William C. and Dorothy M. Smith - Page 5




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          commissions based on the products that his or her downline                  
          distributors are able to sell.  If a downline distributor then              
          recruits additional individuals to sell, the original upline                
          distributor receives commissions on sales by both downline                  
          distributors.  The additional commissions received by the upline            
          distributor are not, however, determined by the profitability of            
          the downline distributors, only by their sales.                             
               Mrs. Smith was recruited in this fashion to become a                   
          downline distributor for Susan Walsh, first for Espial in 1999,             
          and in subsequent years for Renaissance and Cyberwize.  The                 
          record does not reflect who introduced Mrs. Smith to 24/7                   
          Internet Marketing.  Ms. Walsh provided Mrs. Smith with product             
          training and sales organization training and advised her on how             
          to teach and train other potential downline distributors.                   
               With the exception of Cyberwize, Mrs. Smith created nominal            
          business plans for each of the companies for which she marketed.            
          These plans included vague goals about the number of customers              
          Mrs. Smith would attract and the sales that she would achieve.              
          For instance, Mrs. Smith’s Espial business plan is an undated,              
          one-page document which states:  “I will build a sales force and            
          retail products to derive income that will exceed employment in             
          the corporate arena, and I will have become a highly visible                
          sales organization known as a leader in sales, sponsorship, team            
          support, and residual income.”  With respect to her market, Mrs.            







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Last modified: November 10, 2007