnification

An Associate is fully responsible for all of his or her verbal and written statements made regarding Talk Fusion products, services, and the Marketing and Compensation Plan which are not expressly contained in official Talk Fusion materials.  Associates agree to indemnify Talk Fusion and Talk Fusion’s directors, officers, employees, and agents, and hold them harmless from any and all liability including judgments, civil penalties, refunds, attorney fees, court costs, or lost business incurred by Talk Fusion as a result of the Associate’s unauthorized representations or actions.  This provision shall survive the termination of the Associate Agreement.

3.5.2 - Income Claims

In their enthusiasm to enroll prospective Associates, some Associates are occasionally tempted to make income claims or earnings representations to demonstrate the inherent power of network marketing.  This is counterproductive because new Associates may become disappointed very quickly if their results are not as extensive or as rapid as the results others have achieved.  At Talk Fusion, we firmly believe that the Talk Fusion income potential is great enough to be highly attractive, without reporting the earnings of others.

Moreover, the Federal Trade Commission and several countries and states have laws or regulations that regulate or even prohibit certain types of income claims and testimonials made by persons engaged in network marketing.  While Associates may believe it beneficial to disclose the earnings of themselves or others, such approaches have legal consequences that can negatively impact Talk Fusion as well as the Associate making the claim unless appropriate disclosures required by law are also made contemporaneously with the income claim or earnings representation.  Because Talk Fusion Associates do not have the data necessary to comply with the legal requirements for making income claims, an Associate, when presenting or discussing the Talk Fusion opportunity or Marketing and Compensation Plan to a prospective Associate, may not make income projections, income claims, or disclose his or her Talk Fusion income (including the showing of bank statements, or tax records). 

Associates may display and/or sell Talk Fusion products at trade shows and professional expositions.  Before submitting a deposit to the event promoter, Associates must contact the Associate Services department in writing for conditional approval, as Talk Fusion’s policy is to authorize only one Talk Fusion business per event.  Final approval will be granted to the first Associate who submits an official advertisement of the event, a copy of the contract signed by both the Associate and the event official, and a receipt indicating that a deposit for the booth has been paid.  Approval is given only for the event specified.  Any requests to participate in future events must again be submitted to the Marketing Department.  Talk Fusion further 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, services, or the Talk Fusion opportunity.  Approval will not be given for swap meets, garage sales, flea markets or farmer’s markets as these events are not conducive to the professional image Talk Fusion wishes to portray.

3.7.1 - Nonsolicitation

Talk Fusion Associates are free to participate in other multilevel or network marketing business ventures or marketing opportunities (collectively “network marketing”).  However, during the term of this Agreement, Associates may not directly or indirectly Recruit other Talk Fusion Associates or Customers for any other network marketing business.  Following the cancellation of an Associate’s independent Associate Agreement, and for a period of six calendar months thereafter, with the exception of an Associate who is personally sponsored by the former Associate, a former Associate may not Recruit any Talk Fusion Associate or Customer for another network marketing business.  Associates and the Company recognize that because network marketing is conducted through networks of independent contractors dispersed across the entire United States and internationally, and business is commonly conducted via the internet and telephone, an effort to narrowly limit the geographic scope of this non-solicitation provision would render it wholly ineffective.  Therefore, Associates and Talk Fusion agree that this non-solicitation provision shall apply to all markets in which Talk Fusion conducts business. 

3.7.2 - Sale of Competing Goods or Services

Associates must not sell, or attempt to sell, any competing non-Talk Fusion programs, products or services to Talk Fusion Customers or Associates.  Any program, product or services in the same generic categories as Talk Fusion products or services is deemed to be competing, regardless of differences in cost, quality or other distinguishing factors.

3.7.3 - Associate Participation in Other Direct Selling Programs

If an Associate is engaged in other non-Talk Fusion direct selling programs, it is the responsibility of the Associate to ensure that his or her Talk Fusion business is operated entirely separate and apart from any other program.  To this end, the following must be adhered to:

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

3.7.4 - Downline Activity (Genealogy) Reports

Downline Activity Reports are available for Associate access and viewing at Talk Fusion’s official web site.  Associate access to their Downline Activity Reports is password protected.  All Downline Activity Reports and the information contained therein are confidential and constitute proprietary information and business trade secrets belonging to Talk Fusion.  Downline Activity Reports are provided to Associates in strictest confidence and are made available to Associates for the sole purpose of assisting Associates in working with their respective Downline Organizations in the development of their Talk Fusion business.  Associates should use their Downline Activity Reports to assist, motivate, and train their downline Associates. The Associate and Talk Fusion agree that, but for this agreement of confidentiality and nondisclosure, Talk Fusion would not provide Downline Activity Reports to the Associate.  An Associate shall not, on his or her own behalf, or on behalf of any other person, partnership, association, corporation or other entity:

• Directly or indirectly disclose any information contained in any Downline Activity Report to any third party;
• Directly or indirectly disclose the password or other access code to his or her Downline Activity Report;
• Use the information to compete with Talk Fusion or for any purpose other than promoting his or her Talk Fusion business;
• Recruit or solicit any Associate or Customer of Talk Fusion listed on any report, or in any manner attempt to influence or induce any Associate or Preferred Customer of Talk Fusion, to alter their business relationship with Talk Fusion; or
• Use or disclose to any person, partnership, association, corporation, or other entity any information contained in any Downline Activity Report.

Upon demand by the Company, any current or former Associate will return the original and all copies of Downline Activity Reports to the Company.

Talk Fusion does not condone Associates specifically or consciously targeting the sales force of another direct sales company to sell Talk Fusion products or to become Associates for Talk Fusion, nor does Talk Fusion condone Associates solicitation or enticement of members of the sales force of another direct sales company to violate the terms of their contract with such other company.  Should Associates engage in such activity, they bear the risk of being sued by the other direct sales company.  If any lawsuit, arbitration or mediation is brought against an Associate alleging that he or she engaged in inappropriate recruiting activity of its sales force or customers, Talk Fusion will not pay any of Associate’s defense costs or legal fees, nor will Talk Fusion indemnify the Associate for any judgment, award, or settlement.  

Actual or attempted cross sponsoring is strictly prohibited.  “Cross sponsoring” is defined as the enrollment of an individual who or entity that already has a current Customer or Associate Agreement on file with Talk Fusion, or who has had such an agreement within the preceding six calendar months, within a different line of sponsorship.  The use of a spouse’s or relative’s name, trade names, DBAs, assumed names, corporations, partnerships, trusts, federal ID numbers, or fictitious ID numbers to circumvent this policy is prohibited.  Associates shall not demean, discredit or defame other Talk Fusion Associates in an attempt to entice another Associate to become part of the first Associate’s marketing organization.  This policy shall not prohibit the transfer of a Talk Fusion business in accordance with Section 3.4.

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

If an Associate has questions about or believes any errors have been made regarding commissions, bonuses, Downline Activity Reports, or charges, the Associate must notify Talk Fusion in writing within 60 days of the date of the purported error or incident in question.  Talk Fusion will not be responsible for any errors, omissions or problems not reported to the Company within 60 days.

Neither international, federal nor state regulatory agencies or officials approve or endorse any direct selling or network marketing companies or programs.  Therefore, Associates shall not represent or imply that Talk Fusion or its Marketing and Compensation Plan have been "approved," "endorsed" or otherwise sanctioned by any government agency.

All Associates are required to provide their Social Security Number or a Federal Employer Identification Number to Talk Fusion on the Associate Application and Agreement.  Upon enrollment, the Company will provide a unique Associate Identification Number to the Associate by which he or she will be identified.  This number will be used to place orders, and track commissions and bonuses.

Each Associate is responsible for paying local, state, and federal taxes on any income generated as an Independent Associate.  If a Talk Fusion business is tax exempt, the Federal tax identification number must be provided to Talk Fusion.  Every year, Talk Fusion will provide an IRS Form 1099 MISC (Non-employee Compensation) earnings statement to each U.S. resident who: 1) Had earnings of over $600 in the previous calendar year; or 2) Made purchases during the previous calendar year in excess of $5,000.

Associates are independent contractors, and are not purchasers of a franchise or a business opportunity.  The agreement between Talk Fusion and its Associates does not create an employer/employee relationship, agency, partnership, or joint venture between the Company and the Associate. Associates shall not be treated as an employee for his or her services or for Federal or State tax purposes.  All Associates are responsible for paying local, state, and federal taxes due from all compensation earned as an Associate of the Company.  The Associate has no authority (expressed or implied), to bind the Company to any obligation.  Each Associate shall establish his or her own goals, hours, and methods of sale, so long as he or she complies with the terms of the Associate Agreement, these Policies and Procedures, and applicable laws.

The name of Talk Fusion and other names as may be adopted by Talk Fusion are proprietary trade names, trademarks and service marks of Talk Fusion.  As such, these marks are of great value to Talk Fusion and are supplied to Associates for their use only in an expressly authorized manner.  Use of Talk Fusion name on any item not produced by the Company is prohibited except as follows:

Associate's Name
Independent Talk Fusion Associate

All Associates may list themselves as an “Independent Talk Fusion Associate” in the white or yellow pages of the telephone directory under their own name.  No Associate may place telephone directory display ads using Talk Fusion's name or logo.  Associates may not answer the telephone by saying “Talk Fusion”, “Talk Fusion Incorporated”, or in any other manner that would lead the caller to believe that he or she has reached corporate offices of Talk Fusion.

You may wish to arrange insurance coverage for your business.  Your homeowner’s insurance policy does not cover business-related injuries, or the theft of or damage to inventory or business equipment.  Contact your insurance agent to make certain that your business property is protected.  This can often be accomplished with a simple “Business Pursuit” endorsement attached to your present home owner’s policy.

Associates shall comply with all international, federal, state, and local laws and regulations in the conduct of their businesses.  Many cities, counties and countries have laws regulating certain home-based businesses.  In most cases these ordinances are not applicable to Associates because of the nature of their business.  However, Associates must obey those laws that do apply to them.  If a city or county official tells an Associate that an ordinance applies to him or her, the Associate shall be polite and cooperative, and immediately send a copy of the ordinance to the Compliance Department of Talk Fusion.  In most cases there are exceptions to the ordinance that may apply to Talk Fusion Associates.

A person who is recognized as a minor in his/her state of residence may not be a Talk Fusion Associate.  Associates shall not enroll or recruit minors into the Talk Fusion program.

If any member of an Associate’s immediate household engages in any activity which, if performed by the Associate, would violate any provision of the Agreement, such activity will be deemed a violation by the Associate and Talk Fusion may take disciplinary action pursuant to the Statement of Policies against the Associate.  Similarly, if any individual associated in any way with a corporation, partnership, trust or other entity (collectively “affiliated individual”) violates the Agreement, such action(s) will be deemed a violation by the entity, and Talk Fusion may take disciplinary action against the entity.

Although a Talk Fusion business is a privately owned, independently operated business, the sale, transfer or assignment of a Talk Fusion business is subject to certain limitations.  If an Associate wishes to sell his or her Talk Fusion business, the following criteria must be met:

• Protection of the existing line of sponsorship must always be maintained so that the Talk Fusion business continues to be operated in that line of sponsorship. 
• The buyer or transferee must become a qualified Talk Fusion Associate.  If the buyer is an active Talk Fusion Associate, he or she must first terminate his or her Talk Fusion business and wait six calendar months before acquiring any interest in the new Talk Fusion business.
• Before the sale, transfer or assignment can be finalized and approved by Talk Fusion, any debt obligations the selling Associate has with Talk Fusion must be satisfied.
• The selling Associate must be in good standing and not in violation of any of the terms of the Agreement in order to be eligible to sell, transfer or assign a Talk Fusion business.

Prior to selling a Talk Fusion business, the selling Associate must notify Talk Fusion’s Marketing Department of his or her intent to sell the Talk Fusion business.  No changes in line of sponsorship can result from the sale or transfer of a Talk Fusion business. An Associate may not sell, transfer or assign individual business centers; if a business is sold, transferred or assigned, all business centers must be included in the transaction.

Talk Fusion Associates sometimes operate their Talk Fusion businesses as husband-wife partnerships, regular partnerships, corporations, or trusts.  At such time as a marriage may end in divorce or a corporation, partnership or trust (the latter three entities are collectively referred to herein as “entities”) may dissolve, arrangements must be made to assure that any separation or division of the business is accomplished so as not to adversely affect the interests and income of other businesses up or down the line of sponsorship.  If the separating parties fail to provide for the best interests of other Associates and the Company in a timely fashion, Talk Fusion will involuntarily terminate the Associate Agreement.

During the divorce or entity dissolution process, the parties must adopt one of the following methods of operation:

3.20.1 - One of the parties may, with consent of the other(s), operate the Talk Fusion business pursuant to an assignment in writing whereby the relinquishing spouse, shareholders, partners or trustees authorize Talk Fusion to deal directly and solely with the other spouse or non-relinquishing shareholder, partner or trustee.

3.20.2 - The parties may continue to operate the Talk Fusion business jointly on a “business-as-usual” basis, whereupon all compensation paid by Talk Fusion will be paid according to the status quo as it existed prior to the divorce filing or dissolution proceedings.  This is the default procedure if the parties do not agree on the format set forth above.

Under no circumstances will the Downline Organization of divorcing spouses or a dissolving business entity be divided.  Similarly, under no circumstances will Talk Fusion split commissions between divorcing spouses or members of dissolving entities.  Talk Fusion will recognize only one Downline Organization and will issue only one commission check per Talk Fusion business per commission cycle.  Commissions shall always be issued to the same individual or entity.  In the event that parties to a divorce or dissolution proceeding are unable to resolve a dispute over the disposition of commissions and ownership of the business in a timely fashion as determined by the Company, the Associate Agreement shall be involuntarily canceled.

If a former spouse has completely relinquished all rights in the original Talk Fusion business pursuant to a divorce, he or she is thereafter free to enroll under any sponsor of his or her choosing without waiting six calendar months.  In the case of business entity dissolutions, the former partner, shareholder, member, or other entity affiliate who retains no interest in the business must wait six calendar months from the date of the final dissolution before re-enrolling as an Associate.  In either case, however, the former spouse or business affiliate shall have no rights to any Associates in their former organization or to any former retail customer.  They must develop the new business in the same manner as would any other new Associate.

All active Associates in good standing have the right to sponsor and enroll others into Talk Fusion.  Each prospective Customer or Associate has the ultimate right to choose his or her own Sponsor.  If two Associates claim to be the Sponsor of the same new Associate or Customer, the Company shall regard the first application received by the Company as controlling.

Upon the death or incapacitation of an Associate, his or her business may be passed to his or her heirs.  Appropriate legal documentation must be submitted to the Company to ensure the transfer is proper.  Accordingly, an Associate should consult an attorney to assist him or her in the preparation of a will or other testamentary instrument.  Whenever a Talk Fusion business is transferred by a will or other testamentary process, the beneficiary acquires the right to collect all bonuses and commissions of the deceased Associate’s marketing organization provided the following qualifications are met.  The successor(s) must:

• Execute an Associate Agreement;
• Comply with terms and provisions of the Agreement;  and
• Meet all of the qualifications for the deceased Associate’s status.
• Bonus and commission checks of a Talk Fusion business transferred pursuant to this section will be paid in a single check jointly to the devisees.  The devisees must provide Talk Fusion with an “address of record” to which all bonus and commission checks will be sent;
• If the business is bequeathed to joint devisees, they must form a business entity and acquire a federal taxpayer Identification number.  Talk Fusion will issue all bonus and commission checks and one 1099 to the business entity.

3.22.1 - Transfer Upon Death of an Associate

To effect a testamentary transfer of a Talk Fusion business, the successor must provide the following to Talk Fusion: (1) an original death certificate; (2) a notarized copy of the will or other instrument establishing the successor’s right to the Talk Fusion business; and (3) a completed and executed Associate Agreement.

3.22.2 - Transfer Upon Incapacitation of an Associate

To effectuate a transfer of a Talk Fusion business because of incapacity, the successor must provide the following to Talk Fusion: (1) a notarized copy of an appointment as trustee; (2) a notarized copy of the trust document or other documentation establishing the trustee’s right to administer the Talk Fusion business; and (3) a completed Associate Agreement executed by the trustee.

The Federal Trade Commission and the Federal Communications Commission each have laws that restrict telemarketing practices.  Both federal agencies (as well as a number of states) have “do not call” regulations as part of their telemarketing laws.  Although Talk Fusion does not consider Associates to be “telemarketers” in the traditional sense of the word, these government regulations broadly define the term “telemarketer” and “telemarketing” so that your inadvertent action of calling someone whose telephone number is listed on the federal “do not call” registry could cause you to violate the law.  Moreover, these regulations must not be taken lightly, as they carry significant penalties (up to $11,000.00 per violation). 

Therefore, Associates must not engage in telemarketing in the operation of their Talk Fusion businesses.  The term “telemarketing” means the placing of one or more telephone calls to an individual or entity to induce the purchase of a Talk Fusion product or service, or to recruit them for the Talk Fusion opportunity.  “Cold calls" made to prospective customers or Associates that promote either Talk Fusion’s products or services or the Talk Fusion opportunity constitute telemarketing and are prohibited.  However, a telephone call(s) placed to a prospective customer or Associate (a "prospect") is permissible under the following situations:

3.23.1 - If the Associate has an established business relationship with the prospect.  An “established business relationship” is a relationship between an Associate and a prospect based on the prospect’s purchase, rental, or lease of goods or services from the Associate, or a financial transaction between the prospect and the Associate, within the eighteen (18) months immediately preceding the date of a telephone call to induce the prospect's purchase of a product or service.

3.23.2 - The prospect’s personal inquiry or application regarding a product or service offered by the Associate, within the three (3) months immediately preceding the date of such a call.

3.23.3 - If the Associate receives written and signed permission from the prospect authorizing the Associate to call.  The authorization must specify the telephone number(s) which the Associate is authorized to call.

3.23.4 - You may call family members, personal friends, and acquaintances.  An “acquaintance” is someone with whom you have at least a recent first-hand relationship within the preceding three months.  Bear in mind, however, that if you make a habit of “card collecting” with everyone you meet and subsequently calling them, the FTC may consider this a form of telemarketing that is not subject to this exemption.   Thus, if you engage in calling “acquaintances,” you must make such calls on an occasional basis only and not make this a routine practice.

3.23.5 - In addition, Associates shall not use automatic telephone dialing systems relative to the operation of their Talk Fusion businesses. The term “automatic telephone dialing system” means equipment which has the capacity to: (a) store or produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers.

4.1 - Change of Address, Telephone, and E-Mail Address

To ensure timely delivery of products, support materials, and commissions, it is critically important that the Talk Fusion’s files are current.  Street addresses are required for shipping since DHL cannot deliver to a post office box.  Associates planning to change their e-mail address or move must send their new e-mail address, physical address and telephone numbers to Talk Fusion’s Corporate Offices to the attention of the Associate Services Department.  To guarantee proper delivery, two weeks advance notice must be provided to Talk Fusion on all changes. 

4.2.1 - Ongoing Training

Any Associate who sponsors another Associate into Talk Fusion must perform a bona fide assistance and training function to ensure that his or her downline is properly operating his or her Talk Fusion business.  Associates must have ongoing contact and communication with the Associates in their Downline Organizations.  Examples of such contact and communication may include, but are not limited to:  newsletters, written correspondence, personal meetings, telephone contact, voice mail, electronic mail, and the accompaniment of downline Associates to Talk Fusion meetings, training sessions, and other functions.  Upline Associates are also responsible to motivate and train new Associates in Talk Fusion product knowledge, effective sales techniques, the Talk Fusion Marketing and Compensation Plan, and compliance with Company Policies and Procedures.  Communication with and the training of downline Associates must not, however, violate Section 3.2 (regarding the development of Associate-produced sales aids and promotional materials).

Associates must monitor the Associates in their Downline Organizations to ensure that downline Associates do not make improper product or business claims, or engage in any illegal or inappropriate conduct.  Upon request, every Associate should be able to provide documented evidence to Talk Fusion of his or her ongoing fulfillment of the responsibilities of a Sponsor.

4.2.2 - Increased Training Responsibilities

As Associates progress through the various levels of leadership, they will become more experienced in sales techniques, product knowledge, and understanding of the Talk Fusion program.  They will be called upon to share this knowledge with lesser experienced Associates within their organization.

4.2.3 - Ongoing Sales Responsibilities

Regardless of their level of achievement, Associates have an ongoing obligation to continue to personally promote sales through the generation of new customers and through servicing their existing customers.

Talk Fusion wants to provide its independent Associates with the best products, compensation plan, and service in the industry.  Accordingly, we value your constructive criticisms and comments.  All such comments should be submitted in writing to the Associate Services Department.  Remember, to best serve you, we must hear from you!  While Talk Fusion welcomes constructive input, negative comments and remarks made in the field by Associates about the Company, its products, or compensation plan serve no purpose other than to sour the enthusiasm of other Talk Fusion Associates.  For this reason, and to set the proper example for their downline, Associates must not disparage, demean, or make negative remarks about Talk Fusion, other Talk Fusion Associates, Talk Fusion’s products, the Marketing and Compensation plan, or Talk Fusion’s directors, officers, or employees. 

Associates must provide the most current version of the Talk Fusion Policies and Procedures, Talk Fusion Terms and Conditions, Talk Fusion Marketing and Compensation Plan and Talk Fusion Income Disclaimer to individuals whom they are sponsoring to become Associates before the applicant signs an Associate Agreement.  Additional copies of Policies and Procedures can be downloaded from Talk Fusion’s website.

Associates observing a Policy violation by another Associate should submit a written report of the violation directly to the attention of the Talk Fusion Compliance Department.  Details of the incidents such as dates, number of occurrences, persons involved, and any supporting documentation should be included in the report.

5.1 - Product Sales

The Talk Fusion Marketing and Compensation Plan is based on the sale of Talk Fusion products and services to end consumers.  Associates must fulfill personal and Downline Organization retail sales requirements (as well as meet other responsibilities set forth in the Agreement) to be eligible for bonuses, commissions and advancement to higher levels of achievement.  The following sales requirements must be satisfied for Associates to be eligible for commissions:

5.1.1 - Associates must satisfy the Personal Sales Volume requirements to fulfill the requirements associated with their rank as specified in the Talk Fusion Marketing and Compensation Plan.  “Personal Sales Volume” includes purchases made by the Associate and purchases made by the Associate’s personal customers. 

There are no exclusive territories granted to anyone.  No franchise fees are required.

6.1 - Bonus and Commission Qualifications

An Associate must be active and in compliance with the Agreement to qualify for bonuses and commissions.  So long as an Associate complies with the terms of the Agreement, Talk Fusion shall pay commissions to such Associate in accordance with the Marketing and Compensation plan.

6.2.1 - Adjustments for Cancelled Services

Associates receive bonuses and commissions based on the actual sales of products and services to end consumers.  When Talk Fusion issues a refund for cancelled services, the bonuses and commissions attributable to the refunded services will be deducted, in the month in which the refund is given, and continuing every pay period thereafter until the commission is recovered, from the Associates who received bonuses and commissions on the sales of the refunded services.

6.2.2 - Other Deductions

Talk Fusion will deduct from all bonus and commissions a commission processing fee of $1.00 per commission cycle.

All information provided by Talk Fusion in downline activity reports, including but not limited to personal sales volume (or any part thereof), and downline sponsoring activity is believed to be accurate and reliable.  Nevertheless, due to various factors including  but not limited to the inherent possibility of human and mechanical error; the accuracy, completeness, and timeliness of orders; denial of credit card payments; returned products; credit card and charge-backs; the information is not guaranteed by Talk Fusion or any persons creating or transmitting the information.

ALL PERSONAL SALES VOLUME INFORMATION IS PROVIDED "AS IS" WITHOUT WARRANTIES, EXPRESS OR IMPLIED, OR REPRESENTATIONS OF ANY KIND WHATSOEVER.  IN PARTICULAR BUT WITHOUT LIMITATION THERE SHALL BE NO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR USE, OR NON‑INFRINGEMENT.

TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, TALK FUSION AND/OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION WILL IN NO EVENT BE LIABLE TO ANY DISTRIBUTOR OR ANYONE ELSE FOR ANY DIRECT, INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES THAT ARISE OUT OF THE USE OF OR ACCESS TO PERSONAL AND GROUP SALES VOLUME INFORMATION (INCLUDING BUT NOT LIMITED TO LOST PROFITS, BONUSES, OR COMMISSIONS, LOSS OF OPPORTUNITY, AND DAMAGES THAT MAY RESULT FROM INACCURACY, INCOMPLETENESS, INCONVENIENCE, DELAY, OR LOSS OF THE USE OF THE INFORMATION), EVEN IF TALK FUSION OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION SHALL HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.  TO THE FULLEST EXTENT PERMITTED BY LAW, TALK FUSION OR OTHER PERSONS CREATING OR TRANSMITTING THE INFORMATION SHALL HAVE NO RESPONSIBILITY OR LIABILITY TO YOU OR ANYONE ELSE UNDER ANY TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY, PRODUCTS LIABILITY OR OTHER THEORY WITH RESPECT TO ANY SUBJECT MATTER OF THIS AGREEMENT OR TERMS AND CONDITIONS RELATED THERETO.

Access to and use of Talk Fusion’s reporting services and your reliance upon such information is at your own risk.  All such information is provided to you "as is".  If you are dissatisfied with the accuracy or quality of the information, your sole and exclusive remedy is to discontinue use of and access to Talk Fusion’ reporting services and your reliance upon the information.

7.1 - Satisfaction Guarantee

If any Independent Associate or Customer is unsatisfied with any product purchase for personal use, Talk Fusion offers a 100% three (3) day money-back guarantee (unless otherwise required by law). Please note that shipping charges and sales tax are not refundable. Returns in excess of the purchase price of $149.00 shall also constitute an Associate’s voluntary request to cancel.

Upon cancellation of an Associate’s Agreement, the Associate may return sales aids held in his or her inventory for a refund.  Associates may only return sales aids that he or she personally purchased from Talk Fusion (purchases from other Associates or third parties are not subject to refund) within 12 months prior to the date of cancellation so long as the materials are unopened and in Resalable condition. Upon receipt of Resalable sales aids, the Associate will be reimbursed 90% of the net cost of the original purchase price(s).  Shipping charges incurred by an Associate when the sales aids were purchased will not be refunded.  If the purchases were made through a credit card, the refund will be credited back to the same account. 

7.2.1 - Montana Residents

A Montana resident may cancel his or her Associate Agreement within 15 days from the date of enrollment, and may return his or her Welcome Kit for a full refund, excluding shipping costs, within such time period.

8.1 - Disciplinary Sanctions

Violation of the Agreement, these Policies and Procedures, violation of any common law duty, including but not limited to any applicable duty of loyalty, any illegal, fraudulent, deceptive or unethical business conduct, or any act or omission by an Associate that, in the sole discretion of the Company may damage it’s reputation or goodwill, may result, at Talk Fusion's discretion, in one or more of the following corrective measures:

• Issuance of a written warning or admonition;
• Requiring the Associate to take immediate corrective measures;
• Imposition of a fine, which may be withheld from bonus and commission checks;
• Loss of rights to one or more bonus and commission checks;
• Talk Fusion may withhold from an Associate all or part of the Associate’s bonuses and commissions during the period that Talk Fusion is investigating any conduct allegedly in violation of the Agreement.  If an Associate’s business is canceled for disciplinary reasons, the Associate will not be entitled to recover any commissions withheld during the investigation period;
• Suspension of the individual’s Associate Agreement for one or more pay periods;
• Involuntary termination of the offender’s Associate Agreement;
• Any other measure expressly allowed within any provision of the Agreement or which Talk Fusion deems practicable to implement and appropriate to equitably resolve injuries caused partially or exclusively by the Associate’s policy violation or contractual breach;
• In situations deemed appropriate by Talk Fusion, the Company may institute legal proceedings for monetary and/or equitable relief.

When an Associate has a grievance or complaint with another Associate regarding any practice or conduct in relationship to their respective Talk Fusion businesses, the complaining Associate should first report the problem to his or her Sponsor who should review the matter and try to resolve it with the other party's upline sponsor.  If the matter involves interpretation or violation of Company policy, it must be reported in writing to the Associate Services Department at the Company.  The Associate Services Department will review the facts and attempt to resolve it.

Any controversy or claim arising out of or relating to the Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  Associates waive all rights to trial by jury or to any court.  All arbitration proceedings shall be held in Hillsborough County, State of Florida.  All parties shall be entitled to all discovery rights pursuant to the Federal Rules of Civil Procedure.  There shall be one arbitrator, an attorney at law, who shall have expertise in business law transactions with a strong preference being an attorney knowledgeable in the direct selling industry, selected from the panel that the American Arbitration Panel provides. Each party to the arbitration shall be responsible for its own costs and expenses of arbitration, including legal and filing fees.  The decision of the arbitrator shall be final and binding on the parties and may, if necessary, be reduced to a judgment in any court of competent jurisdiction.  This agreement to arbitration shall survive any termination or expiration of the Agreement.

Nothing in these Policies and Procedures shall prevent Talk Fusion from applying to and obtaining from any court having jurisdiction a writ of attachment, a temporary injunction, preliminary injunction, permanent injunction or other relief available to safeguard and protect Talk Fusion’s interest prior to, during or following the filing of any arbitration or other proceeding or pending the rendition of a decision or award in connection with any arbitration or other proceeding.

Jurisdiction and venue of any matter not subject to arbitration shall reside exclusively in Hillsborough County, State of Florida.  The Federal Arbitration Act shall govern all matters relating to arbitration.  The law of the State of Florida shall govern all other matters relating to or arising from the Agreement.  Notwithstanding the foregoing, and the arbitration provision in Section 8.3 residents of the State of Louisiana shall be entitled to bring an action against Talk Fusion in their home forum and pursuant to Louisiana law.

9.1 - Effect of Cancellation

So long as an Associate remains active and complies with the terms of the Associate Agreement and these Policies and Procedures, Talk Fusion shall pay commissions to such Associate in accordance with the Marketing and Compensation Plan.  An Associate’s bonuses and commissions constitute the entire consideration for the Associate's efforts in generating sales and all activities related to generating sales (including building a downline organization).  Following an Associate’s non-renewal of his or her Associate Agreement, cancellation for inactivity, or voluntary or involuntary cancellation of his or her Associate Agreement (all of these methods are collectively referred to as “cancellation”), the former Associate shall have no right, title, claim or interest to the marketing organization which he or she operated, or any commission or bonus from the sales generated by the organization.  An Associate whose business is cancelled will lose all rights as an Associate.  This includes the right to sell Talk Fusion products and services and the right to receive future commissions, bonuses, or other income resulting from the sales and other activities of the Associate’s former downline sales organization.  In the event of cancellation, Associates agree to waive all rights they may have, including but not limited to property rights, to their former downline organization and to any bonuses, commissions or other remuneration derived from the sales and other activities of his or her former downline organization.

Following an Associate’s cancellation of his or her Associate Agreement, the former Associate shall not hold himself or herself out as a Talk Fusion Associate and shall not have the right to sell Talk Fusion products or services.  An Associate whose Associate Agreement is canceled shall receive commissions and bonuses only for the last full pay period he or she was active prior to cancellation (less any amounts withheld during an investigation preceding an involuntary cancellation).

If an Associate does not earn a commission or bonus for one year, his or her Associate Agreement will be cancelled for inactivity.

An Associate’s violation of any of the terms of the Agreement, including any amendments that may be made by Talk Fusion in its sole discretion, may result in any of the sanctions listed in Section 8.1, including the involuntary cancellation of his or her Associate Agreement.  Cancellation shall be effective on the date on which written notice is mailed, faxed, or delivered to an express courier, to the Associate’s last known address (or fax number), or to his/her attorney, or when the Associate receives actual notice of cancellation, whichever occurs first.

A participant in this network marketing plan has a right to cancel at any time, regardless of reason.  Cancellation must be submitted in writing to the Company at its principal business address. The written notice must include the Associate’s signature, printed name, address, and Associate I.D. Number.  If an Associate is also subscriber to Talk Fusion’s services, the Associate’s service agreement shall continue in force unless the Associate also specifically requests that the service agreement also be canceled.

An Associate may voluntarily cancel his or her Associate Agreement. The Company may also elect not to renew an Associate's Agreement upon its anniversary date.  Renewal fees are waived for Associates who are also active Talk Fusion customers.

If an Associate is also a Talk Fusion service subscriber, and his or her Associate Agreement is cancelled for any reason, but he or she continues to purchase Talk Fusion services, the former Associate will be classified as a retail customer.

Active Customer — A Customer who purchases Talk Fusion services and whose account is current.

Active Associate — An Associate who has received a commission during the preceding twelve months and who has not had his or her Associate Agreement voluntarily or involuntarily cancelled.

Active Rank — The term “active rank” refers to the current rank of an Associate, as determined by the Talk Fusion Marketing and Compensation Plan, for any month.  To be considered “active” relative to a particular rank, an Associate must meet the criteria set forth in the Talk Fusion Marketing and Compensation Plan for his or her respective rank.  (See the definition of “Rank” below.)

Agreement - The contract between the Company and each Associate includes the Associate Application and Agreement, the Talk Fusion Policies and Procedures, Talk Fusion Terms and Conditions, Talk Fusion Marketing and Compensation Plan and Talk Fusion Income Disclaimer, all in their current form and as amended by Talk Fusion in its sole discretion.  These documents are collectively referred to as the “Agreement.”

Cancel — The termination of an Associate’s business.  Cancellation may be either voluntary, involuntary, through non-renewal or inactivity.

Genealogy Report — A report generated by Talk Fusion that provides critical data relating to the identities of Associates, sales information, and enrollment activity of each Associate’s Marketing Organization.  This report contains confidential and trade secret information which is proprietary to Talk Fusion.

Immediate Household — Heads of household and dependent family members residing in the same house.

Official Talk Fusion Material — Literature, audio or video tapes, and other materials developed, printed, published and distributed by Talk Fusion to Associates.

Personal Production — Moving Talk Fusion products or services to an end consumer for personal use.

Personal Sales Volume (PSV) — The commissionable value of services and products sold in a calendar month: (1) by the Company to an Associate; and (2) by the Company to the Associate’s personal non-Associate customers.

Rank — The “title” that an Associate has achieved pursuant to the Talk Fusion Marketing and Compensation Plan. 

Recruit  — For purposes of Talk Fusion’s Conflict of Interest Policy (Section 3.7), the term “Recruit” means:

(a) Actual or attempted solicitation, enrollment, encouragement, or effort to influence in any other way, either directly, indirectly, or through a third party, another Talk Fusion Associate or Customer to enroll or participate in another multilevel marketing, network marketing or direct sales opportunity.

(b)  The conduct described in subsection (a) constitutes recruiting even if the Associate’s actions are in response to an inquiry made by another Associate or Customer.  This subsection (b) is not applicable in California.

Resalable —Sales aids shall be deemed "resalable" if each of the following elements is satisfied: 1) they are unopened and unused; 2) packaging and labeling has not been altered or damaged; 3) they are in a condition such that it is a commercially reasonable practice within the trade to sell the sales aids at full price; 4) it is returned to Talk Fusion within one year from the date of purchase.  Any sales aids that are clearly identified at the time of sale as nonreturnable, discontinued, or as a seasonal item, shall not be resalable.

Retail Customer — An individual who purchases Talk Fusion products from an Associate but who is not a participant in the Talk Fusion compensation plan.

Sponsor — An Associate who enrolls a Customer or another Associate into the Company, and is listed as the Sponsor on the Associate Application and Agreement.  The act of enrolling others and training them to become Associates is called “sponsoring.”