YOUNG LIVING CANADA ULC INDEPENDENT DISTRIBUTOR POLICIES AND PROCEDURES

Transcription

1 YOUNG LIVING CANADA ULC INDEPENDENT DISTRIBUTOR POLICIES AND PROCEDURES is the responsibility of each distributor to read, understand, adhere to, and ensure that he/she is operating under the most current version of the Policies and Procedures. 1.4 Code of Ethics Table of Contents: Section 1: Introduction Section 2: Becoming a Distributor Section 3: General Policies Section 4: Sponsor's Responsibilities Section 5: Advertising Section 6: Sales Requirements Section 7: Commissions and Bonuses Section 8: Product Returns Section 9: Ordering Section 10: Shipping Section 11: Payment Section 12: Distributor Account Management Section 13: Dispute Resolution and Disciplinary Action Section 14: Inactivity, Reactivation, and Cancellation 1.1 Welcome SECTION 1- INTRODUCTION Welcome to Young Living Canada ULC! We are pleased that you have chosen to join our company, ( YL, Young Living or the Company ). Young Living is dedicated to providing you with the best products and business opportunity that you can find anywhere. Leading financial experts and business gurus all agree that the home-based business sector is the wave of the business future. The time that you invest in becoming familiar with our Company, including the Policies and Procedures, will make a significant difference in your business experience. It will also be helpful to keep in touch with your upline support team on a regular basis to stay informed of the latest information regarding Young Living's products, business, support programs, meetings, and events. Be proactive and seek the needed support from your upline sponsor or other upline leader. If you are unable to obtain the support you need, please call the Customer Care Department at ( ) for assistance. 1.2 Purpose The purpose of the Independent Distributor Policies and Procedures is: To set standards of acceptable business behavior To define the relationship between you and Young Living To assist you in building and protecting your business 1.3 Policies Incorporated in the Distributor Agreement Throughout these Policies and Procedures, whenever the term Agreement is used, it refers collectively to the Young Living Distributor Application and Agreement, the order form, the Policies and Procedures, and the compensation plan. These documents are incorporated by reference into the YL Distributor Agreement (in their current form and as amended by Young Living from time to time). It Young Living has established the following Code of Ethics to govern the Independent Distributor's business. You are required to become familiar with and agree to abide by this code as a condition of extending your Independent Distributor relationship. Violations of the Code of Ethics or the Policies and Procedures may result in termination of your distributor contract and your opportunity to participate in the Young Living business. Be sure you understand the principles and policies each of these code commitments entails. Code of Ethics I will follow the highest standards of honesty and integrity in the development and operation of my Young Living business. I will give prompt and efficient service to anyone to whom I have introduced Young Living's products. I will make no claims for, or representations about, any Young Living products, other than those claims or representations found in current Company literature or on labels. I will not make negative or disparaging remarks about anyone who may be in competition with Young Living, or with their people, products, or organizations. I will not engage in activities that may cause losses to Young Living or to any other Young Living Independent Distributor. I will not use the Young Living trademark, trade name, logo, information, distributor lists, literature, meetings, gatherings, or Young Living resources to further other business interests. I will perform all duties of a sponsor and a leader as I build my Young Living business. I will respect the privacy of both my upline and downline distributors and customers and comply with section 3.10 of these Policies and Procedures. I will present the Young Living compensation plan accurately and honestly, clearly portraying the level of effort required to achieve success without exaggerating the financial possibilities. I will abide by all rules, regulations, laws, and ordinances that are applicable to the operation of my Young Living business as a distributor

2 2 1.5 Amendments/Acceptance The Company may amend the terms and conditions of the Distributor Agreement, Policies and Procedures, compensation plan, and Product Price List. The changes will become effective 30 days after first published by Young Living. Such amendments or modifications shall be made known through official Young Living publications distributed to all active distributors or posted to the web (e.g., e- News). If a distributor is not willing to accept these changes, Young Living must be notified in writing within these 30 days prior to the change being effective. Any continued business, ordering, acceptance of a commission or bonus payout or any other benefit by a distributor pursuant to this Agreement constitutes acceptance of this Agreement in whole with any and all amendments. 1.6 Delays Young Living shall not be responsible for delays and failures in performing its obligations due to circumstances beyond its reasonable control. This includes, without limitation, acts of God, strikes, labor difficulties, riots, wars, fire, flood, death, curtailment or interruption of a source of supply, government decrees or orders, etc. 1.7 Partial Validity If any provision of the Distributor Agreement, in its current form or as it may be amended, is found to be invalid or unenforceable for any reason, only the invalid portion(s) of the provision shall be severed. The remaining terms and conditions shall remain in full force and effect and shall be construed as if such invalid or unenforceable provision never comprised a part of the Agreement. The continuation of a distributor's Young Living business or a distributor's acceptance of bonuses or commissions constitutes acceptance of any and all amendments. 1.8 Waiver Young Living never forfeits its right to require compliance with this Agreement or with applicable laws and regulations governing business conduct. Only in rare circumstances will a policy be waived, and the Compliance Officer or another officer of the Company will convey such waivers in writing. The waiver will apply only to that specific case. While Young Living attempts to enforce the Agreement uniformly, failure to enforce any provision of this Agreement does not waive Young Living's right to enforce any provisions with that same distributor or any other distributor. 1.9 Titles Not Substantive The titles and headings to these Policies and Procedures are for reference only and therefore do not constitute and shall not be construed as substantive terms of the Distributor Agreement. SECTION 2 - BECOMING A DISTRIBUTOR 2.1 Requirements to Become a Young Living Distributor To become a Young Living distributor, each applicant must: Be at least eighteen (18) years of age; Have a valid Social Insurance Number (SIN) or Federal Business Number (BN); Read the Young Living Policies and Procedures and compensation plan insert; and Complete, sign, and submit a Distributor Application and Agreement to Young Living within thirty (30) days of enrollment. The Company reserves the right to reject any application from a new distributor. 2.2 Distributor Application Applicants must submit a Distributor Application and Agreement form to Young Living. Applications may be submitted through mail, fax, or the official Young Living website and must be received within thirty (30) days of enrollment to continue receiving distributor benefits. If not received, the applicant's account will be placed on hold until the form is received. If a distributor, for whatever reason, fails to submit a completed Distributor Application, they hereby consent to these Policies and Procedures in their entirety, by participating as a distributor and receiving distributor pricing on orders. 2.3 Telephone Registration You may also register via telephone. However, a completed Distributor Application and Agreement must be submitted and received by corporate headquarters within thirty (30) days of any telephone registration. Failure to submit a completed application by the thirty-day deadline negates your ability to purchase Young Living products. Retail Customers may register via telephone and are not required to submit a Distributor Agreement. 2.4 Web Applications If you register via the website ( or any official replicated website, you will not need to submit a paper application. SECTION 3 GENERAL POLICIES 3.1 Independent Contractor Status Applicant acknowledges that, as a Distributor, he/she is an independent contractor. Applicant understands that his/her status as a Distributor does not constitute either a sale of a franchise or a distributorship (exclusive or otherwise), and absolutely no fees have been or will be required from Distributor for the right to distribute YL s products pursuant to the Agreement. The Agreement is not intended and shall not be construed to create a relationship of employeremployee, agency, partnership, or joint venture between any Distributor, sponsor and/or YL. Applicant agrees that as an independent contractor, he/she will: (a) Comply with all applicable federal, provincial and local laws, rules and regulations pertaining to the Agreement, including the sale, distribution and advertising of YL products.

3 3 (b) At his/her own expense, complete all filings, and obtain such licenses as are required by applicable federal, provincial and local laws, rules and regulations, with respect to the Agreement and his/her activities as a Distributor. Applicant understands that as a Distributor, he/she has no authority to bind YL to any obligation. It is his/her responsibility to pay all income, local or applicable taxes as a Distributor, and he/she acknowledges that he/she is not eligible for employee benefits, such as unemployment compensation, worker s compensation or minimum wages. He/she acknowledges that YL encourages Distributors to set their own hours and to supply all of their own equipment and tools for operating their YL business, such as telephones, transportation, professional services, office equipment and supplies. Further, Applicant understands that he/she should determine his/her own methods of sale, so long as he/she complies with the policies of YL. Without limiting the generality of the foregoing, as a Distributor, Applicant agrees that he/she shall be fully responsible for (i) all applicable federal and provincial withholding taxes, source deductions, PST, GST, HST, income tax, other taxes, employment insurance premiums, Canada Pension Plan contributions, worker s compensation contributions or provincial employee health tax contributions and other levies, premiums, licence requirements and fees related to his/her earnings and activities as a Distributor, and (ii) all expenses incurred in connection with the operation of his/her YL-related business, including but not limited to travel, meals, accommodation, secretarial, office, telephone and other business expenses. Distributors are not employees or agents of their Sponsor. 3.2 Types of Customers Member: The generic term used to identify a Young Living distributor, customer, or professional account. Young Living reserves the right to accept or reject any new members. Retail Customer: A member who chooses not to participate in the Young Living business opportunity, but rather desires only to purchase the products directly from the Company for personal consumption. Retail Customers purchase products at the published customer/retail price. Retail Customers' purchases apply toward the sponsor's Personal Volume (PV). Thus, orders placed by any of your retail customers count to qualify you in the compensation plan. Retail Customers do not participate in the Young Living business or network marketing plan and cannot sponsor others into the plan or resell YL product. PV in these Policies and Procedures refers to the amount of YL Product you personally sell or consume personally each month.* *NOTE: This does not constitute a personal purchase requirement to become a Distributor, move up in rank or to fully participate in the plan. Pursuant to these policies and procedures (i) YL recognizes that Distributors may wish to purchase products in reasonable amounts for their own personal or family use, (ii) buying products for any reason other than bona fide resale (or for personal use in reasonable amounts) is prohibited, and (iii) Distributors must not purchase any excessive inventory nor encourage others to do so. Distributor: A distributor (you) may purchase product from Young Living at the published wholesale price and have the potential of earning commissions and bonuses based on qualification and achievement rank in the Young Living compensation plan. (See the published compensation plan details for specific information.) When enrolling in Young Living, you must read and agree to abide by the Policies and Procedures of Young Living and submit a completed Distributor Application and Agreement. (See Section 2.) 3.3 Same Household Distributorship A rebuttable presumption exists that two or more persons living in the same household may not sponsor each other or have separate distributor relationships with Young Living via participation in another distributor's business as they are assumed to be a family unit with common interests in each of the household's accounts. Unless Young Living is presented with sufficient evidence to the contrary, or is otherwise satisfied that the multiple accounts in a single household are truly independent (which decision rests entirely with the management of Young Living), the rules for same household distributorships shall apply, which are as follows: If one person living in the same household is already a distributor, the other, non-participating person in the household may become a coapplicant on the same distributor record as the first individual, and the distributorship shall be treated as a joint tenancy with rights of survivorship. If two distributors marry, they may combine their distributor organizations (if one has sponsored the other), sell one of them, terminate one of them, or they may choose to maintain separate Young Living distributorships. Contact the Customer Care Department for help working through the process and gathering any information that may be necessary to comply with this provision. Children of a distributor eighteen (18) years of age or older may become a separate Independent Distributor, as long as they are the principal participant. 3.4 Corporations, Partnerships, Limited Liability Companies, and Trusts A partnership, corporation or trust may become a Young Living distributor by submitting to Young Living a partnership agreement, certificate of incorporation, articles/certificate of organization, or trust agreement along with a copy of the provincial registration form for the entity or a certificate of good standing for the entity issued by the province of incorporation or organization. The registration form or certificate of good standing must be indicate the names of all of the shareholders, officers, members, managers, partners, or trustees of the entity, or have such included with the submission to Young Living. The entity remains responsible for any indebtedness or other obligation to Young Living. No individual may participate in more than one distributorship in any form. A distributor may change status under the same sponsor from individual to partnership or corporation by submitting the appropriate documentation mentioned above. Young Living reserves the right to approve or disapprove any distributor's change of business names, formation of partnerships, corporations, and trusts for tax, estate planning, and limited liability

4 4 purposes. In addition, by submitting a copy of the certificate of partnership or incorporation, it is certifying that no person with an interest in the new business entity has had an interest in another distributorship within six (6) months of the submission of the certificate (unless it is the continuation of an existing distributorship that is changing its form of doing business). 3.5 Sale, Transfer, or Assignment Young Living reserves the right to approve or disapprove any distributor's request for sale, transfer, or assignment of their organization for any reason. You may not sell, transfer, or assign your distributorship to any person or entity without Young Living's written approval. To request approval, the following criteria must be met: (a) (b) (c) (d) (e) (f) (g) Succession Young Living must approve of the buyer prior to a sale. The buyer must be (or must become) a qualified Young Living distributor. You must notify Young Living corporate offices of your intent to sell or transfer the business. The request must be made in writing with a notarized signature which then must be mailed to Young Living. No changes in line of sponsorship or your downline can result from the sale or transfer. Before any transfer or sale will be approved, any debt obligations you may have with Young Living must be satisfied. If you are not in compliance with all the terms of this agreement, Young living shall resolve any such issue prior to reviewing a transfer or sale request. Young Living does not waive any violations of this agreement even though a violation may have occurred under a prior owner of a distributorship. The recipient of any approved transfer or sale of an organization may be held responsible in the event that a previous violation of the Agreement is discovered to have been made by the prior owner of the organization after the transfer or sale has been made. Any action that may be taken on a distributorship with the previous owner under section 13.3 of these Policies and Procedures may therefore carry over to the new owner. Upon death or incapacitation, your rights to commissions, bonuses, and downline organization, together with all distributor responsibilities, will pass to your legal heir(s) or legal representative(s). The heir(s) or representative(s) must present Young Living with proof of death or incapacitation, along with appropriate legal documentation and a properly completed Distributor Application and Agreement. The beneficiary acquires the right to collect all commissions and bonuses of your sales organization provided that he and/or she meet all of the qualifications necessary for the compensation plan and this transfer is completed. Young Living reserves the right to approve or reject all succession transfers. 3.6 Separation of a Young Living Distributor Business Young Living distributors sometimes operate their Young Living businesses as husband/wife partnerships, regular partnerships, corporations, or trusts. At such time as a marriage may end in divorce or a corporation, partnership, or trust (the latter three entities are collectively referred to herein as entities ) may dissolve, arrangements must be made to assure that any separation or division of the business is accomplished so as not to adversely affect the interests and income of other business upline or downline of sponsorship. If the separating parties fail to provide for the best interests of other distributors and the Company, it is a violation of the Agreement, and Young Living may involuntarily terminate the Agreement pursuant to Young Living Policies and Procedures. During the proceedings of a divorce or entity dissolution, the parties must adopt one of the following methods of operation: One of the parties may, with consent of the other(s), operate the business pursuant to a notarized assignment in writing whereby the relinquishing party(ies) authorize(s) Young Living to deal directly and solely with the other party(ies). A notarized request from the person being removed is required. A new Distributor Agreement is required from the person remaining on the account. The parties may continue to operate the Young Living business jointly on a business-as-usual basis, whereupon all compensation paid by Young Living will be paid in the joint names of the distributors or in the name of the entity to be divided as the parties may independently agree among themselves. Pursuant to a court order involving parties. If one of these requirements is not met, Young Living will maintain the status quo as to how commissions are paid. Under no circumstances will the downline organization of divorcing spouses or a dissolving business entity be divided. Similarly, under no circumstances will Young Living split commission and bonus cheques between divorcing spouses or distributors of dissolving entities. Young Living will recognize only one downline organization and will issue only one commission cheque per Young Living business per commission cycle. Commission cheques shall always be issued to the same individual or entity, unless agreed by all parties that the commissions will be due and paid to another party or by order of a court having jurisdiction over Young Living. If a former spouse or a former entity affiliate has completely relinquished all rights in his/her original Young Living business, he/she is thereafter free to enroll under any sponsor of his/her choosing. However, in such case the former spouse or partner shall have no rights to any distributors in their former organization or to any former customers. They must develop the new business in the same manner as would any other new distributor. All references to spouses, divorces and marriage herein shall include the concepts of common law partners and the entering into and breakdown of common law relationships, and the terms hereof shall apply equally.

5 5 3.7 Roll-Up of Marketing Organization When a vacancy occurs in a marketing organization due to the termination of a Young Living business, each distributor in the first level immediately below the terminated distributor on the date of the cancellation will be moved to the first level ( front line ) of the terminated distributor's sponsor. For example, if A sponsors B, and B sponsors C1, C2, and C3, if B terminates her business then C1, C2, and C3 will roll-up to A and become part of A's first level. Young Living also reserves the right to sell the distributorship that has been canceled. 3.8 Taxes Enroller is changed to null Income Taxes You are responsible for complying with the tax laws in the jurisdiction where you reside. In Canada, you are responsible for paying any local, provincial, or federal income taxes on earnings generated through your Young Living business. Distributors whose annual earnings are expected to exceed $500 agree to provide their Social Insurance Number (SIN) or Federal Business Number (BN) for tax reporting purposes. Any fines or penalties incurred by Young Living because of an incorrect taxpayer ID number or name will be your responsibility and you agree to reimburse Young Living for these costs. Every year, Young Living will provide a CRA Form T4A earnings statement to each Canadian resident who had earnings over $500 in the previous calendar year. Retail Customers are not required to provide their Social Insurance Number or Federal Business Number to Young Living. Changes to a SIN or BN must be received via a completed form. The name and SIN/BN on a member's account must match CRA records. These forms must match the signature of the owner on the account. For tax reporting purposes, changes to these numbers will result in the creation of a new account, therefore assigning a new member number to ensure that the correct name is used with the correct SIN/BN and owner of the account. No previous T4As may be reissued under the new SIN or BN. Earnings made before the change will be reported on the original SIN/BN. Earnings after any change will be recorded on the new SIN/BN. A co-applicant may be added with the consent of the primary distributor. Taxes will be reported on the primary distributor's tax number Goods and Services Taxes Young Living may be required to collect and remit GST, HST, or other provincial taxes on your behalf based on the published retail price of the product and according to applicable federal and provincial tax rates. Young Living may be required by other countries to collect value added taxes for which you will be responsible. Any questions concerning retail tax requirements should be directed to your tax advisor. 3.9 Distributor Claims and Representation Indemnification You are fully responsible for all verbal and written statements you make regarding Young Living's products, services, and the compensation plan which are not expressly contained in official Young Living materials. You agree to indemnify Young Living and Young Living's directors, officers, employees, and agents, and hold them harmless from any and all liability including judgments, civil penalties, refunds, attorney fees, court costs, or lost business incurred by Young Living as a result of the distributor's unauthorized representations or actions. This provision shall survive the termination of the Distributor Agreement Product Claims Product claims are limited to the specific claims that appear in the product promotional materials prepared by Young Living for the Canadian market. Claims that are made for the products in other countries, such as the United States, are not permitted to be made in Canada. Distributors who violate this provision will be subject to compliance action up to and including termination of their distributorship. Distributors who make unauthorised, illegal or misleading claims also expose themselves to prosecution for violation of Canadian law. You may not diagnose or prescribe any Young Living product unless you are a licensed medical professional authorised to do so. Please ensure that your professional rules of conduct do not regard the promotion and/or sale of products as misconduct or a conflict of interest. Anyone improperly diagnosing or prescribing Young Living's products may jeopardize the future of Young Living and all of its distributors and therefore will be subject to termination of their distributorship Income Claims No false or misleading income projections may be made to prospective distributors. In their enthusiasm, distributors are occasionally tempted to represent hypothetical income figures based upon the inherent power of network marketing as actual income projections. This is counterproductive since new distributors may be quickly disappointed if their results are not as extensive or as rapid as a hypothetical model would suggest. The income potential of a Young Living distributor is great enough to be highly attractive in reality without resorting to artificial and unrealistic projections. Moreover, applicable laws regulate or even prohibit certain types of income claims and testimonials made by persons engaged in network marketing. While distributors may believe it beneficial to provide copies of cheques or to disclose the earnings of themselves or others, such approaches have legal consequences that can negatively impact Young Living, as well as the distributor making the claim, unless appropriate disclosures required by law are also made contemporaneously with the income claim or earnings representation. A distributor, when presenting or discussing the Young Living opportunity or compensation plan to a prospective distributor, may not make income projections, income claims, or disclose his or her Young Living income (including the showing of cheques, copies of cheques, bank statements, or tax records). Distributors will clearly state in all presentations to prospective Distributors the following: (a) No Product purchase is required of anyone at any time to participate as a Distributor, move up in rank under the program or earn commissions or bonuses thereunder.

6 6 (b) Commissions will not be provided solely for sponsoring a new Distributor. wolfberry fruit, puree or extract. Violation of this policy may result in the termination of the distributorship. In all presentations to prospective Distributors, the most current YL Distributor Compensation Summary shall be provided to such prospects. The YL Distributor Compensation Summary will change from time to time to reflect updates in compensation figures. Currently, it reads as follows: There are no guarantees regarding income. Our estimate of what the typical participant is likely to earn, per year, is approximately CDN$ A participant, for the purposes of this estimate, includes all participants who make a sale of YL products within the one year period. This estimate is subject to change after the first six months of our operation in Canada and will be updated annually thereafter. This Typical figure is representative of the smallest range of compensation expected to be earned by over 50% of all participants in the plan. Distributors shall make clear to prospective Distributors that (i) profits are not guaranteed and that the Compensation Plan is based upon sales of Products, and (ii) the financial success of a Distributor depends entirely upon that Distributor s individual effort, dedication, and the training and supervision the Distributor provides to his or her downline Deceptive Practices Unauthorized Recruiting Recruiting Distributors may engage in other business ventures, including other selling activities, involving products, services, or business opportunities not offered or marketed by Young Living. However, distributors may not take advantage of their knowledge of or association with other distributors whom they did not personally sponsor, including their knowledge resulting from or relating to their individual lines of sponsorship, in order to promote and expand such other business ventures. Such conduct constitutes an unwarranted and unreasonable interference with the business of other distributors and Young Living Contacts Beneath First-Level Absolutely Prohibited During the term of the Agreement and for a period of 12 months following expiry or termination of the Agreement, for whatever reason, every distributor agrees not to solicit, directly or indirectly, other distributors whom he or she did not personally sponsor in order to sell, offer to sell, or promote other products, services, or business opportunities, investments, securities, or loans not offered or marketed by Young Living Competition with Compensation Plan Every distributor agrees, during the term of the Agreement, not to sell, offer to sell, or promote any other business opportunities, products, or services that are considered to be in direct competition with Young Living. Direct competition is defined as any company whose primary product line consists of, or relates to, essential oils, essential oil blends, or products containing essential oils and/or Cross-Line Recruiting Actual or attempted cross-line recruiting or sponsoring is strictly prohibited. Cross-line recruiting is defined as the sponsoring or attempted sponsoring of an individual or entity that already has a current Distributor Agreement on file with Young Living within a different line of sponsorship or with a different sponsor. The use of a spouse's name, trade names, DBAs (Doing Business As), assumed names, corporations, trusts, federal business numbers, or fictitious ID numbers to circumvent this policy is prohibited. You shall not demean, discredit, or defame another Young Living distributor especially in an attempt to entice another distributor to become part of your marketing organization Bonus Buying and Stacking Bonus buying includes (a) the enrollment of individuals or entities without their knowledge of and/or execution of a Distributor Application and Agreement by such individuals or entities; (b) the fraudulent enrollment of an individual or entity as a distributor or customer; (c) the enrollment or attempted enrollment of non-existent individuals or entities as distributors or customers (phantoms); or (d) the use of a credit card by or on behalf of a distributor or customer when the distributor or customer is not the account holder of such credit card without written authorization. The term stacking includes, without limitation: (a) the failure to transmit to Young Living, or the holding of a Distributor Application and Agreement in excess of two (2) business days after its execution; (b) the placement or manipulation of Distributor Applications and Agreements for the purpose of maximizing compensation pursuant to Young Living's compensation plan; (c) providing financial assistance to new distributors for the purpose of maximizing compensation pursuant to Young Living's compensation plan; d) buying products or drop shipping through another's account to increase the payout of your distributorship; or e) having a beneficial interest in more then one distributorship. Bonus buying and stacking are material breaches of these Policies and Procedures and are strictly and absolutely prohibited Repackaging and Relabeling You may not relabel, alter the labels of, repackage, or refill any Young Living product. Young Living's products must be sold in their original containers only. Such relabeling or repackaging would violate governing laws, which could result in severe criminal penalties. In the event this rule is violated, you agree to indemnify Young Living against any harm resulting from the repackaging or relabeling of any of its products Downline Genealogy Reports The Young Living Genealogy Reports are confidential and contain proprietary business trade secrets. You may not use the report for

7 7 any purpose other than for developing and supporting your Young Living business. During any term of the Distributor Agreement and following the termination or expiration of the Agreement between you and Young Living for any reason whatsoever, you shall not, on your own behalf or on behalf of any other person, partnership, or other entity: Disclose any information contained in the reports to any third party; Use the reports to compete with Young Living; Recruit or solicit any distributor or customer listed on the reports to participate in other multilevel or direct marketing ventures; or Use or disclose to any person, partnership, association, corporation, or other entity any information contained in any downline Genealogy Report or termination of your distributorship. Upon demand by the Company, you will return the original and all copies of downline Activity Reports (including electronic files) to the Company. This provision shall survive the termination or cancellation of this Agreement Product Liability Coverage Young Living maintains insurance to protect the Company against product liability claims. It is Young Living's intent to share our coverage benefits with Independent Distributors so long as they are marketing Young Living's products in accordance with applicable laws and regulations, the Distributor Agreement, and any directives that may be issued by Young Living. It is not our intent to share our coverage, nor is the product liability insurance intended to extend coverage, for claims that arise as a result of a distributor's misconduct in storing, labeling, describing, marketing or promoting the products Commercial Outlets You may display Young Living's products in commercial outlets where professional services are the primary source of revenue and product sales are secondary, such as approved service-oriented establishments, including, but not limited to, health spas, beauty shops, and physicians' and chiropractors' offices Trade Shows and Expositions You may display and/or sell Young Living's products at trade shows and expositions. All literature displayed at the event must be official Young Living literature and must clearly identify yourself as an Independent Distributor International As Young Living develops an increasingly international presence, careful attention must be given to country-specific legal and tax considerations if your developed downline is in other countries. Compliance with foreign laws regarding intellectual property, customs, taxation, literature content, and other direct selling guidelines is critical to successful international expansion. Consequently, you are authorized to market and sell Young Living's products and services and to recruit and sponsor other distributors only in countries in which Young Living is authorized to conduct business, as listed in official Young Living literature. Because unauthorized pre-market opening activity may jeopardize the Company's ability to enter a new market and result in loss of opportunity for many other distributors, those who engage in unauthorized pre-market opening activity will be subject to disciplinary measures, possibly leading to termination. You are not authorized to register product, trade names, or IP addresses in any country for or in behalf of Young Living. Any violator agrees to indemnify the Company for any such activity that damages the Company including, but not limited to, loss of profit, loss of goodwill, any damages, and reasonable attorney's fees. If a distributor desires to sponsor internationally in a country officially recognized as open, certain requirements must be met. A distributor must: 1. Be in good standing in the country of residence; 2. Read and understand the Policies and Procedures in place for the country into which they are sponsoring; 3. Agree to follow all company Policies and Procedures for this country 4. Agree to follow any and all applicable laws of such foreign country; and 5. Agree to any tax withholdings that may be required for that foreign country Distributors will not import or sell product into any country that is not legally importable or saleable. Distributors will follow all laws in any country into which they sponsor, including, but not limited to, all direct selling laws, all solicitation laws, all advertising laws, all claims laws, all tax laws, and any other laws that apply to operating a distributorship in a foreign country. In some countries, customers may purchase Young Living products on a not-for-resale basis as customers. This product, if so allowed, can only be used by the purchaser and not resold. SECTION 4 SPONSOR'S RESPONSIBILITIES 4.1 Sponsoring All distributors in good standing have the right to sponsor others in Young Living. Each prospective distributor has the ultimate right to choose his or her own sponsor. If two distributors claim to be the sponsor of the same new distributor or customer, the Company shall regard the first application received by the Company as binding. 4.2 Ongoing Supervision, Training, and Sales As a sponsor, you are expected to train, supervise, and communicate with your sales organizations through letters, newsletters, meetings, telephone contacts, voice mail, electronic mail, trainings, and by accompanying enrollees to Young Living's training meetings.

8 8 4.3 Non-Disparagement In setting the proper example for your downline, you must not disparage, slander, or defame other Young Living distributors, Young Living's products, the compensation plan, or the Company's employees. Such disparagement constitutes a material breach of these Policies and Procedures and may result in termination of your distributorship. 4.4 Reporting Policy Violations You should report any observed policy violations to the Young Living Distributor Compliance Department by ing distributorcompliance@youngliving.com or calling the Customer Care Department. SECTION 5 ADVERTISING You must not make false or fraudulent claims about Young Living's products, the compensation plan, or its income potential. You may use your own materials as long as they legally comply with all applicable laws and this Section 5, and are marked as Independent Distributor. 5.1 Use of Company Materials To prevent inadvertent errors or illegal claims, you should strive to use the current Young Living literature for advertising and describing Young Living's products or programs. The materials must be used in context so as not to be misleading. All Young Living materials whether printed, on video or DVD, produced by sound recording, or any other electronic format are copyrighted and may only be reproduced in whole or in part when authorized by Young Living. Anyone found copying audio, video, or written materials produced by Young Living or its personnel without written approval is subject to disciplinary action. There is no recording permitted during any Young Living convention or meeting. Anyone found recording the Young Living convention or any other Young Living meeting will be escorted out and subject to disciplinary action, and the tapes will be confiscated. Production or distribution of a distributor's notes from any Young Living event is prohibited. 5.2 Trademarks and Copyrights The name of Young Living, Young Living Essential Oils, Young Living Lavender Farms, or any other names that may be adopted by Young Living, such as trade names, trademarks, logos, and slogans of Young Living, and the web address or URL (or any names that are confusingly similar) are proprietary to Young Living and of great value. You may only advertise Young Living's products using the Young Living logos or trademarks with written permission. All advertising material not produced by Young Living must use the words Independent Distributor to clearly show you are representing the Company in the capacity of an Independent Distributor. 5.3 Media Inquiries You may not attempt to respond to media inquiries regarding Young Living, its products or services, or your independent Young Living business. All inquiries by any type of media must be immediately referred to the Young Living Distributor Compliance Department. This will ensure that accurate and consistent information reaches the general public. 5.4 Distributor-Developed Advertising Materials Young Living encourages its distributors to promote its products through use of Young Living produced literature. This material is copyrighted and should not be reproduced without written permission. Advertising through any medium, such as television, radio, mail, newsletters, faxes, or Internet must be done in accordance with all applicable laws. Distributors are responsible for knowing and complying with all such local, provincial or national laws. Should a distributor decide to produce and/or use materials other than materials from Young Living, such distributors must clearly identify that the material is from an Independent Distributor and not Young Living. Any use of advertising material not produced by Young Living must be compliant with all applicable laws. Such material must be produced in a professional and tasteful manner. Material must not be used that is not in compliance with this provision or that reflects poorly upon Young Living. Violations may subject a distributor to the sanctions allowed under these Policies and Procedures. 5.5 Domain Names and Addresses Distributors may not use, attempt to register, register, or own any of Young Living s trade names, trademarks, service names, service marks, product names, company names, or any derivative thereof for any Internet domain name in whole or in part, either in the U.S. or abroad. Nor may distributors incorporate or attempt to incorporate any of Young Living s trade names, trademarks, service names, service marks, product names, the company names, or any derivative thereof into any electronic mail address. In accordance with this policy, all existing distributor domain names that violate this provision will be expected to be brought into conformance within three months of notification of a violation by Young Living. In limited circumstances, an Distributors may not use, attempt to register, register, or own any of Young Living s trade names, trademarks, service names, service marks, product names, company names, or any derivative thereof for any Internet domain name in whole or in part, either in the U.S. or abroad. Nor may distributors incorporate or attempt to incorporate any of Young Living s trade names, trademarks, service names, service marks, product names, the company names, or any derivative thereof into any electronic mail address. In accordance with this policy, all existing distributor domain names that violate this provision will be expected to be brought into conformance within three months of notification of a violation by Young Living. In limited circumstances, an infringing domain name or address registration may be allowed to exist upon the signing of an annual trademark license agreement with Young Living, which shall also carry a license fee. Such license agreements may be offered, withdrawn, or modified by Young Living at its own discretion at any time, and those distributors with non-conforming domain name registrations who do not make such an agreement with Young Living will be expected to transfer those registrations to Young Living with the three month time period noted above. Infringing domain name or address registration may be allowed to exist upon the signing of an annual trademark license agreement with Young Living, which shall also carry a license fee. Such license agreements may be offered, withdrawn, or modified by Young Living at its own discretion at any time, and those distributors with non-conforming domain name registrations who do not make such an agreement with Young Living will be expected to transfer those registrations to Young Living with the three month time period noted above.

9 9 5.6 Internet Policy All distributors may use the Internet to further their businesses using websites, splash pages, and social media (collectively Distributor Sites ). Distributor Sites used to promote Young Living, Young Living products, or Young Living events must display, in a prominent location, a current Young Living Independent Distributor logo. Young Living Independent Distributor logos are provided by Young Living, and include the phrase Independent Distributor. Use of logos that do not in include the phrase Independent Distributor is strictly prohibited. Distributor Sites must further include the distributor s member number. Distributor Sites may include product descriptions, photographs, video, and other media, made available to distributors by Young Living. These pages may not (a) use any Young Living logo besides the Young Living Distributor logo; (b) use Young Living s trade dress; (c) make any health claims, as outlined in section 3.9.2; (d) promote the products or business of any other company; or (e) contain false or misleading information. Distributors are responsible to ensure that all users of their Distributor Sites comply with these requirements. Distributor Sites may, at Young Living s sole discretion, be monitored by Young Living. Failure to monitor Distributor Sites for any period of time does not waive Young Living s rights to enforce the provisions of this section. When using social media, Distributors may not use as their username, account name, or other identifier (collectively Username ) any of Young Living s trade names or company names or any other name that may be confused with Young Living or suggest Young Living s sponsorship thereof. Usernames may, however, include Young Living trade names and company names only if they also include Independent Distributor or Indep. Distributor. 5.7 Telephone Solicitation The use of Young Living's name or copyrighted materials may not be made with automatic calling devices or boiler room operations to solicit potential members. 5.8 Testimonials and Meetings Testimonials You must take every precaution to ensure that any testimonials you use are legal Meetings Testimonials must be limited to the specific claims that appear in the product promotional materials prepared by Young Living for the Canadian market. Any testimonial must comply with all applicable laws, such as the Food and Drugs Act and its Regulations and the Competition Act. At meetings, people may give testimonials about the Company's products, provided these claims are limited to the specific claims that appear in the product promotional materials prepared by Young Living for the Canadian market. If a person gives a testimonial at a Company-sponsored meeting, that falls outside the scope of the specific claims that appear in the product promotional materials prepared by Young Living for the Canadian market, both the distributor hosting the meeting and the Company may be subject to adverse legal action. If you are the meeting leader: You should ensure that the attendees understand the need to comply with Canadian legal requirements and not arrange for any claims which go beyond the specific claims that appear in the product promotional materials prepared by Young Living for the Canadian market. If there is an impromptu improper testimonial from someone, please redirect the discussion by pointing out that only the claims that appear in the promotional materials prepared by Young Living for the Canadian market are appropriate. Third-party scientific literature may NOT be distributed at a meeting and cannot be used to promote the sale of product. Third-party scientific literature is limited to use for educational purposes only. 5.9 YLEO Personal Websites Young Living offers a personalized website to assist in your marketing efforts. Contact the Customer Care Department for more details or log in to your Virtual Office at the corporate website for more information Photographs of Distributors By becoming an Independent Distributor with Young Living, you consent to have your picture taken at various Young Livingsponsored events by Young Living corporate staff, and to have those images used by Young Living as they see fit in advertising and marketing materials. You will not be compensated for this usage. If you have a religious or moral objection to having your picture taken, please notify a member of Young Living's corporate staff at the event where pictures are being taken. The provisions of this section will permanently survive the term of this Agreement. 6.1 Product Sales SECTION 6 SALES REQUIREMENTS The Young Living compensation plan is based upon the sale of Young Living's products and services to end consumers. You must fulfill specified personal and downline organization sales requirements (as well as meet other responsibilities set forth in these Policies and Procedures) in order to be eligible for bonuses, commissions, and advancement to higher levels of achievement. The following sales requirements must be satisfied in order for you to be eligible for commissions: A minimum of 70% of your orders must be sold to customers or other end users. You may not purchase additional product until at least 70% of the previous order has been sold to end consumers.

10 10 Independent Distributors will comply with applicable consumer protection laws and regulations (including any consumer rights to receive specific notices and any rights to return product afforded consumers under applicable Provincial consumer protection legislation). When making a sale to an end customer, Distributors must provide him/her with an official Company retail receipt at or prior to the time of the initial sale and every sale thereafter. These sales receipts set forth (i) the consumer protection rights afforded by applicable Provincial and Territorial law for direct sales, including the right to cancel (without any reason) the sale contract up to 10 days after the end customer receives a copy of the contract, and (ii) the Company s thirty (30) day return policy. Copies of the receipt can be found on Company s corporate web site:. Distributors must duplicate the form and provide one to the retail customer and retain a copy for their records. There are two sets of receipts: one for Quebec, another for the remaining twelve provinces and territories. You should maintain copies of all such sales receipts for a period of six years and furnish them to Young Living at the Company's request. Young Living will maintain records documenting the purchases by distributor's customers and direct purchases by customers. Young Living distributors agree not to stock excessive inventory and to abide by the 70% rule, which is that 70% of the distributor's inventory has been sold or consumed prior to ordering more. By ordering more product, the distributor certifies that 70% of all prior orders has been consumed or sold. The distributor also agrees not to purchase inventory for the sole purpose of qualifying for compensation payments. The Company opportunity is built upon retail sales to the ultimate consumer. The Company recognizes that distributors may wish to purchase products in reasonable amounts for their own personal use. 6.2 Customers and Sales Requirements Nonmember and customer orders satisfy customer sales requirements. 6.3 Excessive Purchases of Inventory Prohibited Young Living strictly prohibits the purchase of products in unreasonable amounts solely for the purpose of qualifying for commissions, bonuses, or advancement in the Compensation Plan. You may not purchase more than you can reasonably resell or consume in any month, nor encourage others to do so. Distributors must not represent that there is any obligation to purchase products, literature or other sales aids, nor shall they represent that overrides, bonuses, commissions or other earnings may be obtained solely from the purchase of products rather than the sale of products. 6.4 No Price or Territory Restrictions Price List. You may sell Young Living's products at any price you choose. There are no exclusive territories granted to anyone. No franchise fees are required. SECTION 7 COMMISSIONS AND BONUSES 7.1 Commissions and Bonus Cheques You must be active, in compliance with this Agreement, and have no holds on your distributor account to qualify for compensation. As long as you comply with the terms of the Agreement, Young Living shall pay commissions on approximately the 20th of each month for the prior month's sales. Commission amounts under $25 will not be issued as a cheque but retained as a credit on account for future product purchases. 7.2 Recap Statements Detailed reports are available online in the Virtual Office of the corporate website. If you do not have Internet access, you may request that the report be faxed or mailed to you for a small fee. 7.3 Adjustments Distributors agree that adjustments will be made to your commission cheque for any processing fees, unpaid balances, or debts owed for other services. When a product is returned to Young Living for a refund or is repurchased by the Company, the bonuses and commissions attributable to the returned or repurchased product(s) will be deducted from any future commission cheques, including that of the upline. Any other debt may be offset against commission cheques. 7.4 Deductions/Maintenance Fees A monthly maintenance fee is assessed each month and is used to cover your subscription to the YL quarterly magazine, accounting, processing, and account maintenance. The fee may be tax deductible, so consult your personal tax advisor for details. The fee schedule is as follows: Monthly Commissions Fee $10-49 $1.00 $50-99 $2.00 $ $3.00 $ $4.00 $1,000 + $ Errors or Questions Review your Commission and Bonus Recap statements and report any errors or discrepancies to Young Living within forty-five (45) days from the date on the cheque. Errors or discrepancies which are not brought to Young Living's attention within forty-five (45) days will be deemed waived. You are not required to sell Young Living's products at the suggested customer prices set by Young Living in the Young Living Product

11 Commissions and Bonuses Young Living attempts to ensure cheques are sent to the proper address (the address on record with Young Living). For various reasons beyond Young Living's control, some compensation cheques are not cashed within ninety (90) days. If after ninety (90) days from issue a compensation cheque is not cashed, it will be voided and the amount credited to the distributor's account. After one hundred and eighty (180) days from issuance, any voided cheque amounts so credited will be subject to a monthly maintenance fee of 10% of the amount or $10, whichever is greater. This maintenance fee will allow Young Living to search for credit holders, maintain the accounts, and send out requests and search material. Distributors agree to handle compensation credits in this manner. 7.7 Other Credits Any other account credits due to such things as product returns, credit in lieu of cheque, promotional credits, etc., will begin to accrue an account maintenance fee after one hundred eighty (180) days from issuance of the credit. The account maintenance fee will be 10% of the credit or $10, whichever is greater. 7.8 Reissue Requests There is a $35 service charge for reissuing a cheque before thirty (30) days have passed from the original date of the cheque. This charge will be deducted from the balance owed to the distributor. 8.1 Return Policy SECTION 8 PRODUCT RETURNS Young Living reserves the right to review each return or exchange on a case-by-case basis. Returns will cause promotions, credits, commissions, and bonuses to be adjusted or reversed, both for the person making the return and for any upline distributors who received compensation on such sales Return Guidelines Any member who is dissatisfied with any Young Living products may return: Any unopened product within thirty (30) days after shipment for a full refund in the same method of payment of the purchase price and applicable sales tax (less shipping charges). Any opened product with which the member is dissatisfied within thirty (30) days after shipment for a credit on the member's Young Living account of the purchase price and applicable sales tax (less shipping charges). Any sealed or opened product or defective product with which a member is dissatisfied up to ninety (90) days after shipment for credit of the purchase price and applicable sales tax (less shipping charges and a 10% handling fee). Customers returning product to distributors will follow the same return policy and the distributor is responsible for returning the product to the Company within ten (10) days of receiving the return. Damaged or incorrect shipments of products will not be subject to fees Returns of Inventory by Distributors If you choose to cancel your Distributor Agreement, you may return any product inventory or sales aids purchased in the preceding twelve (12) months for a refund if you are unable to sell or use the merchandise. You may return only products and sales aids that are in resalable condition, unless otherwise required by law. Resalable condition is defined as the same unopened condition as it was purchased new. You must return the products to Young Living, prepay the shipping charges, and include a letter explaining that you wish to terminate your Distributor Agreement and receive a refund. Upon receipt of the products, you will be reimbursed 90% of the net cost of original purchase price(s), less shipping charges. The Company shall deduct from the reimbursement any commissions, bonuses, or other incentives received by you as a result of the product you are returning Product Kits Any product kit returned to Young Living must be complete; otherwise the kit will not be eligible for an exchange or refund. No individual items from a kit will be eligible for a refund Return of Promotional Product(s) For any complimentary item(s) received by the purchaser via a qualifying purchase or through the buy-one-get-one-free (BOGO) promotion, returns will be handled as follows: If a qualifying purchase is returned in whole or in part, therefore negating the qualification to receive the complimentary item, the promoted product(s) must also be returned or the member will be charged for the free product(s). If one of the BOGO products is returned, Young Living will not credit the member, as Young Living will assume the returned item(s) is the promoted product(s). If both products of the BOGO are returned, Young Living will credit the member for the product purchased. 8.2 Procedures for Returns The following procedures apply to all returns for refund, repurchase, or exchange: The customer or distributor who purchased it directly from Young Living must return all products. All product(s) must be returned in its original container. The return must have a Return Merchandise Authorization number (RMA) that may be obtained by calling the Customer Care Department. The RMA number must be written on the outside of each package, or the shipment will be returned to sender. A completed product return form must be included with the package. All returns must be shipped pre-paid to Young Living. Young Living does not accept C.O.D. packages. If returned product is not received by the Company's distribution center, it is the responsibility of the member to trace the

12 12 shipment. Young Living is not liable for items lost or damaged in transit. Volume for exchanges will be counted in the month the exchange transaction was made. No refund or exchange will be made for subsequent returns of the same product, except when the product is damaged or defective. Credits will be issued when Young Living has processed the return. 9.1 Ordering Methods SECTION 9 ORDERING All member types may place orders by telephone, fax, mail, YL website, the Automated Phone Ordering System, or through the Essential Rewards program. For security reasons, orders will not be accepted via Phone When ordering by phone, be prepared to present all information requested on the Young Living order form. Live operators are available Monday through Friday from 7:00 a.m. to 7:00 p.m. and Saturday from 7:00 a.m. to 3:00 p.m. Mountain Time. Payments can be made by ACH (US banks only, bank draft) or credit card Fax When ordering by fax, print information legibly on the order form. Payments can be made by ACH (US banks only, bank draft) or credit card. Orders may be faxed to Mail When ordering by mail, send completed order form with payment to: Young Living Attn: Order Entry 3125 West Executive Parkway Lehi, Utah Payments may be made by credit card, cashier's cheque, money order, or personal cheque (US funds only). DO NOT SEND CASH Young Living Website The corporate website makes ordering and accessing information online quick and easy. Available twenty-four (24) hours a day, seven (7) days a week, the website allows you to place online orders. You will need your member number and password (which should be kept confidential) to establish a login and security code (four-digit PIN) at You must keep your PIN secure and only order on your account Automated Phone Ordering System (IVR) The Automated Phone Ordering System is available seven (7) days a week, twenty-four (24) hours a day. To place your order on the Automated Phone Ordering System, please have the following information available: your member number, security code (four-digit PIN), name, method of payment (MasterCard, VISA, Discover, American Express, or ACH US banks only, bank drafts), and a list of products with item numbers. You may access the Automated Phone Ordering System by calling You must keep your PIN secure and only order on your account. Promotions are not honored on this system. Essential Rewards orders cannot be created or updated on this system. 9.2 Essential Rewards Program The backbone to any successful networking company is a strong autoship program. The Young Living Essential Rewards program promotes consistent ordering and provides valuable incentives to distributors. An Essential Rewards order is entirely optional. Participation in this program is not required to join as a Distributor, earn commissions or bonuses under the Company s compensation plan or to move up in rank in the Company s plan. To enroll in this program, indicate when placing your order that it is an Essential Rewards order, select the product you would like Young Living to send you each month, and select the day of the month you would like the order processed (some limitations on available dates may apply). This can be done both via live operator, and through the website. The credit card or bank account from which you authorize payment will be automatically charged the amount of the order, plus applicable shipping and sales tax. The minimum purchase under this program is 50 Personal Volume (PV) Essential Rewards Product Credits Essential Rewards members are eligible to earn Essential Rewards credits based on the following schedule: 1-6 months (consecutively) earn a credit of 10% of the Essential Rewards order each month. (Maximum of 30 credits per month.) 7-12 months (consecutively) earn a credit of 15% of the Essential Rewards order each month. (Maximum of 50 credits per month.) 13 months + (consecutively) earn a credit of 20% of the Essential Rewards order each month. (Maximum of 75 credits per month.) The credits will be issued to each member's account once the order has been shipped Credit Redemption The credits are valid for product purchases only (Full PV products only, no sales aids). Products purchased with Essential Rewards credits have no PV or other qualification value. Credits may only be used after two (2) months of participation. Credits must be used on a separate order and may not be combined with any other order. Credits may not be used toward special promotional offers. Member is required to pay all shipping costs for reward orders Essential Rewards Changes

13 13 An Essential Rewards order may be changed up to midnight Mountain Time on the date selected for processing through the corporate website or telephone. Participation in the Essential Rewards program is purely optional and does not relieve you from compliance with the customer sales requirement or compliance with the 70% resale rule Essential Rewards Cancellation If an Essential Rewards order is cancelled or returned, any unused product credits will be forfeit and the consecutive months of participation in the program will be reset to zero. If you wish to cancel your Essential Rewards order, you must do so by speaking with an operator at or via the Live Help feature on the Young Living website Essential Rewards Program Because the Essential Rewards program is an incentive-driven program designed to help regulate and stimulate sales, it is subject to change at any time. Contact Customer Service or visit the corporate website for details on the current Essential Rewards program. 9.3 General Ordering Policies On mail orders with invalid or incorrect payment, Young Living will attempt to contact you by phone, mail, or to obtain another payment. If these attempts are unsuccessful after five (5) business days, the order will be cancelled. For orders to be counted in a given month, they must be received and accepted on or before the last day of the month. Changes made to pending orders that have not yet shipped will keep the original date the order was entered. This may affect commission qualification. If an item ordered is out of stock or discontinued, Young Living will attempt to contact you by phone or so you may select an alternative item, if qualifications are negatively affected. If we are unable to contact you or do not receive a response from you within one to two (1-2) business days, Young Living will remove the item and process the order. No C.O.D. orders will be accepted. Payment plans are not allowed when purchasing product. The balance may be paid with different credit cards, but must be paid in full before the order will be shipped Back Orders Because back orders often cause qualification problems and because some of our products are dependent on uncertain international supplies beyond our control, Young Living does not usually offer back orders. Only under unusual circumstances will Young Living offer a back order. If a back order does occur, no additional shipping charges will be incurred in shipping the backdated product Month-End Order Processing Cutoff The month-end order processing cutoff is the last calendar day of the month at 11:59 p.m. Mountain Time. Mailed and faxed orders must be received by the last day of the month. All mailed-in orders will be credited to the month in which they are received. Even when the end of the month falls on a weekend, holiday, or a day that the Young Living office is closed, the deadline will not normally be extended. The Automated Phone Ordering System, the fax line, and the website are available seven (7) days a week, twenty-four (24) hours a day, making it possible to place all orders by the end of the month. SECTION 10 SHIPPING 10.1 Shipping Methods and Charges Domestic orders are generally shipped within two (2) business days (excluding weekends and holidays). A packing slip is included in each shipment. It contains the order number, member number and name, product code, product name, price, and the amount and method of payment. Distributors should keep these packing slips for personal accounting records. Package tracking is available through most major carriers Shipping Discrepancies When an order is received, the products should be checked against the packing slip to make certain there is no discrepancy or damage. Please notify Young Living of any shipping discrepancies or damage as soon as possible. Failure to notify Young Living of any shipping discrepancy or damage within five (5) business days of receipt of shipment will forfeit your right to request a correction. A completed Shipping Discrepancy/Damage Claim form, Return Merchandise Authorization (RMA) number, and a copy of the packing slip are required for the processing of all shipping discrepancies or damage claims. If the required forms are not included, Young Living will not process shipping discrepancies, issue credits, or replace damaged products. These forms are included in each order when packaged for shipment. To correct any problems you may have encountered with your shipments, please contact the Customer Care Department. Your Customer Care Representative will discuss the steps to rectify the situation and issue a Return Merchandise Authorization (RMA) number. You may contact us by telephone or by fax Methods of Payment SECTION 11 PAYMENT Young Living accepts the following payment methods: Credit Cards/Debit Cards VISA, MasterCard, American Express, and Discover. Using someone else's credit card without their written permission is illegal and may be grounds for involuntary termination of your distributorship as well as possible legal action. ACH Check Payments US checking accounts only. The Automatic Clearing House (ACH) program authorizes Young Living to draft against a member's bank account for the amount of the order. Money Orders or Cashier's Cheques US funds (mail-in orders only). Personal Cheques US funds (mail-in orders only).

14 Returned Cheques and Insufficient Funds It is your responsibility to ensure that there are sufficient funds available in your account to cover regular orders and Essential Rewards orders. If a personal cheque or ACH check is returned for non-sufficient funds (NSF), you will not be able to place orders using personal cheques or ACH checks until the balance is paid with a credit card or a money order. An NSF cheque will be sent to a collection service and appropriate processing fees will be charged, and your account will be placed on suspension. Failure to promptly resolve an NSF cheque may result in legal action and possible termination of your distributorship. Any uncollected amount may be deducted from commissions Commission and Bonus Release Form You may choose to retain your commissions and bonuses (all or in part) in the form of a credit on your Young Living account. This credit would be used against future product purchases, in accordance with Section 7.8. The Commission and Bonus Release form must be received and approved by Young Living before your compensation cheque can be issued as a credit on account. SECTION 12 DISTRIBUTOR ACCOUNT MANAGEMENT 12.1 Changes to a Distributor Account You must immediately notify Young Living of all changes to the information contained on the Distributor Application and Agreement. You may update your existing information by submitting a written request indicating the changes, by submitting a Personal Information Change Form, or by making such changes in the Virtual Office of the corporate website. The modifications permitted within the scope of this paragraph do not include a change of sponsor or tax information Sponsor Changes To protect the integrity of all marketing organizations and safeguard the hard work of all distributors, Young Living strongly discourages changes in sponsorship. Accordingly, the transfer of a Young Living business from one sponsor to another is rarely permitted. Requests for a change of sponsor must be submitted in writing via mail, fax, or to resolutions@youngliving.com and must include the reason for the transfer. Requests submitted via must come directly from the distributor, and must be sent from the address on file with Young Living. Requests cannot be submitted by another distributor even in the form of a forwarded . That fact notwithstanding, Young Living reserves the right to make sponsor changes at any time and at its sole discretion. When a request for a sponsor change is received, there will be a 30 day mandatory waiting period to allow for processing. Transfers or changes will be considered only under the following circumstances: 1. In cases involving fraudulent inducement or unethical sponsoring established by clear and convincing evidence, a distributor may request that he/she be transferred to another organization with his or her entire marketing organization intact. All requests for transfer alleging fraudulent enrollment practices will be evaluated on a case-by-case basis. 2. The distributor seeking to transfer submits a written request including the written approval of the three active upline members whose income will be affected by the transfer. For purposes of this section only, active is defined as a member who is purchasing 100 PV each month for the last six months. The request must come directly from the distributor requesting to move, and not from anyone else, including the upline members. To ensure that the upline members have submitted their approvals, it is recommended that upon sending an approval to Young Living, the distributor initiating the request for a sponsor change be copied on the correspondence. The request is subject to approval by the Young Living Executive Committee. Any downline distributors shall remain in the original genealogy and shall not be moved with the transferring distributor. When a request for sponsor change is submitted, the first five levels of upline members will receive a notification of the request. If, after the required waiting period, the requesting member has not canceled the request, the sponsor change will then be completed. 3. A distributor who has not placed an order in six months is eligible to transfer to another sponsor of his/her choosing. The request for the sponsor change must be submitted before any further orders are placed on the members account, and must indicate the understanding that the existing downline will be forfeited. Any downline distributors shall remain in the original genealogy and shall not be moved with the transferring distributor. 4. The enroller will be set to null. Problems of attitude, non-support, personality conflicts, or social preferences are not acceptable reasons for a change. A fee of $35 will be charged for all sponsor changes. This fee will be charged even if the request is rejected by Young Living Sponsor/Enroller Changes A change of sponsor may be granted if requested during the new member s first 30 days of registration or reactivation, unless the member has already begun to build a downline organization. If a member registers using Young Living s placement program, the member reserves the right to change his/her sponsor within 30 days of being placed. Requests may only come from the newly registered or reactivated member, or their enroller. Requests may be made directly over the phone if within the first 5 days. of registration. After 5 days, the request must be submitted in writing via mail, , or fax. Requests must contain the signature of the new or reactivated distributor. If it is ed, it must be received from the address Young Living has on file for the new or reactivated distributor. Requests submitted via must come directly from the distributor, and must be sent from the address the distributor has on file with Young Living. Requests cannot be submitted by another distributor, even in the form of a forwarded . Signatures submitted via must be attached in the form of a PDF, or scanned copy. Inability to access and confirm the information on such attachments may slow the processing of requests. If the new distributor and the sponsor both submit sponsor change requests within the appropriate and allotted time frame, the request from the new or reactivated distributor will always take precedent.

15 Downline Genealogy Reports Downline Genealogy Reports are optional and may be ordered at any time. Members with a personal website may receive two (2) free ed downline reports per month, upon request, and all reports after two (2) are $5 each. Members who do not have a personal website will pay $5 for each report requested. Members who wish to have the ed report sent out automatically each month will pay $5 for each report, regardless of the member's personal website status. Members who wish to have the report faxed or mailed will pay $5 for the first ten (10) pages and ten (10) cents per page after ten (10). Downline Genealogy Reports contain trade secret information, which is proprietary to Young Living. Refer to Section 3.11 for restrictions on using these reports. Young Living may request the return of these reports at any time, and will require their return upon distributor termination Regional Account Managers Upon reaching the rank of Executive, you have access to the Regional Account Managers These specialists provide you with additional information and services that may be beneficial in supporting your Young Living business. For more information, contact the Customer Care Department The D. Gary Young Foundation: Young Living Outreach Every person who is enrolled as an active distributor of Young Living products shall be automatically considered a non-voting Distributor Member of The D. Gary Young Foundation: Young Living Outreach within this class of membership. The privileges associated with this class of membership shall include the invitation to contribute to the foundation for the advancement of its charitable purposes, the invitation to participate (at the member's own expense where applicable) in certain member-participation charitable activities of the foundation, and the right to receive periodic reports of the charitable activities and accomplishments of the foundation. The duties associated with such non-voting membership shall be maintenance of the member's distributor status with Young Living products, and conduct which will not bring shame or dishonor to the foundation or to Young Living. SECTION 13DISPUTE RESOLUTION AND DISCIPLINARY ACTION 13.1 Disputes Between Distributors If you have a grievance or complaint with another distributor regarding any practice or conduct in relationship to your respective Young Living business, you should first discuss the problem with the other distributor. If this does not resolve the problem, report the problem to your upline leader who is a Silver or above to resolve the issue at a local level. If the matter cannot be resolved, it must be reported to the Young Living Distributor Compliance Department in writing via mail, fax, or at distributorcompliance@youngliving.com. The complaint should identify specific instances of alleged improper conduct and, to the extent possible, identify the relevant dates on which the event(s) complained of took place, the location(s) where they occurred, and all persons who have firsthand knowledge of the improper conduct. Upon receipt of a written complaint, the Young Living Distributor Compliance Department will investigate the matter, review the applicable policies, and render a decision on how the dispute shall be resolved. Distributor Compliance may also issue disciplinary sanctions consistent with the provisions of Section Disputes Between Young Living and Distributors Arbitration All disputes and claims relating to Young Living, its compensation plan, its products, the rights and obligations of its distributors and Young Living, or any other claim or cause of action relating to product purchase(s) or performance, either of a distributor or of Young Living under the Distributor Agreement, shall be settled totally and finally by arbitration in Salt Lake City, Utah, unless the laws of the jurisdiction in which you reside expressly require otherwise. There shall be an arbitrator, an attorney-at-law with expertise in transactional law (there being a strong preference for an attorney knowledgeable in the direct selling industry), selected from the panel in which the American Arbitration Panel provides. Each party to the arbitration shall be responsible for its own costs and expenses of arbitration, including legal and filing fees. If you file a claim or counterclaim against Young Living, you may do so only on an individual basis and not with any other distributor or as part of a class action. The decision of the arbitrator shall be final and binding upon the parties and may, if need be, be reduced to a judgment in any court of competent jurisdiction. This agreement to arbitrate shall survive any cancellation or expiration of the Distributor Agreement. Nothing in these Policies and Procedures shall prevent Young Living from applying to and obtaining from any court having jurisdiction a writ of attachment, temporary injunction, preliminary injunction, permanent injunction, or available relief to safeguard and protect Young Living's interest prior to, during, or following the filing of any arbitration or other proceeding, or pending the rendering of a decision or award in connection with any arbitration or other proceeding. The existence of any distributor claim or cause of action against Young Living does not preclude Young Living from enforcing the distributor's covenants and agreements contained in the Distributor Agreement Jurisdiction, Venue, and Choice of Law Jurisdiction and venue of any matter not subject to arbitration shall reside in any state or federal court located in Salt Lake City, Utah, unless the laws of the jurisdiction or country in which the distributor resides expressly require otherwise, despite this jurisdiction clause. By signing the Distributor Agreement, you consent to jurisdiction within these two forums. The laws of the state of Utah shall govern disputes involving the Distributor Agreement Disciplinary Actions At Young Living's discretion, violation of any of the terms and conditions of the Distributor Agreement and these Policies and Procedures including but not limited to any illegal, fraudulent, deceptive, or unethical business conduct; non-payment of your account with Young Living, declination of credit card or ACH authorizations; or investigation into any of the above may result in a hold on your account, which may include one or more of the following sanctions: Written warning clarifying the meaning and application of a specific policy or procedure and advising that a continued breach will result in further sanctions; Probation, which may include requiring you to take remedial action and will include follow-up monitoring by Young Living to ensure compliance with the Distributor Agreement;

16 16 Withdrawal or denial of an award or recognition, or restricting participation in Young Livingsponsored events for a specified period of time or until you satisfy certain specified conditions; Suspension of certain privileges of distributorship including, but not limited to, placing a product order, participating in Young Living programs, progressing in the compensation plan, or participating as a distributor for a specified period of time or until you satisfy certain specified conditions; Withholding commissions or bonuses for a specified period of time or until the distributor satisfies certain specified conditions; Imposing fair and reasonable fines or other penalties in proportion to actual damages incurred by Young Living and as permitted by law; and/or Termination of the Distributor Agreement Appeals of Disciplinary Action Following issuance of a sanction or disciplinary action (other than a suspension pending an investigation), you may appeal the sanction to the Executive Review Committee. The appeal must be in writing and received by the Company within fifteen (15) days from the date of the disciplinary action. If the appeal is not received within the fifteen-day period, the sanction will be final. Submit all supporting documentation with appeal correspondence. The Executive Committee will review and reconsider the sanction, consider other appropriate action, and notify the distributor in writing of its decision. SECTION 14 INACTIVITY, REACTIVATION, AND CANCELLATION 14.1 Inactivity If you do not meet the personal volume (PV) requirement in any particular month, you will be deemed inactive for that month and will not receive commissions or bonuses for the sales generated through the downline organization Involuntary Cancellation or Termination Violation of any of the terms of the Distributor Agreement constitutes a material breach of the Distributor Agreement and may result in any disciplinary actions listed in Section 13.3, including cancellation or termination of the Distributor Agreement. Involuntary cancellation or termination will result in the loss of all rights to the downline organization and any commissions or bonuses generated thereby. Distributors who are terminated shall receive compensation for the last full calendar month prior to termination of their distributorship. Young Living may also terminate a distributorship at any time upon 30 days written notice for convenience. When a distributor is terminated for cause, the distributor will be notified by mail or other delivery method, calculated to reach the recipient at the address on file. Cancellation is effective on the date on which written notice is issued. The terminated distributor must immediately cease representing himself or herself as a Young Living distributor. A distributor who has been terminated for cause may reapply to become a distributor twelve (12) calendar months from the date of termination. Any such distributor wishing to reapply must submit a letter to the Young Living Distributor Compliance Department setting forth the reasons why he/she believes he/she should be allowed to operate a Young Living business. It is within Young Living's sole discretion whether or not to permit such a request Voluntary Cancellation You may cancel your Distributor Agreement at any time and for any reason. Written notice must be provided to the Company and must include your signature, printed name, member number, address, PIN, and telephone number. If you voluntarily cancel your Distributor Agreement, you may become a customer. Additionally, you may reapply to become a distributor six (6) months after the cancellation date Effects of Cancellation Upon cancellation or termination, you release all rights to your distributor benefits including the downline organization and all future commissions and bonuses resulting from the downline sales production. If you remain inactive for a period of twelve (12) consecutive months, you will be effectively dropped from the Young Living sales organization and your Distributor Agreement cancelled. Any existing sales organization or downline will in effect roll-up to your first active upline distributor Reactivation Distributors dropped for inactivity may reactivate their membership by contacting the Customer Care Department and requesting reactivation. Reactivating members must thereafter satisfy the PV requirements, and they will be reactivated under their prior sponsor/enroller unless otherwise requested. Should the prior sponsor be inactive, the member will be reactivated under the first active upline member. Reactivating members have no claim to downline that was lost when they were dropped for inactivity and are treated as a new member.