IE DISTRIBUTOR AGREEMENT

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IE DISTRIBUTOR AGREEMENT

The applicant (hereinafter "Distributor") hereby applies to be appointed as an independent distributor of INNER ENERGIES ("IE") products, and agrees to follow and be bound by the terms and conditions of the Distributor Agreement ("Agreement").

1. DEFINITIONS: As used in this Agreement, the following terms have the following definitions:

The term "Distributor" means an IE Distributor, or an Executive IE Distributor, as the case may be, who sells IE products pursuant to the guidelines set forth herein. No costs other than the administrative fee, and no purchases are required, to become a Distributor.
An "Executive IE Distributor" is a distributor who has paid and is timely with his or her administrative fee, and who has made at least three sales, one of which may be made to him or herself and two (2) of which must be made directly by the Distributor. Executive IE Distributors shall be referred to as "Qualified".
"Administrative Fee" means a payment of $20, received by IE with the submission of the Distributor Application and on each sixth month anniversary of acceptance of the distributor's application and/or renewal.

"Product" refers to both the Inner Energies Marketing Service and Inner Energies' Courses.

2. ETHICAL STANDARDS AND BUSINESS PRACTICES: An IE distributor must adhere to the highest ethical, moral, legal, and financially sound business practices and conduct his/her business in accordance with those sound practices and the terms of this IE Distributor Agreement, representing the IE product line in a responsible, honest and knowledgeable manner.

3. INDEPENDENT CONTRACTOR STATUS: The terms "Distributor" and "Executive Distributor" are in no way to be construed as creating an employment relationship between the Distributor and IE. The Distributor understands, and agrees, that he or she makes sales as he or she sees fit, pays appropriate taxes on the sale of products and any income said distributor receives, sets his or her own hours, is not paid on an hourly basis, is not paid by IE but rather through the sale of IE products, and supplies his or her own equipment. The Distributor further understands and agrees that the sections of this Agreement entitled SALES and DISTRIBUTION do not establish in IE any right to control said distributors but rather ensure that Distributor's activities conform to applicable laws.

The Distributor further understands and agrees that, as an IE distributor, he or she is and shall at all times remain an independent contractor, and is not an employee, agent, representative, franchisee, joint venturer, shareholder or partner in IE, and, as such, may not create any liability or obligation of any kind on behalf of IE. The Distributor further agrees and understands that acceptance of this application by IE does not constitute a sale of a franchise or distributorship, and that there are no geographic territories granted to any distributor. The Distributor further understands, agrees and states that no franchise fee or distributorship fee has been paid, and that he or she is not acquiring any interest in a security.

4. SALE OF IE PRODUCTS: In selling IE products, Distributor agrees to conform his or her sales activities to the guidelines set forth below:

Distributor must truthfully, correctly and accurately describe the nature of IE products, and is prohibited from warranting, assuring, or guaranteeing any particular result from the use of any IE product.

Distributors may sell IE products using only materials and methods approved of by IE. The Distributor understands that materials distributed and sold are the property of IE which may not be copied without the prior written consent of IE. All advertising, promotional materials, electronic communications and/or media exposure must first be approved in writing by IE. The name INNER ENERGIES may not be used in any materials without the express prior written approval by IE. All Distributor promotional material must clearly indicate, in 8-point minimum type "NOT OFFICIAL IE LITERATURE."

The Distributor is responsible for maintaining his or her own records of income and expenses and for reporting as may be required by law, at his or her own expense. The Distributor is responsible for collecting and remitting to the appropriate authority or authorities any sales taxes, goods and/or services taxes. The Distributor is also responsible for obtaining any governmental licensing and paying related fees as applicable. The Distributor further agrees to comply with all laws governing the sale and distribution of products in the jurisdiction in which the Distributor is domiciled or in which sales are made, as applicable. The Distributor agrees to hold IE harmless and to indemnify IE from all claims for damages and/or liabilities whatsoever which may result from any acts or omissions in connection with the distributor's activities as an IE distributor, provided that such acts or omissions are imputed to IE.

The Distributor understands and agrees that a direct selling program such as IE is a highly competitive business, subject to all risks associated with any such business venture, and that IE makes, and Distributor receives, no guarantees or assurances whatsoever regarding any income or loss which may result from his or her activities as an IE distributor.

The Distributor must supply to IE, within 5 business days, a copy of any written complaint received by said distributor. An IE Distributor must also inform IE, within 1 business day, of any consumer complaint of which the Distributor becomes aware. IE shall be informed and approve of the Distributor's response to any consumer complaint, or shall handle the response directly.

The Distributor must issue to each customer a fully completed and signed official IE receipt for each product sale at the time of each transaction, and forward to IE a copy of said receipt within (3) business days of the purchase.

The Distributor must inform all purchasers of applicable guarantees on IE products, and supply to his or her customer a full refund within 72 hours of a properly documented and timely request for a refund. Should a Distributor not provide said refund within the prescribed period, this Agreement immediately terminates upon the expiration of said 72 hours. In the event said refund is not made within said period, IE will make said payment, and seek reimbursement, through debits or otherwise, from said Distributor or the Executive Distributor supervising said Distributor, as appropriate and as the case may be.

5. DISTRIBUTION: In introducing other persons to IE products, Distributor agrees to conform his or her activities to the guidelines set forth below:

A Distributor must supply all potential Distributors with a copy of this Agreement and any amendments thereto.

When describing the IE marketing system, any and all representations made by the Distributor must be truthful, correct and accurate and the IE Distributor will present the system in its entirety, without material omissions, distortions or misrepresentations. An IE Distributor must fully disclose to prospective distributors information regarding financial risks as well as potential rewards, the latter of which shall be limited to the Distributor's personal experience. The Distributor expressly understands and agrees that he or she will not make any statement or representation that participation as an IE Distributor by others will be a source of income, profit or success.

The Distributor must inform prospective distributors of available information and IE business tools, including when available the following:

- the address and contact information for IE

- conference call schedule and hook-up information

- IE's brochure, and fax services

- the entire product list

- IE's web site and subscription information

The Distributor shall not require another Distributor to participate financially in marketing and/or recruitment activities.
The Distributor shall not be permitted to stockpile quantities of IE products but rather can only order IE products for direct shipment to customers from whom payment has been received.
The Distributor may not produce, design or utilize any marketing, promotional or training material which includes the name IE, or utilize the IE logo, trademarks, or servicemarks, or copyrighted material, without the express written approval of IE. Distributors must not state or imply that the Distributor's or privately produced literature or training material is in any way endorsed by IE. All material produced by a Distributor which refers to an IE product must include on every page, in minimum 8-point type, the phrase "NOT OFFICIAL IE LITERATURE."
The Distributor understands and agrees that any income is earned solely from the sales of products.
The Distributor must forward to IE a fully completed IE Distributor Application ("Application") for all new Distributors, including applicable fees. Once an Application has been filed and accepted, no changes in Distributorship will be permitted except by express written consent of IE and all other parties so involved. The Distributor understands and agrees that IE reserves the right to limit, restrict or delay the admission of any new IE Distributor for any reason.
The Distributor must supply to all distributors whom will distribute IE products for said Distributor the names, addresses and telephone numbers of at least two other Executive distributors.
IE Executive Distributors must inform IE in writing of all newly qualified distributors as soon as practicable upon their qualification.

6. TERMINATION OF AGREEMENT: This Agreement will be immediately terminated and/or revoked if the Distributor breaches any of the terms of this Agreement, any terms or conditions of the Distributor Application, or engages in any conduct which IE believes is detrimental to the interests of IE or its shareholders.

Either party may cancel Distributor's appointment as an IE distributor, at any time and with or without cause, by notice in writing to the other party, (a) within 14 days of the date of this Agreement without penalty for a full refund of the $20 administrative fee, (b) at any time thereafter said cancellation being effective upon the date of mailing plus five days, or notification, whichever comes later.

Should the Distributor be terminated or resign, the existing group of distributors, if any, shall automatically pass to the immediate Distributor for whom the terminated or resigning Distributor initially sold IE products. No change in Distributor status will be permitted except by consent of the parties.

7. IMAGES AND TESTIMONIALS: The Distributor hereby grants to IE or its agents the right to use any and all photographs, video images, or media images ("images") of the Distributor, including any written correspondence, letters or testimonies ("Testimonials") and agrees that such images and Testimonials shall become the sole property of IE and waives any rights the Distributor might have in said images and Testimonials. The Distributor further acknowledges and agrees that IE may, in its sole discretion, use the images and Testimonials for any legal and/or promotional purpose and hereby fully releases IE from any and all claims the Distributor might assert in connection with its use of said images and Testimonials.

8. TITLE, RIGHT AND INTEREST: Distributor hereby acknowledges IE's exclusive right, title and interest in and to the IE name, trademarks and copyrights, as appropriate, in IE literature, materials and tapes, and agrees to not at any time do or cause to be done any act or thing contesting or in any way impairing or tending to impair any part of such right, title or interest, including but not limited to copying IE literature or tapes. In connection with the use of the IE name, trademarks, materials, literature or tapes, Distributors shall not in any manner represent that they have an ownership interest in the IE name, trademarks or copyrights in IE materials or literature, and shall appropriately show and/or display IE's interest thereof and therein. Distributors further acknowledge that their use of the IE name, trademarks, materials, literature or tapes shall not create in favor of the Distributor any right, title or interest therein or thereto, but that all such uses shall not create in favor of the Distributor any right, title or interest therein or thereto, but that all such uses shall inure to the benefit of IE.

9. ENFORCEMENT: Should IE be required to take action, including but not limited to legal action, to enforce the terms of this Agreement and/or its interest in its literature, materials and tapes, said Distributor hereby agrees not to contest IE's request for injunctive relief, agrees that IE will be irreparably harmed by the violation of any term of this Distributor Agreement, admits that the balance of the equities is in IE's favor and that the public interest favors the granting of said injunction, and further agrees that, in the event IE prevails or any aspect of its claim, including a request for injunctive relief, that said Distributor will be responsible for all fees and costs associated with said action, including but not limited to filing fees, deposition costs, expert fees, and attorney's fees.

10. NON-COMPETE: Distributor hereby acknowledges and agrees that IE developed and is the owner of certain trade secrets, including techniques, know-how, style, and methods and procedures of business operations, which were and are applied to the development of its products and which will be revealed to and used by Distributor in the sale of IE products; and Distributor hereby agrees that during the term of this Agreement and any extension hereto for a period of 90 days following the termination of this Agreement or any extension hereto, not to sell, solicit, advertise or promote any product, service, or wares as a business opportunity involving products similar to those of IE, such as self-awareness programs, self actualization programs, intentional living programs or programs of like kind.

11. SAVINGS CLAUSE: If any provision of this Agreement is held to be invalid, the invalidation will not affect other provisions of this Agreement which can be given effect without the invalid provision, and to this end the provisions of this Agreement are deemed severable.

12. AMENDMENTS: The Distributor is bound by these guidelines which, the parties hereto agree, may be amended by IE from time to time without prior notice for the duration of their distributorship with IE, said amendments to become effective upon mailing or other notification by IE.

13. VOLUNTARINESS: The Distributor hereby expressly represents and warrants that he or she has had an opportunity to review and consider the terms and effect of this Agreement, has had the opportunity to consult with professionals, including counsel and accountants, regarding the terms of this Agreement, that he or she enters this Agreement freely and voluntarily, and that he or she intends to be bound by the terms of this Agreement.

14. BINDING EFFECT OF AGREEMENT: This Agreement shall be binding upon the parties hereto, and any heirs, representatives, and permitted successors and assigns of the Distributor.

15. GOVERNING LAW: This Agreement shall be governed by and interpreted under the laws of the state of Colorado.

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