Erom Healthcare USA™
Policies & Procedures

1. The Agreement.

These Policies & Procedures govern the relationship between you, as an Independent Erom Healthcare USA Distributor, and Erom, Inc. d/b/a Erom Healthcare USA (hereafter “Erom Healthcare USA” or the “Company”). These Policies & Procedures, together with the Terms & Conditions of the Erom Healthcare USA Distributor Agreement, the Erom Healthcare USA Compensation Plan, and the Erom Healthcare USA Business Entity Addendum (the Business Entity Addendum is only applicable to Distributors who enroll as a business entity) make up the Agreement between you and Erom Healthcare USA. Therefore, as used in this document, the term “Agreement” collectively refers to these Policies & Procedures, the Terms & Conditions of the Erom Healthcare USA Distributor Agreement, the Erom Healthcare USA Compensation Plan, and the Erom Healthcare USA Business Entity Addendum, in their current form and as may be amended in the future at the Company’s discretion. Independent Distributors shall be referred to herein as “Distributors.” Any promises, representations, offers, or other communications not expressly set forth in the Agreement are of no force or effect.

2. Independent Contractor Status.

Distributors are independent contractors and not employees, partners, legal representatives, or franchisees of Erom Healthcare USA. Distributors are solely responsible for paying all expenses they incur, including but not limited to travel, food, lodging, secretarial, office, long-distance telephone and other business expenses. DISTRIBUTORS SHALL NOT BE TREATED AS AN Erom Healthcare USA EMPLOYEE FOR FEDERAL OR STATE TAX PURPOSES. Erom Healthcare USA is not responsible for withholding and shall not withhold or deduct FICA, or taxes of any kind from Distributors’ compensation. Distributors are not entitled to workers’ compensation or unemployment security benefits of any kind from Erom Healthcare USA.

In all written, graphic, or digital material used for Erom Healthcare USA business purposes, Distributors must represent themselves as a “Erom Healthcare USA™ Independent Distributor.” In verbal conversations with prospective Distributors and Members, Distributors must introduce themselves as an “independent Erom Healthcare USA Distributor.” Distributors shall not lead anyone to believe that they are employees of Erom Healthcare USA.

3. Income Taxes.

As an independent contractor, you are responsible for paying local, state, and federal taxes on any income generated as an Erom Healthcare USA Distributor. Every year, Erom Healthcare USA will provide an IRS Form 1099 MISC (Non-employee Compensation) earnings statement to each U.S. resident who: 1) Had earnings of over $600 in the previous calendar year; or 2) Made purchases during the previous calendar year in excess of $5,000. To facilitate this reporting, you must provide Erom Healthcare USA with your Social Security Number, Employer Identification Number, or Taxpayer Identification Number as appropriate.

4. W-9 Form Required.

Your Status as an Erom Healthcare USA Distributor is temporary. You must submit a properly completed IRS Form W-9 to Erom Healthcare USA within 60 days from the end of the first earning period during which you have earned income or bonuses. Failure to submit a W-9 when required will result in the cancellation of your Erom Healthcare USA business. You will have 60 days from such date to submit your properly completed W-9 to Erom Healthcare USA by uploading an image of your properly completed W-9 via the Distributor Back Office (“My Office”) or by sending a scan of the properly completed W-9 to Admin@eromplus-usa.com. If you do not submit your W-9 within such time, the Agreement (and your Erom Healthcare USA) business will be cancelled.

5. Adherence to the Agreement.

Distributors must comply with the Agreement. If you have not yet reviewed the Policies & Procedures at the time you execute this Agreement, they are posted in your Distributor Back-Office (referred to as “My Office”). You must review the Policies & Procedures within five days from the date on which you execute this Agreement. If you do not agree to the Policies & Procedures, your sole recourse is to notify the Company and cancel the Agreement. Failure to cancel constitutes your acceptance of the Policies & Procedures. You must be in good standing, and not in violation of the Agreement, to be eligible for bonuses or commissions from Erom Healthcare USA.

6. Amendments to the Agreement.

The Company reserves the right to amend the Agreement at its discretion. Amendments shall be effective 30 days after notice and publication of the amended provisions in each Distributor’s My Office, but amendments shall not apply retroactively to conduct that occurred prior to the effective date of the amendment. If you do not agree to any amendments, your sole recourse is to cancel the Agreement. The continuation of a Distributor’s Erom Healthcare USA business, the acceptance of any benefits under the Agreement, the acceptance of bonuses or commissions, or the continued use of or access to the Distributor’s My Office constitutes acceptance of all amendments.

7. No Purchase or Payment Required.

No purchase, payment, or investment is necessary to become a Distributor. Distributors are not required to purchase Erom Healthcare USA products or sales tools, or to pay any fees in order to participate in the Erom Healthcare USA network marketing program.

8. Distributors’ Rights.

Distributors:

• • Have the right to sell, and solicit orders for, Erom Healthcare USA products in accordance with these Policies & Procedures. It is within the exclusive right of Erom Healthcare USA to accept or reject orders submitted by Distributors.
• • Have the right to enroll others as Erom Healthcare USA Members or Distributors.
• • If qualified, have the right to earn commissions and bonuses pursuant to the Erom Healthcare USA Compensation Plan.

9. Assignment of Rights and Delegation of Duties.

Distributors may not assign any rights under the Agreement without the prior written consent of Erom Healthcare USA. Any attempt to transfer or assign the Agreement without the express written consent of Erom Healthcare USA renders the Agreement voidable at the option of Erom Healthcare USA and may result in termination of the Agreement.

If the assets of Erom Healthcare USA, or a controlling ownership interest in Erom Healthcare USA, is transferred to a third party, Erom Healthcare USA may assign its rights and delegate its duties and obligations under the Agreement to such third party as part of the sale or transfer.

10. Waiver.

Any waiver by either Party of any breach of the Agreement must be in writing and signed by an authorized agent of the Party against which the waiver is asserted. Any waiver of a breach by a Party shall be a one-time waiver only and shall not operate or be construed as a waiver of any subsequent breach.

11. Waiver of Right of Publicity.

Distributors grant Erom Healthcare USA an irrevocable license to reproduce and use their name, photograph, video, personal story, testimonial, and/or likeness in its advertising or promotional materials, including but not limited to use in online forums. Distributors waive all claims for remuneration for such use and all rights to inspect or approve all draft, beta, preliminary, and finished material.

12. Minimum Age.

Persons under age 18 may not be Distributors and no Distributor shall knowingly recruit or sponsor, or attempt to recruit or sponsor, any person under age 18.

13. Severability.

If any provision of the Agreement, in its current form or as amended, is held void or unenforceable, only the void or unenforceable portion(s) of the provision shall be severed from the Agreement and the remaining provisions shall remain in effect. The severed provision shall be reformed so that it is in compliance with the law and reflects the purpose of the original provision as closely as possible. The existence of any claim or cause of action of a Distributor against Erom Healthcare USA shall not constitute a defense to Erom Healthcare USA’s enforcement of any term or provision of the Agreement.

14. Term and Renewal of the Agreement.

The term of the Agreement is one year from the date of enrollment. Unless previously terminated as provided in the Agreement, the Agreement shall automatically renew for subsequent one-year terms on each anniversary of the Agreement. A Distributor may cancel the Agreement at any time and for any reason. Erom Healthcare USA reserves the right to elect not to renew a Distributor’s Agreement at its option upon 30 days’ prior written notice.

A participant in this multilevel marketing program has a right to cancel at any time, regardless of reason. Cancellation must be submitted in writing to the company at its principal business address or via the Distributor’s My Office.

Erom Healthcare USA reserves the right to terminate all Distributor Agreements upon 30 days’ notice if the Company elects to: (1) cease business operations; (2) dissolve as a business entity; or (3) terminate distribution of its products and/or services via direct selling channels.

15. General Conduct.

Distributors shall safeguard and promote the good reputation of Erom Healthcare USA and its products, and must avoid all illegal, deceptive, misleading, unethical, or immoral conduct or practices. Distributors agree that they shall exhibit high moral character in their personal and professional conduct. Distributors shall not engage in any conduct that may damage the Company’s goodwill or reputation. While it is impossible to specify all misconduct that would be contrary to this provision, and the following list is not a limitation on the standards of conduct to which Distributors must adhere pursuant to this section, the following standards specifically apply to Distributors’ activities:

• • Deceptive conduct is always prohibited. Distributors must ensure that their statements are truthful, fair, accurate, and are not misleading.
• • If the Agreement is cancelled for any reason, the Distributor must discontinue using the Erom Healthcare USA name, and all other Erom Healthcare USA intellectual property, and all derivatives of such intellectual property, in postings on all Social Media, websites, or other promotional material.
• • Distributors may not represent or imply that any state or federal government official, agency, or body has approved or endorses Erom Healthcare USA, its program, or products.
• • Distributors must not engage in any illegal, fraudulent, deceptive, or manipulative conduct in their business or their personal lives that, in the Company’s sole discretion, could damage the Company’s reputation or the culture that exists within the field sales force.

16. Social Media.

In addition to meeting all other requirements specified in these Policies & Procedures, should a Distributor utilize any form of social media in connection with her Erom Healthcare USA business, including but not limited to blogs, Facebook, Twitter, Instagram, LinkedIn, YouTube, or Pinterest, the Distributor agrees to each of the following:

• • Distributors are responsible for the content of all material that they produce and all of their postings on any social media site, as well as all postings on any social media account that they own, operate, or control.
• • Distributors agree that they shall not make any product claims, weight loss testimonials, income claims (including lifestyle claims), or compensation plan claims in any social media posting unless such claims are in compliance with the provisions of Sections 24, 25, 26, and 27 as applicable.
• • Distributors shall not make any social media postings, or link to or from any postings or other material that is sexually explicit, obscene, pornographic, offensive, profane, hateful, threatening, harmful, defamatory, libelous, harassing, or discriminatory (whether based on race, ethnicity, national origin, creed, religion, gender, gender identity, sexual orientation, physical or mental disability, or otherwise), is graphically violent, is solicitous of any unlawful behavior, that engages in personal attacks on any individual, group, or entity, or is in violation of any intellectual property rights of the Company or any third party.
• • No product sales or enrollments may occur on or through any social media site. To process sales or enrollments, a social media posting must link only to Erom Healthcare USA’s corporate website or an official Erom Healthcare USA corporate social media page.
• • It is each Distributor’s responsibility to follow the social media site’s terms of use.
• • Any social media account that is directly or indirectly operated or controlled by a Distributor that is used to discuss or promote Erom Healthcare USA’s products or the Erom Healthcare USA opportunity may not contain any posts that promote the products, services, or business program of any direct selling company other than Erom Healthcare USA. Nor may any such social media account link to any website or social media page or account that promotes the products, services, or business program of any direct selling company other than Erom Healthcare USA.
• • During the term of this Agreement and for a period of 12 calendar months thereafter, a Distributor may not use any social media account on which they discuss or promote, or have discussed or promoted, the Erom Healthcare USA business or Erom Healthcare USA’s products to directly or indirectly solicit anyone for another direct selling or network marketing program (collectively, “direct selling”). Violation of this provision shall constitute a violation of the nonsolicitation provision in Section 29.
• • During the term of the Agreement and for 12 calendar months after the cancellation of a Distributor’s business for any reason, a Distributor shall not take any action on any social media account or page on which they discuss or present, or have discussed or presented, Erom Healthcare USA’s products or the Erom Healthcare USA business that may reasonably be foreseen to draw an inquiry from Erom Healthcare USA’s Distributors relating to the Distributor’s other direct selling business activities or products. Violation of this provision shall constitute a violation of the nonsolicitation provision in Section 29.
• • If a Distributor creates a business page, team page, or group page on any social media site that promotes or relates to Erom Healthcare USA, its products, or opportunity, the page may not promote or advertise the products or opportunity of any network marketing business other than Erom Healthcare USA and its products. If the Agreement is cancelled for any reason or if the Distributor becomes inactive, the Distributor must immediately deactivate the business page, team page, or group page or, at the former Distributor’s option, turn over administrative rights to the page to Erom Healthcare USA so that the Company may deactivate the page.
• • Distributors shall respect the privacy of other social media users. Distributors shall not engage in abusive social media practices including but not limited to harvesting or trolling for connections, shaming, or bullying others.

17. Distributor Websites and Mobile Apps.

Distributors may not create their own websites or mobile applications to promote their Erom Healthcare USA business or Erom Healthcare USA’s products and services. Nor may Distributors use any non-Erom Healthcare USA website to sell or promote the sale of Erom Healthcare USA products or services. Prohibited websites and online forums include, but are not limited to, Distributors’ personal websites, other non-Erom Healthcare USA websites, online retailers (e.g., Amazon), online auctions (e.g., eBay), classified listings websites (e.g., Craigslist), and social media sites (e.g., Facebook Marketplace and others). Erom Healthcare USA products may only be sold or promoted, and new Erom Healthcare USA Distributors or Members may be enrolled only, at: the official Erom Healthcare USA website.

18. Sales Tools.

Erom Healthcare USA makes a wide variety of Sales Tools available to Distributors to use to promote their independent Erom Healthcare USA businesses. However, the Company recognizes that some Distributors may wish to create and use their own Sales Tools as well. If a Distributor wishes to create and use his or her own Sales Tools (including, without limitation, advertising materials, promotional materials, and all other marketing methods), the proposed Sales Tool(s) must be submitted to the Company and receive written approval before they can be used or made public. Unless the Distributor has received written approval to produce and use a proposed Sales Tool, the request shall be deemed denied. Erom Healthcare USA reserves the right to refuse approval for a Distributor-created Sales Tool at its sole discretion. Notwithstanding the foregoing, note that Distributors may not create their own websites or mobile applications to promote their Erom Healthcare USA businesses or to promote the sale of Erom Healthcare USA products. Erom Healthcare USA further reserves the right to rescind approval for any previously approved Sales Tools, and Distributors waive all claims against Erom Healthcare USA, its officers, directors, owners, employees, and agents for damages, expenses, costs, or remuneration of any other nature arising from or relating to such rescission.

Distributors who receive written authorization from Erom Healthcare USA to produce and publish Sales Tools may make approved Sales Tools available to other Distributors and may sell such Sales Tools to other Distributors provided the Sales Tools are sold to other Distributors at the selling Distributor’s cost. That is, Distributors may not make any profit from the sale of Sales Tools to other Distributors; they may only cover their own expenses for the production of the Sales Tools that they sell. Any sale or attempt to sell Sales Tools to another Distributor at a profit will result in the termination of the offending Distributor’s Erom Healthcare USA business. Distributor-produced Sales Tools must not contain any product, weight loss, income, or compensation plan claims unless such claims are in compliance with Sections 24 through 27, below.

19. Trademarks and Copyrights.

The name “Erom Healthcare USA” and other names and logos as may be adopted by the Company are proprietary trade names, trademarks, and service marks of Erom Healthcare USA. The Company grants Distributors a limited license to use its trademarks and trade names in promotional media for so long as the Distributor’s Agreement is in effect. Upon cancellation of a Distributor’s Agreement for any reason, the license shall expire, and the Distributor shall immediately discontinue all use of the Company’s trademarks and trade names. Under no circumstances may a Distributor use any of Erom Healthcare USA’s trademarks or trade names in any email address, website domain name, social media handle, social media name or address, or in any unapproved Sales Tools.

Erom Healthcare USA regularly produces live and recorded events as well as webinars and telephone conference calls. During these events Company executives, Distributors, and guests appear and speak. The content of such events is copyrighted material that is owned exclusively by the Company. Distributors may not record company functions for any reason, whether such event is live, a webinar, via conference call, or delivered through any other medium.

In addition, Company produced Sales Tools, videos, audios, podcasts, and printed material are also copyrighted. Distributors shall not copy or make derivatives of any such materials for their personal or business use without the Company’s prior written approval.

20. Sales Outlets.

To support the Company’s direct selling distribution channel and to protect the independent contractor relationship, Distributors agree that they will not sell Erom Healthcare USA products in any retail, wholesale, warehouse, or discount establishment, or any online retail, auction, or buy-sell site (including but not limited to Amazon and eBay) without prior written approval from Erom Healthcare USA. Notwithstanding the foregoing, Distributors may display and sell Erom Healthcare USA products at professional trade shows.

21. Service-Related Establishments.

Distributors may promote and sell Erom Healthcare USA products in service-related establishments. A service-related establishment is a business establishment whose primary revenue is earned by providing personal service rather than by selling products. Such establishments include offices of doctors, dentists, and other health professionals; health clubs or fitness centers; beauty salons; and any other business where customer use of the establishment is controlled by membership or appointment. Erom Healthcare USA reserves the right to make the final determination as to whether an establishment is service-related or is a proper place for the sale of its products.

22. Change of Sponsor.

As a rule, Distributors may not change their Sponsors (the Distributors under whom they are enrolled). The only means by which a Distributor may legitimately change his/her Sponsor are by:

• • Voluntarily canceling the Agreement in writing and remaining inactive for six (6) full calendar months. Following the six-calendar month period of inactivity, the former Distributor may reapply under a new Sponsor. The Distributor will lose all rights to his/her former downline organization upon his/her cancellation; or
• • Submitting a written request for a change of Sponsor to the Company. The Distributor requesting the transfer must also submit written and signed transfer authorization forms from his/her Sponsor as well as the Distributors above the Sponsor by sponsorship. The change of sponsor form may be downloaded from your My Office.

23. Waiver of Claims.

In cases wherein a Distributor improperly changes his/her Sponsor, Erom Healthcare USA reserves the sole and exclusive right to determine the final disposition of the downline organization that was developed by the Distributor in his/her second line of sponsorship. DISTRIBUTORS WAIVE ANY AND ALL CLAIMS AGAINST Erom Healthcare USA, ITS OFFICERS, DIRECTORS, OWNERS, EMPLOYEES, AND AGENTS THAT RELATE TO OR ARISE FROM Erom Healthcare USA’S DECISION REGARDING THE DISPOSITION OF ANY DOWNLINE ORGANIZATION THAT DEVELOPS BELOW A DISTRIBUTOR WHO HAS IMPROPERLY CHANGED HIS/HER SPONSOR.

24. Product Claims.

Distributors must not make claims, including but not limited to testimonials, about Erom Healthcare USA’s products or services that are not consistent with the claims contained in official Erom Healthcare USA literature or posted on Erom Healthcare USA’s official website. Under no circumstances shall any Distributor state or imply that any Erom Healthcare USA product is useful in the diagnosis, treatment, cure, or prevention of any disease, illness, injury, or other medical condition.

25. Weight Loss Testimonials.

If a Distributor makes a weight loss testimonial in connection with any Erom Healthcare USA product, the Distributor must adhere to each of the following:

• • The Distributor making the testimonial must clearly and conspicuously disclose that he/she is an Erom Healthcare USA independent Distributor.
• • The testimonial must be true and accurate and must disclose all additional material information that impacted his/her weight loss (e.g., changes in lifestyle or exercise habits, use of diet pills, etc.).
• • The testimonial must clearly and conspicuously disclose the generally expected results for those who go on the Erom Healthcare USA program. The generally expected results are posted on the Erom Healthcare USA website at www.eromhc-usa.com/results.
• • No testimonial may be made relating to use of the Company’s products and their impact on any weight-related illness suffered by the individual making the testimonial, including but not limited to diabetes claims and cholesterol reduction claims.

26. Income Claims.

When presenting or discussing the Erom Healthcare USA opportunity or Compensation Plan to a prospective Distributor, Distributors may not make income projections, income claims, income testimonials, or disclose their Erom Healthcare USA income (including, but not limited to, the showing of checks, copies of checks, bank statements, or tax records), or the income of any other Erom Healthcare USA Distributor. Nor may Distributors make lifestyle income claims. A lifestyle income claim is a statement or depiction that infers or states that the Distributor is able to enjoy a luxurious or successful lifestyle due to the income they earn from their Erom Healthcare USA business. Examples of prohibited lifestyle claims include, but are not limited to, the following types of representations:

• • That a Distributor (or his/her spouse) was able to quit his/her job.
• • That a Distributor was able to replace his/her income from a job.
• • That a Distributor was able to pay for a child’s private school or college education due to his/her Erom Healthcare USA earnings.
• • That a Distributor was able to acquire expensive or luxury material possessions (e.g., homes, cars, jewelry, boats, recreational vehicles, etc.).
• • That because of his/her Erom Healthcare USA earnings a Distributor was able to travel to exotic or expensive destinations.

The foregoing income claims restrictions apply to in-person presentations as well as promotional materials distributed by a Distributor including social media postings.

27. Compensation Plan and Opportunity Claims.

When presenting or discussing the Erom Healthcare USA Compensation Plan and/or the Erom Healthcare USA opportunity, Distributors must make it clear to prospects that financial success in Erom Healthcare USA requires commitment, effort, and sales skill. Conversely, Distributors must never represent that one can be successful without diligently applying themselves. Examples of misrepresentations in this area include, but are not limited to:

• • It’s a turnkey system.
• • The system will do the work for you.
• • Just get in and your downline will build through spillover.
• • Just join and I’ll build your downline for you.
• • The Company does all the work for you.
• • You don’t have to sell anything.
• • All you have to do is buy your products every month.

The above are just examples of improper representations about the Compensation Plan and the Company’s program. It is important that Distributors do not make these, or any other representations, that could lead a prospect to believe that they can be successful as a Distributor without commitment, effort, and sales skill.

28. Media Inquiries.

Distributors must not interact with the media regarding the Erom Healthcare USA business or products. All inquiries from the media, including radio, television, print, online, or any other medium, shall be directed to the Erom Healthcare USA marketing department.

29. Nonsolicitation.

Erom Healthcare USA Distributors are free to participate in other network marketing programs. However, during the term of this Agreement and for one year following the termination or cancellation of the Agreement for any reason, a Distributor may not directly or indirectly recruit other Erom Healthcare USA Distributors (except for the Distributor’s personally sponsored downline Distributors) for any other network marketing business. The term “recruit” means the direct or indirect, actual or attempted, sponsorship, solicitation, enrollment, encouragement, or effort to influence in any other way, another Erom Healthcare USA Distributor to enroll or participate in another network marketing opportunity. This conduct constitutes recruiting even if the Distributor’s actions are in response to an inquiry made by another Distributor or Member.

If a Distributor is engaged in another network marketing program, it is the responsibility of the Distributor to ensure that his or her Erom Healthcare USA business is operated entirely separate and apart from all other businesses and/or Network Marketing programs. To this end, the Distributor must not:

• • Display Erom Healthcare USA promotional material, sales aids, or products with or in the same location as, any non-Erom Healthcare USA promotional material or sales aids, products, or services (Instagram, Facebook, Pinterest, and similar social media sites are exempt from this provision).
• • Offer the Erom Healthcare USA opportunity, products, or services to prospective or existing Members or Distributors in conjunction with any non-Erom Healthcare USA program, opportunity, or products.
• • Offer, discuss, or display any non-Erom Healthcare USA opportunity, products, services, or opportunity at any Erom Healthcare USA-related trunk-show, meeting, seminar, convention, webinar, teleconference, or other function.

30. Confidential Information.

“Confidential Information” includes, but is not limited to, the identities, contact information, and/or sales information relating to Erom Healthcare USA Distributors and/or Members: (a) that is contained in or derived from any Distributors’ respective Distributor My Office; (b) that is derived from any reports issued by Erom Healthcare USA to Distributors to assist them in operating and managing their Erom Healthcare USA business; and/or (c) to which a Distributor would not have access or would not have acquired but for his/her affiliation with Erom Healthcare USA. Confidential Information constitutes proprietary business trade secrets belonging exclusively to Erom Healthcare USA and is provided to Distributors in strict confidence. Confidential Information shall not be directly or indirectly disclosed to any third party nor used for any purpose other than Distributor’s use in building and managing his/her Independent Erom Healthcare USA business.

31. Handling Personal Information.

If a Distributor receives personal information from or about a Distributor, a prospective Distributor, a Member, or a prospective Member, it is the Distributor’s responsibility to maintain the security of the personal information and to shred, destroy, or irreversibly delete the personal information of others once the Distributor no longer needs it. To the extent that it is necessary for a Distributor to store or maintain personal information of others, the Distributor must store or maintain the information in a secure location, whether physical or digital. Credit card and payment information must be destroyed/deleted immediately upon processing of payment. As used herein, personal information is information that can be used to identify, locate, or contact an individual, alone or when combined with other personal or identifying information. Examples of personal information include an individual’s:

• • Name;
• • Home or other physical address;
• • Email address;
• • Telephone number;
• • Social Security Number or other tax identification number;
• • Driver’s license number;
• • Bank account number;
• • Credit card or debit card number; and
• • Personal characteristics including photographic image, fingerprints, handwriting, or other unique biometric data.

32. Product Inventory & Bonus Buying.

There is no need for Distributors to carry an inventory of Erom Healthcare USA products for resale as all products are direct shipped from the Company to the customer. Distributors should only order Erom Healthcare USA products if they have a current need for the products for their own personal or household use, for display purposes, or for fulfilment of customer orders or demand. In addition, bonus buying is strictly prohibited. Bonus buying is the purchase of merchandise for any reason other than bona fide resale or use, or any mechanism or artifice to qualify for rank advancement or maintenance, incentives, prizes, commissions or bonuses that are not driven by bona fide product purchases by end user consumers for actual use.

33. Limitations on Distributor and Household Businesses.

An individual may own, operate, control, or have an interest in, only one Erom Healthcare USA business, and there may be only one Erom Healthcare USA business in a household. A “household” is defined as all individuals including dependent children who are living at the same residential address as a family or in a family-like setting. A household may consist of a single individual or two or more individuals and may consist of individuals living together in a family-like unit who are not related (whether by blood, marriage, domestic partnership, adoption or otherwise. Dependent children attending school away from home are considered part of the household. Erom Healthcare USA will consider exceptions to this Policy on a case-by-case basis upon written request submitted to the Compliance Department.

34. Actions of Third Parties.

If a third party acting on behalf of, or with the active or passive assistance or knowledge of a Distributor engages in conduct that would be a violation of the Agreement, the conduct of the third-party may be imputed to the Distributor. “Knowledge” of misconduct is not limited to actual knowledge. If a Distributor engages in acts or omissions that the Distributor knows or SHOULD KNOW will enable a third party to violate this Agreement if such action was taken by the Distributor, the Distributor shall be deemed to have knowledge of the violation.

35. Tampering with Product Packaging.

Erom Healthcare USA products must be sold in their original packaging. Distributors shall not alter the original packaging or labeling of products that they are selling to their personal retail customers.

36. Negative Comments/Nondisparagement.

Negative comments in the field serve only to sour the enthusiasm of other Distributors. Therefore, Distributors must not disparage, libel, slander, demean, or make negative or critical comments to third parties or other Distributors about Erom Healthcare USA, its owners, officers, directors, management, employees, other Erom Healthcare USA Distributors, or the Compensation Plan. Disputes or disagreements between any Distributor and Erom Healthcare USA shall be resolved through the dispute resolution process, and the Company and Distributors agree specifically not to demean, discredit, or criticize one another on the Internet or any other public forum. Complaints and concerns about Erom Healthcare USA should be directed to the Customer Service Department (CS@eromplus-usa.com).

37. Product Sales.

The Erom Healthcare USA Compensation Plan is based on the sale of Erom Healthcare USA products and services to end consumers. Distributors must fulfill personal and downline organization retail sales requirements specified in the Compensation Plan (as well as meet other responsibilities set forth in the Agreement) to be eligible for bonuses, commissions, and advancement to higher levels of achievement.

38. Sales Receipts.

Distributors must provide their retail customers that purchase merchandise directly from the Distributor with two copies of an official Erom Healthcare USA sales receipt at the time of the sale and advise them of the three-day right to rescind the transaction, which is set forth on the receipt. Distributors must maintain all retail sales receipts for a period of two years and furnish them to Erom Healthcare USA at the Company’s request. Sales receipts can be downloaded in PDF format from the Distributor My Office.

39. Transaction Submission Integrity.

It is essential to the success of the Company, its Distributors, and Members, that submissions of transactions to the Company maintain integrity of communication. It is to be expected that all transactions submissions to the Company, including, but not limited to, Distributor applications and enrollments, Distributor communications, Distributor financial transactions, and Member transactions, be submitted by the individual or entity involved in the transaction. Third party submission of any and all transactions submissions is prohibited. A Distributor may not communicate any transactions submissions on behalf of another Distributor, Distributor applicant, or Member. A Distributor may not use his or her credit card or bank account on behalf of another individual or Distributor. This rule is applicable to any and all forms of transactions submissions, including, but not limited to, online, telephone, fax, email, etc.

40. Adjustment to Bonuses and Commissions.

Compensation stemming from product sales is fully earned when the applicable return, repurchase, and chargeback periods applicable to product sales have all expired. If a product is returned to Erom Healthcare USA for a refund or is repurchased by the Company, or a chargeback occurs, the compensation attributable to the returned or repurchased product(s) will be recovered by the Company from the Distributors who were paid commissions or bonuses based on the original sales of such products. Such unearned compensation will be deducted, in the month in which the refund is issued or the chargeback occurs and continuing every pay period thereafter until the commissions are fully recovered from the selling Distributor and upline Distributors who received bonuses and commissions on the sales of the refunded products. Likewise, if it is the responsibility of a Distributor to issue a refund to a customer, but if Erom Healthcare USA issues the refund, the Company may deduct the amount refunded to the customer from the Distributor’s subsequent bonus and commission payments.

Erom Healthcare USA reserves the right to withhold or reduce any Distributor’s compensation as it deems necessary to comply with any garnishment or court order directing Erom Healthcare USA to retain, hold, or redirect such compensation to a third party.

41. Satisfaction Promise/Product Return Policies.

If for any reason an Erom Healthcare USA product that you purchase for your own personal use does not meet your expectations, you may contact the Customer Service Department at 866-866-1004 or CS@eromplus-usa.com within 30 days of the date of purchase to request a replacement, exchange, or refund, subject to the following rules.

• • Replacement Due to Manufacturer’s Defect or Missing Item. If you request a replacement item due to a manufacturer’s defect or a missing item, the replacement item will be shipped to you at no cost to you as long as the item is shipped to the same address as the original item. Additional charges may apply if you request that the exchange or replacement item is shipped to a different address.
• • Exchange Not Due to Manufacturer’s Defect or Missing Item. If you wish to exchange an item for another item and the original item is not defective, you will be responsible for the payment of any differences in product prices as well as shipping costs to return the original item to us. In addition, you will be charged the shipping costs to send the exchange item to you. No exchange will be made for products that are not in good and resalable condition, not in their original packaging, or that were otherwise designated by us at the time of sale as nonreturnable, discontinued, or seasonal.
• • Refund Not Due to Manufacturer’s Defect or Missing Item. If you wish to receive a refund for a product under this policy, we may require you to return the item to us. In that event, you will be responsible for the payment of any shipping costs to return the original item to us. Upon our timely receipt of the returned item (if required) a refund of the purchase price (less shipping costs) will be issued to you. Items designated by us at the time of sale as nonreturnable, discontinued, or seasonal are not eligible for a refund under this policy. Nor are business supplies, Sales Tools, or Starter Kits.
• • Sales Receipt Required. If you do not have your original sales receipt, we reserve the right to refuse to honor your product replacement, exchange, or refund request.
• • Product Credit. We reserve the right to issue product credit to you in lieu of your replacement, exchange, or refund request at our discretion if the conditions set forth in this Product Return Policy are not met by you. If you return an item that was purchased using product credit, upon approval, the credit will be reissued. The original product credit expiration date will be extended by 15 days.
• • Customer Returns. Note that the foregoing Satisfaction Promise and Product Return Policies are applicable to products that you sell directly (from your own inventory) to customers. Therefore, if a customer wishes to return a product to you pursuant to these policies, you agree that you shall honor these policies with respect to any such return. After a customer has returned a product to you pursuant to the above, you may likewise return the product to the Company for refund or exchange in accordance with the above policies.
• • Questions. If you have any questions about product returns, discrepancies, back-ordered items or anything else concerning the above Satisfaction Promise/Product Return Policies, please contact the Customer Service Department at 866-866-1004 or CS@eromplus-usa.com.

42. Return of Merchandise and Sales Aids by Distributors Upon Cancellation or Termination.

Within 30 days from the cancellation or termination of a Distributor’s Agreement, the Distributor may return products and Sales Tools that he or she personally purchased from Erom Healthcare USA during the 12-month period preceding the date of cancellation or termination for a refund so long as the goods are in currently marketable condition. (The one-year limitation shall not apply to residents of Louisiana, Maryland, Massachusetts and Wyoming and Puerto Rico). Upon the Company’s timely receipt of returned goods and confirmation that they are in currently marketable condition, the Distributor will be reimbursed 90% of the net cost of the original purchase price(s). Shipping and handling charges will not be refunded. If the purchases were made through a credit card, the refund will be credited back to the same account. Goods are in “currently marketable condition" if they are unopened and unused and packaging and labeling has not been altered or damaged. Merchandise that is clearly identified at the time of sale as nonreturnable, closeout, discontinued, or as a seasonal item, or which has passed it commercially reasonable usable or shelf-life, is not in currently marketable condition.

43. Louisiana, Massachusetts, and Wyoming Residents:

If a resident of Louisiana, Massachusetts, or Wyoming cancels the Distributor Agreement, upon receipt of a written request from such canceling Distributor, Erom Healthcare USA will refund 90% of the costs incurred by such canceling Distributor to participate in the program during the one-year period immediately preceding the date of the cancellation.

44. Maryland Residents:

A Distributor who resides in Maryland may cancel the contract for any reason within 3 months after the date of receipt of goods or services first ordered; upon cancellation, the Company shall repurchase the goods; and the repurchase price shall be at least 90% of the original price paid by the Distributor.

45. Puerto Rico Residents:

A Puerto Rico resident may cancel this Agreement at any time within 90 days from the date of enrollment, or at any time upon showing the Company’s noncompliance with any of the essential obligations of the distribution contract or any act or omission by the Company adversely affecting the interests of the cancelling Distributor in the development of the market of the properties or services. Such cancellation must be sent to the Company in writing and sent via registered mail. If a Puerto Rico resident cancels under these conditions, the Company shall: (a) Reacquire the total of the products that he/she purchased from the Company which are in his/her possession and in good condition at a price of not less than ninety percent (90%) of their original net cost; (b) Return to the cancelling Distributor not less than ninety percent (90%) of the original net cost of any services that he/she acquired from the Company; (c) Return 90% of any sum paid by the cancelling Distributor for the purpose of participating in the business.

46. Other Purchase Cancellation Rights – Three Day Right of Cancellation.

Except as provided herein for residents of Alaska and certain residents of North Dakota, retail customers have three business days within which to cancel a purchase and obtain a full refund. Distributors and Members likewise have three business days within which to cancel their initial purchase of Erom Healthcare USA products or services and obtain a full refund (subsequent purchases made by Distributors and Members are not subject to this right of cancellation). The three business day time limit is extended to five business days for residents of Alaska and is extended to 15 days for residents of North Dakota who are 65 or older. An explanation of these rights is contained on the official Erom Healthcare USA sales receipt.

47. Compliance Measures / Disciplinary Sanctions.

Violation of any term of the Agreement, violation of any common law duty, including, but not limited to any applicable duty of loyalty, any illegal, fraudulent, deceptive or unethical business conduct, or any act or omission by a Distributor that the Company reasonably believes may damage its reputation or goodwill (such damaging act or omission need not be related to the Distributor’s Erom Healthcare USA business), may result, at Erom Healthcare USA’s discretion, in one or more of the following corrective measures:

• • Issuance of a written warning;
• • A requirement that the Distributor to take immediate corrective measures;
• • Erom Healthcare USA may withhold from a Distributor all or part of the Distributor’s bonuses and commissions during the period that Erom Healthcare USA is investigating any conduct allegedly in violation of the Agreement. If a Distributor’s business is canceled for disciplinary reasons, the Distributor will not be entitled to recover any commissions withheld during the investigation period;
• • The removal of one or more downline Distributors from the offending Distributor’s downline organization/team.
• • Suspension and/or termination of the offending Distributor’s My Office access;
• • Suspension of the individual’s Distributor Agreement and independent Erom Healthcare USA business for one or more pay periods (without pay);
• • Involuntary termination of the offender’s Distributor Agreement; or
• • Any other measure expressly allowed within any provision of the Agreement or which Erom Healthcare USA deems appropriate to address the misconduct or appropriate to equitably resolve injuries caused partially or exclusively by the Distributor’s policy violation or contractual breach.

In situations deemed appropriate by Erom Healthcare USA, the Company may institute legal proceedings for monetary and/or equitable relief, subject to the Dispute Resolution Policy at Section 58.

48. Disclosure of Compliance Measure / Disciplinary Sanction to Upline.

If a disciplinary sanction or compliance measure is taken against a Distributor pursuant to Section 47, the Company may disclose the details of the matter and its resolution to the disciplined Distributor’s Sponsor and other upline leaders.

49. Cancellation or Termination of the Agreement

• • Voluntary Cancellation. A participant in this network-marketing plan has a right to cancel at any time, regardless of reason. Cancellation must be submitted in writing to the Company at its principal business address or by cancelling his/her business through the Distributor My Office. The written notice must include the Distributor’s signature, printed name, address, and Distributor I.D. Number. A Distributor may also voluntarily cancel the Agreement by withdrawing consent to contract electronically.
• • Cancellation for Inactivity. If a Distributor fails to meet “Active Status” requirements mentioned set forth in Compensation plan, his/her Distributor Agreement and Erom Healthcare USA business will be cancelled for inactivity.
• • Involuntary Cancellation. Violation of any term of the Agreement, violation of any common law duty, including, but not limited to any applicable duty of loyalty, any illegal, fraudulent, deceptive or unethical business conduct, or any act or omission by a Distributor that the Company reasonably believes may damage its reputation or goodwill (such damaging act or omission need not be related to the Distributor’s Erom Healthcare USA business), may result, at Erom Healthcare USA’s discretion, in the termination of this Agreement as provided in Section 47 above.
• • Effect of Cancellation. So long as a Distributor remains active and complies with the terms of the Agreement, Erom Healthcare USA shall pay bonuses and commissions to such Distributor 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 Marketing Organization).
  A Distributor whose business is cancelled for any reason will lose all Distributor rights, benefits, and privileges. This includes the right to represent yourself as an Independent Erom Healthcare USA Distributor, to sell Erom Healthcare USA products and services and the right to receive commissions, bonuses, or other income resulting from his/her own sales and the sales and other activities of the Distributor and the Distributor’s former downline sales organization.
  A Distributor whose Distributor Agreement is canceled shall receive commissions and bonuses only for the last full pay period he or she was active prior to cancellation (less any amounts withheld during an investigation preceding an involuntary cancellation).
• • Reclassification. If at the time of the cancellation of a Distributor’s Distributor Agreement the Distributor is also on the Erom Healthcare USA autoship program, the Distributor’s autoship order shall continue in force unless the Distributor specifically requests that his or her autoship agreement be canceled. If the former Distributor does not request the cancellation of his or her autoship agreement, the former Distributor shall be reclassified as a Member.

50. Indemnification.

Each Distributor agrees to indemnify Erom Healthcare USA for any and all costs, expenses, consumer reimbursements, fines, sanctions, damages, settlements or payments of any other nature that Erom Healthcare USA incurs resulting from or relating to any act or omission by the Distributor that is illegal, fraudulent, deceptive, negligent, unethical, or in violation of the Agreement. Erom Healthcare USA may elect to exercise its indemnification rights through withholding any compensation due the Distributor. This right of setoff shall not constitute Erom Healthcare USA’s exclusive means of recovering or collecting funds due Erom Healthcare USA pursuant to its right to indemnification.

51. Business Transfers.

Distributors in good standing who wish to sell or transfer their business must receive Erom Healthcare USA’s prior written approval before the business may be transferred. A business that is on disciplinary probation, suspension, or under disciplinary investigation is not in good standing and may not be transferred unless and until the disciplinary matter is resolved. Requests to transfer a business must be submitted in writing to the Compliance Department at Admin@erom-usa.com. The request to transfer will be denied if the business is not in good standing or if there is another reasonable reason for denying the request. Prior to transferring a business to a third party, the Distributor must offer Erom Healthcare USA the right of first refusal to purchase the business on the same terms as negotiated with a third party. The Company shall have 30 days to exercise its right of first refusal. A Distributor who has transferred his or her independent Erom Healthcare USA business to a third party must wait a minimum of six (6) months from the date of the transfer before re-enrolling as a Distributor.

52. Transfer Upon a Distributor’s Death.

Upon the death of a Distributor, the Distributor’s Erom Healthcare USA business may be passed to his/her heirs. The beneficiary or transferee of the business must notify Erom Healthcare USA of their intention to receive the transfer of the business within six (6) months of the date of death. If Erom Healthcare USA receives no such notification within such time period, the Agreement shall be automatically cancelled. Prior to the actual transfer of the business, the beneficiary or transferee must provide Erom Healthcare USA with certified letters testamentary or letters of administration and written instructions of the executor of the estate, or an order of the court, that provides direction on the proper disposition of the business. The beneficiary must also execute and submit to the Company an Erom Healthcare USA Distributor Agreement within 30 days from the date on which the business is transferred by the estate to the beneficiary or transferee, or the Agreement will be cancelled. Because Erom Healthcare USA cannot divide commissions among multiple beneficiaries or transferees, if there are multiple beneficiaries or transferees of the business, the beneficiaries or transferees must form a business entity (corporation, LLC, partnership, etc.) and submit an Erom Healthcare USA Distributor Agreement in the name of the business entity. Upon the completion of these requirements, Erom Healthcare USA will transfer the business and issue commissions to the individual beneficiary or business entity. During the pendency of the actual transfer of the business, commission and bonus payments (if any are earned) will be issued in the name of the estate of the deceased Distributor. The beneficiary of the business shall be responsible for the payment of all monthly and renewal fees that may have accrued but not been paid during the pendency of the transfer. Failure to pay these fees shall result in the termination of the Agreement.

53. Divorce of a Distributor.

Erom Healthcare USA is not able to divide commissions among multiple parties, nor is it able to divide a downline organization. Consequently, in divorce cases, any settlement or divorce decree must award the business in its entirety to one party. Erom Healthcare USA will recognize as the owner of the business the former spouse to whom the business is awarded pursuant to a legally binding settlement agreement or decree of the court. The former spouse who receives the Erom Healthcare USA business must also execute and submit an Erom Healthcare USA Distributor Agreement within 30 days from the date on which the divorce becomes final or the business will be cancelled.

54. Dissolution of a Business Entity.

If a business entity that operates an Erom Healthcare USA business dissolves, the owners of the business entity must instruct the Company on the identity of the proper party who is to receive the business. The Erom Healthcare USA business must be awarded to a single individual or entity that was previously recognized by the Company as an owner of the business entity; the Company cannot divide the business among multiple parties or issue separate commission payments. The recipient of the Erom Healthcare USA business must also execute and submit an Erom Healthcare USA Distributor Agreement to the Company within 30 days from the date of the dissolution of the business entity or the Agreement will be cancelled. If the business entity wishes to sell or transfer its Erom Healthcare USA business to an individual or entity who was not previously recognized by the Company as an owner of the business entity, it must do so pursuant to Section 51.

55. Inducing Distributors to Violate the Agreement.

Distributors shall not directly or indirectly induce, encourage, or assist another Distributor to violate the Agreement.

56. Reporting Errors.

If a Distributor believes that Erom Healthcare USA has made an error in his/her compensation, the structure or organization of his/her genealogy, or any other error that impacts the Distributor’s income, he/she must report it to the Company in writing within 60 days from the date on which the mistake occurred. While Erom Healthcare USA shall use its best efforts to correct errors reported more than 60 days after the date of the error, Erom Healthcare USA shall not be responsible to make changes or remunerate Distributors for losses for mistakes that are reported more than 60 days after the mistake occurs.

57. International Activities.

Distributors may not sell Erom Healthcare USA products or conduct business activities of any nature in any foreign country that the Company has not announced is officially open for business.

58. Dispute Resolution.

If a dispute between a Distributor and Erom Healthcare USA arises from or relates to the Agreement, the Erom Healthcare USA business, the rights and obligations of either party, or the relationship between the parties, the parties shall resolve the dispute as set forth in the following dispute resolution provisions. The following shall apply to all proceedings under this dispute resolution provision:

• • Any claim a party has against the other must be brought within one year from the date on which the first act or omission supporting or giving rise to the claim occurred; otherwise, such claim or cause of action shall be permanently barred. In cases in which informal negotiation is required, once informal negotiation is requested in writing this one-year limitation of actions provision shall be tolled until the completion of the mediation phase of this provision and for ten calendar days thereafter.
• • At no time prior to the completion of the negotiation and mediation steps described below shall either party initiate arbitration or litigation in small claims court related to this Agreement or the business except as may be specified otherwise in this dispute resolution provision.
• • All offers, promises, conduct and statements, whether oral or written, made in the course of the negotiation and/or mediation by any of the parties, their agents, employees, experts and attorneys are confidential, privileged and inadmissible for any purpose, including impeachment, in arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the negotiation and/or mediation.
• • If an action is brought in small claims court instead of arbitration, the parties agree that the matter shall remain in small claims court and shall advance only on an individual (non-class, non-representative) basis.
• • A dispute relating to whether the dispute between the Company and a Distributor is subject to arbitration shall be decided through arbitration.

Stages of Dispute Resolution & General Dispute Resolution Procedures.Disputes between the Company and a Distributor(s) that arise from or relate to the Agreement, the business operated by the Distributor and/or the Company, the opportunity offered by the Company, or the relationship between the parties, shall be resolved according to the three-step procedure of (a) informal negotiation; (b) non-binding mediation; and (c) binding arbitration or in small claims court. THE PARTIES AGREE TO RESOLVE THE DISPUTE THROUGH BINDING ARBITRATION AND WAIVE CLAIMS TO A TRIAL BEFORE ANY COURT OR JURY EXCEPT IN SMALL CLAIMS COURT AS PROVIDED HEREIN.

• Step 1 - Informal Negotiation. The parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement or the Company’s business promptly by negotiation between the aggrieved Distributor(s) and executives of the Company who have authority to settle the controversy and who are at a higher level of management than the persons with direct responsibility for administration of this Agreement. A party may, at its election, choose to be accompanied in such negotiation by an attorney. If one party elects to have its attorney present, the other party must also agree to have its attorney present if that party has retained counsel. Informal negotiations shall occur in La Mirada, California unless the parties mutually agree on another location. Informal negotiations shall take place telephonically or by videoconference if either party requests such.

  To institute the negotiation process, either party may give the other party written notice of any dispute not resolved in the normal course of business. Within 10 days after delivery of the notice, the receiving party shall submit to the other a written response. The notice and response shall include with reasonable particularity (a) a statement of each party’s position and a summary of arguments supporting that position, and (b) the name and title of the executive and attorney who will accompany that party (if applicable), or the name of the Distributor and his/her attorney (if applicable) who will accompany him/her in the negotiation. Within 20 days after delivery of the notice, the parties and the attorneys (as applicable) of both parties shall meet at a mutually acceptable time and place. Such meeting may occur telephonically if one party requests that the meeting be held telephonically.

  Unless otherwise agreed in writing by the negotiating parties, mediation may be commenced one business day following the close of the negotiation phase described above. The negotiation phase is “closed” when one party notifies the other in writing that it considers the negotiation “closed.” Such closure shall not preclude continuing or later negotiations if desired by both parties.

• Step 2 - Mediation.

  If the parties are unsuccessful in resolving their dispute through good faith negotiation, they shall seek to resolve the dispute through mediation. If a party elects to pursue mediation, the party shall submit a written request for mediation to the other party within 10 calendar days after the negotiation phase is completed. The parties shall have 10 calendar days following such request to select a mutually acceptable mediator. If the parties cannot agree on a mutually acceptable mediator, they shall apply to JAMS to have a neutral mediator appointed.

  Mediation shall be conducted within 20 calendar days from the date on which the mediator is selected or appointed or as otherwise agreed upon by the parties and the mediator. The mediation shall occur in La Mirada, California unless the parties mutually agree on another location. Mediation shall take place telephonically or by videoconference if either party requests such. The parties shall split the mediator’s fees equally unless the value of the relief sought by a Distributor is $10,000 or less. If the value of the relief sought by a distributor is $10,000 or less, at the Distributor’s request, Erom Healthcare USA will pay all of the mediator’s fees associated with the mediation.

  Unless otherwise agreed upon by the parties, the mediation shall be closed no later than 30 calendar days following the completion of the meeting between the mediator and the parties.

• Step 3 - Binding Confidential Arbitration or Small Claims Court. If the parties do not successfully resolve their dispute through the negotiation and mediation procedures above, the dispute shall be resolved through binding confidential arbitration as set forth below. If the dispute is within the jurisdictional limits of the small claims court in the state in which Distributor resides, the dispute may be resolved in such small claims court. If an action is brought in small claims court instead of arbitration, the parties agree that the matter shall remain in small claims court and shall advance only on an individual (non-class, non-representative) basis.

  JAMS to Administer Arbitration. If the dispute between the Company and a Distributor is subject to arbitration, the arbitration shall be filed with, and administered by JAMS in accordance with its Comprehensive Rules and Procedures, which are available on JAMS’ website at https://www.jamsadr.com. Copies of JAMS Rules and Procedures will also be emailed to Distributors upon request to the Erom Healthcare USA Compliance Department (compliance@erom-usa.com). Notwithstanding the rules of JAMS, unless otherwise stipulated by the Parties, the following shall apply to all Arbitration actions:

• • The Federal Rules of Evidence shall apply in all cases.
• • The Parties shall be entitled to all discovery rights permitted by the Federal Rules of Civil Procedure.
• • The Parties shall be entitled to bring motions under Rules 12 and/or 56 of the Federal Rules of Civil Procedure.
• • The arbitration hearing shall commence no later than 500 days from the date on which the arbitrator is appointed and shall last no more than five business days.
• • The Parties shall be allotted equal time to present their respective cases.
• • An Arbitrator's Award will consist of a written statement stating the disposition of each claim. The award will also provide a concise written statement of the essential findings and conclusions on which the award is based.
• • Unless the parties mutually agree to another location, all arbitration proceedings shall be filed and held in La Mirada, California
• • If the value of the relief sought is $25,000 or less, the arbitration shall be conducted based solely on written submissions, unless either party requests an in-person, telephonic, or videoconference hearing or the arbitrator decides that a hearing is necessary. In cases where an in-person hearing is held, either party may attend by telephone or video conference unless the arbitrator requires otherwise.
• • The parties shall split the arbitrator’s fees equally unless the value of the relief sought by a Distributor is $10,000 or less. If the value of the relief sought by a distributor is $10,000 or less, at the Distributor’s request, Erom Healthcare USA will pay all of the arbitrator’s fees associated with the arbitration.
• • Any dispute relating to whether the dispute is subject to arbitration shall be decided through arbitration.

Confidentiality. Disputes shall remain confidential between the Company and the Distributor in question. With the exception of discussing the claims with bona fide witnesses to the dispute and the party’s legal counsel, neither party shall verbally or in writing discuss, publish, or otherwise disseminate the claims, allegations, merits, evidence, positions, pleadings, testimony, rulings, awards, orders, issues, or any other aspect of the dispute with or to any third party, including but not limited to disclosure on the internet or on any social media or blog platform prior to, during, or after any phase of the dispute resolution process unless a specific exemption contained in this dispute resolution provision applies. Nothing in this confidentiality provision shall prohibit or limit the Company from discussing any compliance matter and/or its resolution with the upline of a Distributor who has received disciplinary action by the Company or any matter related to the resolution of a dispute between the Company and a Distributor.

Liquidated Damages for Breach of the Confidentiality Obligation. If a Party violates its confidentiality obligations under this arbitration provision, the nonbreaching party shall incur significant damages to its reputation and goodwill that shall not be readily calculable. Therefore, if a Party, its attorneys, agents, or a proxy of a party breaches the confidentiality provision of this dispute resolution provision, the following shall apply:

• • The non-breaching party shall be entitled to liquidated damages in the amount of $10,000.00 per violation, or $50,000 per violation if the disclosure is published on the internet, including but not limited to disclosure on any website or blog or on any social media forum. Every disclosure of each claim, allegation, pleading, or other prohibited disclosure shall constitute a separate violation. Notwithstanding this confidentiality and liquidated damage provision, nothing herein shall limit the right or ability of a Party to disclose evidence, claims or allegations relating to the dispute to any individual who is, or who may be, a bona fide witness to the dispute. The Parties agree that this liquidated damage amount is reasonable and waive all claims and defenses that it constitutes a penalty; AND
• • Breach of the confidentiality provision by disseminating or publishing information described in subparagraph c. above through any form of mass media (including but not limited to posting on the Internet or on any social media platform) by a party, a party’s agent, or a party’s proxy shall constitute an act of wanton and gross bad faith, and shall constitute a waiver of the beaching party’s right to pursue the claim(s) and/or defense(s) against the non-breaching party, and shall entitle the non-breaching party to a default judgment against the breaching party.

Arbitration Opt-Out. A Distributor who does not wish to be subject to this Arbitration provision may opt-out by notifying Erom Healthcare USA in writing of his/her desire to opt-out of this Arbitration provision within 30 days of the Distributor’s execution of the Agreement. The opt-out notice shall be sent via email to Admin@erom-usa.com or by regular mail to Erom Healthcare USA, Attn: Compliance Department, 14630 Industry Circle, La Mirada, CA 90638.

Actions Not Subject to Arbitration. Notwithstanding the foregoing, the following claims may be, but need not be, resolved through confidential binding arbitration:

• • Claims by Distributors who have properly opted out of the arbitration provision.
• • Claims that are within the jurisdictional limit of the small claims court in jurisdiction in which the Distributor resides.
• • Claims seeking only public equitable relief that is authorized by state or federal statue and such relief is not available through arbitration. If equitable relief is specifically authorized by an applicable federal or state statute, the parties agree that an action may be brought before a state or federal court residing in the county in which either party resides or has its principal place of business so long as (a) the relief sought is limited to equitable relief that is specifically authorized by federal or state statute; and (b) the equitable relief is unavailable through arbitration proceedings. The confidentiality provisions and corresponding liquidated damages provisions for breach of confidentiality provision contained in this dispute resolution provision shall remain in effect for claims and actions asserted under this Step 3(c).

Emergency Relief. Either party may bring an action before JAMS seeking emergency relief to protect its intellectual property rights, including but not limited to protecting its rights pursuant to the non-solicitation provisions of these Policies & Procedures. A claim or cause of action seeking emergency relief shall be brought pursuant to the Emergency Relief Procedures in JAMS Comprehensive Rules and Procedures, available at https://www.jamsadr.com, or by contacting the Compliance Department (866-866-1004 or Admin@erom-usa.com). The parties agree that any violation of the Nonsolicitation provisions (Section 29) or Confidential Information provisions (Section 30) of these Policies & Procedures shall entitle Erom Healthcare USA to emergency and permanent equitable relief because: (a) there shall be no adequate remedy at law; (b) Erom Healthcare USA shall suffer immediate and irreparable harm should such policies be breached; and (c) if emergency and permanent equitable relief is not granted, the injury to Erom Healthcare USA shall outweigh the potential harm to Distributor if emergency and/or permanent equitable relief is granted.

Disputes Not Subject to the Informal Negotiation and/or Mediation Steps.A party need not go through the informal negotiation or mediation steps described above in the following situations:

• • Action to Enforce Arbitration Award or Order. Either party may bring an action in a court properly vested with jurisdiction to enforce an arbitration award or order including but not limited to an order for emergency relief.
• • Petitions for Emergency Relief. If a party deems it necessary to seek emergency relief to protect its interests, it may seek emergency relief as set forth in this dispute resolution provision without engaging in the negotiation or mediation process set forth above. Notwithstanding the foregoing, the parties are encouraged, but not required, to engage in negotiation and or mediation concurrently with any pending request for emergency relief.
• • Disciplinary Sanctions. The Company shall not be required to engage in the three-step dispute resolution process prior to imposing disciplinary sanctions for violation of the Agreement.

Remedies. Unless limited by the terms of this Agreement, remedies available to you under U.S. federal laws, the laws of the state of California, and the state and local laws of your state, shall remain available to you in any arbitration proceeding.

59. Class Action Waiver.

All disputes, whether pursued through arbitration or before the courts, that arise from or relate to the Agreement, that arise from or relate to the Erom Healthcare USA business, or that arise from or relate to the relationship between the parties, shall be brought and proceed on an individual basis. The parties waive their rights to pursue any action against the other party and/or their respective owners, officers, directors, and agents, on a class or consolidated basis. You may opt out of this class action waiver if you wish by submitting written notice to the Company of your desire to opt out within 30 days from the date on which you enroll as a Distributor. Submit your written opt-out notice to Admin@erom-usa.com or Erom Healthcare USA, Attn: Compliance Department, 14630 Industry Circle, La Mirada, CA 90638.

60. Governing Law.

The Federal Arbitration Act shall govern all matters relating to arbitration. Except as is otherwise specifically referenced in these Policies & Procedures, the law of the State of California without regard to principles of conflicts of laws, shall govern all other matters relating to or arising from the Agreement, the business, the relationship between the parties, or any other claim between the Parties, whether such claim is grounded in contract, tort, warranty, or any other theory of law. Notwithstanding the foregoing, if a dispute is brought in a small claims court properly vested with jurisdiction, the law of the state in which the small claims court resides shall apply.

61. Damages for Wrongful Termination.

In any case which arises from or relates to the wrongful termination of a Distributor’s Agreement and/or independent business, the parties agree that damages will be extremely difficult to ascertain. Therefore, the parties stipulate that if the involuntary termination of a Distributor’s Agreement and/or loss of their independent business is proven and held to be wrongful under any theory of law, Distributor’s sole remedy shall be liquidated damages calculated as follows:

• • For Distributors earning up to $10,000.00 in the twelve (12) calendar months prior to termination, liquidated damages shall be in the amount of her gross compensation that he/she earned pursuant to the Erom Healthcare USA Compensation Plan in the twelve (12) months immediately preceding the termination.
• • For Distributors earning up to $10,000.00 in the twelve (12) calendar months prior to termination, liquidated damages shall be in the amount of her gross compensation that he/she earned pursuant to the Erom Healthcare USA Compensation Plan in the twelve (12) months immediately preceding the termination.
• • For Distributors earning up to $10,000.00 in the twelve (12) calendar months prior to termination, liquidated damages shall be in the amount of her gross compensation that he/she earned pursuant to the Erom Healthcare USA Compensation Plan in the twelve (12) months immediately preceding the termination.

62. Damage Waiver.

In any action arising from or relating to the Agreement, the parties waive all claims for consequential, indirect, incidental, special, exemplary, punitive, or enhanced damages, or lost profits or revenues, arising out of, relating to, or in connection with any beach of the Agreement, regardless of (a) whether such damages were foreseeable, (b) whether or not the breaching party was advised of the possibility of such damages, or (c) the legal or equitable theory (contract, tort, warranty or otherwise) upon which the claim is based. The parties further waive all claims to exemplary and punitive damages. Nothing in this provision or this Agreement shall restrict or limit a party’s right to recover liquidated damages as set forth in these Policies & Procedures.

63. Attorney’s Fees and Costs.

Each party to a dispute shall bear its own attorney’s fees and costs.

64. Louisiana Residents.

The dispute resolution provisions in these Policies & Procedures shall apply to Louisiana residents with the exception that any arbitration between the Company and a Louisiana resident Distributor may be brought in the Distributor’s home forum and pursuant to Louisiana law.