AFFILIATE AGREEMENT This agreement contains the terms and conditions that apply to you or your companies (herein referred to as "Affiliate") participation as an Affiliate in the "Self Mastery Co Affiliate Program" (herein referred to as "The Program" or "Affiliate Program") and to the establishment of links from your Web site to our Web site, "selfmasteryco.com." (Self Mastery Co. herein referred to as "SMC"). BE ADVISED THAT UPON YOUR ACCEPTANCE, THIS IS A LEGALLY BINDING AGREEMENT. AS PART OF BECOMING AN AFFILIATE, YOU WILL BE ASKED WHETHER OR NOT YOU AGREE TO ITS TERMS. IF YOU DO NOT AGREE TO THE TERMS, PLEASE DO NOT JOIN OUR AFFILIATE PROGRAM, AND THE APPLICATION PROCESS WILL TERMINATE. YOU SHOULD CONSULT SUCH OF YOUR ADVISORS AS YOU BELIEVE NECESSARY PRIOR TO MAKING A DECISION TO ACCEPT THIS AGREEMENT. Enrollment Our enrollment process consists of two steps. First, you must complete the online registration form, and agree to the terms of this Agreement. Second, we will evaluate your application notify you whether or not we will accept you as an affiliate. Notwithstanding your completion of the first step, we may reject and/or later terminate your application if we determine (in our sole discretion) that your site is unsuitable for the Affiliate Program for any or no reason, including, but not limited to, inclusion of content, or links to such material that is in any way unlawful, harmful, threatening, harassing, defamatory, obscene, violent or that: a. Violates copyrights, trademarks, or any other intellectual property rights of SMC and its subsidiaries and affiliates or any other person or entity; b. Includes "selfmasteryco.com" or any similar variations thereof in the domain name or other HTML tags. c. Employees of SMC and the immediate family members of such employees are not allowed to participate in the SMC Affiliate Program. Promotion of Affiliation a. As an Affiliate Program member, we will make available to you a variety of graphic and textual links ("Links"), which, subject to the terms and conditions of this Agreement, you may display wherever you want on your site. The Links will serve to identify your site as a member of our Affiliate Program and will establish a link from your site to ours. b. You agree that you will cooperate fully with us in order to establish and maintain such Links, and will not alter Links or their content in any way, except as we may direct from time to time. Each Link connecting users of your site to the pertinent area of our site will in no way alter the look, feel or functionality of our site. Affiliate Identification All Affiliates will be required, in order to allow SMC to track each affiliate visitor and sale, to either: (i) display a graphic or text provided by us indicating their affiliate relationship to SMC for recognition in SMC systems; (ii) use the URL or Link that specifies their affiliate account with SMC to the SMC systems, which will have been provided to them by SMC. Affiliates need not state to visitors on their site their affiliate status or relationship with SMC. Our Responsibilities We will be responsible for providing the information necessary to allow you to make appropriate Links from your site to our site. We will be responsible for: (i) processing every order placed by a customer following a Link from your site in accordance with our normal operating procedures; (ii) tracking the volume and amount of sales from the Links on your site; and (iii) providing information to you regarding sales statistics. SMC is NOT responsible or liable to pay out on sales generated from Affiliates where the customer has clicked through to a SMC site and has either: (i) disabled our ability to track or identify them as a unique visitor through their own means (personal firewall, masking): (ii) have bookmarked the SMC site for later reference after click through from the affiliate site, deleted all history, cookies and offline files, and then returned for a sale or any type of action that would result in the Affiliate potentially earning commissionable revenue. SMC cannot be held liable for any inability to track such users or customers for the purpose of affiliate identification or tracking in the aforementioned situations i and ii. Commission Determination Only SMC products that are: (i) sold by SMC; (ii) purchased by users linking to the SMC site from your site pursuant to a Link; (iii) shipped by SMC; and (iv) for which SMC has received full payment will qualify for a commission ("Qualifying Purchases"). No commissions will be paid for product orders that are cancelled or returned, and such will be deducted on a monthly basis. Commission rates will be based on the aggregate amount actually paid to SMC for Qualifying Purchases, excluding amounts collected by us for sales taxes, duties, shipping, handling, and similar charges, amounts due to credit card fraud and bad debt, and credits for returned goods (such calculation resulting in, "Net Sales"). All qualifying product items available for sale on our site will be included in the computation of Net Sales. Specific commission rates are determined solely by SMC. SMC reserves the right to change the commission rate by notification 5 business days prior to the intended change. These changes will not be retroactive in nature, unless SMC and the Company have so agreed to in written statement and such commission agreement. Commission Payments Following the end of every calendar month, when the total commissions due to you under the preceding Section 5 equal $50 or more, we will send a commission check for the applicable commissions (less any taxes required to be withheld under applicable law). Such commission checks will be sent within five (5) days after the end of a calendar month. Earned commissions less than $50 will be held and accumulated until such time they are eligible for payment in accordance with this section. Payments will ONLY be sent to the business name and/or person, and the address listed in the SMC affiliate reporting system, available for viewing and altering by the affiliate at http://www.selfmasteryco.com/shop/advertising.asp SMC is not responsible or liable for the accuracy of this information or any such altering by the Affiliate or its officers which may result in any damages to the Affiliate. Reports of Sales/Order Processing and Tracking You will be given a password to allow you to enter SMC Affiliate Admin site (http://www.selfmasteryco.com/shop/advertising.asp). This password-protected site will allow you to review your sales statistics, which will be updated at least once daily, reflecting data through the previous day. Policies/Pricing/Product Descriptions Customers who buy SMC products through the Affiliate Program will be deemed to be customers of SMC. SMC shall be the owner of all information or data collected with respect to them. In addition, all of our rules, policies, and operating procedures concerning customer orders, customer service, privacy, and SMC product sales will apply to those customers. We may change our policies and operating procedures at any time. For example, we will determine the prices to be charged for SMC products sold under the Affiliate Program in accordance with our own pricing policies. Prices and availability of SMC products may vary from time to time, and the availability and price of any particular product cannot be guaranteed. YOU MAY NOT PLACE INDIVIDUAL PRODUCT PRICING OR LOGOS, IMAGES, OR DESCRIPTIONS RELATED TO PRODUCTS ON YOUR SITE WITHOUT OUR EXPRESS PRIOR WRITTEN PERMISSION. Publicity You shall not create, publish, distribute, or permit any written material that makes reference to us without first submitting such material to us and receiving our written consent. License a. WE GRANT YOU A NON-EXCLUSIVE, NON-TRANSFERABLE, NON-SUBLICENSABLE, REVOCABLE RIGHT TO (i) ACCESS OUR SITE THROUGH THE LINKS SOLELY IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT AND (ii) SOLELY IN CONNECTION WITH SUCH LINKS, TO USE THE SMC TRADEMARKS AND LOGOS AND SIMILAR IDENTIFYING MATERIAL RELATING TO US BUT ONLY IN THE FORMS THAT WE PROVIDE TO YOU (COLLECTIVELY, THE "LICENSED MATERIALS"), FOR THE SOLE PURPOSE OF LINKING YOUR SITE TO OUR SITE, WHERE YOUR USERS CAN PURCHASE SMC PRODUCTS. YOU MAY NOT ALTER, MODIFY, OR CHANGE THE LICENSED MATERIALS IN ANY WAY. WE RESERVE ALL OF OUR RIGHTS IN THE LICENSED MATERIALS AND AGREE THAT ALL USES OF THE LICENSED MATERIALS SHALL BE TO THE SOLE BENEFIT AND DISCRETION OF SMC. b. You are only entitled to use the Licensed Materials to the extent that you are a member in good standing of the Affiliate Program. We may revoke your license at any time in our sole discretion, by giving you written notice. If we give you such notice, you must immediately discontinue all use of the Licensed Materials. c. You agree not to use the Licensed Materials in any manner that is disparaging or that otherwise portrays us in a negative light. d. You grant to us a non-exclusive license, for the term of this Agreement, to utilize your names, titles, and logos, as the same may be amended from time to time to advertise, market, promote, and publicize in any manner our rights hereunder; provided, however, that we shall not be required to so advertise, market, promote, or publicize. Obligations Regarding Your Site a. You are solely responsible for, and we have no liability for, the development, operation, or maintenance of your site, or for any materials contained on your site. b. You agree that your site will not, in any way, copy or resemble the look and feel of our site, nor will you create the impression that your site is our site or is a part of our site, nor will you frame any page on the selfmasteryco.com, or any SMC owned, site. c. You agree that your site does not currently contain and will not contain any content, or links to such material, that is in any way unlawful, harmful, threatening, harassing, defamatory, obscene, or violent as more fully set forth in Section 1. d. You also agree that your site will not contain any content from our site, except to the extent that materials are obtained by you strictly in accordance with the provisions of this Agreement. You further agree that your domain name does not and will not contain any form or similarity to selfmasteryco.com. form of a catalog or library of the Dating Tips Newsletters, or similar words thereto. Any such containment of this content without the express written consent of SMC will result in termination of your Affiliate status and prompt removal of any such content from your site within 2 days. You agree not to deal with any third party to exploit any of the SMC trademarks or content for the purpose of causing your site to appear as a search result or for any other reason. Terms of Agreement and Termination The term of this Agreement will begin upon our acceptance of your application and will end when terminated by either party. Either you or SMC may terminate this Agreement at any time, with or without cause, by giving the other party written notice of termination. You are only eligible to earn commissions on sales occurring during the term, and commissions earned through the date of termination will remain payable only if the related Qualified Purchases are not cancelled or returned. We may withhold your final payment for a reasonable time to ensure that the correct amount is paid. Modification We may modify any of the terms and conditions contained in this Agreement at any time in our sole discretion. Modifications may include, but are not limited to, changes in the scope of available commissions, commission payment schedules, payment procedures, and Affiliate Program rules. If any modification is unacceptable to you, your only recourse is to terminate this Agreement. Your continued participation in the Affiliate Program following our posting of a change notice or new agreement on our site will constitute binding acceptance of the change. Relationship of Parties You and SMC are independent contractors, and nothing in this Agreement will create any partnership, joint venture, agency, franchise, sales representative, or employment relationship between the parties. You will have no authority to make or accept any offers or representations on our behalf. Disclaimers NEITHER SMC NOR ITS SUPPLIERS MAKES ANY EXPRESS OR IMPLIED WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE AFFILIATE PROGRAM OR TO ANY SMC PRODUCTS SOLD THROUGH THE AFFILIATE PROGRAM (INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTIBILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR ANY IMPLIED WARRANTIES ARISING OUT OF COURSE OF PERFORMANCE, DEALING, OR TRADE USAGE). IN ADDITION, NEITHER SMC NOR ITS SUPPLIERS MAKE ANY REPRESENTATION THAT THE OPERATION OF THE SMC SITE WILL BE UNINTERRUPTED OR ERROR FREE, AND NEITHER SMC NOR ITS SUPPLIERS WILL BE LIABLE FOR THE CONSEQUENCES OF ANY INTERRUPTIONS OR ERRORS. Representations and Warranties You represent and warrant to us that: you have the right and authority to enter into this Agreement and perform your obligations under the Agreement. Confidentiality You agree that all customer information related to the SMC Affiliate Program belongs to us including the "Licensed Materials". You agree to protect as secret all SMC Affiliate Program customer information and Affiliate Program business and sales information related to us, you, or our suppliers (collectively, "Information"), not to disclose Information to any third parties, and not to use Information for any purpose other than the purposes of this Agreement. You agree to protect Information using methods at least as protective as those you use to protect your own information of a confidential nature, but in no event, using less than a standard of reasonable care. Limitation of Liability NEITHER SMC NOR ITS SUPPLIERS WILL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES, OR FOR ANY LOSS OF REVENUE, PROFITS, OR DATA, ARISING IN CONNECTION WITH THIS AGREEMENT OR THE AFFILIATE PROGRAM, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, AND YOU WAIVE ALL RIGHTS TO ANY CLAIMS FOR ANY SUCH DAMAGES. FURTHER, THE AGGREGATE LIABILITY OF SMC AND ITS SUPPLIERS WITH RESPECT TO THIS AGREEMENT AND THE AFFILIATE PROGRAM WILL NOT EXCEED THE TOTAL COMMISSIONS PAID OR PAYABLE TO YOU UNDER THIS AGREEMENT. Indemnification You agree to indemnify and hold harmless SMC and its subsidiaries, and suppliers, and their directors, officers, employees, and shareholders, against any and all claims, actions, demands, liabilities, losses, damages, judgments, settlements, costs, and expenses, including reasonable attorneys' fees, ("Losses") insofar as such Losses, or actions in respect of Losses, arise out of or are based on (i) any claim that our use of Affiliate trademarks infringes on any trademark, trade name, service mark, copyright, license, intellectual property, or other proprietary right of any third party, (ii) any misrepresentation of a representation or warranty or breach of a covenant and agreement made by you, or (iii) any claim related to your site, including, without limitation, claims regarding content on your site. Uncontrollable Circumstances SMC's performance under this Agreement shall be excused to the extent that its performance is hindered, delayed or made commercially impractical by causes beyond its reasonable control. Independent Investigation You acknowledge that you have read this Agreement and agree to all its terms and conditions. You understand that we may at any time (directly or indirectly) solicit customer referrals on terms that may differ from those contained in this Agreement or operate Web sites that are similar to or compete with your site. You have independently evaluated the desirability of participating in the Affiliate Program and are not relying on any representation, guarantee, or statement other than as set forth in this Agreement. Governing Law This Agreement will be governed by the laws of the State of California, without reference to rules governing choice of law. Any action relating to this Agreement must be brought in the federal or state courts located in Los Angeles, California, and you irrevocably consent to the jurisdiction of such courts. You may not assign this Agreement. Our failure to enforce your strict performance of any provision of this Agreement will not constitute a waiver of our right to subsequently enforce such a provision or any other provision of this Agreement. DEFINITIONS THE EXISTENCE OF THESE DEFINITIONS DOES NOT IN ANY WAY IMPLY THAT SMC AGREES TO ANY OF THE STATED TERMS OR USES WITHIN THIS AFFILIATE AGREEMENT WITH THE AFFILIATE. THIS IS MERELY A REFERENCE OR GUIDE FOR AFFILIATES. Affiliate: An independent party that promotes the products or services of a merchant in exchange for a commission. Also an associate, partner, reseller, or referral partner. Commission: The income you receive for generating a sale, lead or click-through to a merchant's web site. Sometimes called a referral fee, a finder's fee or a bounty. Affiliate Program: Used in a broad sense, an affiliate program is any type of revenue sharing program where an affiliate web site receives a portion of income for delivering sales, leads, or traffic to a merchant web site. In a narrow sense, affiliate programs are commonly considered those programs that use a pay- per-sale model like our own. Also termed associate, partner, referral, reseller, or sponsor programs. Pay-Per-Sale: A program where you receive a commission for each sale of a product or service that you refer to a merchant's web site. Pay-per-sale programs usually offer the highest commissions and the lowest conversion ratio. Also referred to as Cost-per- Action (CPA for short) and generically as an Affiliate Program. Pay-Per-Lead: A program where you receive a commission for each sales lead that you generate for a merchant web site. Examples for SMC could include completed surveys, contest or sweepstakes entries, downloaded software demos, or free trials or newsletter sign ups. Pay-per-lead generally offers midrange commissions and midrange to high conversion ratios (since visitor purchases are not required for you to be able to earn a commission). Pay-Per-Click: A program where you receive a commission for each click (visitor) you refer to a merchant's web site. Pay-per-click programs generally offer some of the lowest commissions (from $0.01 to $0.25 per click), and a very high conversion ratio since visitors need only click on a link to earn you a commission. Pay-Per-Impression: A program where you receive a commission each time that a merchant's ad or link is displayed on your site. Pay- per-impression generally offers the lowest commissions, but a nearly 100% conversion ratio since a visitor merely has to view the ad to earn you a commission -- and this often results in the highest earnings potential. Pay-per-impression programs are generally measured in CPMs (see below) and form the standard of banner advertising for larger web sites. Conversion Ratio: The ratio of visitors from your site that are "converted" into a sale, lead or click, and go on to earn the you a commission. A conversion ratio of 5% would mean that for every 100 visitors to your site, 5 would click-through, complete an action and earn you a commission. Many factors will influence the conversion ratio, including how targeted the affiliate program's products are to your visitor's interests, the price and value of the products being promoted, the merchant's ability to track all sales, and the overall effectiveness of the merchant's web site. Click-Through Ratio: The percentage of visitors who click-through on a link to visit the merchant's web site. Higher click-throughs are preferable although not always a great measure of success. Pay-per-click earnings are highly dependent on the click-through ratios. Click-through ratios can often be improved through a variety of means: by making links more visible to visitors, adding personal comments or testimonials about the product, or even reducing the number of links a visitor can follow. CPM: The practice of calculating a cost per 1000 ad displays. It is used by programs that pay on an impression basis -- with the CPM rate being the amount you earn for every 1000 times an advertisement is displayed. For example, a $5 CPM means you earn $5 every time 1000 ads are displayed on your site. CPM can also be calculated for pay-per-sale, pay-per-lead and pay-per-click programs by using this formula: Amount earned / (number of impressions/1000) Calculating the CPM of affiliate programs can be an effective means of comparing the results over time from various programs -- allowing you to put more emphasis on the strong programs, and dropping the poorly performing programs. Residual Commission: Residual commissions refer to programs that provide affiliates the ability to earn an income, month after month, for referring a sale to a merchant. They are usually those that offer some type of service for which the customer is charged an ongoing subscription fee. Examples include web hosting, tele- communications, and ecommerce solutions. They offer an effective benefit to affiliates since the affiliate can earn income for an extended period, perhaps even years, from a single sale. Tracking Method: Tracking refers to the way that a program tracks referred sales, leads or clicks. The most common are by using a unique web address (URL) for each affiliate, or by embedding an affiliate ID number into the link that is processed by the merchant's software. Some programs also use cookies for tracking. Cookies: Cookies are small files stored on the visitor's computer which record information that is of interest to the merchant site. Despite concerns that some people have, cookies are in no way dangerous -- and can not be used to steal names, email addresses, phone or credit card numbers. With affiliate programs, cookies have two primary functions: to keep track of what a customer purchases, and to track which affiliate was responsible for generating the sale (and is due a commission). Be especially wary of programs that only use cookies since they have many inherent limitations: the user can turn them off, they expire after a certain date or time, and they can be deleted off the visitor's computer. Most programs use either unique URLs or affiliate ID numbers in conjunction with cookies to track properly. Cookies can then be used to give the affiliate credit at a later time of purchase, even if the visitor returns to the merchant's site as opposed to the affiliate's unique URL.