18policies <strong>and</strong> proceduresremuneration derived from the sales <strong>and</strong> other activitiesof his or her former downline organization.Following a Consultant’s cancellation of his or herConsultant Agreement, the former Consultant shall nothold himself or herself out as an <strong>Ambit</strong> Consultant <strong>and</strong>shall not have the right to sell <strong>Ambit</strong> products or services.A Consultant whose Consultant Agreement is canceledshall receive commissions <strong>and</strong> bonuses only for the lastfull pay period he or she was active prior to cancellation(less any amounts withheld during an investigationpreceding an involuntary cancellation).10.2. Inactive StatusTo remain “active,” a Consultant must sponsor a newConsultant or enroll a new energy customer within thepreceding four months. If a Consultant does not sponsora new Consultant or enroll a new energy customer in thepreceding four months, the Consultant’s <strong>Ambit</strong> businesswill be placed into inactive status <strong>and</strong> no commission willtrigger until the position is reactivated by sponsoring anew customer or Consultant.10.3. Involuntary CancellationA Consultant’s violation of any of the terms of theAgreement, including any amendments that may be madeby <strong>Ambit</strong> in its sole discretion, may result in any of thesanctions listed in Section 9.1, including the involuntarycancellation of his or her Consultant Agreement.Cancellation shall be effective on the date on which writtennotice is mailed, faxed or delivered by an express courierto the Consultant’s last known address (or fax number),or to his/her attorney, or when the Consultant receivesactual notice of cancellation, whichever occurs first.10.4. Voluntary CancellationA participant in this network marketing plan has a right tocancel at any time, regardless of reason. Cancellation mustbe submitted in writing to the Company at its principalbusiness address, which is:<strong>Ambit</strong> <strong>Energy</strong>Attention: Consultant Cancellation1801 North Lamar Street, Suite 200Dallas, Texas 75202The written notice must include the Consultant’ssignature, printed name, address, <strong>and</strong> Consultant I.D.number. If a Consultant is also a customer of <strong>Ambit</strong><strong>Energy</strong>, <strong>Ambit</strong> will continue to provide energy services tothe customer, <strong>and</strong> invoice the customer for such services,unless he or she also specifically requests that his or herenergy services also be cancelled. Section 11: DefinitionsActive Consultant: A Consultant who has sponsoreda new Consultant or enrolled a new energy customer inthe preceding four months.Active Rank: The term “active rank” refers to thecurrent rank of a Consultant, as determined by the <strong>Ambit</strong>Compensation Plan, for any month. To be considered“active” relative to a particular rank, a Consultant mustmeet the criteria set forth in the <strong>Ambit</strong> CompensationPlan for his or her respective rank.Agreement: The contract between the Company <strong>and</strong>each Consultant includes the Consultant Application<strong>and</strong> Agreement, the <strong>Ambit</strong> <strong>Policies</strong> <strong>and</strong> <strong>Procedures</strong>, <strong>and</strong>the <strong>Ambit</strong> Compensation Plan, all in their current form<strong>and</strong> as amended by <strong>Ambit</strong> in its sole discretion. Thesedocuments are collectively referred to as the “Agreement.”Cancel: The termination of a Consultant’s business.Cancellation may be either voluntary, involuntary,through non-renewal or inactivity.Customer: The term “customer” means current, past<strong>and</strong> prospective <strong>Ambit</strong> <strong>Energy</strong> customers.Genealogy Report: A monthly report generated by<strong>Ambit</strong> that provides critical data relating to the identitiesof Consultants, sales information, <strong>and</strong> enrollment activityof each Consultant’s Marketing Organization. This reportcontains confidential <strong>and</strong> trade secret information whichis proprietary to <strong>Ambit</strong>.Official <strong>Ambit</strong> Material: Literature, audio or videotapes, <strong>and</strong> other materials developed, printed, published<strong>and</strong> distributed by <strong>Ambit</strong> to Consultants.Recruit: The actual or attempted sponsorship,solicitation, enrollment, encouragement, or effort toinfluence in any other way, either directly, indirectly,or through a third party, another <strong>Ambit</strong> Consultant orcustomer to enroll or participate in another multilevelmarketing, network marketing or direct sales opportunity.Resalable. Sales aids shall be deemed “resalable” ifeach of the following elements is satisfied: (1) they areunopened <strong>and</strong> unused; (2) packaging <strong>and</strong> labeling has notbeen altered or damaged; (3) they are in a condition such
ambit energy, l.p.19that it is a commercially reasonable practice within thetrade to sell the merch<strong>and</strong>ise at full price; (4) it is returnedto <strong>Ambit</strong> within one year from the date of purchase;(5) the product contains current <strong>Ambit</strong> labeling. Anysales aids that are clearly identified at the time of sale asnonreturnable, discontinued, or as a seasonal item, shallnot be resalable.Retail Customer: An individual who purchases <strong>Ambit</strong>services from a Consultant but who is not a participant inthe <strong>Ambit</strong> compensation plan.Upline: This term refers to the Consultant or Consultantsabove a particular Consultant in a sponsorship line up tothe Company. Conversely stated, it is the line of sponsorsthat links any particular Consultant to the Company.
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