Policies and Procedures

SpeechPhone Direct is a Christian based direct sales organization dedicated to teaching the full gospel truth about God’s plan for prosperity and how to build a life and business founded on the solid rock of biblical truth. SpeechPhone Direct’s mission is to help people break free from the negative influences that prevent true prosperity and help individuals and families achieve the abundant life promised in John 10:10. We help each person establish a right relationship with God first, family second and business third. We then help each person to start and successively operate a home based business to create true residual income for life.

These Policies and Procedures, in their present form and as amended at the sole discretion of SpeechPhone Direct, LLC (hereafter “SpeechPhone Direct” or the “Company”), are incorporated into, and form an integral part of, the SpeechPhone Direct Independent Distributor Agreement. Throughout these Policies, when the term “Agreement” is used, it collectively refers to the SpeechPhone Direct Independent Distributor Application and Agreement, these Policies and Procedures, the SpeechPhone Direct Marketing and Compensation Plan, and the SpeechPhone Direct Business Entity Registration Form (if applicable). These documents are incorporated by reference into the SpeechPhone Direct Independent Distributor Agreement (all in their current form and as amended by SpeechPhone Direct). It is the responsibility of each Distributor 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 Distributor, it is the responsibility of the sponsoring Distributor to ensure that the applicant is provided with, or has online access to, the most current version of these Policies and Procedures and the SpeechPhone Direct Marketing and Compensation Plan prior to his or her execution of the Distributor Agreement.

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

SpeechPhone Direct Distributors are required to comply with all of the Terms and Conditions set forth in the Agreement which SpeechPhone Direct may amend at its sole discretion from time to time, as well as all federal, state, and local laws governing their SpeechPhone Direct 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 your Sponsor or from SpeechPhone Direct.

Because federal, state, and local laws, as well as the business environment, periodically change, SpeechPhone Direct reserves the right to amend the Agreement and its prices in its sole and absolute discretion. By signing the Distributor Agreement, a Distributor agrees to abide by all amendments or modifications that SpeechPhone Direct elects to make. Amendments shall be effective upon notice to all Distributors that the Agreement has been modified. Notification of amendments shall be published in official SpeechPhone Direct materials. The Company shall provide or make available to all Distributors 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) voice mail system broadcast; (4) inclusion in Company periodicals; (5) inclusion in product orders or bonus checks; or (6) special mailings. The continuation of a Distributor’s SpeechPhone Direct business or a Distributor’s acceptance of bonuses or commissions constitutes acceptance of any and all amendments.

SpeechPhone Direct 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.

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 SpeechPhone Direct to exercise any right or power under the Agreement or to insist upon strict compliance by a Distributor 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 SpeechPhone Direct’s right to demand exact compliance with the Agreement. Waiver by SpeechPhone Direct can be effectuated only in writing by an authorized officer of the Company. SpeechPhone Direct’s waiver of any particular breach by a Distributor shall not affect or impair SpeechPhone Direct’s rights with respect to any subsequent breach, nor shall it affect in any way the rights or obligations of any other Distributor. Nor shall any delay or omission by SpeechPhone Direct to exercise any right arising from a breach affect or impair SpeechPhone Direct’s rights as to that or any subsequent breach.

The existence of any claim or cause of action of a Distributor against SpeechPhone Direct shall not constitute a defense to SpeechPhone Direct’s enforcement of any term or provision of the Agreement.

b) Reside in the United States a U.S. Territory or any country that SpeechPhone Direct has officially announced is open for business;

d) Submit a properly completed Distributor Application and Agreement to SpeechPhone Direct.

No person is required to purchase SpeechPhone Direct products, sales aids, training, or to pay any charge or fee to become a Distributor. In order to familiarize new Distributors with SpeechPhone Direct services, sales techniques, sales aids, and other matters, the Company recommends that they participate in Basic Certification and Advanced Training. tc " — No Purchase Required" \l 2

Distributors may visit www.SpeechPhoneDirect.com to download the complete set of SpeechPhone Direct PDF files at no cost. These include the Distributor Application and Agreement, the Policies and Procedures, Customer Order Forms, brochures, flyers, and other documents. In the alternative, a Distributor may order a starter kit for $25.00, which includes hard copies of all such documents.

As an alternative to registering by mail or online (at the Company’s website or at the replicated website of his or her Sponsor), a potential new Distributor may call the SpeechPhone Direct office during regular business hours to receive a temporary Distributor Identification Number and temporary authorization for a new Distributor. (See the front of the Distributor Application and Agreement for phone numbers and appropriate business hours.) If the applicant registers by telephone, he or she must be able to provide all necessary Distributor Agreement information over the telephone and order a Starter Kit using a valid credit card.

The new Distributor’s ID number and authorization will be valid for 30 days, pending receipt of the completed and signed original Distributor Application and Agreement by SpeechPhone Direct. Once the original Distributor Application and Agreement is received at the SpeechPhone Direct Home Office, the new Distributor Agreement will be extended to one full year from the date on which the Distributor ID number was issued. If the new Distributor Application and Agreement is not received within the temporary 30-day time period, the temporary authorization shall expire, the ID number will be canceled, and the Distributor Application and Agreement will be automatically terminated.

Once a Distributor Application and Agreement has been accepted by SpeechPhone Direct, the benefits of the Marketing and Compensation Plan and the Distributor Agreement are available to the new Distributor. These benefits include the right to:

b) Participate in the SpeechPhone Direct Marketing and Compensation Plan (receive bonuses and commissions, if eligible);

c) Sponsor other individuals as Customers or Distributors or Authorized Dealers into the SpeechPhone Direct business and thereby, build a marketing organization and progress through the SpeechPhone Direct Marketing and Compensation Plan;

d) Receive periodic SpeechPhone Direct literature and other SpeechPhone Direct communications;

e) Participate in SpeechPhone Direct-sponsored support, service, training, motivational and recognition functions, upon payment of appropriate charges, if applicable; and

f) Participate in promotional and incentive contests and programs sponsored by SpeechPhone Direct for its Distributors.

The term of the Distributor Agreement is one year from the date of its acceptance by SpeechPhone Direct (subject to reclassification for inactivity after six months pursuant to Section 11.3). Distributors must renew their Distributor Agreement each year by paying an annual renewal fee of $37.00 on or before the anniversary date of their Distributor Agreement. If the renewal fee is not paid within 30 days after the expiration of the current term of the Distributor Agreement, the Distributor Agreement will be canceled. Distributors may elect to utilize the Automatic Renewal Program (“ARP”). Under the ARP, the renewal fee will be charged to the Distributor’s credit card on file with the Company.

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

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

To promote both the services, and the tremendous opportunity SpeechPhone Direct offers, Distributors must use the sales aids and support materials produced by SpeechPhone Direct. The rationale behind this requirement is simple. SpeechPhone Direct has carefully designed its products, product labels, Marketing and Compensation Plan, and promotional materials to ensure that each aspect of SpeechPhone Direct is fair, truthful, substantiated, and complies with the vast and complex legal requirements of federal and state laws. If SpeechPhone Direct Distributors were allowed to develop their own sales aids and promotional materials (which includes Internet advertising), notwithstanding their integrity and good intentions, the likelihood that they would unintentionally violate any number of statutes or regulations affecting a SpeechPhone Direct business is almost certain. These violations, although they may be relatively few in number, would jeopardize the SpeechPhone Direct opportunity for all Distributors.

Accordingly, Distributors must not produce their own literature, advertisements, sales aids and promotional materials, or Internet web pages.

SpeechPhone Direct will not permit Distributors to create side-businesses selling sales aids to other SpeechPhone Direct Distributors. Therefore, Distributors who receive authorization from SpeechPhone Direct to produce their own sales aids may not sell such material to any other SpeechPhone Direct Distributor. Distributors may make approved material available to other Distributors free of charge if they wish, but may not charge other SpeechPhone Direct Distributors for the material.

If a Distributor desires to utilize an Internet web page to promote his or her business, he or she may do so through the Company’s replicated website program only. This program permits Distributors to advertise on the Internet and to choose from among a variety of home page designs that can be personalized with the Distributor's message and the Distributor's contact information. These websites seamlessly link directly to the official SpeechPhone Direct website giving the Distributor a professional and Company-approved presence on the Internet. No Distributor may independently design a website that uses the names, logos, or product descriptions of SpeechPhone Direct or otherwise promotes (directly or indirectly) SpeechPhone Direct services or the SpeechPhone Direct opportunity. Nor may a Distributor use "blind" ads on the Internet that make product or income claims which are ultimately associated with SpeechPhone Direct products, the SpeechPhone Direct opportunity, or the SpeechPhone Direct Marketing and Compensation Plan. The use of any other Internet website or web page (including without limitation auction sites such as eBay) to in any way promote the sale of SpeechPhone Direct products, the SpeechPhone Direct opportunity, or the Marketing and Compensation Plan is a breach of the Agreement and may result in any of the disciplinary sanctions set forth in Section 9.1.

Distributors may not use or attempt to register any of SpeechPhone Direct’s trade names, trademarks, service names, service marks, product names, the Company’s name, or any derivative thereof, for any Internet domain name. Nor may Distributors incorporate or attempt to incorporate any of the Company’s trade names, trademarks, service names, service marks, product names, the Company’s name, or any derivative thereof, into any electronic mail address unless provided by the Company which must always include the phrase “Independent Distributor” as a signature mark on each and every email message sent.

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

Distributors must not attempt to respond to media inquiries regarding SpeechPhone Direct, its services or services, or their independent SpeechPhone Direct business. All inquiries by any type of media must be immediately referred to SpeechPhone Direct’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.

SpeechPhone Direct does not permit Distributors 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 a Distributor that promotes SpeechPhone Direct, the SpeechPhone Direct opportunity, or SpeechPhone Direct services must comply with the following:

b) 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).

c) The email must include the Distributor’s physical mailing address and clearly identifiy that the email is from the Distributor NOT the Company.

d) The email must clearly and conspicuously disclose that the message is an advertisement or solicitation.

e) The use of deceptive subject lines and/or false header information is prohibited.

f) All opt-out requests, whether received by email, web site or regular mail, must be honored. If a Distributor receives an opt-out request from a recipient of an email, the Distributor must forward the opt-out request to the Company.

SpeechPhone Direct may periodically send commercial emails on behalf of Distributors. By entering into the Distributor Agreement, Distributor agrees that the Company may send such emails and that the Distributor’s physical and email addresses will be included in such emails as outlined above. Distributors shall honor opt-out requests generated as a result of such emails sent by the Company.

Except as provided in this section, Distributors may not use or transmit unsolicited faxes or use an automatic telephone dialing system relative to the operation of their SpeechPhone Direct 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 SpeechPhone Direct, 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 Distributor 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 a Distributor and a person, on the basis of: (a) an inquiry, application, purchase or transaction by the person regarding services offered by such Distributor; 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 Distributor Application and Agreement by such individuals or entities; (b) the fraudulent enrollment of an individual or entity as a Distributor or Customer; (c) the enrollment or attempted enrollment of non-existent individuals or entities as Distributors or Customers (“phantoms”); (d) Purchasing SpeechPhone Direct services or services on behalf of another Distributor or Customer, or under another Distributor’s or Customer’s I.D. number, to qualify for commissions or bonuses; (e) purchasing excessive amounts of goods or services that cannot reasonably be used or resold in a month; and/or (f) any other mechanism or artifice to qualify for rank advancement, incentives, prizes, commissions or bonuses that is not driven by bona fide product or service purchases by end user consumers.

A corporation, limited liability company (LLC), partnership or trust (collectively referred to in this section as a “Business Entity”) may apply to be a SpeechPhone Direct Distributor by submitting its Certificate of Incorporation, Certificate of Organization, Partnership Agreement or trust documents (these documents are collectively referred to as the “Entity Documents”) to SpeechPhone Direct, along with a properly completed Business Entity Registration Form. If a Distributor enrolls online, the Entity Documents and Business Entity Registration Form must be submitted to SpeechPhone Direct within 30 days of the online enrollment. (If not received within the 30-day period, the Distributor Agreement shall automatically terminate.) The Business Entity Registration Form must be signed by all of the shareholders, partners or trustees. Members of the entity are jointly and severally liable for any indebtedness or other obligation to SpeechPhone Direct.

To prevent the circumvention of Section 4.27 (regarding transfers and assignments of SpeechPhone Direct business), if an additional partner, shareholder, member, or other business entity affiliate is added to a business entity, the original applicant must remain as a party to the original Distributor Application and Agreement. If the original Distributor wants to terminate his or her relationship with the Company, he or she must transfer or assign his or her business in accordance with Section 4.27. If this process is not followed, the business shall be canceled upon the withdrawal of the original Distributor. All bonus and commission checks will be sent to the address of record of the original Distributor. Please note that the modifications permitted within the scope of this paragraph do not include a change of sponsorship. Changes of sponsorship are addressed in Section 4.5, below. There is a $25.00 fee for each change requested, which must be included with the written request and the completed Distributor Application and Agreement. SpeechPhone Direct may, at its discretion, require notarized documents before implementing any changes to an SpeechPhone Direct business. Please allow thirty (30) days after the receipt of the request by SpeechPhone Direct for processing.

A SpeechPhone Direct business may change its status under the same sponsor from an individual to a partnership, LLC, corporation or trust, or from one type of entity to another. There is a $25.00 fee for each change requested, which must be included with the written request and the completed Distributor Application and Agreement. Such changes shall be processed only once per year and must be submitted by November 30 to become effective on January 1 of the following year. In addition, Distributors operating their SpeechPhone Direct businesses utilizing a business entity must notify SpeechPhone Direct of the addition or removal of any officers, directors, shareholders, managers, members or business associates of the business entity.

To protect the integrity of all marketing organizations and safeguard the hard work of all Distributors, SpeechPhone Direct strongly discourages changes in sponsorship. Maintaining the integrity of sponsorship is critical for the success of every Distributor and marketing organization. Accordingly, the transfer of a SpeechPhone Direct business from one sponsor to another is rarely permitted and must be approved in writing by SpeechPhone Direct. Such approval may be granted or denied in SpeechPhone Direct’s sole and absolute discretion.

Requests for change of sponsorship must be submitted in writing to the Distributor Services Department, and must include the reason for the transfer. Transfers will only be considered in the following three circumstances:

In cases in which the new Distributor is sponsored by someone other than the individual he or she was led to believe would be his or her Sponsor, a Distributor may request that he or she be transferred to another organization with his or her entire marketing organization intact. All requests for transfer alleging fraudulent enrollment practices shall be evaluated on a case by case basis. Requests for transfer under this policy must be made within 60 days from the date of enrollment and the Distributor requesting the change has the burden of proving that he or she was placed beneath the wrong sponsor.

The Distributor seeking to transfer submits a properly completed and fully executed Sponsorship Transfer Form which includes the written approval of his or her seven (7) immediate upline Distributors. Photocopied or facsimile signatures are not acceptable. All Distributor signatures must be notarized. The Distributor who requests the transfer must submit a fee of $50.00 for administrative charges and data processing. If the transferring Distributor also wants to move any of the Distributors in his or her marketing organization, each downline Distributor must also obtain a properly completed Sponsorship Transfer Form and return it to SpeechPhone Direct with the $50.00 change fee (i.e., the transferring Distributor and each Distributor in his or her marketing organization multiplied by $50.00 is the cost to move a SpeechPhone Direct business.) Downline Distributors will not be moved with the transferring Distributor unless all of the requirements of this paragraph are met. Transferring Distributors must allow thirty (30) days after the receipt of the Sponsorship Transfer Forms by SpeechPhone Direct for processing and verifying change requests.

In cases wherein the appropriate sponsorship change procedures have not been followed, and a downline organization has been developed in the second business developed by a Distributor, SpeechPhone Direct reserves the sole and exclusive right to determine the final disposition of the downline organization. Resolving conflicts over the proper placement of a downline that has developed under an organization that has improperly switched sponsors is often extremely difficult. Therefore, DISTRIBUTORS WAIVE ANY AND ALL CLAIMS AGAINST SPEECHPHONE DIRECT THAT RELATE TO OR ARISE FROM SPEECHPHONE DIRECT’S DECISION REGARDING THE DISPOSITION OF ANY DOWNLINE ORGANIZATION THAT DEVELOPS BELOW AN ORGANIZATION THAT HAS IMPROPERLY CHANGED LINES OF SPONSORSHIP.

A Distributor may legitimately change organizations by voluntarily canceling his or her SpeechPhone Direct business and remaining inactive (i.e., no purchases of SpeechPhone Direct services for resale, no sales of SpeechPhone Direct products, no sponsoring, no attendance at any SpeechPhone Direct functions, participation in any other form of Distributor activity, or operation of any other SpeechPhone Direct business) for six (6) full calendar months. Following the six month period of inactivity, the former Distributor may reapply under a new sponsor. SpeechPhone Direct will consider waiving the six month waiting period under exceptional circumstances. Such requests for waiver must be submitted to SpeechPhone Direct in writing.

A Distributor is fully responsible for all of his or her verbal and written statements made regarding SpeechPhone Direct products, services, and the Marketing and Compensation Plan which are not expressly contained in official SpeechPhone Direct materials. Distributors agree to indemnify SpeechPhone Direct and SpeechPhone Direct’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 SpeechPhone Direct as a result of the Distributor’s unauthorized representations or actions. This provision shall survive the termination of the Distributor Agreement.

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

Moreover, the Federal Trade Commission and several 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 Distributors may believe it beneficial to provide copies of checks, or to disclose the earnings of themselves or others, such approaches have legal consequences that can negatively impact SpeechPhone Direct as well as the Distributor making the claim unless appropriate disclosures required by law are also made contemporaneously with the income claim or earnings representation. Because SpeechPhone Direct Distributors do not have the data necessary to comply with the legal requirements for making income claims, a Distributor, when presenting or discussing the SpeechPhone Direct opportunity or Marketing and Compensation Plan to a prospective Distributor, may not make income projections, income claims, or disclose his or her SpeechPhone Direct income (including the showing of checks, copies of checks, bank statements, or tax records).

Distributors may display and/or sell SpeechPhone Direct services at trade shows and professional expositions. Before submitting a deposit to the event promoter, Distributors must contact the Distributor Services Department in writing for conditional approval, as SpeechPhone Direct’s policy is to authorize only one SpeechPhone Direct business per event. Final approval will be granted to the first Distributor who submits an official advertisement of the event, a copy of the contract signed by both the Distributor 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 Distributor Services Department. SpeechPhone Direct further reserves the right to refuse authorization to participate at any function which it does not deem a suitable forum for the promotion of its products, services, or the SpeechPhone Direct 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 SpeechPhone Direct wishes to portray.

SpeechPhone Direct Distributors 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, Distributors may not Recruit other SpeechPhone Direct Distributors or Customers for any other network marketing business. Following the cancellation of this Agreement, and for a period of six months thereafter, with the exception of a Distributor who is (a) personally sponsored by the former Distributor; and (b) who is on the former Distributor’s first downline level (“frontline”) [criteria (a) and (b) must both be met], a former Distributor may not Recruit any SpeechPhone Direct Distributor or Customer for another network marketing business. Distributors 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, Distributors and SpeechPhone Direct agree that this non-solicitation provision shall apply to all markets in which SpeechPhone Direct conducts business.

Distributors must not sell, or attempt to sell, any competing non-SpeechPhone Direct programs, services or services to SpeechPhone Direct Customers or Distributors. Any program, product or services in the same generic category as SpeechPhone Direct services or services is deemed to be competing, regardless of differences in cost, quality, or ingredient content.

Distributors may not display SpeechPhone Direct products, services or promotional material with any other promotional material, services or services in a fashion that might in any way confuse or mislead a prospective customer or Distributor into believing there is a relationship between the SpeechPhone Direct and non-SpeechPhone Direct services or services. Distributors may not offer the SpeechPhone Direct opportunity, services or services to prospective or existing Customers or Distributors in conjunction with any non-SpeechPhone Direct program, opportunity, product or service. Distributors may not offer any non-SpeechPhone Direct opportunity, services or services at any SpeechPhone Direct-related meeting, seminar or convention, or immediately following such event.

Downline Activity Reports are available for Distributor access and viewing at SpeechPhone Direct’s official web site. Distributor 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 SpeechPhone Direct. Downline Activity Reports are provided to Distributors in strictest confidence and are made available to Distributors for the sole purpose of assisting Distributors in working with their respective Downline Organizations in the development of their SpeechPhone Direct business. Distributors should use their Downline Activity Reports to assist, motivate, and train their downline Distributors. The Distributor and SpeechPhone Direct agree that, but for this agreement of confidentiality and nondisclosure, SpeechPhone Direct would not provide Downline Activity Reports to the Distributor. A Distributor shall not, on his or her own behalf, or on behalf of any other person, partnership, association, corporation or other entity:

a) Directly or indirectly disclose any information contained in any Downline Activity Report to any third party;

b) Directly or indirectly disclose the password or other access code to his or her Downline Activity Report;

c) Use the information contained in any Downline Activity Report to compete with SpeechPhone Direct or for any purpose other than promoting or supporting his or her SpeechPhone Direct business; or

d) Recruit or solicit any Distributor or Customer listed on any Downline Activity Report, or in any manner attempt to influence or induce any Distributor or Preferred Customer , to alter their business relationship with SpeechPhone Direct.

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

SpeechPhone Direct does not condone Distributors specifically or consciously targeting the sales force of another direct sales company to sell SpeechPhone Direct services or to become Distributors for SpeechPhone Direct, nor does SpeechPhone Direct condone Distributors 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 Distributors 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 a Distributor alleging that he or she engaged in inappropriate recruiting activity of its sales force or customers, SpeechPhone Direct will not pay any of Distributor’s defense costs or legal fees, nor will SpeechPhone Direct indemnify the Distributor 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 Distributor Agreement on file with SpeechPhone Direct, 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. Distributors shall not demean, discredit or defame other SpeechPhone Direct Distributors in an attempt to entice another Distributor to become part of the first Distributor’s marketing organization. This policy shall not prohibit the transfer of a SpeechPhone Direct business in accordance with Section 4.27.

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

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

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

Distributors must not manipulate enrollments of new applicants and purchases of products. All Distributor Applications and Agreements, and product orders must be entered online within 72 hours from the time they are signed by a Distributor or placed by a customer, respectively.

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

Each Distributor is responsible for paying local, state and federal taxes on any income generated as an Independent Distributor. If a SpeechPhone Direct business is tax exempt, the Federal tax identification number must be provided to SpeechPhone Direct. Every year, SpeechPhone Direct will provide an IRS Form 1099 MISC (Non-employee Compensation) earnings statement to each U.S. resident who had earnings of over $600 in the previous calendar year.

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

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

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

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.

Because of critical legal and tax considerations, SpeechPhone Direct must limit the resale of SpeechPhone Direct services, and the presentation of the SpeechPhone Direct business, to prospective customers and Distributors located within the United States and U.S. Territories and those other countries that the Company has announced are officially opened for business. Moreover, allowing a few Distributors to conduct business in markets not yet opened by SpeechPhone Direct would violate the concept of affording every Distributor the equal opportunity to expand internationally.

Accordingly, Distributors are authorized to sell SpeechPhone Direct services, and enroll Customers or Distributors only in the countries in which SpeechPhone Direct is authorized to conduct business, as announced in official Company literature. SpeechPhone Direct services or sales aids cannot be shipped into or sold in any foreign country. Distributors may sell, give, transfer, or distribute SpeechPhone Direct services or sales aids only in their home country. In addition, no Distributor may, in any unauthorized country: (a) conduct sales, enrollment or training meetings; (b) enroll or attempt to enroll potential customers or Distributors; or (c) conduct any other activity for the purpose of selling SpeechPhone Direct products, establishing a marketing organization, or promoting the SpeechPhone Direct opportunity.