This Agreement is hereby entered into between the Applicant signed on the front side of this Agreement and Young Living Essential Oils, hereafter known as "YL".

1) Applicant hereby applies to be an Independent Distributor in the Young Living Essential Oils (YL) distribution program. If this application is approved by YL, the Applicant agrees to the terms of this Distributor Agreement, Policies and Procedures, and Compensation Plan (Agreement), as each is amended from time to time. Applicant confirms that he/she is of legal age and capacity and can be bound by the terms of this Agreement. Applicant further confirms that he/she is not currently a YL Distributor nor has he/she been a YL Distributor during the twelve months preceeding the date of this Agreement.
2) Young Living may approve or reject this application at its sole discretion and for any reason in accordance with YL Policies and Procedures in effect now or in the future. Approval of this application by YL is authorization for Applicant to be a Distributor and to sell YL products. The Agreement to be a Distributor and to sell YL products will continue until terminated as follows:

a) Applicant cancels Agreement by written notification to Young Living;

b) Applicant's account becomes inactive. Accounts are considered inactive when less than 50 PV are purchased or sold within a twelve-month period; or

c) Young Living terminates the Agreement because of a violation of the terms of the Agreement, Compensation Plan, or Policies and Procedures. The Compensation Plan and Policies and Procedure may be modified from time to time by YL, and Applicant agrees to be bound by such changes.

3) Immediately upon termination or nonrenewal of this Agreement, Applicant shall:

a) lose all rights to purchase products from YL at Distributor cost;

b) cease from representing himself/herself as a Distributor of Young Living;

c) lose all rights to his/her Distributorship and his/her participation in the Compensation Plan, including all future commissions and earnings resulting therefrom, shall terminate; and

d) take all other actions reasonably required by YL, including the discontinuance of YL's trademarks and service marks.

4) This Agreement does not establish an agency, joint venture, or employer/employee relationship. Applicant and YL agree that this Agreement does not create a fiduciary relationship between them. Applicant acknowledges that he/she is an independent contractor and is not a spokesperson, legal representative, or employee of Young Living. Applicant acknowledges that he/she cannot obligate or otherwise bind YL to any agreement or duty. Applicant shall not be treated as an employee, agent, franchise, joint venture, partner, or owner of YL for federal or state tax purposes. Applicant agrees to assume the responsibility for all taxes coming due or arising from his/her activities as a YL Distributor, including, but not limited to, sales tax, state and federal income tax, FICA and Medicare withholdings, and unemployment tax. In addition, Applicant agrees to abide by all state and federal laws pertaining to the sale and distribution of YL products, including the filing of any documents or forms. Applicant indemnifies and agrees to hold harmless YL, its officers, directors, employees, and agents against any liability, claims, obligations, expenses (including attorney fees), or other damages arising out of or in any way related to or connected with, allegedly or otherwise, Applicant's:

a) activities as a Distributor including, without limitation, any unauthorized representations or claims made by Applicant;

b) breach of the terms of this Agreement, Policies and Procedures manual, or Compensation Plan; or

c) violation of or failure to comply with any applicable federal, state, or local law or regulation.

5) Young Living authorizes Applicant to sponsor others as YL Distributors, Preferred Customers, or Retail Customers in accordance with Policies and Procedures. Applicant agrees not to make ANY claims regarding the amount of potential earnings. Applicant agrees not to make ANY claims that state or imply that earnings can be based on the sole activity of sponsoring other YL Members as no compensation is paid for sponsoring. Applicant further agrees not to make ANY claims that state or imply that YL Members have exclusive territories.
6) All YL products purchased by Applicant are subject to the warranties and disclaimers applicable to these products at the time of purchase. Applicant acknowledges and agrees that when marketing the products:

a) not to make diagnoses of medical conditions;

b) not to make claims that YL products will prevent, treat, cure, or mitigate any disease or disease condition in humans or animals;

c) not to use pictures, graphic displays, written materials, or make any claims about YL products not contained in YL sales and promotional literature approved by YL; and

d) not to make any claims about YL products that can be construed as a drug or health claim.

7) The Young Living Compensation Plan is based upon the sale of Young Living 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 the Policies and Procedures) in order to be eligible for bonuses, commissions, and advancement to higher levels of achievement.
8) Applicant must also pay for the products or services he/she purchases when the order is placed. If Applicant fails to pay for the products or services when placing an order, the order will not be processed.
9) Applicant acknowledges that Young Living product names, as well as the YL corporate name and logos, are the exclusive property of YL. Applicant agrees not to use trademarks, the YL product names, corporate name, or logos to promote his/her independent business or any other purpose without written authorization from YL. Applicant further acknowledges that its customer lists, distributor lists, manufacturing procedures, formulas, operating, financial and marketing materials, YL Genealogy Reports, Policies and Procedures Manual, and Compensation Plan are YL proprietary property and contain confidential business information and trade secrets. During the term of the Agreement or thereafter, Applicant agrees not to use such materials and information except to develop his/her YL business pursuant to this Agreement and not to compete with Young Living. Applicant agrees not to disclose the information contained in those reports to third parties or to recruit, solicit, or otherwise engage other YL members to participate in other business ventures.
10) Applicant acknowledges that YL is not liable for any damages or losses caused by the delay or inability to manufacture, sell, or deliver its products due to labor strikes, accidents, fire, flood, acts of civil authority, acts of God, or from any other causes that are beyond the control of YL.
11) This Agreement cannot be sold or assigned without the written approval of YL. All permitted successors in interest or assigns must comply with all terms of this Agreement. YL may assign this Agreement at any time.
12) This Agreement shall be interpreted and construed in accordance with the laws of the State of Utah applicable to contracts to be performed therein. Any legal action concerning this Agreement shall be brought in the state and federal courts located in Salt Lake City, Utah. In the event any court of competent jurisdiction shall declare any portion of this Agreement to be invalid, the remainder of this Agreement shall not be invalidated thereby but shall remain in full force and effect.
13) This Agreement, the Policies and Procedures, and the Compensation Plan (all of which are incorporated and herein by reference and which may be amended from time to time at YL discretion) constitute the entire agreement between Applicant and YL, supersede all prior agreements, and no other promises, representations, guarantees, or agreements of any kind shall be valid unless in writing and signed by both parties. Only an instrument in writing signed by all parties may modify this Agreement unless otherwise provided for in this Agreement.
14) The waiver by Applicant or YL of a breach of any provision of this Agreement shall not be considered to be a continuing waiver and shall not operate or be construed as a waiver of any subsequent breach by either party. Waiver of any term of the Policies and Procedures Manual must be in writing and signed by an authorized officer of Young Living.
15) The covenants and obligations of Applicant to abide by the nonsolicitation, the trade secrets, and confidential information convenants contained herein shall survive termination of this Agreement.
16) Applicant agrees that upon a breach of this Agreement that YL will be immediately and irreparably harmed and cannot be made whole solely by monetary damages. Applicant agrees that the remedy at law for any breach of any provision of this Agreement shall be inadequate; and that in addition to any other remedies, in law or in equity it may have, YL shall be entitled, without the necessity of proving actual damages, to temporary and permanent injunctive relief to prevent the breach of any provision of this Agreement and/or to compel specific performance of this Agreement.

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

SECTION 1   INTRODUCTION

1.1 Welcome
Welcome to Young Living Essential Oils! We are pleased that you have chosen to join our 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 (1-800-371-3515) 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 (YL)
• 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). It 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
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.

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 fifteen (15) 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 fifteen (15) 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 Security (SSN) or Federal Tax ID Number (TIN) if residing within the United States;
• 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 Enrollment Kit
The applicant is required to purchase a Young Living Start Living Kit ($40.00) or an enrollment kit, containing the Start Living Kit, in order to become a distributor and receive wholesale pricing. The Start Living Kit contains materials designed to familiarize new distributors with Young Living's products, services, sales techniques, sales aids, and other training materials. The kit also includes samples of various products and promotional tools.

2.3 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.

2.4 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 and Preferred Customers may register via telephone and are not required to submit a Distributor Agreement.

2.5 Web Applications
If you register via the website (www.youngliving.com) or any official replicated website, you will not need to submit a paper application.

SECTION 3   GENERAL POLICIES

3.1 Independent Contractor Status
As a Young Living distributor, you are an independent sales contractor and are not a purchaser of a franchise or business opportunity. The agreement between you and Young Living does not create an employer/employee relationship, agency, partnership, or joint venture. You have no authority (expressed or implied) to bind the Company to any obligation. You are encouraged to establish your own goals, hours, and methods of sale as long as you comply with applicable laws and the terms and conditions of the Distributor Agreement.

3.2 Types of Customers
Member:

Retail Customer:

Preferred Customer:

Distributor:

Professional:

Purchases of 0–499.99 PV: No discount
Purchases of 500–999.99 PV: 24% discount from retail
Purchases of 1,000 PV or more: 27% discount from retail

To facilitate the discount pricing offered to professionals, the commission payout to the upline on orders placed by professional members is reduced by 50%. Professional orders do count as regular orders for qualification purposes for the upline. Professionals do not participate in the Young Living business or network marketing plan and may not participate in the Essential Rewards program. Professional members must complete the appropriate application and agree to the professional account terms and conditions.

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 co-applicant 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, limited liability company (LLC), or trust may become a Young Living distributor by submitting to Young Living a partnership agreement, certificate of incorporation, articles/certificate of organization (LLC), or trust agreement along with a copy of the state registration form for the entity or a certificate of good standing for the entity issued by the state 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 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:

3.5.1 Succession
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. A W-9 form is required from the new member. 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.

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 this Agreement, and Young Living may involuntarily terminate the Distributor 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 and W-9 form 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 checks between divorcing spouses or distributors of dissolving entities. Young Living will recognize only one downline organization and will issue only one commission check per Young Living business per commission cycle. Commission checks 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.

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.

• Enroller is changed to null

3.8 Taxes
3.8.1 Income Taxes
You are responsible for complying with the tax laws in the jurisdiction where you reside. In the United States, you are responsible for paying local, state, and federal income taxes on any earnings generated through your Young Living business. Distributors who enroll are required by law to provide their Social Security or Federal Tax Identification Number for tax reporting purposes. Those who do not submit a valid tax ID number may be subject to backup withholdings, possible processing fees, customer status change, and may be required to submit a W-9 form or other tax documentation. 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 an IRS Form 1099 MISC (Non-Employee Compensation) earnings statement to each U.S. resident who falls into one of the following categories:

Preferred customers and customers are not required to provide their Social Security or Federal Tax Identification Number to Young Living.

Changes to a SSN or TIN must be received via a completed W-9 form. The name and TIN on a member's account must match IRS 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 TIN and owner of the account. No previous 1099s may be reissued under the new SSN or TIN. Earnings made before the change will be reported on the original TIN. Earnings after any change will be recorded on the new TIN.

A co-applicant may be added with the consent of the primary distributor. Taxes will be reported on the primary distributor's tax number.

3.8.2 Sales Taxes
Young Living is required to collect and remit sales taxes on your behalf based on the published retail price of the product and according to tax rates of the state in the “ship to” address on any given order. If you have a physical business location where you are retailing product, you must submit to the Company a valid resale exemption certificate, a business license, a picture of the store front, and a letter stating why you should be tax exempt. Young Living reserves the right to verify the validity of the resale certificate and some evidence of resale. The responsibility of collecting and remitting sales taxes to the appropriate authorities will then fall to you. 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
3.9.1 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.

3.9.2 Product Claims
No improper claims about the products may be made. In particular, you may not make any claim that Young Living's products are useful in the prevention, treatment, or cure of any disease or condition. Do not make any statements or claims that are false or misleading concerning Young Living's products. You must comply with all laws, both state and federal, regarding any statements made.

You may not diagnose or prescribe any Young Living product unless you are a licensed medical professional authorized to do so. 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.

3.9.3 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, the Federal Trade Commission and several states have laws or regulations that 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 checks 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. Because Young Living distributors do not have the data necessary to comply with the legal requirements for making income claims, 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 checks, copies of checks, bank statements, or tax records). Young Living distributors must comply with all local and federal laws.

3.10 Deceptive Practices
3.10.1 Unauthorized Recruiting
3.10.1.1 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.

3.10.1.2 Contacts Beneath First-Level Absolutely Prohibited
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.

3.10.1.3 Competition with Compensation Plan
Every distributor agrees not to sell, offer to sell, or promote any other business opportunities, products, or services in connection with Young Living's compensation plan.

3.10.2 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 ID 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.

3.10.3 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.

3.10.4 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.

3.11 Downline Genealogy Reports
The Young Living Genealogy Reports are confidential and contain proprietary business trade secrets. You may not use the report for 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 multi-level 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.

3.12 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.

3.13 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.

3.14 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.

3.15 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.

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 e-mailing 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 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, state, 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 E-mail Addresses
Distributors may not use or attempt to register any of Young Living's trade names, trademarks, service names, service marks, product names, the Company's name, or any derivative thereof for any Internet domain name in whole or in part, either in the US 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's name, or any derivative thereof into any electronic mail address.

5.6 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.

5.7 Testimonials and Meetings
5.7.1 Testimonials
You must take every precaution to ensure that any testimonials you use are legal.

• Testimonials must be factual.
• Testimonials must not claim to treat, cure, prevent, or mitigate any disease. This includes expressed and implied claims. Avoid all references to any disease. Once Young Living (or an Independent Distributor) uses a testimonial relating an experience of treating a disease with the products, those products then become subject to regulation by the FDA as “drugs,” which require government approval before they can be lawfully marketed.
• Testimonials should promote the “supportive” nature of the product. Testimonials about general well-being and the effects on “systems” of the body are encouraged (i.e., supports normal immune function, circulatory function, boosts energy level, etc.).
• Any testimonial must comply with all applicable laws.

5.7.2 Meetings
At meetings, people may give testimonials about how the Company's supplements have helped them. If a person makes a “disease claim” at a Company-sponsored meeting, the claim may be imputed to the Company, thereby subjecting the Company and the person to adverse legal action.

If you are the meeting leader:

• You should not arrange for a disease-cure testimonial.
• You should not personally give a disease-cure testimonial.
• If there is an impromptu disease-cure testimonial from someone, redirect the discussion by saying, “Our supplements are designed to improve nutrition; they are not intended to diagnose, treat, cure, or prevent any disease. However, scientific research has established a connection between nutrition and many disease conditions.”

Third-party scientific literature that is compliant with local, state, and federal law may be distributed at a meeting but must be placed separate and apart from promotional material.

5.8 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.

5.9 Photographs of Distributors
By becoming an Independent Distributor with Young Living, you consent to have your picture taken at various Young Living-sponsored 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.

SECTION 6   SALES REQUIREMENTS

6.1 Product Sales
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, preferred customers, or other end users. The sales volume of your personally enrolled preferred customers shall be included with the sales determining compliance with the 70% requirement. You may not purchase additional product until at least 70% of the previous order has been sold to end consumers.
• You are required to furnish your customers with a sales receipt, which specifies the date of sale, the amount of sale, the items purchased, and the Young Living satisfaction guarantee. Additionally, if you sell product inventory to other distributors, you must provide the purchaser with a sales receipt. You should maintain copies of all sales receipts for a period of two (2) years and furnish them to Young Living at the Company's request. Young Living will maintain records documenting the purchases of distributor's customers and direct purchase 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.

6.2 Nonmembers
You may personally sell Young Living's products to nonmembers at any price you choose.

6.3 Customers and Sales Requirements
Nonmember, preferred customer, and customer orders satisfy customer sales requirements.

6.4 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.

6.5 No Price or Territory Restrictions
You are not required to sell Young Living's products at the suggested customer prices set by Young Living in the Young Living Product 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 Checks
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 check 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 check 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 checks, including that of the upline. Any other debt may be offset against commission checks.

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
$100-499	$3.00
$500-999	$4.00
$1,000 +	$5.00

7.5 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 check. Errors or discrepancies which are not brought to Young Living's attention within forty-five (45) days will be deemed waived.

7.6 Commissions and Bonuses
Young Living attempts to ensure checks are sent to the proper address (the address on record with Young Living). For various reasons beyond Young Living's control, some compensation checks are not cashed within ninety (90) days. If after ninety (90) days from issue a compensation check 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 check 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 check, 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 check before thirty (30) days have passed from the original date of the check. This charge will be deducted from the balance owed to the distributor.

SECTION 8   PRODUCT RETURNS

8.1 Return Policy
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 purchases.

8.1.1 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. Excessive returns may be deemed an abuse of Young Living's return policy and may result in suspension of your return privileges and/or distributorship. Damaged or incorrect shipments of products will not be subject to fees.

8.1.2 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.

8.1.3 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.

8.1.4 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 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.

SECTION 9   ORDERING

9.1 Ordering Methods
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 e-mail.

9.1.1 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.

9.1.2 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 1-866-203-5666.

9.1.3 Mail
When ordering by mail, send completed order form with payment to:

Young Living
Attn: Order Entry
3125 West Executive Parkway
Lehi, Utah 84043

Payments may be made by credit card, cashier's check, money order, or personal check (US funds only). DO NOT SEND CASH.

9.1.4 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 www.youngliving.com. You must keep your PIN secure and only order on your account.

9.1.5 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 1-888-880-1549. 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 preferred customers and distributors alike. An Essential Rewards order should be a standard purchase of product that is used consistently every month. 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. There is a minimum purchase of 50 Personal Volume (PV) required.

9.2.1 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.

9.2.2 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

9.2.3 Essential Rewards Changes
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.

9.2.4 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 1-800-371-2928 or via the Live Help feature on the Young Living website.

9.2.5 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 e-mail 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 e-mail 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.

9.3.1 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 back-dated product.

9.3.2 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.

10.2 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.

SECTION 11   PAYMENT

11.1 Methods of 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 Checks—US funds (mail-in orders only).
• Personal Checks—US funds (mail-in orders only).

11.2 Returned Checks 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 check or ACH check is returned for non-sufficient funds (NSF), you will not be able to place orders using personal checks or ACH checks until the balance is paid with a credit card or a money order. An NSF check 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 check may result in legal action and possible termination of your distributorship. Any uncollected amount may be deducted from commissions.

11.3 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 check 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.

12.1.2 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 email to resolutions@youngliving.com and must include the reason for the transfer. Transfers or changes will be considered only under the following circumstances:

1. In cases involving fraudulent inducement or unethical sponsoring, a distributor may request that he or she be transferred to another organization with his or her entire marketing organization intact. All requests for transfer alleging fraudulent enrollment practices shall be evaluated on a case-by-case basis.
2. The distributor seeking to transfer submits a written request including the written approval of the five (5) upline members whose income will be affected by the transfer. 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.
3. A distributor who has not placed an order in six (6) 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. 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.

12.1.3 Sponsor/Enroller Changes
A change of sponsor or enroller may be granted if requested during the new member's first thirty (30) days of enrollment or reactivation. The request must be in writing via mail, e-mail, or fax. If a member enrolls using Young Living's placement program, the enrollee reserves the right to change his or her sponsor and/or enroller within thirty (30) days over the phone.

12.2 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 e-mailed 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 e-mail report requested. Members who wish to have the e-mailed report sent out automatically each month will pay $5 for each e-mail 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.

12.3 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.

12.4 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 13   DISPUTE 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 e-mail 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 13.3.

13.2 Disputes Between Young Living and Distributors
13.2.1 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 state 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.

13.2.2 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 state 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.

13.3 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;
• Withdrawal or denial of an award or recognition, or restricting participation in Young Living-sponsored 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.

13.4 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.

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.

14.2 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.

14.3 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.

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.

14.4 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 preferred customer or customer. Additionally, you may reapply to become a distributor six (6) months after the cancellation date.

14.5 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.