Business Guide

POLICIES AND PROCEDURES

Business Guide

TABLE OF CONTENTS 2

SECTION 1 – INTRODUCTION 1.1 Purpose of Policies 1.2 Policies and Compensation Plan Incorporated into Distributor Agreement 1.3 Changes to these Provisions 1.4 Confidentiality 1.5 Independent Contractor Status 1.6 Notices 1.7 Policies and Provisions Severability

5

SECTION 2 - APPLICATION, PRIVILEGES, DISTRIBUTORSHIP OWNERSHIP AND RENEWAL 2.1 Applicant Requirement (s) 2.2 Identification Numbers 2.3 Holding Applications or Orders 2.4 Joint Applicants – Husbands and Wives, Household/Family Members or Affiliated Individuals 2.5 Addition of Co-Applicants 2.6 Multiple Ownerships 2.7 Partnerships, Corporations and Trusts 2.8 Death or Incapacitation 2.9 Divorce, Separation or Dissolving Partnership 2.10 Sales or Transfers or Assignment of Immunotec Business 2.10.1 Approval required 2.10.2 Right of First Refusal 2.11 Annual Renewal 2.12 Address, Phone and Name Changes

11

SECTION 3 - DISTRIBUTOR TAX REPORTING RESPONSIBILITIES 3.1 3.2 3.3 3.4 3.5 3.6

13

American Residents Canadian Residents Quebec Residents Retail Sales Tax Indian Status / Tax Exempt Forms Other Forms

22 SECTION 6 – SALES REQUIREMENTS 6.1 6.2 6.3 6.4 6.5 6.6 6.7

Markets for Distributors Product Sales No Price or Territory Restrictions Sales Receipts Inventory Loading Prohibited Bonus Buying Stacking

25 SECTION 7 – COMMISSIONS 7.1 Bonus and Commission Qualifications 7.2 Adjustments to Bonuses and Commissions 7.2.1 Adjustments for Returned Products 7.2.2 Other Deductions 7.2.3 Unclaimed Commissions and Credits 7.3 Errors or Questions

26 SECTION 8 - ORDERING 8.1 8.2 8.3 8.4 8.5

ImmunoDirect Customers Purchasing Immunotec Products General Ordering Policies Shipping and Back Order Policies Confirmation of Order

27 SECTION 9 – PAYMENTS 9.1 Sufficient Funds 9.2 Returned Checks

28 SECTION 10 - GOVERNMENTAL APPROVAL OR ENDORSEMENT

28 SECTION 11 - LABELING, PACKAGING OR TAMPERING WITH PRODUCTS

28 SECTION 12 - INSURANCE 29 SECTION 13 – SATISFACTION GUARANTY AND RETURN POLICY

SECTION 4 - REPRESENTATIONS MADE BY DISTRIBUTORS 4.1 Business Cards, Stationery, Phone Listing 4.2 Sponsors 4.3 Change of Sponsor 4.4 Sponsor Responsibilities 4.4.1 Ongoing Training 4.4.2 Increased Training Responsibility 4.4.3 Ongoing Sales Responsibility 4.5 Cross-Sponsoring / Cross-Selling 4.5.1 Cross-Selling 4.5.2 Cross-Sponsoring 4.6 Assignment of Leads 4.7 Unauthorized Claims and Actions 4.7.1 Indemnification 4.7.2 Product Claims 4.7.3 Income Claims 4.8 Non-disparagement

18

POLICIES AND PROCEDURES

SECTION 5 – ADVERTISING 5.1 Trademarks, Logos, Names and Copyrights 5.2 Literature, Sales Aids, Television and Radio 5.3 Internet/World Wide Web pages 5.4 Inquiries from Media 5.5 Telephone/Telemarketing 5.6 Trade Shows and Fairs 5.7 Displays of Product 5.8 Medical Claims and Product Testimonials

13.1 ImmunoDirect Customer Return Policy 13.2 Retail Customers 13.3 Return of Products 13.3.1 Return of Products (Products Purchased for Personal Consumption) 13.3.2 Returns by Distributors (Product Returned by Personal Retail Customers) 13.4 Returns of Inventory and Sales Aids by Distributors 13.4.1 Montana Residents 13.5 Commission and Bonus Reversals

31 SECTION 14 – ADHERENCE TO POLICIES AND PROCEDURES, INACTIVITY AND CANCELLATION 14.1 Violations of Policies and Procedures 14.2 Disciplinary Actions 14.3 Suspension 14.4 Permanent Termination 14.5 Notice 14.6 Voluntary Resignation 14.7 Cancellation Following a Failure to Renew 14.8 Cancellation Due to Inactivity 14.9 Reclassification Following Cancellation Due to Inactivity 14.10 Effect of Cancellation 14.11 Roll-up of marketing Organization

1

2

S E C T I O N

1. INTRODUCTION 1.1 PURPOSE OF POLICIES

1.2 POLICIES AND COMPENSATION PLAN

Immunotec Inc., incorporated under the laws of Canada and

INCORPORATED INTO DISTRIBUTOR AGREEMENT

Immunotec Research Inc, incorporated under the laws of

These Policies and Procedures, in their present form and as

Delaware (hereinafter “Immunotec” or the “Company”) are

amended at the sole discretion of Immunotec Inc. and/or

network marketing companies that market products through

Immunotec Research Inc. are incorporated into, and form an

Independent Distributors (hereinafter “Distributor” or

integral part of, the Immunotec Distributor Agreement.

“Distributors”). It is important to understand that your

Throughout these Policies, when the term “Agreement” is

success and the success of your fellow distributors is

used, it collectively refers to the Immunotec Distributor

dependent upon the integrity of the men and women who

Application and Agreement, these Policies and Procedures

market our products. To clearly define the relationship that

and the Immunotec Compensation Plan. These documents are

exists between Distributors and Immunotec, and to explicitly

incorporated by reference into the Immunotec Distributor

set a standard for acceptable business conduct, Immunotec

Agreement (all in their current form and as amended by

has provided hereinafter, in addition to the Distributorship

Immunotec). It is the responsibility of each Distributor to

Agreement and Compensation Plan, a more explicit and

read, understand, adhere to, and ensure that he or she is

detailed version of some of the terms and conditions that an

aware of and operating under the most current version of

Immunotec Distributor must abide by and that are deemed to

these Policies and Procedures. When sponsoring or enrolling a

form part of the Application and Agreement (IRL-1 form)

new Distributor, it is the responsibility of the sponsoring

(hereinafter “Agreement” or “Distributor Agreement”).

Distributor to provide the most current version of these Policies and Procedures and the Immunotec Compensation

Immunotec Distributors are required to comply with all of

Plan to the applicant prior to his or her execution of the

the Terms and Conditions set forth in the Agreement which

Distributor Agreement.

Immunotec may amend at its sole discretion from time to time, as well as all federal, state, provincial, territorial, and

Immunotec requires each Distributor to comply with all

local laws governing their Immunotec business and their

Policies and Procedures. Immunotec reserves the right to

conduct. Because you may be unfamiliar with many of these

employ any and all actions that are deemed necessary to

standards of practice, it is very important that you read and

determine and ensure compliance with the Policies and

abide by the Agreement. Please review the information in this

Procedures which are an essential condition of the

manual carefully. It explains and governs the relationship

Distributorship granted to the Distributor by Immunotec.

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 the Immunotec Distributor Support Department.

POLICIES AND PROCEDURES

1.3 CHANGES TO THESE PROVISIONS

1.4 CONFIDENTIALITY

Because federal, state, provincial, territorial and local laws, as

Immunotec will supply data processing and reporting

well as the business environment, periodically change,

information to Distributors regarding their personal downline

Immunotec reserves the right to amend the Agreement and its

sales organization only. The Distributor agrees that such

prices in its sole and absolute discretion. By signing the

information is proprietary and confidential to Immunotec, and

Distributor Agreement, a Distributor agrees to abide by all

it is transmitted to the Distributor in confidence and for the

amendments or modifications that Immunotec elects to make.

sole purpose of assisting the Distributor in building his or her

Amendments shall be effective upon notice to all distributors

Distributorship business. The Distributor shall not disclose

that the Agreement has been modified. Notification of

any proprietary or confidential information about Immunotec,

amendments shall be published in official Immunotec

its products, or business or the Distributor’s downline or upline

materials. The Company shall provide or make available to all

to any other person, firm, partnership, entity or corporation.

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)

Genealogy reports and/or mailing labels are released to Immunotec Distributors only for supporting their downline

fax-on-demand; (4) voice mail system broadcast; (5)

Distributors. All information provided by Immunotec is

inclusion in Company periodicals; (6) inclusion in product

proprietary and given to the Distributor in confidence and the

orders or bonus checks; or (7) special mailings. The

Distributor hereby agrees to protect the confidentiality and

continuation of a Distributor’s Immunotec business or a

refrain from making use thereof for any purpose other than

Distributor’s acceptance of bonuses or commissions

supporting their downline organization. This includes all

constitutes acceptance of any and all amendments.

information obtained by the Distributor or former Distributor in regard to other members of any other genealogy. The Distributor agrees to the terms of confidentiality as set out in these Policies and Procedures, and agrees to meet his or her ethical obligations, which include respecting the wishes of downline leaders in communications with their individual networks. In the case where Immunotec is informed of the misuse by a former or active Independent Distributor of said proprietary information, Immunotec may seek injunctive relief and file civil proceedings to obtain financial compensation for damages suffered.

3

4

IMMUNOTEC BUSINESS GUIDE

1.5 INDEPENDENT CONTRACTOR STATUS

1.6 NOTICES

Distributors are independent contractors, and are not

All notices provided for in these Policies and Procedures shall

purchasers of a franchise or a business opportunity. The

be deemed properly delivered by depositing the notice in the

agreement between Immunotec and its Distributors does not

mail, postage pre-paid, addressed to the Distributor at the

agency,

last address recorded with Immunotec. Immunotec may also

partnership, or joint venture between the Company and the

arrange for delivery by courier or messenger service, or send

Distributor. A Distributor shall not be treated as an employee

the notice via facsimile transmission or e-mail followed by

for his or her services or for Federal, Provincial, or State tax

confirmation copy sent by mail.

create

an

employer/employee

relationship,

purposes. All Distributors are responsible for paying local, state, provincial, 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

1.7 POLICIES AND PROVISIONS SEVERABILITY If any provision herein, 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

Policies and Procedures, and applicable laws.

the Agreement. The name “Immunotec” and other names as may be adopted by Immunotec are proprietary trade names, trademarks and service marks of Immunotec. As such, these marks are of great value to Immunotec and are supplied to Distributors for their use only in an expressly authorized manner. Use of the Immunotec name on any item not produced by the company is prohibited except as follows: Distributor’s Name Independent Immunotec Distributor All Distributors may list themselves as an “Independent Immunotec Distributor” in the white or yellow pages of the telephone directory under their own name. No Distributor may place telephone directory display ads using Immunotec’s name or logo. Distributors may not answer the telephone by saying

“Immunotec”,

“Immunotec

Incorporated”,

“Immunotec Research Inc.”, or in any other manner that would lead the caller to believe that he or she has reached corporate offices of Immunotec.

POLICIES AND PROCEDURES

S E C T I O N

2. APPLICATION, PRIVILEGES, DISTRIBUTORSHIP OWNERSHIP AND RENEWAL An Applicant becomes an Immunotec Independent Distributor and the Application becomes an Agreement only when an Application and Agreement form (IRL-1) duly completed and signed by the Applicant has been received by Immunotec and accepted. The Application and Agreement form must be duly completed and personally signed by the applicant. Applicants may register to become Independent Distributors by faxing or mailing an Application and Agreement form to Immunotec’s Distributor Support/Customer Service Department or by completing the agreement on the Immunotec Web site. Applicants enrolling by fax must submit both the front and back of the Application and Agreement. Applicants enrolling by telephone may telephone the Immunotec corporate office during regular business hours to receive a temporary Distributor Identification Number (“DIN”) and temporary authorization for a new Distributor. (See the front of the Distributor Application and Agreement for phone numbers and appropriate business hours.) The applicant must be able to provide all necessary Distributor Agreement information for the online, telephone, or fax enrolment. A new Basic Distributor Kit may be ordered at this time using a valid credit card. A telephone applicant’s DIN and authorization will be valid for 30 days, pending receipt of the completed and signed original Distributor Application and Agreement by Immunotec. Once the original Distributor Application and Agreement is received at the Immunotec Head Office, the new Distributor Agreement will be extended to one full year from the date on which the DIN 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 DIN will be cancelled, and the Distributor Application and Agreement will be automatically terminated and all commission and/or bonus checks will be withheld until a signed copy of the Application and Agreement form is received by Immunotec. Immunotec will record the date of receipt of all Application and Agreement forms. The date of receipt marked on each Application and Agreement becomes the official date for further information, discrepancies or possible claims. If there are any discrepancies between information in an Applicant’s file and the original Application and Agreement, the written Application and Agreement will prevail. Immunotec reserves the right to arbitrarily refuse any Application for the privilege of becoming an Independent Distributor. Independent Distributors are not and may not represent themselves as employees, partners or agents of Immunotec nor are they purchasers of a franchise or license. Distributor privileges include the right to purchase Immunotec products at wholesale prices, sell Immunotec products, participate in the Immunotec Compensation Plan, training seminars, motivational and recognition functions (upon payment of appropriate charges when applicable) and to sponsor other Distributors (“Downline Distributors”). Distributors are to determine their own business hours and methods of operating their businesses on the condition that they adhere to the Policies and Procedures stipulated within this Business Guide, the terms of the Immunotec Compensation Plan and their Application Agreement (IRL-1 form).

5

6

IMMUNOTEC BUSINESS GUIDE

2.1 APPLICANT REQUIREMENT(S)

would violate Immunotec Policies and Procedures, the

All Distributors must be of the legal age of majority in their

Application Agreement or any other policies and procedures

state, province or territory of residence, reside in Canada, the

established by Immunotec for its Distributors.

United States or a U.S. territory, and purchase a starter kit (not applicable in North Dakota). If a state or province requires a direct seller’s license to operate as an independent distributor, it is the responsibility of the applicant to obtain this license. 2.2 IDENTIFICATION NUMBERS All Distributors applying as individuals are required to submit their Social Security Number (SSN - United States only) or Social Insurance Number (SIN - Canada only) for tax reporting purposes. If a distributor is applying as a business, the Federal Tax Identification Number (United States) or Goods and Services Tax (GST) Number and Provincial Sales Tax (PST) Number (Canada) must be used and provided. If a Distributor does not supply the proper tax reporting information, commission and bonus checks will not be paid.

For the purposes of this section, an “Affiliated Individual” is an individual associated in any way through a corporation, partnership, trust or any other entity with an Immunotec Distributor. 2.5 ADDITION OF CO-APPLICANTS When adding a co-applicant (either an individual or a business entity) to an existing Immunotec business, the Company requires a written request as well as a properly completed Distributor Application and Agreement containing the applicant and co-applicant’s Social Security Numbers or Social Insurance Numbers and signatures. To prevent the circumvention of Section 2.10 (regarding transfers and assignments of Immunotec business), the original applicant must remain as a party to the original Distributor Application and Agreement. If the original Distributor wants to terminate

2.3 HOLDING APPLICATIONS OR ORDERS

his or her relationship with the Company, he or she must

Distributors must not manipulate enrolments of new

transfer or assign his or her business in accordance with

applicants or purchases of products. All Distributor

Section 2.10. If this process is not followed, the business

Applications and Agreements, and product orders must be

shall be cancelled upon the withdrawal of the original

sent to Immunotec within 72 hours from the time they are

Distributor. All bonus and commission checks will be sent to

signed by a Distributor or placed by a Customer, respectively.

the address of record of the original Distributor. Please note that the modifications permitted within the scope of this

2.4 JOINT APPLICANTS – HUSBANDS AND WIVES,

paragraph do not include a change of sponsorship. Changes of

HOUSEHOLD/FAMILY MEMBERS OR AFFILIATED

sponsorship are addressed in Section 4 below. There is a

INDIVIDUALS

$25.00 fee for each change requested, which must be

Any spouse of an Immunotec Distributor who wishes to

included with the written request and the completed

become a Distributor may do so, so long as they respect the

Distributor Application and Agreement. Immunotec may, at

cross-sponsoring regulations. They are required to obey all

its

Policies and Procedures as outlined. If one spouse chooses not

implementing any changes to an Immunotec business. Please

to be a Distributor, or if a household/family member or an

allow thirty (30) days after the receipt of the request by

Affiliated Individual chooses not to be a Distributor, the

Immunotec for processing.

person acting as the Distributor expressly agrees and understands that his or her Immunotec Distributorship may be terminated for any actions taken by the non-member spouse, household/family member or Affiliated Individual who

discretion,

require

notarized

documents

before

POLICIES AND PROCEDURES

2.6 MULTIPLE OWNERSHIP

2.8 DEATH OR INCAPACITATION

Distributors may not, directly or indirectly, have an ownership

Upon the death or incapacitation of a Distributor, the

interest, direct or indirect, in more than one Distributorship.

Distributorship will be terminated unless there is a legal

This applies whether the Distributorship’s interest is held as

successor or successors or a legally appointed trustee. The

an individual, partner or shareholder. Immunotec reserves the

legal successor(s) or trustee must submit to Immunotec a copy

right to terminate both Distributorships if this prohibition

of the probated Will or other legal evidence of a valid and

against direct or indirect ownership of a Distributorship is

applicable Will or legal evidence satisfactory to Immunotec,

violated.

an original Death certificate or legal documents stating the trustee’s mandate and right to administer the Immunotec

Notwithstanding the foregoing, Immunotec reserves the right

business along with a new Application and Agreement form

to accept or deny the right for an Independent Distributor to

duly completed and signed, clearly stating that the new

own multiple distributorships. In any event, only express

applicant(s) inherits the Distributorship.

written approval by Immunotec will grant one’s right to multiple ownership.

Bonus and commission checks of an Immunotec business transferred pursuant to this section will be paid in a single

2.7 PARTNERSHIPS, CORPORATIONS AND TRUSTS If an applicant wishes to apply as a corporation, partnership or trust, Immunotec must receive a copy of the articles of incorporation or the partnership declaration and agreement, including the SIN/SSN and a signed Application and Agreement for each partner, shareholder, director and/or officer involved in the corporation or partnership. The

check jointly to the payees. The payees must provide Immunotec with an “address of record” to which all bonus and commission checks will be sent. If the business is bequeathed to joint payees, they must form a business entity and acquire a federal taxpayer Identification number. Immunotec will issue all bonus and commission checks and one IRS Form 1099 to the business entity.

corporation or partnership must disclose all partners, directors, officers and/or shareholders. All documentation

In the event that an existing Distributor inherits a second

must be included with the original Application and Agreement.

Distributorship, the Distributor must either terminate one of

These documents include but are not limited to: the Articles of

the existing Immunotec Distributorships, make an Offer of

Incorporation, charter, licenses, shareholder agreements,

Sale with respect to one of the two Distributorships (please

partnership agreements and other legal information pertaining

refer to Sale or Transfers or Assignment of Immunotec

to the Distributorship. The Application and Agreement will be

Business Section 2.10) or ask Immunotec in writing for

processed under the personal name and not the business name

permission to own multiple distributorships.

without the proper documentation. Each partner, director, shareholder, officer or trustee must agree to be personally bound by the Policies and Procedures as amended from time to time. Upon the dissolution of a corporate distributorship or partnership, the ownership of that distributorship will be transferred pursuant to the agreement amongst the shareholders or partners or upon written notification of a court of competent jurisdiction.

7

8

IMMUNOTEC BUSINESS GUIDE

2.9 DIVORCE, SEPARATION OR DISSOLVING PARTNERSHIP

check per Immunotec business per commission cycle. Commission checks shall always be issued to the same

Immunotec Distributors sometimes operate their Immunotec

individual or entity. In the event that parties to a divorce or

businesses as husband-wife partnerships, regular partnerships,

dissolution proceeding are unable to resolve a dispute over the

corporations, or trusts. At such time as a marriage may end in

disposition of commissions and ownership of the business, the

divorce or a corporation, partnership or trust (the latter three

Distributor Agreement shall be involuntarily cancelled.

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 Distributors and the Company, Immunotec will involuntarily terminate the Distributor Agreement and allow revenues generated by the distributorship to flow upline to their entire organization pursuant to Section 14.11. While a divorce or entity dissolution is pending, the parties must adopt one of the following methods of operation: a) One of the parties may, with consent of the other(s), operate the Immunotec business pursuant to an assignment in writing whereby the relinquishing spouse, shareholders, partners or trustees authorize(s) Immunotec to deal directly and solely with the other spouse or nonrelinquishing shareholder, partner or trustee.

If a former spouse or a former entity affiliate has completely relinquished all rights in their original Immunotec business, they are thereafter free to enroll under any sponsor of their choosing, so long as they meet the waiting period requirements set forth in Section 4. In such case, however, the former spouse or partner may not recruit or sell to any Distributors or any Customers from this former organization. They must develop the new business in the same manner as would any other new Distributor. 2.10 SALES OR TRANSFERS OR ASSIGNMENT OF IMMUNOTEC BUSINESS 2.10.1 APPROVAL REQUIRED Although an Immunotec business is a privately owned, independently operated business, the sale, transfer or assignment of an Immunotec business is subject to certain limitations. The sale of an Immunotec business is subject to approval by Immunotec, such approval may be withheld at the Company’s sole discretion. The seller must submit a written

b) The parties may continue to operate the Immunotec

purchase and sale agreement to the Company and to his or

business jointly on a “business-as-usual” basis, whereupon

her Sponsor who shall have the right of first refusal as set

all compensation paid by Immunotec will be paid in the

forth in Section 2.10.2 below. If a Distributor wishes to sell his

joint names of the Distributors or in the name of the entity

or her Immunotec business, the following criteria must be met:

to be divided as the parties may independently agree between themselves.

The existing line of sponsorship must always be maintained so that the Immunotec business continues to be operated in that

Under no circumstances will the Downline Organization of

line of sponsorship.

divorcing spouses or a dissolving business entity be divided. Similarly, under no circumstances will Immunotec split commission and bonus checks between divorcing spouses or members of dissolving entities. Immunotec will recognize only one Downline Organization and will issue only one commission

The buyer or transferee must be (or must become) a qualified Immunotec Distributor. If the buyer is an active Immunotec Distributor, he or she must first terminate his or her Immunotec business simultaneously with the purchase,

POLICIES AND PROCEDURES

transfer, assignment or acquisition of any interest in the new

2.10.2 RIGHT OF FIRST REFUSAL

Immunotec business or obtain written permission from

If a Distributor desires to sell his or her Immunotec

Immunotec to keep or maintain multiple ownerships.

distributorship, the Distributor’s Sponsor must be given the first right and option, in writing and sent via certified

Before the sale, transfer or assignment can be finalized and approved by Immunotec, any debt obligations the selling Distributor has with Immunotec must be satisfied. The selling Distributor 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 an Immunotec business. Upon complete execution of the purchase and sale agreement and the new Distributor Agreement, the parties must submit copies of the same to Immunotec’s Distributor Support Department for review and approval. Immunotec reserves the right to request additional documentation that may be necessary to analyze the transaction between the buyer and seller. Immunotec’s Distributor Support Department will, in its sole and absolute discretion, approve or deny the sale, transfer or assignment within 30 days after its receipt of all necessary documents from the parties. If the parties fail to obtain Immunotec’s approval for the transaction, the transfer shall be voidable at Immunotec’s option. The purchaser of the existing distributorship will assume the obligations and position of the selling Distributor. A Distributor who sells his or her distributorship shall not be eligible to re-apply as an Immunotec Distributor for a period of at least twelve (12) full calendar months after the sale. No changes in line of sponsorship shall result from the sale or transfer of an Immunotec business.

mail/return receipt requested, to purchase the distributorship. If the Sponsor desires to purchase the distributorship, the purchased distributorship will dissolve with the Sponsor’s current organization to create a single organization. If the Sponsor fails to notify the selling Distributor of his or her intention to purchase the distributorship within ten (10) business days after his or her receipt of the selling Distributor’s notice of intent to sell, the selling Distributor must offer (in succession beginning with the Distributor immediately above the seller’s Sponsor) the distributorship to the first three immediate upline distributors of the seller’s Sponsor upon the same terms provided in the option to the seller’s Sponsor. If an upline Distributor desires to purchase the selling Distributor’s distributorship, the purchasing Distributor must first sell or resign from his or her own distributorship before purchasing another. If each of the three upline Distributors fails to notify the selling Distributor of his or her intention to purchase the distributorship within ten (10) business days after his or her receipt of selling Distributor’s notice of intent to sell, the selling Distributor may proceed with the sale to a third party willing to purchase the existing distributorship upon the same terms provided in the offer to the seller’s Sponsor. The buyer, transferee or assignee must complete a Distributor Agreement (or Transfer Agreement if he or she is a current Immunotec Distributor) and possess reasonable ability to satisfactorily perform the obligations of an Immunotec Distributor who is of the same rank or status as the selling Distributor and purchase a starter kit if said buyer, transferee or assignee is a new distributor.

9

10

IMMUNOTEC BUSINESS GUIDE

Upon complete execution of the purchase and sale agreement,

2.11 ANNUAL RENEWAL

and the new Distributor Agreement, the parties must submit

All Distributorships are valid for a period of one year and

copies of the same to Immunotec’s Distributor Support

expire one year after the date of acceptance of the

Department for review and approval. Immunotec reserves the

Application and Agreement. Distributors are responsible to

right to request additional documentation that may be

pay their renewal fees on time. Distributors who wish to

necessary to analyze the transaction between the buyer and

renew can do so by paying a renewal fee by their renewal

seller. Immunotec’s Distributor Support Department will, in its

date, as established by Immunotec for Distributorship

sole and absolute discretion, approve or deny the sale, transfer

renewals.

or assignment within thirty (30) days after its receipt of all Distributors who do not renew their distributorship and pay

necessary documents from the parties.

their renewal fee within 60 days following their renewal date If the seller sells, transfers or assigns or attempts to sell,

will be deemed to have voluntarily resigned and their file will

transfer or assign his or her distributorship with terms

be deactivated. (Please see Cancellation following a Failure to

different from those set forth in the offer to the seller’s

Renew - Section 14.7)

Sponsor, such transfer shall be voidable at Immunotec’s option. Further, if the parties fail to obtain Immunotec’s

2.12 ADDRESS, PHONE AND NAME CHANGES

approval for the transaction, the transfer shall be voidable at

Distributors are required to notify Immunotec, in writing, two

Immunotec’s

existing

(2) weeks prior to any change in Distributor information.

distributorship will assume the obligations and position of the

These changes include, but are not limited to, address, name,

selling Distributor. A Distributor who sells his or her

telephone and fax number and change of e-mail address.

option. The

purchaser

of

the

distributorship shall not be eligible to re-apply as an Immunotec Distributor for a period of at least twelve (12) full calendar months after the sale.

POLICIES AND PROCEDURES

S E C T I O N

3. DISTRIBUTOR TAX REPORTING RESPONSIBILITIES Immunotec is not responsible for collecting income taxes on any monies earned by Distributors. Immunotec does not deduct any taxes from commission or bonus checks in Canada or the United States. In the United States, retail sales could be subject to local sales taxes. In Canada, Immunotec products and services are subject to the Goods and Services Tax (GST) and to the Provincial Sales Tax (PST) where applicable. If you have any questions about reporting sales taxes, please contact your local tax authority. Each Distributor is responsible for all taxes on any earnings from Immunotec, or the sale of Immunotec products.

3.1 AMERICAN RESIDENTS

CANADA:

Each year Immunotec provides the Internal Revenue Service

To this end, Immunotec will collect Goods and Services Tax

(IRS) with a 1099-Misc form (Non-employee Compensation

(GST) on all Canadian sales of taxable goods and/or services

Earnings Statement) for each American resident who falls

and will also collect Provincial Sales Tax (PST) on sales of

into the following categories: registered as an individual on

products shipped to Quebec or picked up in Quebec.

the Application and Agreement form (IRL-1) and had earnings

Immunotec will not collect the GST and/or the PST in Nova

and/or won prizes of over $600.00 in the previous calendar year;

Scotia, New Brunswick and Newfoundland but will collect the

had commissionable purchases listed on their Independent

Harmonized Sales Tax (HST).

account in excess of $5,000.00 (based on wholesale price), or in accordance with individual state regulations.

The taxes will be calculated on the actual price paid by Distributors and/or Customers.

3.2 CANADIAN RESIDENTS Each year Immunotec provides Revenue Canada with a T4-A

UNITED STATES:

form for each Canadian resident who has registered with

On behalf of American distributors, Immunotec will collect

Immunotec on an Application and Agreement form (IRL-1)

sales tax for each state that allows or requires it to do so (for

and had earnings and/or prizes or bonuses of $500.00 or more.

additional information such as specific states that require Immunotec to collect sales tax, please visit the back office of

3.3 QUEBEC RESIDENTS

your personal Web site) and will remit the tax to the

Each year Immunotec provides residents of the Province of

appropriate government agencies.

Quebec who have earned in excess of $50.00 in commissions and / or prizes with a “Relevé 1” form.

Immunotec is required to collect and remit sales taxes based on its “suggested retail price” and the sales tax rates

3.4 RETAIL SALES TAX

applicable to the ship-to address. The suggested retail price

In designing the Immunotec opportunity, one of our guiding

will be used as the tax base except when:

philosophies has been to free Distributors from as many administrative, operational, and logistical tasks as possible. By doing so, Distributors are free to concentrate on those activities that directly affect their incomes, namely product sales and enrolment activities.

The distributor’s state allows the use of resale certificates or tax numbers. In this case, if the purchase is made for resale and the distributor has a valid resale certificate or tax number on file with Immunotec, Immunotec will not collect

11

12

IMMUNOTEC BUSINESS GUIDE

the applicable taxes from the distributor. The distributor is

If your state does not allow Immunotec to collect sales taxes

responsible for collecting and remitting taxes to the

for Distributors, you are responsible for collecting and reporting

appropriate taxing authorities.

applicable sales taxes for each face-to-face sale made. Distributors agree to indemnify and hold harmless Immunotec

The purchase satisfies the requirements of the Personal Use

from any tax responsibility or obligation, whether as to

Policy described below. Taxes will be based on the actual price

collection, reporting, withholding or otherwise.

paid by the distributor. OR Immunotec sells directly to Customers who have been referred to Immunotec by a distributor. These Customers are

Please consult the U.S. Sales Tax Policy in the back office of

eligible to purchase at a range of discounts. Taxes will be

your personal Web site for additional information pertaining

charged based on the purchase price paid by the Customer. A

to U.S. Sales Taxes such as Personal Use definition, what

Customer is not eligible to resell products, nor use their

states require Immunotec to collect sales tax, etc.

account to make products available to another Customer. 3.5 INDIAN STATUS / TAX EXEMPT FORMS PERSONAL USE:

Immunotec must receive a certified copy of all tax-exempt

Immunotec will collect the applicable sales tax on products

forms before Distributors will be exempt from any taxes.

purchased for personal use based on the actual price paid by

There are no retroactive exemptions if the proper forms are

the distributor, subject to the limitations described below.

not received before any orders are placed.

For the purpose of this policy, personal use includes products

3.6 OTHER FORMS

personally consumed by the distributor and consumption

Immunotec reserves the right to provide the applicable

by the officers, directors, shareholders, or employees of

federal, state and provincial tax authorities, both in the

the distributorship if the distributor is operating under a

United States and Canada, with any additional tax forms as

business name.

required by changes to applicable tax legislation.

Each distributor may order a maximum of $500 worth of products for “personal use” on a monthly basis through the Immunotec autoship (shuttle) program. Immunotec will accept the Distributor’s representation that the product is for personal use at the time of the automatic shipment order setup, whether the representation is made in writing, by fax, electronically, or verbally. The

distributor

is

responsible

for

abiding

by

the

representation. All of Immunotec’s products ordered on the autoship program will be considered and count toward the monthly personal use limit.

POLICIES AND PROCEDURES

S E C T I O N

4. REPRESENTATIONS MADE BY DISTRIBUTORS Each Distributor will honestly, ethically, truthfully, fairly and in accordance with all applicable laws, represent Immunotec products and programs in all discussions, seminars, meetings and approved advertising with or given to the public, Customers, Distributors or prospective Distributors. Distributors are prohibited from misrepresenting or omitting any significant material facts or statements about the Immunotec products or programs. Distributors shall make it clear that Immunotec programs are based upon the retail sales of Immunotec products and that an individual will not be successful by sponsoring others without emphasis on retail sales. The Distributor should emphasize that each Distributor is an independent contractor, and like any other independent business, each Distributor’s success or failure depends on that Distributor’s personal efforts. There can be no representation or guarantee that any Distributors will achieve any level of income, profit or success. Furthermore, Distributors are not permitted to make false or misleading claims with respect to Immunotec products. The Distributorship Agreement in no way holds Immunotec responsible for expenses that are incurred in running a Distributor’s business. The Distributor agrees to indemnify and hold harmless Immunotec, from any and all liability including civil, criminal or penal fines, penalties, governmental or administrative sanctions, refunds, judgments, sanctions, attorneys’ fees, court costs or lost business incurred as a result of a Distributor’s unauthorized representations. Distributors determine their own business hours and methods of sale, providing they comply with the Policies and Procedures stated in official company literature and do not commit any unfair or deceptive trade practices or violate any requirements of Federal, State or Provincial laws. All Distributors shall safeguard and promote the good reputation of Immunotec and its products. The marketing and promotion of Immunotec, the Immunotec opportunity, the Compensation Plan, and Immunotec products shall be consistent with the public interest, and must avoid all discourteous, deceptive, misleading, unethical or immoral conduct or practices. Distributors shall not offer the Immunotec opportunity through, or in combination with, any other system, program, or method of marketing other than that specifically set forth in official Immunotec literature without prior written approval by Immunotec. Distributors shall not require or encourage other current or prospective Customers or Distributors to participate in Immunotec in any manner that varies from the program as set forth in official Immunotec literature. Distributors shall not require or encourage other current or prospective Customers or Distributors to execute any agreement or contract other than official Immunotec agreements and contracts in order to become an Immunotec 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 Immunotec Compensation Plan other than those purchases or payments identified as recommended or required in official Immunotec literature.

13

14

IMMUNOTEC BUSINESS GUIDE

4.1 BUSINESS CARDS, STATIONERY, PHONE LISTING

The Distributor seeking to transfer submits a properly

Business cards, Stationery or Phone Listings must indicate

completed and fully executed Distributorship Agreement

that the person presenting the card, the Stationery or on the

which includes the written approval of any and all upline

Phone listing is an Independent Distributor and must conform

Distributors whose compensation may be directly or indirectly

to the advertising guidelines (section 5).

affected by said change. In some cases, Immunotec may require all Distributor signatures to be notarized. The

4.2 SPONSORS

Distributor who requests the transfer must submit a fee of

All active Distributors in good standing have the right to

$25.00 for administrative charges and data processing. If the

sponsor and enroll others into Immunotec. New applicants

transferring Distributor also wants to move any of the

have the right to choose who their Sponsor will be.

Distributors in his or her marketing organization, said

Professional courtesy dictates that the first Distributor who

Distributor must indicate this clearly on the Sponsorship

presented the Applicant with the complete Immunotec

Transfer Form. All downline Distributors will remain in the

business opportunity will sponsor the prospective Distributor.

same relative position. Should upline or sponsor information

If more than one Distributor claims to be the rightful

change for any downline, then a separate Sponsorship

Sponsor, Immunotec shall honor the first signed Application

Transfer Form must be completed for each change. Downline

and Agreement received at its Head Office.

Distributors will not be moved with the transferring Distributor unless all of the requirements of this paragraph

4.3 CHANGE OF SPONSOR To protect the integrity of all marketing organizations and safeguard the hard work of all Distributors, Immunotec strongly discourages changes in sponsorship. Maintaining the

are met. Transferring Distributors must allow up to thirty (30) days after the receipt of the Sponsorship Transfer Forms by Immunotec for processing and verification of change requests.

integrity of sponsorship is critical for the success of every

Any Distributor wishing to change Sponsors without such

Distributor and marketing organization. Accordingly, the

consent as more explicitly detailed in sub paragraphs (a) and

transfer of an Immunotec business from one sponsor to

(b) must resign, (please see Voluntary resignation Section

another is rarely permitted.

14.6) and remain inactive (i.e., no purchase of Immunotec

Requests for change of sponsorship must be submitted in writing to the Distributor Support Department, and must include the reason for the transfer. Transfers will only be considered in the following two (2) circumstances:

products for resale, no sales of Immunotec products, no sponsoring, no attendance at any Immunotec functions, no participation in any other form of Distributor activity, or operation of any other Immunotec business) forfeiting any downline and commissions or bonuses from their current

inducement, unethical

downline, and file another Application Agreement twelve (12)

sponsoring or conduct or criminal acts, a Distributor may

months after Notice of Resignation is received by Immunotec.

In

cases

involving

fraudulent

request that he or she be transferred to another organization with his or her entire marketing organization intact. All requests for transfer as herein stated shall be evaluated on a case by case basis.

POLICIES AND PROCEDURES

4.4 SPONSOR RESPONSIBILITIES

4.4.2

INCREASED TRAINING RESPONSIBILITY

As Distributors progress through the various levels of 4.4.1

ONGOING TRAINING

leadership, they will become more experienced in sales

Distributors may sponsor others into the Immunotec

techniques, product knowledge, and understanding of the

distributor network as new Distributors. The Sponsor has the

Immunotec program. They may be called upon to share this

responsibility of providing the new Distributor with sufficient

knowledge with less experienced Distributors within their

training, support and information about the Immunotec

organization.

products and programs. Distributors must provide the most current version of the Policies and Procedures and the

4.4.3

Compensation Plan to individuals whom they are sponsoring

Regardless of their level of achievement, Distributors have an

ONGOING SALES RESPONSIBILITY

to become Distributors before the applicant signs an

ongoing obligation to continue to personally promote sales

Application & Agreement. Additional copies of the Policies

through the generation of new Customers and through

and Procedures can be acquired from Immunotec.

servicing their existing Customers.

A Distributor must have continuing contact with his or her

4.5 CROSS-SELLING / CROSS-SPONSORING

downline organization and keep them informed about changes and updates. 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 Distributors to Immunotec meetings, training sessions, and other functions. Upline Distributors are also responsible to motivate and train new Distributors in Immunotec product knowledge, effective sales techniques, the Immunotec Compensation Plan, and compliance with Company Policies and Procedures. Communication with and the training of downline distributors must not, however, violate Section 13 (regarding the development of distributor-produced sales aids and promotional materials).

4.5.1

CROSS-SELLING

Immunotec 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 Immunotec Distributors or Customers other than those whom he/she personally sponsored for any other network marketing business. Following the cancellation of this Agreement, and for a period of ten months thereafter, a former Distributor may not recruit any Immunotec Distributor or Customer for another network marketing business if: 1) that Distributor or Customer was in the former Distributor’s downline marketing organization; or 2) the former Distributor met, developed a relationship with, or

Distributors must monitor the Distributors in their Downline

gained knowledge of the Distributor or Customer by virtue of

Organizations to ensure that Downline Distributors do not

their mutual participation in Immunotec. The term “recruit”

make improper product or business claims, or engage in any

means

illegal or inappropriate conduct. Upon request, every

encouragement, or effort to influence in any other way, either

Distributor should be able to provide documented evidence to

directly or through a third party, another Immunotec

Immunotec of his or her ongoing fulfillment of the

Distributor or Customer to enroll or participate in another

responsibilities of a Sponsor.

multilevel marketing, network marketing or direct sales

actual

or

attempted

solicitation, enrolment,

opportunity. This conduct constitutes recruiting even if the Distributor’s actions are in response to an inquiry made by another Distributor or Customer.

15

16

IMMUNOTEC BUSINESS GUIDE

Distributors must not sell, or attempt to sell, any competing

4.6 ASSIGNMENT OF LEADS

products to Immunotec Customers or Distributors, except

Immunotec rarely receives inquiries from the general public.

those that they have personally sponsored. Any product in the

In rare cases where leads are received, Immunotec tries to

same generic category as an Immunotec product is deemed to

determine, to the best of its ability, if the inquiry originated

be competing (e.g., any dietary supplement is in the same

through the efforts of a particular Distributor. If no contact

generic category as Immunotec’s dietary supplements, and is

to a Distributor can be traced, Immunotec will assign the

therefore a competing product, regardless of differences in

leads to Distributors at its sole discretion, on a rotating basis.

cost, quality, ingredients or nutrient content.). 4.7 UNAUTHORIZED CLAIMS AND ACTIONS Distributors may not display Immunotec products or services

4.7.1

with any other products or services in a fashion that might in

A Distributor is fully responsible for all of his or her verbal

any way confuse or mislead a prospective Customer or

and written statements made regarding Immunotec products

Distributor into believing there is a relationship between the

and the Compensation Plan which are not expressly contained

Immunotec and competitive products or services. Distributors

in official Immunotec materials. Distributors agree to

may not offer the Immunotec opportunity, products or

indemnify Immunotec and Immunotec’s directors, officers,

services to prospective or existing Customers or Distributors

employees, and agents, and hold them harmless from any and

in conjunction with any non-Immunotec program, opportunity,

all liability including judgments, civil penalties, refunds,

product or service. Distributors may not offer any non-

attorney fees, court costs, or lost business incurred by

Immunotec opportunity, products or services at any

Immunotec as a result of the Distributor’s unauthorized

Immunotec-related meeting, seminar or convention, or

representations or actions. This provision shall survive the

immediately following such event.

termination of the Distributor Agreement.

4.5.2

4.7.2

CROSS-SPONSORING

INDEMNIFICATION

PRODUCT CLAIMS

Actual or attempted cross-sponsoring is strictly prohibited.

No claims (which include personal testimonials) as to

“Cross-sponsoring” is defined as the enrolment of an

therapeutic, curative or beneficial properties of any products

individual or entity that already has a current Customer or

offered by Immunotec may be made except those contained in

Distributor Agreement on file with Immunotec, or who has

official Immunotec literature. In particular, no Distributor

had such an agreement within the preceding twelve (12)

may make any claim that Immunotec products are useful in

calendar months, within a different line of sponsorship. The

the cure, treatment, diagnosis, mitigation or prevention of any

use of a spouse’s, relative’s name or an agreement made

diseases; such statements can be perceived as medical or drug

between individuals, trade names, DBAs (doing business as),

claims. Not only are such claims in violation of Immunotec

assumed names, corporations, partnerships, trusts, federal ID

policies, but they potentially violate federal, provincial, and

numbers, or fictitious ID numbers to circumvent this policy is

state laws and regulations.

prohibited. Distributors shall not demean, discredit or defame other Immunotec 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 an Immunotec business in accordance with Section 2.10.

POLICIES AND PROCEDURES

4.7.3

INCOME CLAIMS

4.8 NON-DISPARAGEMENT

In their enthusiasm to enroll prospective Distributors, some

Immunotec wants to provide its Independent Distributors

Distributors are occasionally tempted to make income claims

with the best products, Compensation Plan, and service in the

or earnings representations to demonstrate the inherent

industry. Accordingly, we value your constructive criticism and

power of network marketing. This is counterproductive

comments. All such comments should be submitted in writing

because new Distributors may become disappointed very

to the Distributor Support Department. Remember, to best

quickly if their results are not as impressive or as rapid as the

serve you, we must hear from you! While Immunotec

results others have achieved. At Immunotec, we firmly believe

welcomes constructive input, negative comments and remarks

that the Immunotec income potential is great enough to be

made in the field by Distributors about the Company, its

highly attractive, without reporting the earnings of others.

products, or Compensation Plan serve no purpose other than to sour the enthusiasm of other Immunotec Distributors. For

Moreover, the U.S. Federal Trade Commission, Industry

this reason, and to set the proper example for their downline,

Canada and several states and provinces have laws or

Distributors must not disparage Immunotec, other Immunotec

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 Immunotec as well as the Distributor making the claim unless appropriate disclosures required by law are also made at the same time as the income claim or earnings representation. Because Immunotec Distributors do not have the data necessary to comply with the legal requirements for making income claims, a Distributor, when presenting or discussing the Immunotec opportunity or Compensation Plan to a prospective Distributor, may not make income projections, income claims, or disclose his or her Immunotec income (including the showing of checks, copies of checks, bank statements, or tax records). Hypothetical income examples that are used to explain the operation of the Compensation Plan, and which are based solely on mathematical projections, may be made to prospective distributors, so long as the Distributor who uses such hypothetical examples 1) makes clear to the prospective distributor(s) that such earnings are hypothetical; and 2) provides, within reasonable time, each prospective Distributor with a current copy of Immunotec’s official income disclosure statement.

Distributors, Immunotec’s products, the Compensation Plan, or Immunotec’s directors, officers, or employees. The disparagement of Immunotec, other Immunotec Distributors, Immunotec’s

products,

the

Compensation

Plan,

or

Immunotec’s directors, officers, or employees constitutes a material breach of these Policies and Procedures.

17

18

S E C T I O N

5. ADVERTISING Immunotec encourages Distributors to advertise and promote the company’s products and marketing opportunities. However, it is critically important that all Distributors comply with the advertising guidelines contained in these Policies and Procedures. Failure to comply could result in damage to the reputation and goodwill of Immunotec and its products and could result in possible legal action. In order to protect Immunotec and its Distributors, Immunotec reserves the right to suspend and/or terminate Distributors who are in violation of these advertising guidelines.

5.1 TRADEMARKS, LOGOS, NAMES AND COPYRIGHTS

provincial laws. Were Immunotec Distributors allowed to

Distributors may not use Immunotec trademarks, logos, name

develop their own sales aids and promotional materials (which

or trade names or any distinctive phrases used by Immunotec

includes Internet advertising), notwithstanding their integrity and

in its business except as stated in these Policies and

good intentions, the likelihood that they would unintentionally

Procedures. Distributors who make authorized use of

violate any number of statutes or regulations affecting an

Immunotec’s trademarks, logos, name or trade names must

Immunotec business is almost certain. These violations would

clearly indicate the term «Independent Distributor» and it

jeopardize the Immunotec opportunity for all Distributors.

must be placed directly under the logo or trademark used. The same guidelines apply to business supplies such as letterhead, envelopes, promotional items, etc. Distributors may not use Immunotec trademarks or names in the domain names of

Sales aids and support materials include but are not limited to: CD-ROMs, DVDs, product brochures, video tapes, audio tapes, reference books, health booklets and product catalogs. Distributors may generate advertising pieces such as those

Web site addresses or within an electronic address.

intended for the print media, (i.e. newspapers and magazines), Distributors may not produce for sale or distribution any

for broadcast on radio or television or for meetings, provided

recorded company events and speeches without written

they are submitted to and approved by Immunotec prior to their

permission from Immunotec nor may Distributors reproduce

use. In order to provide an answer when solicited to pre-approve

for sale or for personal use any recording of company-

a Distributor-generated advertising piece as more explicitly detailed hereinabove, Immunotec requires a minimum of three

produced audio or video tape presentations.

business days. Unless the Distributor receives specific written 5.2 LITERATURE, SALES AIDS, TELEVISION

approval to use said advertising piece, the request shall be

AND RADIO

deemed denied.

To promote both the products and the opportunity Immunotec offers, Distributors must use only the sales aids and support materials produced by Immunotec. The rationale behind this requirement is simple. Immunotec has carefully designed its products,

product

labels,

Compensation

Plan,

and

promotional materials to ensure that each aspect of Immunotec is fair, truthful, substantiated, and complies with the vast and complex legal requirements of federal, state, and

POLICIES AND PROCEDURES

5.3 INTERNET/WORLD WIDE WEB PAGES

any person with whom the Distributor has an established

Immunotec will provide all distributors with a customizable,

business or personal relationship. The term “established

replicated version of the corporate Web site upon enrolment.

business or personal relationship” means a prior or existing

Distributors may use their personal Web site as stipulated in

relationship formed by a voluntary two-way communication

the Terms of Use on the Web site. Distributors are prohibited

between a Distributor and a person, on the basis of: (a) an

from putting up or having direct or indirect interest in a Web

inquiry, application, purchase or transaction by the person

site that is independent from the Immunotec corporate site

regarding products offered by such Distributor; or (b) a

and that serves to promote or sell the Immunotec business,

personal or familial relationship, which relationship has not

products or opportunity. Any site in which a Distributor has

been previously terminated by either party.

an interest other than their personal Immunotec site, may not make reference to Immunotec trademarks, logos, names or

5.4 INQUIRIES FROM MEDIA

trade names or any distinctive phrases used by Immunotec in

In order to ensure accuracy and consistency in the

its business. Distributors may create a link to their personal

information given to members of the media, Distributors

Immunotec site from a compliant independent Web site and

receiving any inquiry regarding Immunotec, its products,

may redirect existing URLs to their Immunotec Internet

employees, or marketing programs must immediately refer the

address. Said personal compliant Web site which redirects

inquiring parties to Immunotec’s Head Office through our

users to an Immunotec Internet address must not promote any

Marketing Department. Personal appearances made by

other products and/or business opportunity, must not promote

Immunotec Distributors on television or radio to represent

any health-related benefits derived from any ingredients found

Immunotec products or services are prohibited without the prior

in any of Immunotec’s products nor may it contain or explain

written approval of Immunotec’s Marketing Department.

the benefits associated with the intake or use of any specific or combined ingredients found in any of Immunotec’s products.

5.5 TELEPHONE / TELEMARKETING Immunotec prohibits Distributors from answering or

The use of any other Web site or Web pages (including

identifying themselves on the telephone in any manner that

without limitation, auction sites such as “eBay”) to promote

would make callers believe they have reached the corporate

Immunotec products and/or the business opportunity is

offices of Immunotec. Distributors should therefore refrain

strictly forbidden and any breach of this provision shall

from using Immunotec’s name in answering the phone by

constitute a material breach of these Policies and Procedures.

saying ”Immunotec” or, “this is (name) with Immunotec”. This also applies to telephone listings and recorded messages.

Except as provided in this section, Distributors may not use

The approved telephone listing for all telephone publications

or transmit unsolicited faxes, mass e-mail distribution,

is “Immunotec Independent Distributor (name)”.

unsolicited e-mail, or “spamming” relative to the operation of their Immunotec businesses. The terms “unsolicited faxes”

Distributors must not engage in telemarketing relative to the

and “unsolicited e-mail” mean the transmission via telephone

operation of their Immunotec businesses.The term “telemarketing”

facsimile or electronic mail, respectively, of any material or

means the placing of one or more telephone calls to an

information advertising or promoting Immunotec, its

individual or entity to induce the purchase of an Immunotec

products, its Compensation Plan or any other aspect of the

product, or to recruit them for the Immunotec opportunity.

company which is transmitted to any person, except that these

“Cold calls” made to prospective Customers or Distributors

terms do not include a fax or e-mail: (a) to any person with

that promote either Immunotec’s products or the Immunotec

that person’s prior express invitation or permission; or (b) to

opportunity constitute telemarketing and are prohibited.

19

20

IMMUNOTEC BUSINESS GUIDE

Notwithstanding the foregoing, a Distributor may place

In addition, Distributors shall not use automatic telephone

telephone call(s) to a prospective Customer or Distributor (a

dialing systems relative to the operation of their Immunotec

“prospect”) under the following limited situations:

businesses. The term “automatic telephone dialing system” means equipment that has the capacity to: (a) store or

a) If the Distributor has an established business relationship with the prospect. An “established business relationship” is

produce telephone numbers to be called, using a random or sequential number generator; and (b) to dial such numbers.

a relationship between a Distributor and a prospect based on: 5.6 TRADE SHOWS AND FAIRS i. The prospect’s purchase, rental, or lease of goods or

Each Distributor is responsible for contacting the appropriate

services from the Distributor within the eighteen (18)

local authorities regarding any required sales licenses,

months immediately preceding the date of a telephone

permits or forms with regard to participation in an event such

call to induce the prospect’s purchase of a product or

as a trade show, fair, or exhibition (an “Event”). If a license,

services; or

permit or special form is required, a copy must be sent to

ii. A financial transaction between the prospect and the Distributor within the eighteen (18) months immediately preceding the date of such a call. b) The prospect’s personal inquiry or application regarding a product or service offered by the Distributor within the three (3) months immediately preceding the date of such a call.

Immunotec for its permanent records. You must receive prior permission from Immunotec before setting up an exhibit at any Event. Your request to attend a specific Event must be sent in writing to the Distributor Support Department. When permission is granted, it is granted for the specific Event only. Permission does not carry over to the same Event on another date or at another place. Immunotec grants permission for only one Distributor to

c) If the Distributor receives written and signed permission

display Immunotec products at each Event. If two

from the prospect authorizing the Distributor to call. The

Distributors apply for permission to represent Immunotec at

authorization must specify the telephone number(s) which

any given Event, preliminary permission will be granted to

the Distributor is authorized to call.

each Distributor. Final approval will be given to the first Distributor who provides Immunotec with a copy of the booth

d) Distributors may call family members, personal friends,

space contract showing proof of payment for such Event.

and acquaintances. An “acquaintance” is someone with whom a Distributor has at least a recent first-hand

Distributors are encouraged to cooperate with each other for

relationship (i.e., the Distributor recently personally met

such Events, but Immunotec remains the final authority on

him or her). Bear in mind, however, that if a Distributor

approval of attendance at Events where Immunotec products

makes a habit of “card collecting” from everyone he or she

are represented or displayed.

meets and subsequently calling them, the Federal Trade Commission or Canadian Competition Bureau may consider this a form of telemarketing that is not subject to this exemption. Thus, if Distributors engage in calling “acquaintances”, the Distributor must make such calls on an occasional basis only and not as a routine practice.

If an Independent Distributor wishes to take credit card payments for their retail sales, said Independent Distributor must obtain his or her own merchant account from a third party which offers said services.

POLICIES AND PROCEDURES

5.7 DISPLAYS OF PRODUCT

5.8 MEDICAL CLAIMS AND PRODUCT TESTIMONIALS

In an effort to promote the sales of Immunotec products

No claims as to the therapeutic and or curative properties or

through person-to-person commercialization and to maintain

health benefits of Immunotec products may be made except

a fair and level playing field, Immunotec products may not be

those approved by Immunotec in writing or as contained in

displayed in any retail outlet, including, but not limited to,

the official Immunotec literature, produced and distributed by

drugstores, pharmacies, supermarkets, retail stores, food

Immunotec. In particular, no Distributor may make any claim

stores, natural health product stores, shopping malls or

that Immunotec products are useful in the treatment or cure

restaurants. Instead, signs, brochures, and flyers may be

of any disease or disorder. Medical claims regarding

displayed, indicating that products are available.

Immunotec products are strictly prohibited. Distributors should recommend to any Customer who is currently under a physician’s care, or any medical treatment, to seek the advice of their physician before altering their nutritional regimen to include Immunotec products.

21

22

S E C T I O N

6. SALES REQUIREMENTS 6.1 MARKETS FOR DISTRIBUTORS

A minimum of seventy percent (70%) of a Distributor’s

Due to international regulations regarding ingredient labeling;

personal orders must be sold to his or her personal retail

licensing of product; legal and tax considerations; compliance

Customers. Distributors may not purchase additional product

with Customs; and tax and import laws, Immunotec must

until at least seventy percent (70%) of the previous order has

limit the resale of Immunotec products to Customers and

been sold to end-use consumers. By reordering, a Distributor

Distributors located in Canada and the United States.

certifies that he or she has complied with this policy.

Immunotec products or sales aids may not be shipped to or sold in any country other than the United States or Canada.

6.3 NO PRICE OR TERRITORY RESTRICTIONS Distributors are not required to sell Immunotec products at

Accordingly, Distributors are authorized to sell Immunotec

the suggested retail prices set by Immunotec on the

products and enroll Customers or Distributors only in the

Immunotec Price List. Distributors may sell Immunotec

countries of Canada and the United States. Immunotec

products at any price they choose. There are no exclusive

products or sales aids cannot be shipped into or sold in any

territories granted to anyone. No franchise fees are required.

foreign country. However, to protect the value of Immunotec’s products and to 6.2 PRODUCT SALES

prevent inventory loading, Independent Distributors may not

The Immunotec Compensation Plan is based upon the sale of

sell any or all of Immunotec’s products under the published

Immunotec products to end-use consumers. Distributors must

wholesale price.

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 ranks of achievement. The following sales requirements must be satisfied for Distributors to be eligible for commissions:

6.4 SALES RECEIPTS All Distributors must provide their retail Customers with two copies of an official Immunotec sales receipt at the time of the sale. These receipts set forth the Customer Satisfaction Guarantee for Immunotec products, as well as any consumer protection rights afforded by federal, provincial, or state law.

Distributors must satisfy the Personal Volume (PV), Personal

A written order or receipt shall be delivered to the Customer

Group Volume (PGV) and Total Organization Volume (TOV)

at the time of sale, which sets forth in language that is clear

requirements associated with their rank as specified in the

and free of ambiguity:

Immunotec Compensation Plan. “Personal Group Volume” includes purchases made by the Distributor and purchases made by the Distributor’s personally enrolled ImmunoDirect Customers. Organization Volume shall include the total Sales Volume of all Distributors in his or her marketing organization.

All the terms and conditions of sale, with specification of the total amount the Customer will be required to pay, including all interest, service charges and fees, and other costs and expenses as required by federal, provincial and state law;

POLICIES AND PROCEDURES

THE NAME AND ADDRESS OF THE SALESPERSON OR

Remember that Customers must receive two copies of the sales

THE MEMBER FIRM REPRESENTED.

receipt. In addition, Distributors who make “door-to-door”

Distributors must maintain all retail sales receipts for a period

sales must attach to the duplicate a statement of consumer

of two years and furnish them to Immunotec at the Company’s

cancellation rights and a cancellation form.

request. Records documenting the purchases of Distributors’ ImmunoDirect Customers will be maintained by Immunotec.

For the purposes of these Policies and Procedures, a “door-to-door” sale means a sale or contract for sale of

If a sale qualifies as a “door-to-door” sale, Distributors must

consumer goods or services with a purchase price of $25 or

ensure that the following information is contained on each

more, in which the buyer’s agreement or offer to purchase is

sales receipt:

made at a place other than the place of business of the seller (e.g., sales at the buyer’s residence or at facilities rented on a

(1) The date of the transaction and address where it is signed; (2) The date (not earlier than the tenth business day following the date each party is in possession of a duplicate of the receipt) by which the buyer may give notice of cancellation; and

temporary or short-term basis, such as hotel or motel rooms, convention centers, fairgrounds and restaurants, or sales at the buyer’s workplace). The phrase “consumer goods or services” is defined as “goods or services purchased, leased, or rented primarily for personal, family, or household purposes, including courses of instruction or training

(3) Name, address and telephone number, and where applicable,

regardless of the purpose for which they are taken.” Thus,

the electronic address and fax number of each establishment

whether a transaction involves “consumer goods or services”

of the itinerant merchant (the selling distributor);

will depend upon the ultimate purposes of the purchaser.

(4) Where applicable, the itinerant merchant’s permit number;

“DOOR-TO-DOOR” SALES DO NOT INCLUDE A TRANSACTION:

(5) Name, address and telephone number and, where applicable,

(1) Made pursuant to prior negotiations in the course of a

the electronic address and fax number of the Customer;

visit by the buyer to a retail business establishment having

(6) The description and quantity of the goods that are the object of the sale; (7) The cash price of each item of goods or services; (8) The amounts of all taxes chargeable under any federal or provincial act; (9) The total amount the Customer must pay for the goods sold; (10) Where applicable, the terms and conditions of payment; (11) The frequency and approximate dates of delivery of products.

a fixed permanent location where the products are exhibited for sale on a continuing basis; or (2) Conducted and consummated entirely by mail, email or telephone, and without any other contact between the buyer and the seller or its representative prior to delivery of the products or performance of the services.

23

24

IMMUNOTEC BUSINESS GUIDE

6.5 INVENTORY LOADING PROHIBITED

6.6 BONUS BUYING

Immunotec is a company built on the quality of its products

“Bonus buying” includes: (a) the enrolment of individuals or

and their use by consumers. Immunotec does not require

entities without the knowledge of and/or execution of an

Distributors to maintain an inventory of products.

Application and Agreement by such individuals or entities; (b) the fraudulent enrolment of an individual or entity as a

Inventory loading is strictly prohibited. Distributors are not

Distributor or Customer; (c) the enrolment or attempted

permitted to purchase products in quantities in excess of that

enrolment of non-existent individuals or entities as

necessary for their personal use, retail sales and to service the

Distributors or Customers (“phantoms”); or (d) the use of a

needs of downline Distributors. Distributors are prohibited

credit card by or on behalf of a Distributor or Customer when

from requiring or encouraging new Distributors to purchase

the Distributor or Customer is not the account holder of such

excess products for the sole purpose of qualification. In order

credit card. Bonus buying constitutes a material breach of

to ensure that inventory loading does not occur, each

these Policies and Procedures, and is strictly and absolutely

Distributor wishing to receive commissions under the

prohibited.

Immunotec Compensation Plan must certify that at least seventy percent (70%) of products previously purchased have

6.7 STACKING

been sold to or consumed by end users, and keep accurate

The term “stacking” includes: (a) the failure to transmit to

records of monthly sales to specific consumers. These records

Immunotec, or the holding of an Application and Agreement

will be subject to inspection by Immunotec upon reasonable

in excess of two business days after its execution; (b) the

notice. Each order placed by a Distributor constitutes the

placement or manipulation of Applications and Agreements

Distributor’s reaffirmation to Immunotec of the foregoing.

for the purpose of maximizing compensation pursuant to Immunotec’s Compensation Plan; or (c) providing financial

Immunotec will apply its buy-back policy on rescission or

assistance to new Distributors for the purpose of maximizing

termination by the Distributor of his or her Distributorship,

compensation pursuant to Immunotec’s Compensation Plan.

but Immunotec will not repurchase products or issue refunds

Stacking constitutes a material breach of these Policies and

for products certified as having been consumed or sold.

Procedures, and is strictly and absolutely prohibited.

Falsely representing the amount of product sold or consumed in order to advance in the Immunotec Compensation Plan shall be grounds for the suspension and/or termination of the Distributorship. Immunotec discourages any Distributor from encouraging other Distributors to circumvent the inventory loading prohibition. Immunotec will charge back to a terminating Distributor’s upline any commission rebates or bonuses paid on unauthorized product returned from a terminated Distributor.

POLICIES AND PROCEDURES

S E C T I O N

7. COMMISSIONS 7.1 BONUS AND COMMISSION QUALIFICATIONS

7.2.2

A Distributor must be active and in compliance with the

Immunotec will deduct from all bonus and commission checks

OTHER DEDUCTIONS

Agreement to qualify for any and all bonuses and

a data processing fee for downline genealogy reports sent to

commissions. Immunotec shall pay commissions, on a monthly

Distributors.The minimum fee is $3.00 for a five-page report. A

basis to compliant Distributors in accordance with the

fee of $0.10 per additional page will be charged for larger reports.

Compensation Plan. A commission period is equivalent to (1) calendar month (i.e. January 1st to January 31st). It is the sole responsibility of the Distributor to qualify within every commission period. Immunotec must receive payment in full for any qualifying orders by the end of the commission period. Commissions will not be paid on unpaid orders; nor will unpaid orders count for any qualification. Unpaid orders may be rolled over into the next Commission period. Qualifying points for an order will be assigned on the date the payment is received, not the date the order is placed. The minimum amount for which Immunotec will issue a check is $5.00. If a Distributor’s bonuses and commissions do not equal or exceed $5.00, the Company will accrue the commissions and bonuses until they total $5.00 and will issue a check at that time. 7.2 ADJUSTMENTS TO BONUSES AND COMMISSIONS 7.2.1

ADJUSTMENTS FOR RETURNED PRODUCTS

7.2.3

UNCLAIMED COMMISSIONS AND CREDITS

Distributors must deposit or cash commission and bonus checks within six months from their date of issuance. A check that remains uncashed after six months will be void. After a check has been voided, Immunotec will attempt to notify a Distributor who has an uncashed check by sending a monthly written notice to his or her last known address identifying the amount of the check and advising that the Distributor can request that the check be reissued. There shall be a $15.00 fee for reissuing a check, and a $10.00 fee for each notice that is sent to the Distributor.These charges shall be deducted from the balance owed to the Distributor. Customers or Distributors who have a credit on account must use their credit within six months from the date on which the credit was issued. If credits have not been used within six months, Immunotec shall attempt to notify the Distributor or Customer

Distributors receive bonuses and commissions based on the

on a monthly basis for the following three months, by sending

actual sales of products to end consumers. When a product is

written notice to the last known address, advising the Distributor

returned to Immunotec for a refund or is repurchased by the

or Customer of the credit. There shall be a $10.00 charge for

Company, the bonuses and commissions attributable to the

each attempted notification. This charge shall be deducted

returned or repurchased product(s) will be deducted from the

from the Distributor’s or Customer’s credit on account.

Distributors who received bonuses or commissions on the sales of the refunded products, in the month in which the

Following three unsuccessful attempts at notification, Immunotec will cancel the credit.

refund is given, and continuing every pay period thereafter until the commission is recovered. In the event that any such

7.3 ERRORS OR QUESTIONS

Distributor terminates his or her distributorship, and the

If a Distributor has questions about or believes any errors have

amounts of the bonuses or commissions attributable to the

been made regarding commissions, bonuses, Downline Activity

returned products have not yet been fully recovered by the

Reports, or charges, the Distributor must notify Immunotec

Company, the remainder of the outstanding balance may be

in writing within 60 days of the date of the purported error or

set off against any amounts owed to the terminated

incident in question. Immunotec will not be responsible for

Distributor pursuant to Section 13.5.

any errors, omissions or problems not reported within 60 days.

25

26

S E C T I O N

8. ORDERING 8.1 IMMUNODIRECT CUSTOMERS

8.4 SHIPPING AND BACK-ORDER POLICIES

Distributors are encouraged to promote Immunotec’s

Immunotec will normally ship products within two (2)

ImmunoDirect Program to retail Customers.The ImmunoDirect

business days from the date on which an order is received.

Program allows a retail Customer to purchase his or her

Immunotec will expeditiously ship any part of an order

products directly from Immunotec and to sign up to have a

currently in stock. If, however, an ordered item is out-of-stock,

pre-selected package of Immunotec products delivered to his

it will be placed on back-order and sent when Immunotec

or her home automatically each month. Not only does this

receives additional inventory. Distributors will be charged and

make purchasing simpler, it also allows the Customer to take

given Personal Volume on back-ordered items unless notified

advantage of the discounted ImmunoDirect Customer prices.

on the invoice that the product has been discontinued. Immunotec will notify Distributors and Customers if items

8.2 PURCHASING IMMUNOTEC PRODUCTS

are back-ordered and are not expected to ship within 30 days

Each Distributor should purchase his or her products directly

from the date of the order. An estimated shipping date will

from Immunotec. If a Distributor purchases products from

also be provided. Back-ordered items may be cancelled upon a

another Distributor or any other source, the purchasing

Customer’s or Distributor’s request. Customers and

Distributor will not receive the personal volume that is

Distributors may request a refund, credit on account, or

associated with that purchase.

replacement merchandise for cancelled back-orders. If a

8.3 GENERAL ORDERING POLICIES On mail orders with invalid or incorrect payment, Immunotec will attempt to contact the Distributor by phone, and/or mail

refund is requested, the Distributor’s Personal Volume will be decreased by the amount of the refund in the month in which the refund is issued.

to try to obtain another form of payment. If these attempts

8.5 CONFIRMATION OF ORDER

are unsuccessful after the Commission period has expired, the

A Distributor and/or recipient of an order must confirm that

order will be cancelled. No C.O.D. orders will be accepted.

the product received matches the product listed on the

Immunotec maintains no minimum order requirements.

shipping invoice, and is free of damage. Failure to notify

Orders for products and sales aids may be combined.

Immunotec of any shipping discrepancy or damage within thirty days of shipment will nullify a Distributor’s right to request a correction.

POLICIES AND PROCEDURES

S E C T I O N

9. PAYMENTS 9.1 SUFFICIENT FUNDS

9.2 RETURNED CHECKS

It is the responsibility of each Distributor to ensure that there

Checks returned by a Distributor’s bank for insufficient funds

are sufficient funds or credit available in his or her bank

will not be re-submitted for payment. A $25.00 returned

account to cover his monthly Autoship order or any order

check fee will be charged to the account of the Distributor.

placed via the telephone, fax or Web site. Distributors are also

After receiving a returned check from a Customer or a

responsible to provide Immunotec with changes to their credit

Distributor, all future orders must be paid by credit card or

card information (such as expiration date or credit card

money order. Any outstanding balance owed to Immunotec by

number) five days before a shipment is to be sent. Immunotec

a Distributor for NSF checks and returned check fees will be

does not have the obligation to contact Distributors in regard

withheld from subsequent bonus and commission checks.

to orders cancelled due to insufficient funds or credit. This may result in a Distributor’s failure to meet his or her

In the event commissions have been paid based on the order

Personal Volume requirements for the month. Distributors

for which a check was refused for insufficient funds,

must inform their Customers that should a lack of funds

Immunotec will deduct from the following commission period

result in no product purchases during a commission period,

said commissions.

they will lose their 40% discount.

27

28

S E C T I O N

S E C T I O N

S E C T I O N

10. 11. 12. SECTION 10. GOVERNMENTAL APPROVAL OR ENDORSEMENT Neither federal, provincial, 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 Immunotec or its Compensation Plan have been “approved,”“endorsed” or otherwise sanctioned by any government agency. SECTION 11. LABELING, PACKAGING OR TAMPERING WITH PRODUCTS Distributors must not alter, tamper with, or repackage any of the Immunotec products, sales aids or materials. Distributors who notice any alteration, tampering or repackaging of products should notify Immunotec immediately. Such relabeling or repackaging could violate federal, provincial, and state laws, which could result in severe criminal penalties. Civil liability can arise when, as a consequence of the repackaging or relabeling of products, the persons using the products suffer any type of injury or their property is damaged. SECTION 12. INSURANCE Immunotec carries appropriate product liability insurance as protection against claims arising from possible defects in its products. This coverage does not apply if the Distributor makes unauthorized representations or claims or if any alteration, tampering, repackaging or modification of the products has occurred. Also, this coverage does not protect the Distributor against risk that his or her inventory may be damaged or stolen after receipt. Each Distributor should consult an insurance professional to obtain proper product liability and general liability insurance, generally referred to as “Business pursuit coverage” to meet his or her individual needs. Immunotec may periodically increase the amounts and types of coverage required under the terms of this Agreement to reflect inflation, identification of new risks, changes in law or standards of liability, higher damage awards or other relevant changes in circumstances. The Distributor’s insurance policies must be primary and non-contributory to any similar policies maintained by Immunotec. Each policy must give Immunotec thirty (30) days prior written notice of cancellation, nonrenewal and/or material modification. A certificate of insurance documenting the required coverage shall be sent to Immunotec Distributor Support Department annually.

POLICIES AND PROCEDURES

S E C T I O N

13. SATISFACTION GUARANTEE AND RETURN POLICY All product sales made by Immunotec Distributors to Customers are backed by a 30-day money back guarantee.

13.1

IMMUNODIRECT CUSTOMER RETURN POLICY

13.3

RETURN OF PRODUCTS

Immunotec offers a total Customer satisfaction guarantee.

Before any product(s) or marketing materials can be returned

ImmunoDirect Customers who are not completely satisfied

to Immunotec, a Return Authorization Number (“RA

with the product(s) they have purchased can return all unused

Number”) is required. To obtain the RA Number, the

and unopened merchandise within thirty days from the

Distributor must contact Immunotec’s Distributor Support

original date of purchase, for a complete refund, less any

Department and provide the sales order(s), and lot number(s)

shipping costs. Products that are returned in saleable

for all products and marketing materials being returned. Each

condition after thirty days from the date of purchase will be

item that is being returned to Immunotec must include a

refunded at ninety percent of the original purchase price less

clearly visible RA Number. Items that are returned to

any purchase costs (unless otherwise required by state or

Immunotec without a clearly visible RA Number will be

provincial law). Products that are being returned to

refused. Any costs incurred will be the responsibility of the

Immunotec must be marked with a clearly visible Return

Distributor.

Authorization (RA) number (See Return of Products Section 13.3). ImmunoDirect Customers who return product(s) must cancel their account by faxing or mailing a signed letter of cancellation to the Distributor Support Department.

The Distributor will receive a refund once Immunotec has received the product(s) or marketing material and has verified their condition. All credits will be made by the same method of payment as was used for the original order.

13.2

RETAIL CUSTOMERS

Immunotec offers, through its Distributors, a 100%, 30-day money-back guarantee to all retail Customers. Every Distributor is bound to honor the retail Customer guarantee. If, for any reason, a retail Customer is dissatisfied with any Immunotec product, the retail Customer may return the unused portion of the product to the Distributor from whom it was purchased, within thirty (30) days, for a replacement, exchange or a full refund of the purchase price excluding shipping costs.

13.3.1 RETURN OF PRODUCTS (PRODUCTS PURCHASED FOR PERSONAL CONSUMPTION) If a Distributor is not satisfied with any Immunotec product purchased for personal use, the Company offers a 100%, 10day money-back guarantee (less shipping) on their initial purchase.

29

30

IMMUNOTEC BUSINESS GUIDE

13.3.2 RETURNS BY DISTRIBUTORS (PRODUCT

If the purchases were made with a credit card, the refund will

RETURNED BY PERSONAL RETAIL CUSTOMERS)

be credited back to the same account. The company shall

Immunotec will replace products returned to Distributors by

deduct from the reimbursement paid to the Distributor any

retail Customers on the condition that the Distributor signs

commissions, bonuses, rebates or other incentives received by

and completes the Customer Refund Application form (IRL-

the Distributor which were associated with the merchandise

4) in its entirety, and returns it to Immunotec. This form must

that was returned. Immunotec will not buy-back products

include a copy of the retail receipt, along with the section of

pursuant to this policy that have been previously certified as

the product(s) packaging bearing the lot number(s).

having been re-sold by the Distributor returning products.

Retail Customers have thirty days to return product(s) to

Refunds will be issued within fifteen (15) business days of the

their Distributor for a full refund. Distributors have thirty

date of return and acceptance by Immunotec.

days to request product replacement from Immunotec. Replacement products will not be sent to Distributors who have not met all the conditions for replacement product as listed on the IRL-4 form.

13.4.1 MONTANA RESIDENTS A Montana resident may cancel his or her Distributor Agreement within 15 days from the date of enrolment, and may return his or her starter kit for a full refund within such

13.4

RETURNS OF INVENTORY AND SALES AIDS

time period.

BY DISTRIBUTORS Upon cancellation of a Distributor’s Agreement following Section 14.6, the Distributor may return inventory and sales aids for a refund within one year from the original date of purchase if he or she is unable to sell or use the merchandise. A Distributor may only return products and sales aids purchased by him or her that are in saleable condition. Shipping costs will be incurred by Immunotec. Upon receipt of the saleable products and sales aids, the Distributor will be reimbursed 90% of the net cost of the original purchase price(s). Products are considered saleable if they are unused, unopened and have not passed the expiration date. Any products or marketing materials that are not considered to be in saleable condition will not be accepted for a refund and Immunotec will notify the Independent Distributor of such non-acceptance. The Distributor will then have the option of having the product(s) or marketing materials returned to them, at their own cost. Should the Distributor not notify Immunotec in writing that he or she wishes to have the products or marketing materials returned to him or her within ten days of Immunotec’s notice of non-acceptance, Immunotec will dispose of the products without any liability or compensation to the Distributor.

13.5

COMMISSION AND BONUS REVERSALS

Orders that are returned to Immunotec for refund are subject to commission and bonus reversals. All commissions and bonuses that have been paid out to the Distributor and his or her upline Distributors will be deducted from the appropriate Distributor and/or upline Distributor’s commissions owing.

POLICIES AND PROCEDURES

S E C T I O N

14. ADHERENCE TO POLICIES AND PROCEDURES, INACTIVITY AND CANCELLATION Immunotec Distributors shall monitor the activities of their downline Distributors to help ensure that the Policies and Procedures are being adhered to. A distributor must promptly and accurately report any possible violations to the Immunotec Distributor Support Department. Details of the incidents or violation such as dates, number of occurrences, persons involved, and any supporting documentation should be included in the report.

14.1

VIOLATIONS OF POLICIES AND PROCEDURES

Within ten (10) days of receipt of a suspension notice, a

Immunotec reserves the right to take quick and decisive

Distributor must provide Immunotec with a detailed

action in supervising and enforcing the Policies and

explanation of the incident, for investigative purposes. The

Procedures. Any Distributor who is found to be in violation of

Distributor may be asked to divulge his or her future intent

any of the Policies and Procedures or any other rules,

with respect to his or her Immunotec distributorship.

regulations and procedures instituted by Immunotec is subject to the disciplinary actions outlined in these Policies and Procedures. The offending Distributor may also be subject to legal action including, but not limited to, punitive damages and injunctive proceedings. 14.2

DISCIPLINARY ACTIONS

If substantiated, violations of Immunotec Policies and Procedures will be documented and added to a Distributor’s file. Depending on the severity of the violation, disciplinary actions may include, but are not limited to, suspension and subsequent termination of the Distributor’s distribution rights. 14.3

SUSPENSION

If a Distributor is suspended because of a suspected violation of the Policies and Procedures or other misconduct, the Distributor will lose all rights to any commissions, bonuses and payouts during the period in which the suspension applies. That Distributor will also be prohibited from purchasing or selling any of the Immunotec products or sales aids. Immunotec reserves the right, at its sole discretion, to determine the length of the suspension. A Distributor that repeats a violation or has more than two suspensions will automatically be terminated as a Distributor and lose all rights to his or her downline and commissions and bonuses.

Failure to properly reply with a substantiated response within said timeframe may lead to the Permanent Termination of the distributorship. In case of multiple ownerships, failure to comply with this Section will lead to the termination of all distributorships. 14.4

PERMANENT TERMINATION

If a violation is found to be serious enough to warrant termination, Immunotec reserves the right to pursue all legal recourses against the Distributor. When a decision is made to terminate a Distributorship, Immunotec will send notice via the most efficient, reasonable method. A Distributor that is terminated for violation of the Policies and Procedures shall be liable to indemnify and compensate Immunotec for any other damages resulting to Immunotec from such conduct. Once notice has been given, the Distributor agrees to cease representing himself as an Immunotec Distributor and to cease operation of his or her distributorship. Termination imposed upon a distributorship will automatically be applied to all other distributorships owned under the multiple ownership exemption. If a Distributor wishes to appeal the termination(s), Immunotec must receive written notice within fourteen (14) days of the date of the Distributor’s receipt of the termination notice. If the appeal is not received within the

31

32

IMMUNOTEC BUSINESS GUIDE

fourteen (14) day period, the termination will automatically

In the case where the resigning Distributor is on the Autoship

be deemed final. If an appeal is received within the

Program, The Distributor’s Autoship Program will be

aforementioned delay, Immunotec will review and reconsider

transferred into an ImmunoDirect Customer Agreement and

the termination, consider any other appropriate action, and

will continue in force unless the Distributor specifically

notify the Distributor of its decision. The decision of

indicates within the letter of resignation that he or she also

Immunotec will be final and subject to no further review. Once

wishes to terminate said ImmunoDirect Customer Agreement.

a Distributorship is terminated, the Distributor will immediately cease using any reference to Immunotec

14.7

including telephone listings, replicated Internet Web sites, stationery and any advertising materials.

CANCELLATION FOLLOWING A FAILURE TO RENEW

A Distributor whose file becomes inactive through a failure to renew his or her Distributorship will keep their downline and

14.5

NOTICE

title status but will no longer be able to place orders, qualify

All notices regarding disciplinary action as outlined in these

for commissions, or earn commissions. A file that is inactive

Policies and Procedures, shall be deemed properly delivered

for more than 60 days due to a failure to renew will be

by depositing the notice in the mail, addressed to the name of

terminated and the Distributor will lose all rights and

the Distributor, and sent to the last address recorded with

privileges accorded to that Distributorship.

Immunotec. Immunotec may also arrange for delivery by courier or messenger service, or send the notice via facsimile transmission or e-mail followed by a confirmation copy sent

14.8

CANCELLATION DUE TO INACTIVITY

It is the Distributor’s responsibility to lead his or her marketing organization with the proper example in personal

by mail.

production of sales to end-use consumers. Failure to do so 14.6

VOLUNTARY RESIGNATION

could result in the loss of his or her right to receive

Distributors who wish to terminate their Distributorship may

commissions from sales generated through his or her

do so at all times, regardless of their reason, provided that

marketing

they send a signed written notice explaining the reason(s) why

personally produce less than 180 points of personal sales

the Distributor wishes to terminate his or her distributorship

volume for any pay period will not receive a commission for

to Immunotec’s Distributor Support Department by

the sales generated through their marketing organization for

registered mail, messenger service or facsimile transmission.

that pay period. If a Distributor has not fulfilled his or her

The Distributor is also required to indicate the quantity, sales

personal sales requirements for a period of three consecutive

order number and Return Authorization (RA) number for

calendar months or does not accumulate a minimum of 1000

each item that the Distributor wishes to return to Immunotec

points of Personal Volume for any 12 month period (and thus

(see section 13.5) If the secondary applicant also wishes to

become “inactive”), his or her Distributor Agreement shall be

terminate their Distributorship, he/she is also required to sign

cancelled due to inactivity. The cancellation will become

the termination notice, and must indicate that the Distributor

effective on the day following the last day of the third month

is also terminating his or her Distributorship with Immunotec.

of inactivity. Written confirmation of the cancellation will not

organization. Therefore,

be provided by Immunotec.

Distributors

who

POLICIES AND PROCEDURES

14.9

RECLASSIFICATION FOLLOWING

cancellation, Distributors agree to waive all rights they may

CANCELLATION DUE TO INACTIVITY

have, including but not limited to, property rights, to their

If a Distributor’s Agreement is cancelled for inactivity, the

former

downline

organization

and

to

any

bonuses,

Distributor will be reclassified as an ImmunoDirect Customer

commissions, or other remuneration derived from the sales and

and shall be entitled to purchase products at ImmunoDirect

other activities from his or her former downline organization.

Customer prices. If the former Distributor was on an Autoship program, his or her Autoship orders shall continue to be sent on a monthly basis under the ImmunoDirect program. Notice of the change in status will be sent in the next product order, via regular mail. If the former Distributor wishes to again become a Distributor, he or she must submit written notice to the Company that he or she wishes to reinstate his or her Distributor rights. Such notice must be submitted to the Company no later than three consecutive calendar months following the cancellation date. An individual that is reinstated as a Distributor need not purchase a new starter kit. 14.10 EFFECT OF CANCELLATION As long as a Distributor remains active and complies with the terms of the Distributor Agreement and these Policies and Procedures, Immunotec shall pay commissions to him or her in accordance with the Compensation Plan. A Distributor’s bonuses and commissions constitute the entire consideration for the Distributor’s efforts in generating sales and all activities related to generating sales (including building a downline organization). Following a Distributor’s non-renewal of his or her Distributor Agreement, cancellation for inactivity, or voluntary or involuntary cancellation of his or her Distributor Agreement (all of these methods are collectively referred to as a “cancellation”), the former Distributor 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. A Distributor whose business is cancelled will permanently lose all rights as a Distributor. This includes the right to sell Immunotec products and services and the right to receive future commissions, bonuses, or other income resulting from sales and other activities of the Distributor’s former downline sales organization. In the event of

The former Distributor shall not represent him or herself out as an Immunotec Distributor and shall not have the right to sell Immunotec products or services. A Distributor whose Distributor Agreement is cancelled 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). 14.11 ROLL-UP OF MARKETING ORGANIZATION When a vacancy occurs in a Marketing Organization due to the termination of an Immunotec business, each Distributor in the first level immediately below the terminated Distributor on the date of the cancellation will be moved to the first level (“front line”) of the terminated Distributor’s sponsor. For example, if A sponsors B, and B sponsors C1, C2, and C3, should B terminate his or her business, C1, C2, and C3 will “roll-up” to A and become part of A’s first level.

33

2 | IMMUNOTEC SUCCESS GUIDE

PRINTED IN CANADA 052007 0000535