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ROBERTA CROSS GUNS Office of the Commissioner of

Securities and Insurance 840 Helena Avenue



Helena, MT 59601

(406) 444-2040

(406) 444-3499 (fax)

rcro 55 guns@mt. gov

Attorney for the Securities Department

Hearing Examiner A!J5 Q.2 1010

BEFORE THE COMMISSIONER OF SECURITIES AND INSURANCE OFFICE OF THE STATE AUDITOR

STATE OF MONTANA

IN THE MATTER OF:

ACN, INCORPORATED 1000 Progress Place Concord, NC 28025,

GREGORY PROVENZANO, individually and in his capacity as President of ACN, Inc.; ROBERT STEVANOVSKI, individually and in his capacity as Chairman of ACN, Inc.; ANTHONY CUPISZ, individually and in his capacity as Vice President of ACN, Inc.; and MICHAEL CUPISZ, individually and in his capacity as Vice President of ACN, Inc.,

Respondents.

) CASE NO.: SEC-2010-82

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) NOTICE OF PROPOSED AGENCY

) DISCIPLINARY ACTION AND

) OPPORTUNITY FOR HEARING

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Staff of the Securities Department (Department) of the Office of the Commissioner of

Securities and Insurance, Montana State Auditor, pursuant to the authority of the Securities Act

of Montana, Mont. Code Ann. § 30-10-101, et seq., is proposing to the Commissioner that she

take specific action against ACN, Incorporated (ACN), with a principal place of business located

at 1000 Progress Place Concord, NC 28025, Gregory Provenzano (Provenzano), Robert

Stevanovski (Stevanovski), Anthony Cupisz (A.Cupizs), and Michael Cupisz (M.Cupisz),

identified above, for violations of the Securities Act of Montana (Act). The Commissioner has

Notice of Proposed Agency Disciplinary Action

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authority to take such action under the provisions of Mont. Code Ann. § § 30-10-102, 30-10-103, 30-10-107,30-10-110,30-10-301,30-10-304, 30-10-305,30-10-309,30-10-324, and 30-10-325.

In particular, the Department recommends specific action against the named Respondents including imposition of appropriate fines and appropriate restitution with interest.

Service of process is pursuant to Mont. Code Ann. § 30-10-107.

REASONS FOR ACTION

There is probable cause to believe that the following facts, if true, justify and support such specific action. Furthermore, there is reason to believe that the following facts will be proven true and, therefore, justify and support immediate issuance of an order requiring Respondent to cease and desist their activities in violation of the Securities Act of Montana.

ALLEGATIONS OF FACT

1. On or about March 22, 2010, the Department received a complaint regarding

ACN from a Montana citizen. The complaint indicated the complainant had invested $499 with ACN for the "right to sell phone services." However, the services are not widely available in Montana. According to the complainant the only way to obtain a return on the investment with ACN in Montana is to recruit new participants who are then required to also recruit new participants.

2. ACN notice-filed as a multi-levelmarketing company in Montana. The filing

documents identify Provenzano, Stevanovski, A.Cupisz and M. Cupisz as the principals for the company. Provenzano is identified as President of ACN. Stevanovski is identified as the Chairman of ACN. A.Cupisz and M.Cupisz are identified as Vice Presidents for ACN. Provenzano, Stevanovski, A.Cupisz and M. Cupisz are also the founders of ACN.

Notice of Proposed Agency Disciplinary Action

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3. The Department relied on standard investigation practices and obtained

information from ACN regarding the complainant's allegations. After reviewing the documentation provided by ACN,. the Department determined the following:

a, Compensation to ACN participant investors is derived from either monthly

commissions from the use of the phone services and/or from "customer acquisition bonuses"

(CAB),

b. ACN documents include a statement highlighted by borders indicating "the

bottom line in building your ACN business is that you are acquiring customers and sponsoring 'customer getters' in order to build a residual income for yourself" Attached hereto as Exhibit A is a copy of this document provided to the Department by the Montana complainant

c. The CAB are only payable when the recruited individuals become customers of

the telecommunications service, Thus, in Montana the only compensation tor members in ACN is recruitment of others to sell the product that is not available for use in Montana,

d. The $499 investment is a membership fee for which the investor receives an

internet download of "essential marketing tools," including a training kit and "back-office services" necessary to sell the telecommunications service ACN offers, The investment also gets the investor five points toward his/her first step on the pyramid. Attached hereto as Exhibit B is a copy of the compensation plan provided to the Department by ACN, There is an annual renewal fee, as well, as seen in the ACN IR Agreement, attached hereto as Exhibit C

4. The ACN compensation plan overview provided to the Department by ACN

clearly shows by illustration the pyramid scheme. In order to progress in the company, participant investors must recruit other participants to sell the service that is not usable in Montana,

Notice of Proposed Agency Disciplinary Action

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5. Additionally, the ACN overview page (Exhibit A) provided by the Montana

complainant clearly illustrates the pyramid scheme in section (5). Then in section (7) of the overview, ACN shows the only two ways to earn compensation is by acquiring telecommunication services customers or participants. Because Montanans in particular are unable to use the telecommunications services, the only way to be compensated is to recruit other ACN participants.

6. Participant investors are provided an Independent Representative Agreement (IR

Agreement) when they become "members," See Exhibit C. It appears from these IR Agreements that the $499 investment is a "fee" to become a "team trainer" for recruitment purposes and pays for the "essential marketing tools" of recruitment.

7, Participant investors are promised a certain rate ofreturn based on the numbers of

recruits they obtain for ACN, as set forth in the ACN overview. See Exhibit 8.. For example, ACN tells participant investors they will receive $ 3,000 monthly if they become an Executive Team Trainer (ETT). See Exhibit A. In Section (9) of the Exhibit A overview it appears an EIT must recruit two qualified team trainers (QTT). Alternatively, if a participant investor recruits two QITs who recruit two additional QTTs and each participant investor acquires 20 customers, the investor's "overriding residual income" could be as much as $11,000 per month. The further up the pyramid participant investors are able to progress, the higher the compensation promised.

8. In 2009, ACN recruited over 300 Montana participant investors. Upon reviewing

documentation provided by ACN, the Department determined ACN reported 312 Montana participant investors paid approximately $234,813.02 for monthly fees, membership renewals, supplies and convention fees in 2009. During the same period, ACN's Montana participant

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investors received onl:y $16,615.08 in compensation. The compensation was primarily paid for obtaining new participant investors, rather than for selling the telecommunications services allegedly offered by ACN. In fact, a mere $896.86 was paid as compensation to Montana participant investors for direct sales ofthe telecommunications services to non-participants.

9. In 2008 ACN had 91 Montana participant investors. A review of the

documentation provided by ACN indicates a reported 91 Montana participant investors paid approximately $61,741.69 for monthly fees, membership renewals, supplies and convention fees in 2008. Only two of the 2008 Montana participant investors received more than $600 in compensation - one received approximately $700 and the other received approximately $696. The 2008 compensation was primarily paid for obtaining new participant investors, rather than for the telecommunications services allegedly offered by ACN. In fact, a mere $783.06 was paid as compensation to Montana participant investors for direct sales of the communication services to nonparticipants.

10. ACN promotes its pyramid scheme through an internet website, local "seminars"

and urban conventions.

CONCLUSIONS OF LAW

1. The Montana State Auditor is the Commissioner of Securities (Commissioner)

pursuant to Mont. Code Ann. §§ 30-10-107,2-15-1901.

2. The Commissioner has jurisdiction over this matter pursuant to Mont. Code Ann.

§§ 30-10-102, 30-10-107, 30-10-201, 30-10-202, 30-10-301,. 30-10-304, 30-10-305, 30-10-309, and 30-10-325.

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3. The administration of the Securities Act of Montana ("Act"), Mont. Code Ann. §

30-10-101, et seq., is under the supervision and control of the Securities Commissioner, pursuant to Mont Code Ann. § 30-10-107.

4. The Commissioner shall administer the Securities Department to protect investors

pursuant to Mont. Code Ann. § 30-10-102.

5. Respondents promoted and operated a pyramid promotional scheme selling a

sales plan in which participant investors receive consideration primarily from the recruitment of other participants in the plan rather than from the sale of an actual product or service. Mont. Code Ann. § 30-10-324 (6) (a) and (c).

6. Respondents violated the Act when they promoted and operated a pyramid

promotional scheme in Montana pursuant to Mont. Code Ann. § 30-10-325.

7. Respondent's IR Agreements represent investment contracts through the terms of

the IR Agreement and its references to the compensation plans pursuant to the definition of a "security" at Mont. Code Ann. § 30-10-103 (22) and SEC v. W,J Howey Co., 328 Us. 293 (1946) because Respondents require an investment of money to participate in a common enterprise where the participant investors have an expectation of profit and said profit is derived from the efforts of the recruits the participant investors obtain, rather than from the sale of some product or the provision of some service by the investor.

8. Respondents violated Mont. Code Ann. § 30-10-201 when, in connection with the

above promotion of a pyramid scheme, they offered ACN IR Agreements to persons in Montana without first being registered either as an issuer or as securities salespersons in Montana.

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9. Respondents violated Mont. Code Ann. § 30~10-202, by offering the IR

Agreements that constitute investment contracts, and therefore are securities, to persons in Montana without first registering these securities in Montana.

10. Respondents violated Mont. Code Ann. § 30~1O-301 (1) (b), by failing to disclose

the following material facts which were necessary to disclose in order to make the statements made about the investment in light of the circumstances under which they were made not misleading:

a. that at all times material hereto, the ACN IR Agreements were not registered as securities in Montana;

b. that at all times material hereto, the ACN program is an illegal pyramid promotional scheme;

c. that Respondents made fraudulent statements of material fact when they represented that the program was legitimate in order to encourage participation in the program; and

d. that Respondents made misleading statements when marketing the availability of the telecommunications services in the state of Montana.

11. Respondents violated Mont. Code Ann. § 30-10~301 (I) (c) by engaging in an act,

practice and course of business that acts as a fraud and deceit on persons in Montana by promoting a program that constitutes an illegal pyramid promotional scheme.

12. Respondents violated Mont. Code Ann. § 30~10-301 (1) (c) by engaging in an act,

practice and course of business that acts as a fraud and deceit on persons in Montana by making false representations regarding the ACN program to at least 312 Montana citizens in 2009 and 91 Montana citizens in 2008.

Notice of Proposed Agency Disciplinary Action

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PUBLIC INTEREST

For any and all of the reasons set forth above, it is in the public interest and will protect Montana investors to:

1. Immediately issue a temporary cease and desist order barring Respondents, as

well as ACN's agents and representatives from further violations of the Montana Securities Act

2. Order Respondents to pay administrative fines in an amount and upon such tenus

and conditions as supported by the evidence and determined at hearing of this matter;

3. Order Respondents to pay restitution to Montana investors in an amount and upon

such terms and conditions, including the statutory ten percent per annum interest on the money invested in the ACN pyramid scheme as supported by the evidence and determined at hearing of this matter; and

4. Take such other actions which may be in the public interest and necessary and

appropriate for the protection of Montana investors.

STATEMENT OF RIGHTS

You are entitled to a hearing to respond to this notice, and to present evidence and arguments on all issues involved in this case. You have a right to be represented by an attorney at any and all stages of this proceeding. You may demand a formal hearing before a hearing examiner appointed by the Commissioner pursuant to the Montana Administrative Procedure Act, Mont. Code Ann. § § 2-4-601, et seq., including Mont. Code Ann. § 2-4-631. If you demand a hearing, you will be given notice of the time, place and the nature of the hearing.

If you want to contest the proposed action under the jurisdiction of the Commissioner, you must advise the Commissioner within 15 days of the date you receive this notice. You must advise the Commissioner of your intent to contest the proposed action by writing to Roberta

Notice of Proposed Agency Disciplinary Action

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Cross Guns, State Auditor's Office, 840 Helena Avenue, Helena, MT 59601. Your letter must

clearly indicate whether you demand a hearing, or whether you waive formal proceedings and, if

so, what informal proceedings you prefer for disposition of this case. Pursuant to Mont. Code

Ann. § 2-4-603(2), you may not request to proceed informally if the action could result in

suspension, revocation or any other adverse action against a professional license.

Should you request a hearing, you have the right to be accompanied, represented, and

advised by counsel. If the counsel you choose has not been admitted to practice law in the state

of Montana, he or she must comply with the requirements of Application of American Smelting

and Refining Co., 164 Mont. 139,520 P.2d 103 (1973), and Montana Supreme Court Comm'n

on the Unauthorized Practice of Law v. O'Neil, 334 Mont. 311,147 P.3d 200 (2006).

CONTACT WITH SECURITIES COMMISSIONER'S OFFICE

If you have questions or wish to discuss this matter, please contact Roberta Cross Guns,

Office of the Commissioner of Securities and Insurance, Montana State Auditor, at 840 Helena

Avenue, Helena, MT 59601, (406) 444-2040 or, within Montana, (800) 332-6148. If an attorney

represents you, please make any contacts with this office through your attorney.

POSSIBILITY OF DEFAULT

Failure by Respondents to give notice or to advise of Respondents' demand for a hearing

or informal procedure within 15 days, will result in the entry of a default order imposing the

disciplinary sanctions against Respondents, without further notice to Respondents, pursuant to

6.2. 1 01, Admi nistrati ve Rules of Montana and the Attorney General's Model Rule 10, 1.3.214.

Dated this ~ day of August, 2010.

ROBERTA CROSS GUNS

Attorney for the Securities Department

Notice of Proposed Agency Disciplinary Action

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CERTIFICATE OF SERVICE

I hereby certify the foregoing was served by prep paid US mail, certified, return receipt requested, on the ~ay of August, 2010, on the following:

Julie R Mueller Associate Counsel ACN

1000 Progress Place Concord, NC 28025

Notice of Proposed Agency Disciplinary Action

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Exhibit A

EFFECTIVE AI' RI L 1, 2,009

STAR.TING POSITION

EARNED POSITIONS

5 Points Including at least 2 Preferred Customers

Aquali:fiedTT "

,'-' ." + ' ..

1 qualified IT in 2 separate legs ,(at any level)

15 Points +

1 ETTin

3 separate legs (at any leve!)

" 200 Points in 3 separate legs

3 St.(lfRVP lTCin

3 separate legs (at any level)

'4 Star RVP 1 TC in

4 separatelegs (at any level)

6 res or RVPs in

6 separate legs with at least

3 RVP legs (<It any level)

~Preferred C usto m ers must be either different services or the same service from a household different than your own

'~"

, TC '

lTTTTT

':1lXr'1OiY ~,

Minimum Monthly Downline Billings: $50,000

Minim1.im Monthly 'Downfi'ne Billings: ,'-' ',$'75,000 '- "

Minimum Monthly Oownfine Billings: $500,000

Monthly billings are reported two to three months in arrears.

CABs (Customer Acquisition Bonuses) are earned whel1 TCs and above assist a newly sponsored IT in g.etting qualified within their ftrst 30 days, There are no CABs fOf 3 Star RVPs. CABs, will 'be paid 14 days following the new IT's start date once they qualify, A representative's start date is determined by the date of payment of their Tf application fee. In order to rec.eive CABs, TCs and above must maintain the minimum number of personal customers to be qualified as a Teem Trainer. Please see the

bonus document on MyACN for promotional adjustments to the Compensatton Plan,

~J!r.1 -',' t ... 1 •• ~ , •• .. ~ - ~ • -:~ I.' ~,. ~. ~ ~ .' • < : ~ I,. ~ •• ' ~.~. .'" 0" • ~.... • I "".";

'I."~. '_ , .. r • • - ,. " , •• , ACNPolpt·System,. '.".,.,. ."~. ., ,.',

"i',\. ,.J • ~ .' _.~,' ". \.' , I ~ • - y • '. " '/. ~ ,~. I ~.,- ~ _ ~~

Digital Phone Service with Video Phone (Includes Primary A~cou;it for Fami Iy Pians), IRIS 3000™ Video phone Customers count as 3 Points each

60 . after theenter date

Digital Phone Service with Phone Adapter" '" 1 Point

Wirelessl 'new accounts (individual or air card) (mdudes Pnrnarylfne for Family Plans)

Open Line 4 Star RVP

11/2%,

1st Generation 4 Star RVP

1%

3%

. . _. .

A 4 Star RVPearnsc6mrnjs~jon5 on all customers below 7th levelto an unlimited number of I_~vels to the next 4 Star RVP's 7th level._

2%

See Personal Commissions schedule below.

". DSL Internet Servlce is SO"Al cornmtsstonable, Dial-Up Internet Service is

1110% corn mission able .

.. ,.., 3 Star RVP commissions are riot peld to 4 Star RVP or SVP positions.

Note: 3 Star RVPs, 4 Star RVPs and SVPs must maintain minimum Team Trainer qualifications to qualify for commissions.

$9,000 to $9,999

$10,000 +

"Uplme commissions are half the standard commissions if the personal customer volume exceeds 53.000

Note: ACN reserves the right to adjust the commission schedule for indiVidual accounts such as business and affinity programs where required.

Subject to ACN terms & conditions and pollcles & procedures of the Independent Representative Agreement

Success as an ACN Representative is not guaranteed, but rather influenced by an individual's specific efforts. Not all Independent Representatives make a profit and no one can be guaranteed success as an ACN Independent Representative,"

- ;'~:,:;'" :':, :':~'Wt'~~E~S to¥~l)~.Slq~ Bi~!N~~ p'~;R{~~i~T~ ;,i'~~':;/~:
.... '". >~_<' '. r '- '/I!<~~:." (P~j.d oyer c9~tra~t:terJTl") :":.'::''-~;':'~'' -<: ;1:-> :.: ':. ?
One line or Air Card - $40 ,
2 Line Family Plan - $60
3 line Family Plan - $70 "' ..
; ..... ,/'- "_4 Line Family Plan - $80
<-: ....
5 line Family plan - $90 -_. ~
Single Line Extensions - $20
2 Line Family Extensions - $30
3-5 Line Family Extensions - $35
. Add-A-U'ne - $1 ° per line ..
- -.-
T-Mobile Wireless FlexPay - $20 . . DISHj"ETVoioRKCOMMISSI0N BIlliNG PER MONTH' ..

, '. . . (Paid over contratt~t~rm~) :' '. - . '.

• I' '. ~, ~. 7

$50

Dish Family Plan $19.99

Commissions are calculated based Oil hilly cornrnlsslonebla, ectust monthly billings, excluding Wireless, Satellite 1V and Home Security. Commissionable Revenue for Wireless, Satellite lV and Kome Security customers are it fixed amount based on the plan,

"Unles~ a customer cancels prior to the end of the term.

<!lACN.lnc. 2009 U$ENG_COMFPLAN_W_RP _'10509

Exhibit B

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0 9.100liIJ 9U!l0JBO

Exhibit C

Mar 22 10 12:11p

Caroline Moore

406-777-2129

p,2

ACN World Headquarters 1000 Progress PIacII Concord. f'IC 28025-2449 Phone< (7041260-3226 Fax: (704) 260·36~2 www.amlnu:om

INDEPENDENT REPRESENTATIVE AGREEMENT

I Office-use Only

BIn~date ot PI1m:lpal

Zip Code

I, the under5igned, authortze AeN to charge me cmdlt Cilrd account liSted below and aclalowledge that I have lefjal authority to enter into this agreement. I have carefully read I:he Terms and Conditions and acknowledge this by si9ning <It the bottom ofthe jl8ge.

Si9n~tu'e I Printed Name
Select payment method: a Personal Cheddmake payable 10 AeN) Q Cashier's Check o MoneyOrder o American Express.. Dls(D'vef, Master card or V6iI
Cfediturd AC(QuntNlJm:.er I Expiration Oate
When you lXtWlcIe a meek as payment;. you autncrize us eittler to use 11>" I nfo<mation nom yccr check to "",Ire • on<Hi me elea"",k fund rnn<f ... [rom )f<II.J r <K<'"O/n' erte pre", ss the I
P"Y"'ent as a thol!d< Ir.ionsadlol1. When WI! lise rAis lnf«rnatJah from your chold: 10 make an eie<:lmnlc fund t"'n<fe<. flDldi m.;y be withdr ...... &om your .. tC!OU," as soon as ,he same day I
~au mak .. your ""yment. and you wi II not ,e.eI"" ycur ch""k bock from you, frn •. ncial inst~ ution. In Ihe ... "'" that YO'" check i. ,~med unpaid !of insufllc;.",t or ""CO~l!cted lund,. "'"
m.a)· eleafCnical~ dllol! y:>IJUWlunt foJ me pllncipil! amou III af tJ""heck. I
r--"
I ~nd"l'.Itand Ihal tIl~,e is no '!!qui""""", be)rond Iiing CIf mi, application and no pmch .... ' of sale:! or lralnlflg materlak are requirHi!o ber:cme.., Jndepe.nd ..... , Representallve
atMr t ..... n r:he pltn!~3'Q cf 3 Train leg ICIr. which 'Is gold '1 A(r.rs (051. My ad""""""""ru 10 '!\Ighe' lewls Intle ACN 'C~s<ltinrl PIiIn is based u pe ~ me acq ulsllion of customelS and
!elec:om '" unicoticnsl'l """net U "'gI>. , iJd<nowIedge tim: any pu;chose of ",lei aid!. tralr>ing malerial. or rraining ts Slricdy lIOiunla!y. , abo underst. nd that if I choose to SJ)QfISQr erAer< to
participate In IICN's Compensation FI, n, I will not 'receiVe any wmpensadon WM.tsoI!V<!I fe, lfIe act of sponsoring or ,«rutting. and thai I wiD be compensated bil50d upon the ~ of
~ Independent RepresentatiVes a 1151 only 10 the extent of sall!s made by lfIem to end user OJsto ......... 1 aclcnowl.edge that If I ..... er.ecllti ng this Agre''''l!Ilt en behalf of a company of
any ~nd, I ,..,""rthel ...... maan .,.,fSQ1a .... l'l!$pon~ble for II>e performanc" mall of the duties and cbllgOlioos d~.rtbed in this Agreement.
TE::',lS ,

'1'1.

2.

! 3.

14.

s.

L Iii .. undef51g rred Applicant ~fflml1hat I am oflegai age in 1M otate of e:cec;utlon of this Agreement i

I understand thllt thL!; "greemen!: is II« binmng I.!ntiL received ami iKDIptHI by ACN.. I agree 10 ('mel)' pay for ooy ptoduas, materials. servites or oIher itelm that p.K~aSle from ACN. In th .. """"I that' am d"UnqlJMt wi1h ",,;pect to <uch paymEflts. I acknowledge that AOI ~ affser "xh debt frcm ilny ~Ies O'Mng to _ under lIS Compet1S3t1on Program..

I "9'"" thot I am "" IR reopcnsible"" ~ own bu.iness and not an agent. legal , .. presentative or _pl_ '* ACN or any party with whom ACN tr~nSll<Z er C::CnlraCl> b...me..s. , '9'"'' ,hat I wil not b" fepresenti"9 In any manner. that I a m an ageM,. 'epresenta~. IIl9"I .. "",,,tillive Of emplr>yee at ACN or a"y patty with wham ACIII rnln.aa; or contracts business and WlU not be tre!ted as.." em",oyeeicr PU'l'o<es <:4 .nyfederaJ. stilte or 1oG15tatule, regulation. """i,..."CO! .... othe. i"",.

I "'ay termlnale this A<;jreement for any reason. at any t~. b~ glvirog A~ p.rklr wrlnen netice at its adc.elS of teCC,d AdN may h!rmlnate this Agreement PUTSuant to its f'dldes and

P,eced LItes or in the ev_,hat I breach a ny pan cfthl~ Agreeme.nf- I

lJpcn (equest Cf .... riu ... n notiCE' «termlnatlcn 01 th!5lrgreement P~'$uan! to the procedur .. s set lbrth by P"Tagraph 4 ",Itfoin.",., (1' yea,1Iom the dll'teof purchase, ACN shiilll repurchase the Training Kit, (at ~<OSt of $50;1;)11). pmvfded!hal tI1e Training KlII<retum..a to ACN in a reuswble condltiori.

, "dkDoWtedge mat as an lit 1 a:J1 not guaranteed any inwme nor am I assured 30)1 prc:ilt<or .""" ess , and I certify that na allM$ oFg<I_nteed ~fofit, or fepresenl<ll:lons 01 expected earning' lloat might _u ~ from InjI E'ffcrts as an IR have been mode by AOI or my sponscr, In tIIis (Onne.;ti ..... I shill net represent <Ii re<:tIy or indirectly that 3D)I person m.!)', can Dr will.,.", ,,"y Slated gro rs or net .. mour...: not that 'pcruo''''' ifJ of Qlher iRs is easy to seotte or retain or lhat subsG"".,!I1)f alit, will succeed.

PLEASE SEE PAGE 1 FOR ADDITIONAL rERMS & CONDITIONS I

i .... y c .... 1<1.'1 "'is fla.....a"' ... withcLrt pe ..... 1Iy or obli9"'ioA, fur "full <efund. withIn _, (1 OJ business days from the d_ of l"i' "9"eement, exclu,s!-,e of ItIe date of signing or 11 precessed ~adly the d""" th;s AgIo_em i. sUbmitted to ACN {or pn>eeSsin<J. lundefstand that If I c.""~1 aft.,.. th e ten (1 QJ day per!od.lam not emltled .0 .. ruU reFund This 11",._" Is not applk.;oble in C"eOrgi a Or if superceded by any sIl>!e ra.... IF I can<:1!l..,Imr. the tl!n (101 buSIness days from the date of this ~~ any payme.us """'" by me uncle< this Agtellmenl and My inruurnent """""red by mewln be r~u.ned within _ (10) bUSiness d..,.. folloMngo recetpt bV "CN at 10)' Oncelilltlon Nc<ICfI'. To ",neel!hl> ~ ... t.. I must _I, via 'eglstere<lor CE'nmed ma .. rerum receipt ""IlJesfed. or deliwer persona nV to ACN a signed. dilled copy ola Notice of Qmc:eDatlon. or rend a telegram to; AeN; ~ 1 ODO Ptogress PI_ Conr:rd HC 21lO25-- 2449, If coJ\tellalion occurs after ten [IC» btJ$iness day$ from the date of IIlls Agll!l!lTH!nt itEm'S above applies.

TERII!15
,
I hereby apply to became an Inclependenl ~epreo;entativefor 1I.0I.1nc. ... r>d h<J\'e'<:;""fuUyreaci aJId agree to a bide 11)1. all terns and ccndltiolls ohN" Agleementlncillding '",msfl7 to
#23 an pagel. the CompensadonPlan. tire ACN "",:!-Slamming Policy and tho: ACN Policies pd Procedu res whid! are i""orporilted by remenCfl' herein. Pl&\SE SEE ITEMS M & 115 fOR
IMI'QIrI'ANT <ANCELU.110N INI'OFlMATIOH.
By .Ign 1 Jog this appllatl<!n. k Is h<!rd1y ccrhrned that neither this applcanr, the appae<>nr, sp<>U'"' a. Iffe p;lrtrIer (unless they ar<! '!:he appIl~ant's $PCI~ I\a"" had any ethEr I~ and/or
beneftt in any oil"", AQI dlstribut<mhlp ..alhln. 1{ appll<iJble.lhe 12 months p!';'" 10 the EfIecIhe Oate nfthls "9""""..,t a. set forth In me CUITent. PoIIcies,..,d Prcced ...... atI3ched he...ro.
I prefer my kit in the foIlowinglionguage {choose Gnej Applicant's SlgnaM~ Date
Eoglish Kit 0 Spanish Kit 0
Kit Received: Dves o No A.ppIicam'~Prjl1l"d Hame
Your Team 10 number is: 1st page- ""at CDpY 2111:1 page - 5po nsor mpy 31d Fag"· RepreSelltatl<le wpy
: Mar 22 10 12:11p

Caroline Moore

406-777-2129

p.3

7. I u ndersland thoI.Q.Ql off<!l"S iIa~OtJs 'ervlces in dlffe. .. Rt markers and, t>ased on busines. ~OIIdltions, certe in ~1Iik1.'S or th~ marl<e~ where me ~ces are offiMed may change from tlmo! to time .... ham notice. Furth(!!",l I.IIlde<mnd that ACN strong Iy recommends the marlmttl1g of all ....,11. bl,. s .,...Ices by Il'to their prO'l'ectlve "'stgm ......

8. AOI's renewal fee <0l1"Il1 .... "'" after the Iii', first ann",e,""'Y daile, Ti1e"r>nual fee ls for 5e"'lc;es l><tJVIcled by ACN which Ind. but are not limlled to trading of personal OJrn>"""~ trackil1!J of downline ~ """ld aa:ounting seMCes. The JR can obtain a renl!WlJl appllation from lhoi .... eN website. Renewal app&ca!jon and fee must be re~ by ACN no liIft!r IhiI<l30 d iI;lI5 afI~r tn.. IR's a nnr.ersary d.l" or deaciM1tlon of the IR pcsltion will o<:cu', _.;!dng In the m.fel lure 01 bonu ..... o:ommis;i""g '" _ payments freon AQl, no ..... is " fee to prOCllSS 011 paymen~ mad .. to IRs,

9. Il!dn<>wiedge that my III rel:otlonship Is With ACt; and noI with any .,.mer. supplier, er se<Vlce pr<Mde< with wnon.. IICl'I transacts 'If CondUC15 b"slness.

10. In the preeess af >ell;", or ott,erwi5e P',omotlr!g the p,odud:! or ~W that ACN marileu, I agree thilt I .... an I R, wli """",m In·a 1~1"ed!lcaI and mc",1 manner and I ag ree to Imke no fats.! or ",Ist..ad I "!J st_ment, regard Ing the _Iws relallom"'p. ~.,.,n ACN. the 5.ald ca ........ ;.upplie."lseMce PfOII!d<!fl.) 0 r m e and the products Or services. I agree net to r~"'i< ,_ IRs on the basi. of promoting 1I1e sale of i'lY cno! SIONI"" oI'I'ered by -"CN and that I ,Noll fofl<>w !he CA>n1 II" ~y'. rec:orn mended pradi><:e. of !"O moti ng ~nd selling all 5e1V"",". I ,pecilically il<knowledge Iha.t I shall no! ..,.,gage Intllo! slamming <If a amnmer.

11. I understand that dUling ""Y Investigation b,- ACN with re,1"'Ct to my breach af,his Agr.""'1!fl1 and/or JIOf. Po!ldes ar"o(t P"'lOedu .... , my di51fi)U1OfShlp may be su.pended by ACN ~nd any payment> whlch ""'l' be OIhe",.,", OWIng to .... shall be- e5cJOWEd until final re'iOIution has been ildUeved. ! adlnowlEdge tI1at In the e-.' of my vlolatlon of thiS Agrec:mcnt and/or ACN's Polides and PflXe<fUres my dlstrlbuWIShip IIgI-Itf may be terminale<i witht>Ut fun""r rl!Q!ipI of cammiuions Of payment!; of any kind.

12. I agr .... to keep ...:cu.at~ ,.,mr<!s and SM II not ellgI!Ige ,n cr peno.m any mI""adlng. dea!p!ilte or une1Nal pl3ctl~ I rum"" agree to abide by all f>!der.oI, <tate ""d Ioca1laws and r~~1ions yGVl!lnll191ile 5aIe or solidtalion of Illo! Plodum and sel\jlces: Prlarm<!d b!I ACN .Mlor its. eam..rf.uJ)pli.etlserviul prn",d.,rl.), r"duDin" but POt 5",;t .... tg. any Dnd all permi", and licem es requlrod 1» perform under this A!lr"""",rd.

13. Neither AOt nor anytelec.ommunl(iltlo""",,,_ canler/suppll.r/S4!rvice prcvld01"<:OfI"IIl"I'Iies ... 1I'> whom ACN transom or cont<act. buoll"ll!<S Shall be liable uncel" any drcumstlnces fOr ""l' domage or loss oK ... y kine. ind"d,ng ind; rect spe<.ia I, (>Unitive:, cornpeniiltor;', or ""tISeQU~tiaI damages, io§5eS or profit!; which may resulr flom any cause, indudj ng but not Umlted 10. bleach OfW,","'RIY, delay, act, ,,"or or emisSion of AeN cr .. 0,/ talllerlsuppl1erlseIVlce proVlder(s), QJ '0 the e-vm[ of ctisaJt1til>uiItlon 01 modlflGltion of a product or !'oeM"" I!Y .1101 or Its c.arrlet/suppleflseNi,e "'0I'1deW)" I ... der.;tand tllit 'hi! obligations of ACN and/or its wrlerlsup~~erlseNic:e providtor(s) are IlmiNd to the perfurl'l'lill'lCeof best oeffuns to ,IlIllCe5S cu.stamer o.'Ilet1; for <K:CI!Ilttnc! and approval of requested ~ices,

14. j under.und that as an IR.I am free to Sl!lect myowo mean .. meth0d5;md flliIMeI" ofoperalJOO aoo that I ~ [reo lOchOOSE !h~l\ours and location of"'i ~iYities under thl' Agreemel"lt. subject onl)l to t~e term. of th~ A9I"eement and a~ ACN Policies and Proc:edura

15. 1 adnowledge that "CN marketS po'odo<ts and ..,MoestO eM CUSlomEfHII" raleS Mtabll<hed by ACN Or It. carrll'rl'upplierlseovlce pravlderOO from time to lime and tIIaIttlose products, seNic:-es and mes shall be .ubje<:t to change WlIhOUl prior notk: e,

16. I """" ..... I~@ llut I am r""p,,rul bI@ for sup_I "9 .... d supporting I nde~r.t Il; .. ~tativ<!. of my dovfnUn e, I "9"'"' to mointai n regu"r ..,mmunlCi1tion In ""ppen of my dawnl me repr"""n12tives mroll9h ,,,,,b;oI and written communications.

I 7. ACN ~al1 pt!rioOica&~ m .... """ou, sales 1_, ... plOmotlM material., training and omer products or s ...... ces available. I, """'ever, am under nl) obliga1ion tg pIl ldIase any quantiliei of those m.ll!!rlals or seNlee'< at any Ii_. Rather, I VliU to..,"", t~ optlon to <In:Ier ~nd purchase any materialS Or servICes, wI1kh I may choose. If I <:hoo5e 10 pJrChase sw:lt m_ioo then

I may rel~Jn '''''l'""nused. unope!"l$land coliTently ..... """table items 1i>I' '4> 10 one year and reclei"". <eiund 0190% rAttle puR:t.a5e Price. I wlll incur the (ost (If stllpplng sald miterials

~~ ,

11:1. I ackr.owlMge that I h""" tI1" .l<jht to sign up as many personal custom .... as I ~ Fer each personal customer 5i9'led,1 W~I receive a commission ","ch month from my persoNl (lIStOmer.' telecomrrwllicatioM.-ge P"l"""1lIS and from "1li netWotI< at IRs In accord with the currently ".,Iid ACN Compensation Plan. ACN r~eIVe$ the right III val)' or ch~~ eligibility as set out In the cnm"""""tlOl'l plan. My ~f payrr"",tsl ~ will be based upo.n fUllilll<>g ",(lain terrns.ofqu'al16C1tIDn as 5et fctdI by Ill .. AOII Compensation Plan. I agree that as an ACN Sales ~epresemative. I skalI place pnma.y empIia51s upon the saleaf teIec"",mu~iol'Sllntemel serk'" to nondistriow:.>r cusrom"", a~a condition af my tKeIpr cf.oommlsslons. Uf1Jd ... """"In acum.ton.;M, Cam mission liteS may be adJU51ed for proml1t""" ",oduas or ~"'ed prfdng. I ~gree d1.t an}! P¥l'mems made to me by IICN In check form that remain uncashed by me aftrr six (61 months from ~he date on th~ cheCk are IUfelted by me and I!>e!'eafter a Ie the property of AOt

19. I ~gree to indemniry and hold "CN-lls '" .... holders, directurs, afflO!f$ and empk>,tees harm~ from any and all da.lrns. dl!m ~e5'. ulld eJ<p.n5l1s,lnduding ..... '1 IIUDweys' feeI:, arlSinll out of my actions Or oondua In ... oIo_n of this I!.glE!ement. In the event a dlsp <lie sha II .... Ise belW!!en ~self and lieN' as 10 ou, ~V<! rig!m. dutit>s and obligation. arising out of or rela!llY,l to this A9'-1lt. and th .. PoIlcles and Pmcedwes 01 ACN it Is agreed that sl/Ch disp4es shall be """Iusivell' re!Cived Il1rOll9" binding arbib:atlo<o before the "'meriean Arbitration iIssoc!a'<>n pursuant. to the Co mmercial Rules of Albitratiol\. The arb1lr.a1i:11'I sIIaU be held In Charlotte, North earbil na before a panel of three arblaalolS. eadI side choosing one and then th~ two c""","nll the tMd. All daims hereunder muSZ: be ~r(I!Jghl ... !1hln (We (2) l"'~ of !he date on whIch me farn or circum£tancesgllllng lise (0 the dalmare alleged to """" hapj>efleC!, The Jaw> of tn e s.tate of New York wiH applv 10 tt.., "' .... ticn oldie dispvl1! unless ome1Yllse ~ in ¥f00ng. The award of til. arbitrator shall be 11 .... 1 and may be enc.red In any court of competent Jucrt5dktlo .... Th;s provlsicn sh,,11 nax reroia A04 from seeking p-ellmlmny or pemr.>"",,' iriJu naive relief ill any a>UIt 01 compel.." jIJ I"bdlaion.

2ll. I aCknowied9<!tlIiItll>;r;ie ,«eived II'> .. ACN!';)Iid", .n<l"fOr;cd~ ...... I ~""'tanc and ag.eethi>t Ihe ~lCifi ... d Procedures.re blndlng ~ponme. Ifun~lacmowledgethatACN fu"" ~ its ,Igm to InOdlfy tnl.lIgr_m. the ACN !'<Illdes and Procedures and ill> Compe!1sation Plan at "n~ time by proViding me with written notlflCal:ion or verbal commu.r.1catlon tlvough the ACN web>lte IWWW.ilCninc.c:om).OIsuchmodlficatlon.tfu"oug.otherWritteAOlverbalcommunlca!lJ)nfromACN.Forputl><lSeScHIlIsJ\g;e ... nen1.my address •• indicated on.lhh Agr""ment s ..... 11 b~deemed to be my mrrectadciret •• W11es:s;md untU .... It!En nolillcotlon of. d","'l" of addt"", is provided by m ... o AOl.

21. I acknowled<j" tilat this ~em""l0 the CompOflsatlOf\ PI<1n and the ACN Poli':;"" "nd Procedure:< lncOtpor~t«l Mr"eIn b~ rererenc:es col'$tilute tho! enti '" Agreement "'tYlee~ ~M pill1les hereto and sha8 not be modified or .mer.ded ""1C~as descri1:>od in il<!m 20 above. This A9reemenlsMII be bindlng upon and inure,,, the J>eno.IIrof h .. i~ succ ...... " and pennitTold a"igr.s chloe parries her.eTO.. If any provlsion of ttle Agreement Is determined bjllIny autoorlty d col!1p;:tent ilJr~iClion to be I,,~d or unenfOJeei!bIe In parr or in whole fCO" anll rl!3SOM ..... a!>Oe_. thewli<liq. of the _Ini ng p<oYlslon "r portiOl"\$ fh",.."f ..... 1 1110[ beaffi,a«l"theoeb~.

22, I aclutcwk!dg& thatth& Compensation Plan is ~ en c""ompn>duct< POI "'marl«'llng...cis SOlbjectto change wlthoolt ""lie ...

:u. During the term oItne Ir1dqJender1t Rep"'5I1ntattve ~menr. repre>entl(1We; may 1>01. dftc:tly« Indirecti)'. seU to or solicit telecommunlcatlan5llnle<net servites or ath&r prod!JctS

Of service. offef~ !:oj ACN through ~ny person or entity other trw. mat spl!cilicall)l designated 0' apprwe(l in wrilitlg by 1101. Independel\t Re",.es..ntatives sh.11 nOl.duril1!Jthelr reJ"1on5~p wl!:h ACN and fat a perio1:l ofOl'le {lJ year ~,; directly or indirectly, divert, entice, knowingl~ (all u""". sell or sofkit, 1<>keaway 01 moYe any r:uilt>~rof ACN Of Ill> earlier /sLlJlPIif!r!SI1Nice proYider(5), whether or net the lodepena.nt lI~ntative o(l<jnally (lrOCIIrecI or brQught such customer to ACN fsuch a ~tlvities are collecli~ely refurred to

herein a' 'Solklta\ion'l. All CIA 1ltO""'1S """Ielted t>,. Independent Repnesentalil/ei en beNlf of ACN.and its carrlOf/5uwlll!rls.ervlce pr~r(» Me deemed tQ II<! cDstomers of ACN or "" ~/s_llerfsetYicll provi<k!r{l) and not of its Independent ~ept""eSentali\jes.. Independ""t flepresefltati,,",s understand thllt ,ox;h nOl1-o;oli.:itatloo prohlbitloo s~1 be ~laIy enforced and that ACN', "'rrlerisupj>ller/5"rvi~.e !)fovld"rls) shall be a third party beneficiary of this Pfonlbllion as well as any pmpri.a ry and ccnfidenti", I rdormiltion pr""lded ro AO\I""hic.h

in tum Is recei¥eCllI'.I ~dependent Representative. I'ulther. during ti"le-term 01 the IndepEndent f!~rE!5E!rrtilttve Agreement and for a perlod.of one (1) yg" lhM!ilter, re:presenmilJeS

may not em ... Irno .. direa marke1lllg relatlonshlpwid!_ <MleffSl;lppl,er~ pruv;deraf heN. Curing theot .... rnof thi. ~t and for "perIod eto,,", (') yearthl!r ... ft.", ACM Independent Rep.e5l1r1tOflves may nat solicit an Aa. I~nt R,",,(e5eIlta~"". wheth .. activ". ina"'iw, individual or en1lty I<l Jl'l'ticipate In a _rk .... ~,1ng progr<>tn offered by .. any ether company. regard Ie>S of .... ethel or 1'IOt such network. markedl1g compar1l' olre" ccm~ng prodUCtS or services. Without limiting in any way !!'eN's right to ,,1mII<' all rigl"1t5 <IIId reme.r .......... ibble to.:. violation afthls Ca.>ellant and condltiOl"l wi a ", ••. lil in. bUt Is nw limited to forfeiture of all distr!butoohlp ri!lhls, Im:luding all eu rrent and future commissions, bonuses '!nd payments of anr lei nd.

112009 All "ighB Reserved