Click here to see the complete PDF, then you can printed for your record POLICIES AND PROCEDURES-revisedJune2012.txt ChocoNat Compliance Department JUNE 2014 Section 1 – Purposes of Policies and Procedures Section 2 – Introduction 2.1 – Policies and Procedures Plan Incorporated into Independent Member Agreement 2.2 – Changes of Policies and Procedures 2.3 – Changes to the Agreement 2.4 – Delay 2.5 – Policies and Provisions Severable 2.6 – Waiver Section 3 – Becoming an Independent Member – Rules of Conduct 3.1 – Requirements to Become an Independent Member 3.2 – New Independent Member Registration by Phone, Fax or Internet 3.3 – Renewal of Your Choconat Business Section 4 – Operating a Choconat Business 4.1 – Adherence to the Choconat Compensation Plan 4.2 – Business Entities 4.3 – Minors 4.4 – One Choconat Business per Independent Member and Two per Household 4.5 – Independent Contractor Status 4.6 – Enrolling/Placing 4.7 – Changes to a Choconat Business 4.8 – Roll-up of Marketing Organization 4.9 – Sale, Transfer or Assignment of a Choconat Business 4.10 – Separation of a Choconat Business 4.11 – Succession 4.13 – Transfer upon Incapacitation of an Independent Member 4.14 – Errors or Questions Section 5 – Responsibilities of Independent Members 5.1 – Change of Address or Telephone 5.2 – Continuing Development Obligations 5.3 – Non-disparagement 5.4 – Providing Documentation to Applicants 5.5 – Reporting Policy Violations 5.6 – Company Claims Section 6 – Conflicts of Interest 6.1 – Non-solicitation 6.2 – Targeting Other Direct Sellers 6.3 – Cross Sponsoring 6.4 – Holding Applications or Orders 6.5 – Stacking Section 7 – Communication and Confidentiality within a Choconat Business 7.1 – Downline Activity (Genealogy Reports) 7.2 – Web Access Protection 7.3 – Communication Opt-In Section 8 – Advertising 8.1 – General 8.2 – Independent Member Web Sites 8.3 – Domain Names and Email Addresses 8.4 – Social Networking 8.5 – Use of Celebrity Names 8.6 –Trademarks and Copyrights 8.7 – Media and Media Inquiries 8.8 –Spamming and Unsolicited Faxes 8.9 – Telemarketing 8.10 –Unauthorized Claims and Actions 8.11 – Governmental Approval or Endorsement Section 9 – Rules and Regulations 9.1 – Identification 9.2 – Income Taxes 9.3 – Insurance 9.4 – International Marketing 9.4.1 - International Marketing Definitions 9.4.2 - Authorized Countries 9.5 – Adherence to Laws and Ordinances Section 10 – Sales 10.1 – Retail Establishments 10.2 – Trade Shows, Expositions and other Sales 10.3 – Discount or Auction Web Sites 10.4 – Excess Inventory Purchases Prohibited 10.5 – Bonus Buying Prohibited 10.6 – Re-packaging and Re-labeling Prohibited Section 11 – Sales Requirements 11.1 – Product Sales 11.2 – No Territory Restrictions 11.3 – 70% Sales Rule 11.4 – Sales Receipts Section 12 – Rebates, Bonuses and Commissions 12.1 – Rebates, Bonus and Commission (“Financial Distributions”) Qualifications 12.2 – Adjustment to Rebates, Bonuses and Commissions 12.3 – Unclaimed Commissions and Credits 12.4 – Incentive Trips and Rewards 12.5 – Reports Section 13 – Product Guarantees, Returns and Inventory Repurchase 13.1 – Product Guarantee 13.2 – Inventory Returns 13.3 – Exceptions to the refund policies 13.4 – Montana Residents Section 14 – Dispute Resolution and Disciplinary Proceedings 14.1 – Disciplinary Sanctions 14.2 – Grievances and Complaints 14.3 – Arbitration 14.4 – Governing Law, Jurisdiction and Venue Section 15 – Ordering 15.1 – Retail customers and Preferred customers 15.2 – Purchasing Choconat Products 15.3 – General Order Policies 15.4 – Shipping and Back Order Policy 15.5 – Confirmation of Order Section 16 – Payment and Shipping 16.1 – Deposits 16.2 – Insufficient Funds 16.3 – Restrictions on Third Party Use of Credit Cards 16.4 – Sales Taxes Section 17 – Inactivity and Cancellation 17.1 – Effect of Cancellation 17.2 – Cancellation Due to Inactivity 17.3 – Involuntary Cancellation 17.4 – Voluntary Cancellation 17.5 – Non-renewal Section 18 – Definitions SECTION 1 – PURPOSES OF POLICIES AND PROCEDURES Choconat has developed the following guidelines to assist in the success of the Company and its Independent Members. These Policies and Procedures will help provide the following benefits: + Protect the rights of all Independent Members by providing a framework within which each Independent Member may work in an ethical, effective and secure manner. + Provide an equal and level playing field of opportunity to all Choconat Independent Members + Define the contractual relationship between Choconat and its Independent Members + Inform Independent Members regarding compliance issues and regulatory requirements Choconat requires that all Independent Members understand and abide by these Policies and Procedures as we work together in promoting the Choconat products and opportunity. SECTION 2 – INTRODUCTION 2.1 – Policies and Procedures Plan Incorporated into Independent Member Agreement. These Policies and Procedures, in their present form and as amended at the sole discretion of Choconat (“Choconat®” or the “Company”), are incorporated into, and form an integral part of, the Choconat Independent Member Agreement. Throughout these Policies, when the term “Agreement” is used, it collectively refers to the Choconat Independent Member Application and Agreement, these Policies and Procedures, and the Choconat Compensation Plan. These documents are incorporated by reference into the Choconat Independent Member Agreement. It is the responsibility of each Independent Member 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 enrolling a new Independent Member, it is the responsibility of the Enroller to provide the most current version of these Policies and Procedures and the Choconat Compensation Plan to the applicant prior to his or her execution of the Independent Member Agreement. 2.2 – Purpose of Policies Choconat is a direct sales company that markets products through Independent Members. It is important that all Independent Members understand that their success is dependent upon the integrity of all men and women who market Choconat products. To clearly define the relationship that exists between Independent Members and Choconat, and to explicitly set standards for acceptable business conduct, Choconat has established the Agreement. Choconat Independent Members are required to comply with all of the Terms and Conditions set forth in the Agreement, as well as all Federal, state, and local laws governing their business and their conduct. It is very important that all Independent Members read and abide by the Agreement. Please review the information in this manual carefully. It explains and governs the relationship between Independent Members and the Company. Any questions regarding any policy or rule should be directed to Choconat. 2.3 – Changes to the Agreement Because federal, state, and local laws, as well as the business environment periodically change, Choconat reserves the right to amend the Agreement (including the Member Application, Terms and Conditions and Policies and Procedures) and its prices in its sole and absolute discretion. The Company shall provide or make available to all Independent Members 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 (6) Special mailings. The most current version will be located at www.healthychocolate.company. It is the responsibility of all Independent Members to regularly review www.healthychocolate.company for the most recently published amendment. Unless otherwise provided, amendments shall be effective upon publication on the Company's website. Once the amendment(s) are published, the Independent Member(s) can elect to accept the amendment(s) or reject them. If the Independent Member rejects them, their Agreement will terminate at the end of its term and will not be renewed. If the Independent Member continues to Enroll and/or accept Rebates, Commissions or Bonuses from Choconat, such actions shall be deemed acceptance of the amendments. POLICIES AND PROCEDURES-revisedJune2014.txt